Assertion (A) : The industrial growth in India has been hampered by the burden of many controls and regulations. Reason (R) : The New Industrial Policy seeks to liberate the industry from the shackles of Licensing System. Codes :
Both Assertion (A) and Reason (R) are correct.
Assertion (A): Before 1991, Indian industry worked under the Industries (Development and Regulation) Act, 1951, with industrial licensing, MRTP restrictions, reservation of many industries for the public sector and tight import and foreign-exchange controls. This licence-permit raj delayed new capacity and blunted competition, so A is correct.
Reason (R): The New Industrial Policy of July 1991 abolished industrial licensing for all but a short list of industries (18 at first, five by 2014), eased MRTP rules and opened sectors to private and foreign investment. Freeing industry from the licensing system was its declared aim, so R is correct.
Link: R describes the remedy adopted after the problem; it does not explain why growth was hampered. The code that says only that both statements are correct therefore fits best, and the code claiming R is not correct does not, because the policy did seek to dismantle licensing.
Hence, Both Assertion (A) and Reason (R) are correct.
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