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Overview of India's Industrial Policy

Industrial policy aims to regulate industry and promote sustained growth, employment, balanced development, and international competitiveness. The document outlines India's major industrial policies since 1948 and the objectives of the 1991 New Industrial Policy, which focused on deregulating industry, allowing more flexibility, and fostering growth. Key reforms included abolishing licenses for most industries, raising caps on foreign investment, easing technology transfer rules, reducing public sector monopolies, and allowing more private sector initiative and competition.

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Ramani Ranjan
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37 views13 pages

Overview of India's Industrial Policy

Industrial policy aims to regulate industry and promote sustained growth, employment, balanced development, and international competitiveness. The document outlines India's major industrial policies since 1948 and the objectives of the 1991 New Industrial Policy, which focused on deregulating industry, allowing more flexibility, and fostering growth. Key reforms included abolishing licenses for most industries, raising caps on foreign investment, easing technology transfer rules, reducing public sector monopolies, and allowing more private sector initiative and competition.

Uploaded by

Ramani Ranjan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd

Industrial Policy

Role Of Industrialisation

 1. Employment for deepening labor market


 2. Allows improvement in standard and
quality of living
 3. Improves balance of payments
 4. Provides certain element of national
prestige
Industrial Policy
 It covers rules, regulations, principles,
policies, & procedures laid down by
government for regulating & controlling
industrial undertakings in the country.
 It prescribes the respective roles of the
public, private, joint, cooperative large,
medium & small scale sectors for the
development of industries.
Main Objectives
 To maintain a sustained growth in
productivity
 To enhance gainful employment
 To prevent undue concentration of
economic power
Main Objectives
 To achieve optimal utilization of human
resources
 To attain international competitiveness
and
 To transform India into a major partner
and player in the global arena
Industrial Policies

 Industrial Policy Resolution of 1948


 Industrial Policy Resolution of 1956
 Industrial Policy Resolution of 1973
 Industrial Policy Resolution of 1977
 Industrial Policy Resolution of 1980
 The New Industrial Policy of 1991
Industrial Policy 1991
 Policy focus is on –
 Deregulating Indian industry;
 Allowing the industry freedom and

flexibility in responding to market


forces and
 Providing a policy regime that

facilitates and fosters growth of Indian


industry.
Industrial Policy 1991
 In pursuit of the industrial objectives,
Government decided to take a series of
initiatives in respect of the policies relating
to the following areas:
 Industrial Licensing
 Foreign Investment
 Foreign Technology Agreements
 Public Sector Policy
 MRTP Act
Industrial Licensing Policy
 The Industrial Policy Resolution of 1956
identified the following three categories of
industries:
 Those that would be reserved for development in
public sector.
 Those that would be permitted for development
through private enterprise with or without State
participation.
 Those in which investment initiatives would
ordinarily emanate from private entrepreneurs.
Industrial Licensing Policy
 Industrial Licensing is governed by the
Industries (Development & Regulation)
Act, 1951.
 Industrial licensing was abolished for all
industries, except those specified (06
industries), irrespective of levels of
investment.
Foreign Investment
 Limit on foreign equity holdings raised from
40% to 51% in a wide range of industries
 Foreign Equity Proposals need not to be
accompanied by Foreign Technology
Transfer Agreement
 Procedure for FDI streamlined by creating a
Foreign Investment Promotion Board to
consider individual application case by case
Foreign Technology Agreements

 Foreign technology agreements in high-


priority industries upto Rs. 1 crore were given
automatic permission.
 No permission was required for hiring foreign
technicians and foreign testing of
indigenously developed technologies.
Public Sector Policy
 List of industries reserved for the public (Schedule
A) reduced from 17 to 06

 List of sector reserved for dominance by public


sector (Schedule B) effectively abolished

 Disinvestment in selected public sector enterprise to


raise finance for development, bring in greater
accountability & help create a new culture in their
working for improved efficiency

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