Explanation:

• Statement 1 is incorrect: While the Industrial Policy of 1956 sought to give a dominant role to the public sector, at the same time it assured fair treatment to the private sector. Supplementary notes: Industrial Policy Resolution 1956 (IPR 1956)
• This resolution formed the basis of the Second Five Year Plan.
• This resolution classified industries into three categories
• The first category comprised industries which would be exclusively owned by the state  the second category consisted of industries in which the private sector could supplement the efforts of the state sector, with the state taking the sole responsibility for starting new units
• The third category consisted of the remaining industries which were to be in the private sector.
• Although there was a category of industries left to the private sector, the sector was kept under state control through a system of licenses. No new industry was allowed unless a license was obtained from the government. This policy was used for promoting industry in backward regions; it was easier to obtain a license if the industrial unit was established in an economically backward area. In addition, such units were given certain concessions such as tax bene fi ts and electricity at a lower tariff. The purpose of this policy was to promote regional equality.
• Even an existing industry had to obtain a license for expanding output or for diversifying production (producing a new variety of goods). This was meant to ensure that the number of goods produced was not more than what the economy required. A license to expand production was given only if the government was convinced that the economy required a larger quantity of goods.