Question

Explain the features of economic policy pursued formed under planning till 1991

Answer 1

Following are the features of economic policy in 1991 

- Dependence on public sector There were 17 industries reserved for public sector as against 12 industries for private sector.
- Inward looking trade strategy Substituting foreign goods with the local goods so that more local goods could be sold.- Controlled development of private sector License from Government was required in order to establish a new private firm- Protection to small scale industries Priority to small-scale industries was given, a certain type of products were made by small scale industries so that they do not go out of the market.- Self sufficiency in food grains  Agricultural industry was commercialized and India became self-sufficient in making their own food products.- Diversification of industriesOther than jute, tea and cotton other goods were also made like electricity, automobiles etc.

Answer 2

Till 1991, the Indian economy was primarily agro-based. It had its pitfalls, like for instance economic activity suffered whenever the country had a bad monsoon, generation to generation fragmentation of agricultural land took place as the farming families grew in size and the law of diminishing returns prevailed as a natural phenomenon. In industry, the Government played a big part in setting up industry across sectors, primarily heavy industry, and these were called 'temples of India'; largely generators of employment, modernisation and profitability were given a go by in these units. Licences and permits were mandatory for private investment in industry; these were issued in a random and haphazard manner.
In 1991, economic liberalisation was kicked off in India. Licences and permits were done away with in a significant way, the Government began exiting from industrial activity and foreign capital, which was earlier a taboo, was welcomed. Agriculture was the mainstay, but industry began to turn the wheels of our economy. In agriculture too cropping became selective, new and modern methods of farming were deployed, improved and high-yielding seeds were used and so on.