One of the factor that may not promote industrial development is

Analyze the question

The question asks which factor "may not promote" industrial development. So we are looking for the option that is least helpful, or that does not encourage new industries to grow.

Explain the concept

Industrial development is promoted by things that:

• bring in technology, skills and capital,
• make funds affordable,
• provide infrastructure (power, water, roads, security),
• encourage new firms to start and existing firms to expand.

Governments often use incentives such as tax holidays, but these are normally aimed at new or pioneer industries, to help them survive their early years. This is the "pioneer status" incentive.

Solution: checking each option

• A. Local firms partnering with foreign firms: This promotes development through technology transfer, capital inflow and managerial skills. It is a promoter.
• B. Capital at reasonable interest rates: Cheap credit lowers the cost of investment and encourages expansion. It is a promoter.
• C. Industrial estates with modern amenities: Ready-made infrastructure reduces production costs and attracts investors. It is a promoter.
• D. Granting old firms tax exemptions: Old, established firms are already operating and have passed the difficult start-up stage. Exempting them from tax mainly reduces government revenue and does little to attract new investment or expansion. Tax incentives work best for new firms, so this may not promote industrial development.

Answer: D

Tip: In "which may not promote..." questions, look for the option that sounds helpful but is misdirected. Tax relief is a good incentive, but the word "old" is the catch, because incentives should target new and pioneer industries.