The correct option is 1 and 3 only.
Explanation
The pre-liberalisation era (1950-1990) in India was characterized by an Inward-Looking Trade Strategy (Import Substitution) and strict state control over industrial activities. The primary objective was to promote self-reliance, protect domestic industries from foreign competition, and conserve limited foreign exchange reserves.
Statement 1 is Correct: During this period, the government maintained strict control over imports to manage the Balance of Payments. Imports were largely restricted to essential items that could not be produced domestically, such as heavy machinery, fertilizers, and petroleum. The import of consumer goods was generally banned or severely restricted to encourage domestic production.
Statement 2 is Incorrect: The government did not abolish trade barriers; on the contrary, it imposed severe protectionist measures. These included high tariffs (taxes on imports) and quotas (quantitative restrictions on the amount of goods imported) to prevent foreign goods from competing with domestic products.
Statement 3 is Correct: The private sector was heavily regulated through a system commonly referred to as the "License Raj" (under the Industries Development and Regulation Act, 1951). Private industrialists were required to obtain a government license to establish a new firm, expand production capacity, or diversify into new product lines. This was done to ensure that industrial growth aligned with the government's Five-Year Plans.
Key Takeaway: The pre-1991 Indian economy operated on the principles of Import Substitution (restricting imports to protect local industry) and Industrial Licensing (state regulation of private enterprise).