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?

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.