RAS question
The Industrial Policy Resolution of 1956 was based on:
Correct answer: (A) Mahalanobis Model with emphasis on the public sector.
The Industrial Policy Resolution of 1956 was based on the Mahalanobis Model, with a dominant role assigned to the public sector.
Explanation
The Industrial Policy Resolution of 1956 followed the Mahalanobis Model, which became the basis for the Second Five Year Plan and later plans. Its logic was that industrial growth should be led by the State, especially where heavy investment and capital-goods industries were involved. The policy therefore gave the State a predominant, direct responsibility for industrial development. It also classified industries into Schedule A, reserved for the State; Schedule B, where public and private sectors would coexist but with progressive State ownership; and Schedule C, left to the private sector under regulation. This matches the wider aim of building a socialistic pattern of society through planned industrialisation.
Why the other options are wrong
- (B) The Washington Consensus belongs to the later reform vocabulary of the 1990s, whereas the 1956 resolution was framed around planning, State leadership, and the Mahalanobis Model.
- (C) The Gandhian village-industries model does not fit the 1956 resolution, which emphasised State-led industrialisation, capital goods, and heavy and basic industries.
- (D) Liberal economic reforms are associated with the 1991 Industrial Policy Statement, a major reversal from the earlier public-sector-led approach.
Concept
This tests post-Independence industrial policy and planning strategy, especially the link between the Second Five Year Plan, the Mahalanobis Model, and public-sector-led growth. It recurs in RAS because economic planning, mixed economy, and the 1991 policy shift are core Indian Economy themes.