Correct Option
The correct option is 2 only
Explanation
During the first seven five-year plans (1950-1990), India's economic strategy was anchored in the goal of self-reliance. This was primarily operationalized through an inward-looking trade strategy known as Import Substitution Industrialization (ISI), which aimed to build a self-sufficient industrial base and reduce dependence on foreign nations.
Statement-wise Analysis
- Statement 1 is Incorrect: The core tenet of self-reliance during this period was to avoid imports of goods that could be produced domestically. By restricting imports, the government aimed to protect nascent domestic industries from international competition and conserve scarce foreign exchange reserves.
- Statement 2 is Correct: Self-reliance was considered vital for safeguarding India’s sovereignty. The planners argued that excessive dependence on imported food, capital, and technology would make the country vulnerable to foreign political pressure and interference in national policy decisions.
- Statement 3 is Incorrect: The policy did not encourage the unlimited import of foreign technology. On the contrary, strict regulations were placed on foreign technology and capital to foster the development of indigenous technological capabilities and prevent foreign dominance in the domestic market.
Key Takeaway: The strategy of self-reliance in early Indian planning was synonymous with protectionism and import substitution, prioritizing domestic production over foreign trade to ensure economic independence and political sovereignty.