The correct option is 2 only
Explanation
During the first seven Five-Year Plans (1951-1990), India adopted a mixed economy model heavily influenced by the Industrial Policy Resolution (IPR) of 1956. This resolution laid the foundation for the "Commanding Heights" of the economy to be controlled by the state, while defining a specific, regulated role for the private sector.
Statement-wise Analysis:
- Statement 1 is Incorrect: The planning framework envisaged that the private sector would operate within the discipline of the National Plan. The private sector was not seen as an adversary but as a partner that would supplement the efforts of the state. Its activities were regulated to ensure they were complementary to the public sector's objectives of rapid industrialization and social welfare.
- Statement 2 is Correct: The public sector was assigned the primary and dominant role, not a secondary one. The IPR 1956 explicitly stated that the state would assume direct responsibility for the future development of industries over a wide area. The public sector was expected to lead strategic industries (Schedule A), while the private sector played a supportive role.
- Statement 3 is Incorrect: The private sector was never completely banned from the industrial sector. Under the IPR 1956, industries were classified into three schedules:
- Schedule A: Exclusive responsibility of the State.
- Schedule B: State-led, but private enterprise could supplement state efforts.
- Schedule C: All remaining industries were left to the private sector (subject to licensing and regulation).
Key Takeaway:
In the pre-1991 planning era, the Public Sector held the "Commanding Heights" of the economy, while the Private Sector co-existed in a complementary but regulated capacity under the system of licensing and quotas.