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Economics · 2026 · 4 marks
CBSE 2026 · Region 4 · Set 3 · Q32
(a)Explain briefly the rationale behind the ‘License Raj’ under the Industrial Policy Resolution, 1956.(ii)Explain disinvestment.“In the post-independence era, India adopted a protective tariff policy.”Do you agree with the given statement ? Justify your answer with any two valid arguments.
(a)
Explain briefly the rationale behind the ‘License Raj’ under the Industrial Policy Resolution, 1956.
(ii)
Explain disinvestment.
“In the post-independence era, India adopted a protective tariff policy.”
Do you agree with the given statement ? Justify your answer with any two valid arguments.
Marking-scheme solution
(a)
The Industrial Policy Resolution, $\displaystyle 1956$ regulated the private sector through a system of licenses. This policy aimed at achieving regional equality. The government made it relatively easier to obtain an industrial license, for industrial units to be established in economically backward areas. Moreover, license was needed for expanding/diversifying output by existing industrial units. This was meant to ensure that the quantity of goods produced was not more than what the economy required.
(ii)
Privatisation of the Public Sector Enterprises (PSEs) by selling off part of the equity of PSEs to the public is known as disinvestment.
Yes. In the post-independence era, India adopted a protective tariff policy to:
promote domestic production by substituting imports with locally produced goods.
safeguard emerging industries from intense foreign competition, allowing them to grow and develop sustainably.
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CBSE Class 12 Economics past-paper question from the 2026board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.