Q.Compare the Industrial Policy Resolution, 1956 and the New Industrial Policy, 1991.

The 1956 policy expanded state control over basic industry, while the 1991 policy reversed direction toward liberalisation and private participation.

The Industrial Policy Resolution of 1956 and the New Industrial Policy of 1991 represent two contrasting phases of India's industrial policy, separated by thirty-five years. The 1956 Resolution deepened state control over the industrial structure: it classified industries into three Schedules, reserving basic and heavy industries (iron and steel, heavy machinery, mining, defence) exclusively for the state under Schedule A, assigning a state-led but supplemented role to Schedule B industries such as aluminium and fertilisers, and leaving only the residual Schedule C fully to private enterprise. Private firms wishing to set up or expand in most industries required government industrial licences, and foreign investment was tightly restricted. The New Industrial Policy of 1991 moved in essentially the opposite direction. It abolished industrial licensing for nearly all industries, drastically reduced the list of industries reserved for the public sector alone, liberalised FDI rules to permit automatic approval of foreign equity in many industries, and relaxed the MRTP Act's restrictions on the expansion of large private firms. Where the 1956 policy had been built around state-led heavy industrialisation and close regulation of private enterprise, the 1991 policy was built around reducing state control, encouraging competition, and inviting private and foreign capital into areas the state had earlier reserved for …

A weak answer merely restates each policy separately without explicitly contrasting the direction of change (more state control vs less); examiners awar …