Indian Economy 1950-1990 — Economics STD 12 Humanities & Commerce — Question

To begin with the need to procure a license to start an industry was misused by the big industrial houses. A big industrialist would get a license not for starting a new firm but for preventing competitors from starting new firms.

• The excessive regulation of 'permit license raj' permitted certain firms from becoming more efficient.
• More time was spent by the industrialists in obtaining a license or lobby with the others, rather than on improving their product.