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Doctors Medicines MCQs Q&A

Which of the following statements is/are correct regarding the New Industrial Policy, 1991. a) Aim is to free the domestic entrepreneur from the restrictions of MRTP act. b) Areas where security and strategic concerns predominate, will continue to be reserved for the Public sector. c) In order to invite foreign investment in high priority industries, requiring large investments and advanced technology, it has been decided to provide approval for direct foreign investment upto 27% foreign equity in such industries.

Which of the following statements is/are correct regarding the New Industrial Policy, 1991. a) Aim is to free the domestic entrepreneur from the restrictions of MRTP act. b) Areas where security and strategic concerns predominate, will continue to be reserved for the Public sector. c) In order to invite foreign investment in high priority industries, requiring large investments and advanced technology, it has been decided to provide approval for direct foreign investment upto 27% foreign equity in such industries. Correct Answer a and b only

The correct answer is a and b only.

Key Points

  • The New Industrial Policy announced in June 1991 has brought comprehensive changes in economic regulation in the country.
  • Aim-
    • To unshackle the Indian industrial economy from the cobwebs of unnecessary bureaucratic control,
    • To introduce Liberalisation with a view to integrate the Indian economy with the world economy,
    • To remove restrictions on direct foreign investment as also to free the domestic entrepreneur from the restrictions of MRTP act,
    • The policy aimed to shed the load of the public enterprises which have shown a very low rate of return or were incurring losses over the years.

Important Points

  • Reforms and initiatives undertaken- 
  • Industrial licensing - 
    • Industrial licensing will be abolished for all projects except for a shortlist of industries related to security and strategic concerns, social reasons, hazardous chemicals and overriding environmental reasons, and items of elitist consumption.
    • Industries reserved for the small scale sector will continue to be so reserved.
    • Areas, where security and strategic concerns predominate, will continue to be reserved for the public sector.
  • Foreign Investment -
    • Approval will be given for direct foreign investment up to 51 percent foreign equity in high priority industries. Hence, statement c is not correct.
    • There shall be no bottlenecks of any kind in this process. Such clearance will be available if foreign equity covers the foreign exchange requirement for imported capital goods. 
  • Foreign Technology Agreements -
    • Automatic permission will be given for foreign technology agreements in high priority industries.
    • No permission will be necessary for hiring of foreign technicians, foreign testing of indigenously developed
      technologies.
  • The MRTP Act -
    • The MRTP Act will be amended to eliminates the requirement of prior approval of the Central Government for the establishment of new undertakings, expansion of undertakings, merger, amalgamation, and takeover, and appointment of Directors under certain circumstances. 
    • Emphasis will be placed on controlling and regulating monopolistic, restrictive, and unfair trade practices.
    • Competition act, 2002 replaces the MRTP Act.

Related Questions

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