Question : Assertion: Prior to 1991, many large-scale industries in India have a greater control over Indian markets due to a lack of foreign competition.

Reason: The policymakers of India adopted granting licenses for expansion.

 

Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.

Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.

Option 3: Assertion is true, but the reason is false.

Option 4: Assertion is false, but the reason is true.

Correct Answer: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.

Solution : The correct answer is (b) Both assertion and reason are true, but the reason is not the correct explanation of the assertion.

The assertion is true. Before the economic reforms of 1991, the Indian economy followed a more closed and regulated system, with limited foreign competition in various sectors. This allowed domestic industries to have a relatively greater control over the Indian market.

The reason is also true. The Indian government implemented a system of industrial licensing, where businesses needed to obtain licenses from the government for expansion and capacity enhancement. This system was intended to regulate and control the growth of industries.

However, the reason does not correctly explain why many large-scale industries had greater control over Indian markets. The assertion primarily attributes it to a lack of foreign competition, not solely to the granting of licenses for expansion. The reason provided focuses on the licensing system, which may have played a role in controlling the growth of industries but does not directly address the lack of foreign competition.

Therefore, both the assertion and the reason are true, but the reason does not provide the correct explanation for the assertion.