Industrial Policy of India

Presented by :
Rajneesh Ranjan
 MEANING AND
OBJECTIVES
MEANING :
It means rules, regulations, principles policies
and procedures laid down by the government
for regulating, developing and controlling
industrial undertaking in the country. It
prescribes the respective roles of the public,
private, joint and cooperative sectors for the
development of industries.
 OBJECTIVES

• Achieving a socialistic pattern of society

• Achieving industrial development
• Achieving a self sustained economy
• Alleviating poverty
• Updating technology and modernization of
industry
• Liberalization and globalization of economy
 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
• Industrial Policy Resolution Of 1991
• Public sector policy
 INDUSTRIAL POLICY
RESOLUTION OF 1948
This was the first industrial policy resolution
announced by government of India.

Highlights----
1. It visualized a mixed economy.
2. Division of the Industrial sector into 4
major categories.
3. Small and Cottage Industries were given
privileges.
4. Considered the importance of private
participation.
 CATEGORIES
1.State Monopoly
– Arms and ammunition
– Atomic Energy
– Rail Transport

2. Mixed Sector

– Six industries were specified

• Coal
• Iron & Steel
• Aircraft Mfg
• Ship Building
• Telephone, Telegraph & Wireless (Excluding Radio)
• Mineral Oils
• The existing can continue and after 10 years, the government
will take over those undertakings by paying a compensation
which is fair and equitable.
 Cont….
3.The field of government control

– The government will regulate Industries in this category

• Automobiles
• Heavy Machinery
• Heavy Chemicals
• Fertilizers
• Sugar
• Paper
• Cement
• Cotton
• Woolen textiles etc

4. The field of private enterprises

All other Industries
 INDUSTRIAL POLICY OF
INDIA 1956
General Focus

• To accelerate the rate of economic growth and to

speed up industrialization and, in particular, to
develop heavy industries and machine making
industries, to expand the public sector, and to
build up a large and growing co-operative sector.
• To provide opportunities for gainful employment
and improving living standards and working
conditions of the people .
• To reduce disparities in income and wealth .
• To prevent private monopolies and the
concentration of economic power in different
fields in the hands of small numbers of
individuals.
 Cont…………
• All industries are categories in three
schedules
• Industries placed under schedule “A” were
treated as the exclusive responsibility of the
state.
• Industries in schedule ‘‘B” were
progressively state owned.
• Industries owned in schedule “C” were left
for private sector.
 Industrial policy statement of
1973
It was an extension of the industrial policy 1956.
Features:-
a) role of public sector stressed in attaining a
socialistic pattern of society.
b) Foreign investment was allowed only in
specific industries, subject to FERA & FEMA
restrictions.
c) Small-scale and cooperative sectors were
assigned a special role to play.
d)In the area of agriculture cooperative enterprises
were encouraged.
 Industrial policy 1977

The Janta party govt. presented this industrial

policy

Main objectives were :-

1. Preventing monopoly
2. Maximizing production of consumer goods
3. Making industry responsive to social needs’
4. It aimed at maintaining the close interaction
of agriculture & industrial sector
5. Thrust area was generation of rural
employment opportunities
 Industrial policy of 1980
Congress Govt. on July 1980 announced new
industrial policy:-
1. Development of industrially backward areas
2. Consumer protection against high prices and
bad quality
3. Promoting the process of rural
industrialization
4. Efficient operational management of public
sector
5. Dealing with industrial sickness
 Cont….
• This policy focused attention on the need for
promoting competition in the domestic market,
technological up gradation and modernization .

• The policy laid the foundation for an increasingly

competitive export based and for encouraging
foreign investment in high-technology areas. This
found expression in the Sixth Five Year Plan which
bore the distinct stamp of Smt. Indira Gandhi. It
was Smt. Indira Gandhi who emphasized the need
for productivity to be the central concern in all
economic and production activities .
 Cont….
• These policies created a climate for rapid industrial
growth in the country.
• Thus on the eve of the Seventh Five Year Plan, a
broad-based infrastructure had been built up.
• Basic industries had been established. A high degree of
self-reliance in a large number of items - raw
materials, intermediates, finished goods - had been
achieved.
• New growth centre of industrial activity had emerged,
as well as a new generation of entrepreneurs.
• A large number of engineers, technicians and skilled
workers had also been trained.
 Industrial policy 1991

• Industrial Policy announced in July 1991,

besides liberalization of economy and
globalization, also aimed at building upon the
gains achieved, to correct the distortions,
maintain a sustained growth in productivity and
gainful employment and attain international
competitiveness.
• It envisaged pursuit of these objectives to be
tempered by the need to preserve the
environment and ensure the efficient use of
available resources.
 Cont….
• All sectors of industry whether small, medium or
large, belonging to public, private or cooperative
sectors were to be encouraged to grow and
improve on their post performance.
• The New policy also encompasses
encouragement of entrepreneurship, development
of indigenous technology through investment in
research and development, bringing in new
technology, dismantling of the regulatory system,
development of the capital markets and
increasing competitiveness for the benefit of the
common man.
 Cont….
• While recognizing the role of public sector, the
new policy seeks to ensure that the public sector
is run on business lines envisaging privatization,
disinvestments and public sector restructuring. It
was decided to take a series of initiatives
covering the following areas:
(a)   Industrial Licensing
(b)   Foreign Investment
(c)   Foreign Technology Agreements
(d)   MRTP Act (Monopoly and Restrictive
Trade Practices Act)
(e)  Public Sector Policy
 PUBLIC SECTOR POLICY

• In the pursuit of our development objectives, public

ownership and control in critical sector of the economy
have played an important role in preventing the
concentration of economic power, reducing regional
disparities and ensuring that planned development
serves the common good.
• The Industrial Policy Resolution of 1956 gave the
public sector a strategic role in the economy. Massive
investments have been made over the past four decades
to build a public sector, which has a commanding role
in the economy. Today key selectors of the economy
are dominated by the mature public enterprises that
have successfully expanded production, opened up new
areas of technology and built up a reserve of technical
competence in a number of areas.
References: