What is the purpose of the Licensing Policy in India?

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SSC CGL 2022 Tier-I Official Paper (Held On : 07 Dec 2022 Shift 4)
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  1. To promote benefits to a particular group
  2. To maintain the identity of an area
  3. To show power of the government
  4. To promote regional equality

Answer (Detailed Solution Below)

Option 4 : To promote regional equality
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Detailed Solution

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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.
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