Question : What was the impact of the expansion of the state sector on private sector development during the initial Five-year Plans?
Option 1: It fostered healthy competition.
Option 2: It provided support through subsidies.
Option 3: It led to a crowding out of private investment.
Option 4: It encouraged joint ventures with foreign companies.
Answer (1)
23rd Jan, 2024
Correct Answer: It led to a crowding out of private investment.
Solution : The expansion of the state sector during the initial Five-year Plans led to a crowding out of private investment, as the focus on public sector development limited the resources and opportunities available for private sector growth.
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