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Q46
(IAS/2002)
Economy › Industry, Infrastructure & Investment › Industrial policy reforms
Answer Verified
Which one of the following committees recommended the abolition of reservation of items for the small scale sector in industry?
Result
Your answer:
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·
Correct:
A
Explanation
The Abid Hussain Committee recommended abolition of the reservation of items for the small-scale sector. The Government constituted the Abid Hussain Committee in December 1995 to examine issues concerning the small sector; its report (submitted in 1997) explicitly recommended ending product reservations maintained for small-scale industries. This recommendation came against the historical backdrop of reservation policy that began in 1967 (initially 47 items) and expanded substantially (to over 800 items by the late 1980s), a protection intended to foster employment and shield small firms but later criticized as distorting competition and limiting competitiveness after liberalization [1].
Sources
- [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 6: Indian Economy [1947 – 2014] > 3. Reservation for small scale industries > p. 213
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