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Industrial policy and the 1991 reforms

मराठीत स्पष्टीकरण

Industry and infrastructure · Part 1 / 1 · Fact-checked on · how we check

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The Industrial Policy Resolutions of 1948 and 1956 and the Industries (Development and Regulation) Act, 1951, the licence-permit raj, small-scale reservation, the MRTP Act and FERA, the Statement on Industrial Policy of July 1991, what liberalisation, privatisation and globalisation mean, the Competition Act and the CCI, Maharatna, Navratna and Miniratna enterprises, disinvestment and strategic sales, and the 2021 public sector enterprise policy.

Each idea is explained first in Marathi (मराठी), ending with the English and Hindi exam terms, followed by the same point in exam English. UPSC Prelims is in English or Hindi, so understand it in Marathi and revise it in English.

हे प्रकरण आपला देश वस्तू कशा बनवतो आणि त्यासाठी लागणारे रस्ते, बंदरे, वीज यांच्याबद्दल आहे. पहिला भाग एक कथा: स्वातंत्र्यानंतर मोठे कारखाने सरकारचे, खाजगी उद्योजकाला वाढायला परवानगी लागे; त्या पद्धतीने अर्थव्यवस्था मागे ओढली; जुलै 1991 च्या सुधारणांनी दार उघडले. त्या सुधारणा तीन शब्दांत सांगतात: उदारीकरण, खाजगीकरण, जागतिकीकरण. शेवटी सार्वजनिक क्षेत्राचे काय झाले ते पाहतो. (→ English: liberalisation · privatisation · globalisation · हिन्दी: उदारीकरण · निजीकरण · वैश्वीकरण)

In exam EnglishThis chapter is about how India makes things, and about the roads, ports and power that let it do so. Part 1 tells the story of industrial policy: why independent India chose a state-led path in which the government owned the biggest factories and private firms needed permission to grow, how that system held the economy back, and how the reforms that began in July 1991 opened it up. Three words sum up those reforms: liberalisation, privatisation and globalisation. The part ends with what became of the public sector. Part 2 covers industry as it is measured and supported today, and Part 3 covers infrastructure and how it is paid for.

1948 चे धोरण म्हणजे मिश्र अर्थव्यवस्था — एकाच गाडीला दोन बैल जुंपल्यासारखे, सरकार आणि खाजगी दोघांनी मिळून ओढायचे, लगाम मात्र सरकारच्या हातात. शस्त्रे, अणुऊर्जा, रेल्वे पूर्णपणे केंद्राचे. कोळसा, लोखंड-पोलाद, जहाजबांधणी अशा सहा मूलभूत उद्योगांत नवीन युनिट फक्त सरकार काढणार. बाकीत खाजगी उद्योजक येऊ शकत, पण 1951 च्या कायद्यानुसार कारखाना उभारायला, उत्पादन मोठ्या प्रमाणात वाढवायला, नवे उत्पादन करायला केंद्राचा परवाना लागे — हाच औद्योगिक परवाना. कमी असलेले भांडवल योजनांना हव्या त्या उद्योगांकडे वळवणे हा हेतू. (→ English: mixed economy · industrial licensing · हिन्दी: मिश्रित अर्थव्यवस्था · औद्योगिक लाइसेंसिंग)

In exam EnglishThe first Industrial Policy Resolution, of April 1948, set out a mixed economy, in which public and private enterprise would work side by side under the direction of the state. Arms and ammunition, atomic energy and railways became a monopoly of the Union government. In six basic industries, among them coal, iron and steel, shipbuilding and mineral oils, only the state would start new units, though existing private firms could carry on for ten years. The rest was open to private enterprise under regulation, which came through the Industries (Development and Regulation) Act, 1951: a firm in a scheduled industry needed a licence from the Centre to set up a factory, expand capacity substantially or make a new product. industrial licensing was meant to steer scarce capital into the industries the Plans wanted to grow.

1956 चा ठराव आणखी पुढे गेला. गरीब देशाने आधी 'यंत्रे बनवणारी यंत्रे' उभारली पाहिजेत, या विचाराने दुसऱ्या योजनेने अवजड उद्योग मध्यभागी ठेवले. उद्योगांच्या तीन याद्या झाल्या: यादी A मध्ये 17 — शस्त्रे, अणुऊर्जा, लोखंड-पोलाद, रेल्वे, हवाई वाहतूक — नवीन युनिट फक्त सरकारची जबाबदारी; यादी B मध्ये 12 — यंत्रसामग्री, खते, रस्ते वाहतूक — हळूहळू सरकारकडे, खाजगी मदत करू शकतात; उरलेले यादी C, परवान्यासह खाजगीला. घरातले कर्ते आजोबा महत्त्वाच्या चाव्या स्वतःकडे ठेवतात तसे — तोच सार्वजनिक क्षेत्राच्या 'मोक्याच्या जागा' हा विचार. (→ English: Industrial Policy Resolution, 1956 · commanding heights · हिन्दी: औद्योगिक नीति संकल्प, 1956 · शीर्ष ऊँचाइयाँ)

In exam EnglishThe Industrial Policy Resolution of April 1956 went further. It followed the national goal of a 'socialistic pattern of society' and the Second Five-Year Plan, which put heavy industry at the centre of development on the view that a poor country had to build the machines that make machines. Industries were sorted into three schedules. Schedule A listed 17 industries, among them arms, atomic energy, iron and steel, railways and air transport, where new units would be the exclusive responsibility of the state. Schedule B listed 12, such as machine tools, fertilisers and road transport, that would become progressively state-owned, with private firms allowed to supplement the state's effort. Everything else, in Schedule C, was left to the private sector, still under licensing. Hence the idea of the public sector holding the 'commanding heights' of the economy.

कल्पना करा: आपल्या गावातला उद्योजक नवे यंत्र आणून उत्पादन वाढवू इच्छितो — प्रत्येक कामाला वेगळी परवानगी, प्रत्येकीसाठी महिनोन्महिने वाट; यालाच लायसन्स-परमिट राज म्हणत. परवाने बहुधा व्यवस्था चालवता येणाऱ्या मोठ्या उद्योगघराण्यांनाच मिळत, स्पर्धा नसल्याने खर्च कमी करण्याचा दबाव नव्हता. 1967 पासून 800 हून अधिक वस्तू फक्त लघु युनिटसाठी राखीव केल्या; गुंतवणूक मर्यादा ओलांडली की संरक्षण जाते, म्हणून अनेक युनिट लहानच राहिली. परिणाम: जास्त खर्च, टंचाई आणि दरवर्षी सुमारे 3.5 टक्के अशी संथ वाढ. (→ English: licence-permit raj · small-scale reservation · हिन्दी: लाइसेंस-परमिट राज · लघु उद्योग आरक्षण)

In exam EnglishOver the next three decades the controls grew into what critics called the licence-permit raj. A firm that wanted to build a plant, add capacity or import a machine often needed several separate approvals, each taking months. Licences tended to go to large business houses that knew how to work the system, and protected firms felt little pressure to cut costs or improve quality. From 1967 a growing list of products, at its peak more than 800, was reserved for small-scale units alone. The aim was to protect jobs, but suppose a small unit making a reserved item wanted to grow: beyond the investment limit it lost its protection, so many chose to stay small. The outcome was high costs, frequent shortages and slow growth, which the economist Raj Krishna called the 'Hindu rate of growth', about 3.5 per cent a year.

दोन कायद्यांनी पकड आणखी घट्ट केली. 1969 चा MRTP कायदा: आर्थिक सत्ता काही उद्योगघराण्यांत एकवटल्याने, एका मालमत्ता मर्यादेवरील मोठ्या कंपन्यांना विस्तारासाठी, विलीनीकरणासाठी सरकारी परवानगी लागे. 1973 चा FERA: परकीय चलनावर कडक नियंत्रण, भारतीय कंपन्यांत परकीय हिस्सा साधारणपणे 40 टक्क्यांपर्यंत — म्हणून IBM, Coca-Cola सारख्या कंपन्यांनी देश सोडला. 1977 च्या धोरणाने लघु आणि कुटीर उद्योगांवर लक्ष दिले; 1978 पासून जिल्हा उद्योग केंद्रे आली. 1980 च्या दशकात थोडी शिथिलता आली तरी मूळ व्यवस्था तशीच राहिली. (→ English: MRTP Act, 1969 · FERA, 1973 · हिन्दी: एमआरटीपी अधिनियम, 1969 · फ़ेरा, 1973)

In exam EnglishTwo laws tightened the grip. The Monopolies and Restrictive Trade Practices (MRTP) Act, 1969 followed official findings that economic power was concentrated in a few business houses; large firms above an asset threshold needed government approval to expand, merge or open new units. The Foreign Exchange Regulation Act (FERA), 1973 controlled foreign exchange tightly and generally limited foreign shareholding in Indian companies to 40 per cent; IBM and Coca-Cola were among the firms that left India rather than give up control. The Industrial Policy Statement of 1977 turned attention to small and cottage industries, and District Industries Centres were set up from 1978 to serve them. In the 1980s some rules were eased, for instance by letting firms make a wider range of related products under one licence ('broad-banding'), but the core of the system stayed.

1991 मध्ये परकीय चलन साठा काही आठवड्यांच्या आयातीपुरताच उरला. 24 जुलै 1991 ला, अर्थसंकल्पाच्याच दिवशी, नवे औद्योगिक धोरण आले. औद्योगिक परवाना 18 उद्योग वगळता सर्वांसाठी रद्द — आता ती यादी संरक्षण उपकरणे, स्फोटके, घातक रसायने, तंबाखू, मद्य अशा काहींपुरती आकुंचली. सार्वजनिक क्षेत्रासाठी राखीव उद्योग 17 वरून 8, नंतर फक्त दोन: अणुऊर्जा आणि रेल्वे संचालन. आपल्या जागेत भिंत बांधायला आता परवानगी मागायची नाही, 'बांधतोय' असे कळवले की पुरे — तसे एक ज्ञापन दाखल केले की पुरे. (→ English: industrial licensing · New Industrial Policy, 1991 · हिन्दी: औद्योगिक लाइसेंसिंग · नई औद्योगिक नीति, 1991)

In exam EnglishIn 1991 the system met a crisis: foreign exchange reserves had fallen to a few weeks of imports, as the external sector chapter explains. On 24 July 1991, the day of the Union Budget, the government placed a new Statement on Industrial Policy before Parliament. industrial licensing was abolished for all industries except 18 kept under licensing for reasons of security, strategy, safety or the environment; that list has since shrunk to a handful, such as defence equipment, industrial explosives, hazardous chemicals, and tobacco products and alcoholic drinks. The industries reserved for the public sector were cut from 17 to 8, and later to just two: atomic energy and railway operations. In most fields a firm no longer needed permission to build a factory; it only had to file a memorandum informing the government.
Three landmarks of industrial policy
PolicyMain ideaPublic sectorPrivate sector
Industrial Policy Resolution, 1948Mixed economy under state directionMonopoly in arms, atomic energy and railways; new units in six basic industriesOpen elsewhere, licensed under the 1951 Act
Industrial Policy Resolution, 1956Socialistic pattern; heavy industry firstSchedule A (17 industries) exclusive; Schedule B (12) progressively state-ownedSchedule C, under licensing
Statement on Industrial Policy, 1991Delicensing and opening upReserved list cut from 17 to 8 (now 2)Licence needed only for 18 industries (now a handful); FDI up to 51% automatic in priority industries

त्याच धोरणात 'मोठी कंपनी म्हणजेच संशय' हा MRTP पूर्वपरवानगीचा नियम गेला. प्राधान्य उद्योगांत 51 टक्क्यांपर्यंत थेट परकीय गुंतवणूक आपोआप मंजूर, परदेशी तंत्रज्ञान आणणे सोपे. सतत तोट्यातील सार्वजनिक उपक्रम पुनरुज्जीवन किंवा बंदीसाठी पाठवायचे, काहींतील सरकारी हिस्सा थोडा विकायचा. पुढे FERA ऐवजी 1999 चा FEMA आला — परकीय चलन उल्लंघन हा फौजदारी गुन्हा नव्हे, दिवाणी बाब. हे सगळे एका मोठ्या पॅकेजचा भाग: जुलै 1991 चे रुपयाचे अवमूल्यन आणि कमी आयात शुल्कही त्यातच. (→ English: foreign direct investment · FEMA, 1999 · हिन्दी: प्रत्यक्ष विदेशी निवेश · फ़ेमा, 1999)

In exam EnglishThe same statement ended the MRTP rule that large firms needed prior approval for new investment, so size alone was no longer suspect. foreign direct investment up to 51 per cent in a list of high-priority industries would get automatic approval, and agreements to bring in foreign technology were made easier. Chronically loss-making public enterprises would be referred for revival or closure, and part of the government's shareholding in some would be sold. Later laws completed the picture: FERA was replaced by the Foreign Exchange Management Act (FEMA), 1999, which treats foreign exchange violations as civil rather than criminal matters, and the MRTP Act gave way to a competition law. Industrial policy was one piece of a wider package that also included the rupee devaluation of July 1991 and lower import duties.

तीन शब्द, तीन अर्थ. उदारीकरण: काय, किती, कुठे, कोणत्या किमतीला बनवायचे हे कंपनीने ठरवण्यापासून रोखणारी बंधने काढणे. खाजगीकरण: मालक म्हणून सरकारची भूमिका कमी होणे — सरकारी हिस्सा विकणे, किंवा दूरसंचार, विमान, वीज अशा क्षेत्रांत खाजगी कंपन्यांना येऊ देणे. जागतिकीकरण: कमी शुल्क, सोपी परकीय गुंतवणूक, बाजार ठरवणारा विनिमय दर यांतून जगाशी जोडले जाणे. एका हाताची दोरी सोडली पण दुसरा हात बांधलेला असेल तर काम होत नाही — परवान्यातून सुटलेली कंपनी यंत्रे आयात करून परदेशात विकू शकली तरच वाढते. (→ English: liberalisation · privatisation · globalisation · हिन्दी: उदारीकरण · निजीकरण · वैश्वीकरण)

In exam EnglishThe reforms are summed up as LPG. liberalisation means removing controls that stop firms from deciding what to produce, how much, where and at what price: abolishing licences, freeing interest rates, ending reservations. privatisation means a smaller role for the state as owner, either by selling government shares in public enterprises or by opening fields once kept for the state, such as telecom, airlines and power, to private firms. globalisation means joining the world economy more closely through lower tariffs, easier foreign investment and a market-determined exchange rate. The three support each other: a firm freed from licensing can grow only if it can import machines and sell abroad. The package also worked on two time scales: short-term stabilisation to cut the fiscal and current account deficits, and longer-term structural reform.

परवाने गेल्यावर नवी भीती: एखादी मोठी कंपनी आपल्या ताकदीचा गैरवापर करू शकते. आपल्या बाजारातले सगळे व्यापारी संगनमत करून कांद्याचा भाव वाढवतात, ते कार्टेल. 2002 चा स्पर्धा कायदा असे करार आणि वर्चस्वाचा गैरवापर निषिद्ध करतो, मोठी विलीनीकरणे आधीच तपासतो. तो राबवतो भारतीय स्पर्धा आयोग — 2003 मध्ये स्थापन, 2009 पासून करार आणि वर्चस्वाचे नियम, 2011 पासून विलीनीकरणाचे नियम; 2009 मध्येच MRTP रद्द. फरक: MRTP 'मोठे असणेच चूक' मानत असे, स्पर्धा कायदा 'वाईट वर्तन हीच चूक' म्हणतो. 2023 च्या दुरुस्तीने व्यवहार मूल्याची कसोटी जोडली. (→ English: Competition Commission of India · abuse of dominant position · हिन्दी: भारतीय प्रतिस्पर्धा आयोग · प्रभुत्वशाली स्थिति का दुरुपयोग)

In exam EnglishOnce licensing went, the danger shifted from too many controls to too little competition, since a dominant firm could still misuse its position. The Competition Act, 2002 prohibits agreements that harm competition, such as cartels that fix prices or share out markets, and abuse of a dominant position, such as predatory pricing; it also reviews 'combinations', meaning mergers and acquisitions above set thresholds. It is enforced by the Competition Commission of India, a statutory body set up in 2003, which began enforcing the rules on agreements and dominance in 2009, the year the MRTP Act was repealed, and the merger rules in 2011. The contrast matters: the MRTP Act treated bigness itself as the problem, while the Competition Act punishes harmful conduct whatever the firm's size. A 2023 amendment added a test based on deal value, so that buying a small but valuable company, often a digital one, can be reviewed.

सुधारणांनंतरही सरकारी कंपन्या आहेत. केंद्रीय सार्वजनिक क्षेत्र उपक्रम म्हणजे निम्म्याहून अधिक हिस्सा केंद्राचा (किंवा इतर सार्वजनिक उपक्रमांसह) — NTPC, ONGC ही उदाहरणे. शाळेत चांगले गुण मिळवणाऱ्या मुलाला जास्त मोकळीक देतात तसे सरकार यांना श्रेणी देते: 1997 मध्ये नवरत्न, मिनीरत्न; 2009 मध्ये सर्वात मोठ्यांसाठी महारत्न. श्रेणी जितकी वर, तितकी मंत्रालयाला न विचारता मोठी गुंतवणूक मंडळ मंजूर करू शकते, संयुक्त उपक्रम आणि परदेश विस्तार सोपे. मिनीरत्नला सलग नफा, नवरत्न मिनीरत्नांतून गुणांवर, महारत्न म्हणजे सूचीबद्ध नवरत्न, प्रचंड उलाढाल आणि जागतिक अस्तित्व. (→ English: central public sector enterprise · Maharatna · Navratna · Miniratna · हिन्दी: केंद्रीय सार्वजनिक क्षेत्र उद्यम · महारत्न · नवरत्न · मिनीरत्न)

In exam EnglishLiberalisation did not abolish the public sector. A central public sector enterprise (CPSE) is a company in which the Union government, alone or with other CPSEs, holds more than half the shares; NTPC and ONGC are examples. To give the stronger ones room to compete, the government grades them: the Navratna and Miniratna categories were created in 1997, and the Maharatna category, for the largest, in 2009. The higher the grade, the larger the investment its board can approve without going to the ministry, and the freer it is to form joint ventures and expand abroad. A Miniratna must have made profits consistently, a Navratna is picked from among Miniratnas on a score of performance indicators, and a Maharatna must already be a listed Navratna with very large turnover, net worth and profit and a significant global presence.
Grades of central public sector enterprises
GradeCreatedWho qualifies
Miniratna1997CPSEs with a consistent record of profit
Navratna1997Chosen from Miniratnas on a score of performance indicators
Maharatna2009Listed Navratnas with very large turnover, net worth and profit and a significant global presence

निर्गुंतवणूक म्हणजे सरकारने आपल्या उपक्रमातील काही किंवा सगळे समभाग विकणे. 1991-92 मध्ये अर्थसंकल्पासाठी पैसा उभारायला लहान हिस्से विकून सुरुवात झाली; रंगराजन समिती (1993), निर्गुंतवणूक आयोग (1996) यांनी सल्ला दिला. 1999–2004 मध्ये धोरणात्मक निर्गुंतवणूक — चावीसकट घरच विकल्यासारखी, नियंत्रक हिस्सा आणि व्यवस्थापन खाजगीकडे: पहिली 2000 मध्ये मॉडर्न फूड्स, मग 2001 मध्ये BALCO. 2016 मध्ये विभागाचे नाव DIPAM; एअर इंडियाची टाटांना विक्री जानेवारी 2022 मध्ये पूर्ण. 2021-22 अर्थसंकल्पाचे धोरण: चार धोरणात्मक क्षेत्रांत किमान अस्तित्व, इतरत्र खाजगीकरण किंवा बंदी. (→ English: disinvestment · strategic disinvestment · हिन्दी: विनिवेश · रणनीतिक विनिवेश)

In exam Englishdisinvestment is the sale by the government of part or all of its shares in a public enterprise. It began in 1991-92 with small minority stakes sold mainly to raise money for the budget. The Rangarajan Committee (1993) advised how far the government's stake could fall, and a Disinvestment Commission (1996) advised on what to sell and how. Between 1999 and 2004 came strategic disinvestment, the sale of a controlling stake with management control to a private buyer: Modern Food Industries was first, in 2000, followed by BALCO in 2001. The department in charge was renamed DIPAM (Department of Investment and Public Asset Management) in 2016, and the sale of Air India to the Tata group was completed in January 2022. The New Public Sector Enterprise Policy of the 2021-22 Budget keeps only a bare minimum presence in four broad strategic sectors (atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; banking, insurance and financial services); elsewhere enterprises are to be privatised or closed.

सगळी कथा तीन टप्पे: 1948 पासून 1970 च्या दशकाच्या अखेरीपर्यंत सरकारने नेतृत्व केले, परवाने दिले; 1980 च्या दशकात कडेकडेने थोडी शिथिलता; 1991 पासून 'काय बनवायचे' हे सांगणे सरकारने थांबवले आणि स्पर्धा आयोगामार्फत वर्तनाचे नियमन, कमी उपक्रमांची मालकी, प्रोत्साहने देणे सुरू केले. 1991 चे चार खांब: परवाना रद्द, सार्वजनिक क्षेत्राचे राखीव क्षेत्र खूप कमी, MRTP पूर्वपरवानगीचा शेवट, परकीय गुंतवणूक आणि तंत्रज्ञानाला उघडी दारे. मालकी ठेवून मालमत्ता भाड्याने देणे — मालमत्ता मुद्रीकरण — तिसऱ्या भागात. (→ English: delicensing · asset monetisation · हिन्दी: लाइसेंस समाप्ति · परिसंपत्ति मुद्रीकरण)

In exam EnglishPut together, industrial policy has passed through three stages. From 1948 to the late 1970s the state led and licensed; in the 1980s controls were eased at the edges; and from 1991 the state stopped deciding what firms may make, and turned instead to regulating conduct through the Competition Commission, owning fewer enterprises and, as Part 2 shows, offering incentives to industries it wants to grow. The four pillars of 1991 were delicensing, a much smaller area reserved for the public sector, the end of MRTP prior approval, and open doors to foreign investment and technology. Selling shares is not the only way to use public assets: leasing them out while keeping ownership, called asset monetisation, returns in Part 3.

Exam traps

Recap

Practice questions

Q1. Under the Industrial Policy Resolution, 1956, Schedule A consisted of:

  1. 17 industries in which new units would be the exclusive responsibility of the State
  2. 12 industries that would become progressively state-owned, with private firms supplementing
  3. Industries left to the private sector without any licensing
  4. Products reserved for manufacture by small-scale units
Show answer

Answer: A. 17 industries in which new units would be the exclusive responsibility of the State

Schedule A listed 17 industries, such as arms, atomic energy, iron and steel and railways, reserved for the State. The 12 progressively state-owned industries were Schedule B; the private sector's Schedule C still needed licences; small-scale reservation began only in 1967 and was not part of the schedules.

Q2. Consider the following statements about the Statement on Industrial Policy of July 1991:
1. It abolished industrial licensing for all industries except a short list of 18.
2. It increased the number of industries reserved for the public sector from 8 to 17.
Which of the statements given above is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2
Show answer

Answer: A. 1 only

Statement 1 is correct: licensing was kept only for 18 industries. Statement 2 reverses the change: the reserved list was cut from 17 to 8, not raised. So '2 only', 'Both' and 'Neither' are wrong.

Q3. Match List I (law) with List II (year of enactment):
List I
A. MRTP Act
B. FERA
C. FEMA
D. Competition Act
List II
1. 1999
2. 1969
3. 2002
4. 1973
Select the correct answer using the code given below:

  1. A-2, B-4, C-1, D-3
  2. A-4, B-2, C-1, D-3
  3. A-2, B-4, C-3, D-1
  4. A-2, B-1, C-4, D-3
Show answer

Answer: A. A-2, B-4, C-1, D-3

MRTP Act 1969, FERA 1973, FEMA 1999 and Competition Act 2002, so A-2, B-4, C-1, D-3. The second option swaps MRTP and FERA; the third swaps FEMA and the Competition Act; the fourth gives FERA the FEMA year.

Q4. With reference to the Competition Commission of India, consider the following statements:
1. It reviews mergers and acquisitions above set thresholds.
2. It treats the large size of a firm as an offence in itself.
3. It is a statutory body established under the Competition Act, 2002.
Which of the statements given above are correct?

  1. 1 and 2 only
  2. 1 and 3 only
  3. 2 and 3 only
  4. 1, 2 and 3
Show answer

Answer: B. 1 and 3 only

Statements 1 and 3 are correct. Statement 2 describes the old MRTP approach; the Competition Act punishes harmful conduct, not size. So every option containing statement 2 is wrong.

Q5. Which of the following are at present the only industries reserved for the public sector in India?

  1. Atomic energy and railway operations
  2. Coal and mineral oils
  3. Arms and ammunition and air transport
  4. Iron and steel and heavy machinery
Show answer

Answer: A. Atomic energy and railway operations

After the 1991 cut from 17 to 8, the list was reduced further to atomic energy and railway operations. Coal, mineral oils, arms, air transport, iron and steel and heavy machinery were once reserved but have been opened to private firms.

Q6. Consider the following statements about central public sector enterprises:
1. The Maharatna category was introduced in 2009.
2. A CPSE can be given Maharatna status without first being a Navratna.
Which of the statements given above is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2
Show answer

Answer: A. 1 only

Statement 1 is correct. Statement 2 is wrong: a Maharatna must already be a Navratna listed on a stock exchange. So '2 only', 'Both' and 'Neither' are wrong.

Q7. Which was the first central public sector enterprise sold through strategic disinvestment?

  1. Modern Food Industries
  2. Bharat Aluminium Company (BALCO)
  3. Air India
  4. Steel Authority of India
Show answer

Answer: A. Modern Food Industries

Modern Food Industries was sold in 2000. BALCO followed in 2001; the Air India sale was completed only in January 2022; Steel Authority of India remains a public sector enterprise.

Q8. Under the New Public Sector Enterprise Policy announced in the Union Budget 2021-22, which one of the following is NOT one of the strategic sectors?

  1. Atomic energy, space and defence
  2. Transport and telecommunications
  3. Banking, insurance and financial services
  4. Hotels and tourism
Show answer

Answer: D. Hotels and tourism

The four strategic sectors are atomic energy, space and defence; transport and telecommunications; power, petroleum, coal and other minerals; and banking, insurance and financial services. Hotels and tourism is a non-strategic field, where enterprises are to be privatised or closed; the other three options are strategic sectors.

All parts

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