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Economics · 2026 · 6 marks
CBSE 2026 · Region 5 · Set 1 · Q33
(a) (i) “The Industrial Policy Resolution (IPR), 1956 classified all the industries based on state ownership and control in various categories.” Do…
(i)
“The Industrial Policy Resolution (IPR), $\displaystyle 1956$ classified all the industries based on state ownership and control in various categories.”
Do you agree with the above statement ? Give valid reasons in support of your answer.
(ii)
“The economic reforms of $\displaystyle 1991$ adversely affected the Indian agriculture sector.”
Do you agree with the above statement ? Give valid reasons in support of your answer.
(i)
“The Government of India may further divest its stake in Life Insurance Corporation (LIC) in the current financial year.”
In the light of economic reforms since $\displaystyle 1991$, identify the policy and define the step taken by the government.
(ii)
“India adopted an inward-looking trade strategy during the planning period.”
(I)
State any two reasons behind the adoption of this policy.
(II)
Briefly describe any two ways in which the government implemented this policy.
Marking-scheme solution
(i)
Yes. The Industrial Policy Resolution $\displaystyle 1956$ classified industries into three categories:
The first category comprised industries to be exclusively owned by the government.
The second category consisted of industries in which the private sector could supplement the efforts of the public sector, with the government taking the sole responsibility for starting new units.
The third category consisted of the remaining industries which were to be in the private sector. However, these industries were kept under state control through the system of licenses.
(ii)
Yes. The agricultural sector was adversely affected by the reform process due to:
fall in the public investment in agriculture sector especially in infrastructure like irrigation, power etc.
reduction of fertilizer subsidy has increased the cost of production, thereby affecting the small and marginal farmers
increased international competitiveness owing to liberalisation and reduction of import duties.
(i)
The government has implemented the policy of disinvestment in case of Life Insurance Corporation (LIC).
Disinvestment is referred to the privatization of public sector enterprises (PSEs) by selling off part of the equity of PSEs to the public.
(ii)
(I)
Inward-looking trade strategy aimed at:
replacing imports with domestic production.
saving foreign exchange.
(II)
The government implemented this policy through tariffs and quotas:
Tariffs are a tax on the imported goods. They make imported goods more expensive and discourage their usage.
Quotas specify the quantity of goods which can be imported. These are imposed to restrict imports and therefore protect domestic firms from foreign competition.
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CBSE Class 12 Economics past-paper question from the 2026 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.