(a) (i) Explain briefly the rationale behind the ‘License Raj’ under the Industrial Policy Resolution, 1956. (ii) Explain disinvestment.

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.

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: