Its about industrial policy since its start ie from 1948

1. New Industrial
Policy
1991

2. What is Industrial Policy?
It refers to the government’s policy towards ;
 Establishment
 Functioning
 Growth
 Management of the industries
It is a comprehensive government document that covers all those
policies, rules and regulations that control the industrial
undertakings of the country and shape the pattern of
industrialization.

3. Industrial Policy helpful to
The planners and administrators by providing them
clear guidelines for promoting and regulating industries.
The industrial investors for deciding areas and priorities
of their investment.

4. Birth of Industrial Policy
Due to poor condition of economy
Problem of Industrial sickness
Shortage of raw materials
Deficiency capital
Bad industrial relations
 “Industry Policy Resolution” was issued on 6th April 1948
 It accepted both private and public sector
 This policy was implemented for 8 years
 From here the Planning Era started in Indian economy

5. Industry Policy
Resolution
1948
Industry Policy
Resolution
1951
Industry Policy
Resolution
1956
Industry Policy
Resolution
1973
Industrial
Policy
Industry Policy
Resolution
1977
Industry Policy
Resolution
1980
1991

6. Changes with due course of time
Year Objectives
1948 1. Accelerate rate of economic growth
2. To speed up industrialization
1956 1. Assistance to private sector
2. Expanded role of Cottage and Small Industries
3. Balanced industrial growth among various regions
4. Incentives to labour
1980 1. Maximizing production
2. Achieving higher productivity
3. Higher Employment generation
4. Faster promotion of export oriented and import
substitution industries

7. Objectives of Industrial Policy 1991
Maintain a sustain growth in productivity and gainful
employment
Greater investment in R & D
Bringing in new technology to increase international
competitiveness
Incentives for industrialization of backward areas for promoting
balanced regional development
Increasing productivity and efficiency in PSU’s and reduce their
losses
Enhanced support for small scale industrial
To integrate Indian economy with rest of the world

8. Significant changes in areas
Industrial Licensing Role Of Public Sector
Foreign Investment And Technology
The MRTP Act

9. a) Abolition of Industrial Licensing:
Abolishes the system of industrial licensing for most of the industries
No licenses are required for setting up new industrial units or for
substantial expansion
Except for a short list of industries relating to country’s security and
strategic concerns, hazardous industries and industries causing
environmental degradation
Earlier 18 industries were placed in this list of industries
Only 5 industries relating to health security and strategic concerns that
require compulsory licensing

10. b) De-reservation of Industries for Public Sector:
Most public sector enterprises became symbols of inefficiency
Imposed heavy burden on the government through their perpetual losses
Limit the role of public sector
Encourage private sector’s participation over a wider field of industry
Following changes were made in the policy regarding public sector
industries:
 Reduced reservation for public sector
 Efforts to revive loss making enterprise
 Disinvestment in selected public sector industrial units

11. c) Liberalised Policy Towards Foreign Capital and Technology:
Inflow of foreign capital and import of technology was tightly regulated
Each proposal of foreign investment was to be cleared by the
government in advance
Share of foreign equity was kept very low so that majority of ownership
control remains with Indians
Kept the inflow of foreign capital very small and industrial development
suffered for want of capital resources and technology
Several concessions to encourage flow of foreign capital and technology,
which are as follows;
 Relaxation in Upper Limit of Foreign Investment
 Automatic Permission for Foreign Technology Agreement

12. d) MRTP Act:
MRTP act, 1969, all big companies and large business houses (which had
assets of Rs.100 crores or more) were required to obtain clearance from
the MRTP commission for setting up any new industrial unit
Big impediment for industrial development as the big business firms
which had the resources for development could not grow and diversify
their activities
Put these industries on par with other firms by abolishing those
provisions of the MRTP act which would require no prior approval for
investment
It gives more emphasis on prevention and controlling unfair and
restrictive business practices to protect consumers from such practices

13. Evaluation of Industrial Policy
Aims to unshackle India’s industrial economy from the cobwebs of
unnecessary bureaucratic control
Removal of entry barriers and bringing about transparency in procedures
Virtually ending the ‘Licence-permit Raj’ which has hampered private
initiative and industrial development
New policy throws almost the entire field of industry wide upon for the
private sector
Public sector’s role has been confined largely to industries of defence,
strategic and environmental concerns
More market friendly
Aims at making the best use of available entrepreneurial talent