Economics · Indian Economy Post-Independence

How did the industrial licensing policy under the planning era in India affect the market structure and the growth of large industrial houses?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1It primarily enhanced decentralized rural employment without any industrial concentration
2It allowed established firms to block competitors by hoarding licenses and under-utilizing capacities✓
3It successfully prevented market dominance and promoted rural start-ups
4It drastically increased FDI inflows across all key sectors

Correct answer

It allowed established firms to block competitors by hoarding licenses and under-utilizing capacities

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