Why and how was the private sector regulated under the IPR, 1956?

Why and how was the private sector regulated under the IPR, 1956?

The Industrial Policy Resolution (IPR), 1956, was adopted in order to achieve the aim of a socialistic state with the government controlling the major strategic industries of the economy. Based on the resolution, the industries were classified as:
Category 1: It includes industries which were established and owned exclusively by the public sector.
Category 2: It includes industries in which the public sector would perform the primary role while the private sector would perform a secondary role.
Category 3: Industries which are not included in category 1 and category 2 were given to the private sector.

The government fully controls the private sector either directly or indirectly through IPR, 1956. To initiate a new industry or expand the existing industry, the private sector has to obtain a license from the government. Added to this, the government regulates the private sector by imposing tax, exempting from tax and subsidies to reduce regional disparities in industrial development and checking on the production of undesirable goods in a society.