Solution

IPR or Industrial Policy Resolution, 1956 was a resolution that was adopted by the Indian parliament for Industrial development in India. This resolution was to create a socialistic pattern in society. Under this rule, there were three categories of industries which were:

Schedule A: Industries that are the exclusive responsibility of the state.

Schedule B: Industries that will be predominantly owned by the public sector while private sector will be supplementing the efforts of the public sector.

Schedule C: The remaining industry types that will be managed by the private sector.

The government although defining a separate category for the private sector wanted to keep the sector under state control and hence created a rule that in order to open a new industry or to expand an existing one, a license was required to be obtained from the government. If the industry was opened in a backward area, the government would offer subsidies and other facilities such as easy licensing. This step was taken to maintain regional equality. In order to increase production, the license was required so that no such goods were produced which is socially undesirable.