Which of these is NOT one of the reasons why the public sector played a dominant role in establishing the Industrial sector in India post-independence?

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SSC CHSL Exam 2023 Tier-I Official Paper (Held On: 10 Aug, 2023 Shift 4)
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  1. Poor savings capacity of the public
  2. To avoid generation of private profit
  3. Absence of large enough market for output
  4. Lack of adequate capital with private industrialists

Answer (Detailed Solution Below)

Option 2 : To avoid generation of private profit
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The correct answer is To avoid generation of private profit. Key Points

  • Poor savings capacity of the public:
    • This was one of the main reasons why the public sector played a dominant role in establishing the industrial sector in India post-independence.
    • The private sector did not have enough capital to invest in large-scale industries, and the government had to step in to fill this gap.
  • Absence of a large enough market for output:
    • Another reason why the public sector played a dominant role was that there was not a large enough market for the output of the industries.
    • The private sector would have found it difficult to sustain their businesses in such a scenario, and the government had to step in to provide the necessary infrastructure and support.
  • Lack of adequate capital with private industrialists:
    • As mentioned earlier, the private sector did not have adequate capital to invest in large-scale industries.
    • The government had to provide the necessary capital through various means such as subsidies, tax incentives, and loans.
  • To avoid the generation of private profit:
    • This option is incorrect because it goes against the basic principles of capitalism and entrepreneurship.
    • The private sector is driven by the profit motive, and this is what encourages innovation, efficiency, and growth.
    • The government's role is to facilitate this process by creating a conducive environment for businesses to thrive.

Additional Information

  • Industrial sector in India post-Independence:
    • The Indian government adopted a socialist approach to economic development after Independence in 1947.
    • The focus was on building a self-sufficient economy through import substitution and state-led industrialization.
  • Private sector in India:
    • The private sector was largely absent in the early years of Independence, as the government had nationalized many key industries.
    • It was only in the 1980s and 1990s that the government started liberalizing the economy and allowing private participation in various sectors.
  • Public sector in India:
    • The public sector played a dominant role in the Indian economy for several decades after Independence.
    • The government set up various public sector enterprises in key industries such as steel, coal, power, and telecommunications.
    • These enterprises were supposed to be the engines of growth and development for the country.
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