Question

Read the following statements – Assertion (A) and Reason (R). Choose the correct option given below:
Assertion (A): The excessive regulation of permit license raj prevented certain private firms from becoming fairly competitive.
Reason (R): Private sector wasted huge amounts in obtaining licenses rather than on improving the product quality and international competitiveness.

• A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
• B. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
• C. Assertion (A) is true, but Reason (R) is false.
• D. Assertion (A) is false, but Reason (R) is true.

Hint:

Understand the historical impact of the permit license raj on the private sector in India.

Answer 1

The Correct Option is A

The restrictive licensing system impeded market competition by creating operational inefficiencies for private enterprises. Companies prioritized acquiring permits over product enhancement, thereby diminishing their competitive edge. Consequently, both Assertion (A) and Reason (R) are validated, with the reason providing a direct explanation for the assertion.