Question

Under the New Industrial Policy 1991, several aspects were abolished. Which of the following were not abolished under that policy?
A) Licenses Registration
B) DGTD Registration
C) Foreign Direct Investment
D) All of the above

Answer 1

Hint: The Industrial Policy indicates the pertinent jobs of general society, private, joint and co-employable areas; little, medium and enormous scope ventures. It underlines the public meanings and the monetary improvement system. It additionally clarifies the Government's arrangement towards enterprises, their foundation, working, progress and the executives; unfamiliar capital and innovation, work strategy, and duty strategy.

Complete answer:
The New Industrial Policy 1991 settled the example of monetary and mechanical improvement of the economy. The Industrial Policy uncovered the financial and political way of thinking of improvement. Under the Policy, several aspects were abolished but not the Foreign Direct Investment.

Foreign direct investment (FDI) is when a company has a controlling share in a business entity in another country. Through FDI, foreign companies can directly participate in the daily business of the other country. Not only money but with the increase in the FDI we also see an up-gradation of knowledge, skills and technology.

Generally speaking, foreign direct investment occurs when investors establish foreign businesses or acquire foreign commercial assets, including the establishment of ownership or control in foreign companies. Foreign direct investment is usually made in open economies with skilled labour and growth prospects. Foreign direct investment not only brings money but also skills, technology and knowledge.

Government approval is mandatory. Companies must submit applications through a foreign investment facilitation portal that promotes single-window sharing. The application is then forwarded to the relevant ministries and commissions, which negotiate with the Ministry of Commerce and the Ministry of Industry and Domestic Economic Development (DPIIT) to approve/reject the application. DPIIT will issue standard operating procedures (SOP) to process applications in accordance with existing FDI guidelines.

Thus, the correct answer is option ‘C’.

Note: FDI is an important source of funding for India's economic development. India began economic liberalization after the 1991 crisis, and foreign direct investment has grown steadily since then. India is now one of the top 100 clubs in EoDB and ranks first in the world in the greenfield FDI ranking.