What is the purpose of the Licensing Policy in India?

Question

Question

This question was previously asked in

SSC CGL 2022 Tier-I Official Paper (Held On : 07 Dec 2022 Shift 4)

Answer 1

Correct Answer To promote regional equality

Key Points

The aim of Licensing Policy was to keep the private sector under control.
No new industry was allowed unless a license was obtained from the government.
This policy was used for promoting industries in backward regions.
Even an existing industry had to obtain a license for expanding output or for diversifying production.
For producing a new commodity the license was compulsory.
This was to ensure that the quantity of goods produced was not more than what the economy required.
License to expand production was given only if the government was convinced that the economy required a larger quantity of goods.