In an economy where the major problem to industrial development is the fear of failure, the most important…

Step 1: Analyze the question The key phrase is "the major problem to industrial development is the fear of failure." This is a psychological and attitudinal problem, not a shortage of money, labour, or physical facilities. The policy we choose must directly address people's willingness to take risks and start or run industries.

Step 2: Explain the concept An entrepreneur is a person who organizes the factors of production, takes risks, and introduces new ideas, products, or methods in the hope of making profit. Entrepreneurs who are innovative are creative, willing to take calculated risks, and able to learn from failure. In economics and industrial development, a shortage of such people holds back industrialization, even where capital and labour exist.

Step 3: Evaluate each option

• A. Large capital in form of loan: This solves a shortage of money. But people who fear failure may not even take the loan, or may fear being unable to repay it. It does not address the root problem.
• B. Large pool of labour: Labour is a factor of production, but having many workers does nothing about the unwillingness to start or invest in industries.
• C. Development of innovative entrepreneurs: This tackles the fear of failure directly. Training, mentoring, and encouraging risk-taking builds confidence, creativity, and the ability to set up and run businesses. ✔
• D. Creation of industrial estates: These provide infrastructure such as land, power, and water. They help, but they are physical facilities and do not remove the fear of failure.

Step 4: Answer The policy that matches the problem (fear of failure) is developing people who are willing and able to take risks and innovate.

Correct option: C. Development of innovative entrepreneurs

Exam tip: Always match the type of problem with the type of solution. If the problem is attitudinal or psychological (fear, lack of confidence), look for the option about people, skills, or mindset rather than money or physical facilities.