Industrial Policies: Evolution, Objectives, and Impact
INDUSTRIAL
POLICIES
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:
The study material provided to our students of BBA of Department of
Business Management is solely for the purpose of teaching and learning
and has been obtained from varied sources. I do not claim for the
originality of the content /resources/reading materials (PPTs, PDfs, You
Tube Contents, Book Pdfs, Videos) shared as my own creation, as the
contents/reading resources are a compilation from varied sources
including open access sources and these are shared for the instructional
and learning purpose by the students. I acknowledge and thankful to the
sources, websites content writers and authors for their generosity in
hosting their contents for wider dissemination and use.
Dr. Rahil Yusuf Zai
DoBM, IGNTU
Industrial
Policy
| Meaning
Industrial
policy
means
rules,
regulations,
principles,
policies
and
procedures
laid
down
by
government
for
regulating,
developing,
and
controlling
industrial
undertakings
in the
country.
It
prescribes
the
respective
roles
of
the
public,
private,
joint,
and
co-operative
sectors
for
the
development
of
industries.
It
also
indicates
the
role
of
the
large,
medium
and
small
scale
sector.
Industrial
Policy
| Meaning
It
incorporates
fiscal and
monetary
policies,
tariff
policy,
labour
policy,
and
the
government
attitude
towards
foreign
capital,
and
Role
to
be played
by multinational
corporations
in the
development
of
the
industrial
sector.
Industrial
Policy
| Objectives
Industrial
policy statements
have been announced
from
1948 onwards.
A
number of objectives
have been projected by
the
Government of India while making industrial
policy
declarations.
Some of the
important objectives
can
be
identified
as
follows:
1.
Achieving
a socialistic
pattern
of
society.
2.
Preventing undue
concentration
of economic
power.
3.
Achieving
industrial
development.
4.
Reducing
disparities
in regional
development.
Industrial
Policy
| Objectives
6.
Providing
opportunities
for
gainful
employment.
7.
Achieving
a self-sustained
economy.
8.
Achieving
faster
economic
growth.
9.
Alleviating
poverty.
10.
Protecting
and developing
a healthy
small-
scale
sector.
11.
Updating
technology
and modernization
of
industry.
12.
Liberalization
and globalization
of
economy.
Industrial
Policies from
1948
to1991
Industrial Policy
Resolution
1948
(6
April, 1948);
Industrial Policy
Resolution
(30
April,
1956);
Industrial Policy
Feb 2, 1973;
Industrial
Policy
Dec
23,
1977;
Industrial Policy
Statement of
July,
1980;
Industrial
Policy,
July 24, 1991.
Industrial Policy
Resolution
1948
(6
April, 1948)
The
Government
of
India
announced
its
first
industrial
policy
resolution
on
6
April,1948.
The
policy resolution
laid
stress
on
the
role
of
the
state
in the
development
of
industry.
The
industrial
activities
were
divided
into four
broad
areas:
1.
Items under
central government
control
–
Manufacture
of arms and ammunition,
The
production
and control
of atomic
energy,
Ownership
and management
of railway
transport,
etc.
Industrial Policy
Resolution
1948
(6
April, 1948)
2.
Items under
the
state government control
–
Coal,
Iron and
Steel,
Aircraft
manufacture,
Shipbuilding,
Manufacture
of telephone,
telegraph
and wireless
apparatus, excluding
radio receiving
sets, Mineral
oils, etc.
3.
Items of basic
importance
(planned & regulated
by central
government)
–
Salt,
Automobiles
and
Tractors,
Electric
Engineering,
Other Heavy
Machinery,
Machine
Tools,
Heavy
Chemicals,
Fertilizers
and
Pharmaceuticals,
Power,
Cotton and Woollen
Textiles,
Cement,
Sugar,
Paper and Newsprint,
etc.
Industrial Policy
Resolution
1948
(6
April, 1948)
4.
Items for Private Sector
–
The
rest of the industrial field will
be open to
private
enterprise.
It
also
emphasised
on securing
a
continuous
increase
in production
and
its equitable
distribution.
Importance
was given
to
small scale
and
cottage
industries.
Industrial Policy
Resolution
(30
April, 1956)
Industrial
Policy Resolution
(30
April,
1956)
was
also
regarded
as
the
“Economic
C
onstitution
of
India”.
Major
Objectives
of
Industrial
Policy
Resolution
(30
April,
1956)
are
as follows:
1.
Improving
living standards
and working
conditions
for the
mass
of the people.
2.
To
reduce
disparities in income and
wealth.
3.
To
prevent
private
monopolies
and
concentration
of economic
power.
Industrial Policy
Resolution
(30
April, 1956)
4.
Development
of transport facilities.
5.
The
State will progressively
assume
a
predominant
and direct
responsibility
for setting
up new
industrial undertakings
and for
developing
transport facilities.
6.
Undertake
State trading on an increasing
scale.
7.
Planned
and rapid development.
8.
Expand
public
sector.
9.
Disparities
in levels of development
between
different regions
should
be progressively
reduced.
Industrial
Policy
Feb 2,
1973
The
Industrial
Policy Resolution
of
1956
still
remained
valid,
but
certain
structural
distortions
had
crept
in the
system.
The
new
policies
were
hence
directed
towards
removing
these
distortions.
It
provided
for
a closer
interaction
between
the
agricultural
and
industrial
sectors.
Accorded
the
highest
priority
to
the
generation
and
transmission
of
power.
Industrial
Policy
Feb 2,
1973
Special
legislation
to
protect
cottage
and
household
industries
was also proposed
to
be
introduced.
It
was also
decided
that
compulsory
export
obligations,
merely
for
ensuring
the
foreign
exchange
balance
of
the
project,
would
no
longer
be
insisted
upon
while
approving
new
industrial
capacity.
Industrial
Policy
Dec 23,
1977
Industrial
Policy Dec 23,
1977
Highlights
on
producing
inputs
needed
by
a
large
number
of
smaller
units
and
making
adequate
marketing
arrangements.
To
boost
the development
of
small scale
industries,
the
investment
limit
in the
case
of
tiny
units
was enhanced
to
Rs.2
lakh,
of
a
small
scale units
to
Rs.20
lakh and
of
ancillaries
to
Rs.25
lakh.
Industrial
Policy
Dec 23, 1977
Industrial
processes
and
technologies
aimed
at
optimum
utilisation
of
energy
or the
exploitation
of
alternative
sources
of
energy
would
be
given
special
assistance,
including
finance
on
concessional
terms.
Industrial Policy
Statement
of
July,
1980
Industrial
Policy Statement
of
July,
1980
was
based
on
Industrial
Policy Resolution
(30
April,
1956).
The
major
objectives
are
as follows:
1.
Optimum
utilisation of installed
capacity.
2.
Maximum
production
and achieving
higher
productivity.
3.
Higher
employment
generation.
4.
Promotion
of export-oriented
industries.
Industrial Policy
Statement
of
July,
1980
5.
Consumer
protection against
high prices and
bad
quality.
6.
Correction
of regional
imbalances.
7.
Strengthening
of the agricultural
base through
agro
based
industries
and promotion
of
optimum
inter-sectoral
relationship.
Industrial
Policy,
July 24, 1991
Government
is pledged to launching
a
reinvigorated
struggle
for social and economic
justice,
to end poverty
and unemployment and to
build
a modern, democratic,
socialist,
prosperous
and
forward-looking
India.
Such
a
society
can
be
built if India grows as part
of
the world economy and not in
isolation.
While
Government will continue to follow the
policy
of self-reliance,
there
would be greater
emphasis placed on building
up our ability to pay
for
imports through our own foreign exchange
earnings.
Industrial
Policy,
July
24, 1991
Government
is also committed to development
and
utilisation of indigenous capabilities
in
technology
and manufacturing
as well as its
upgradation
to world standards.
Government
will continue
to pursue a
sound
policy
framework encompassing 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.
Industrial
Policy,
July 24, 1991
The spread
of industrialisation
to backward areas
of
the country will be actively
promoted through
appropriate
incentives,
institutions
and
infrastructure
investments.
Foreign investment
and technology
collaboration
will
be
welcomed to obtain higher
technology,
to
increase
exports and
to expand the production
base.
Labour
will
be made an equal
partner in progress
and
prosperity.
Workers’
participation
in management will be
promoted.
Industrial
Policy,
July 24, 1991
Need to preserve the environment and
ensure the
efficient
use of available
resources.
Maintain
sustained growth in productivity
and
gainful
employment
and
attain
international
competitiveness.
In
pursuit
of the above objectives,
Government
have
decided
to take a
series of initiatives
in
respect
of the policies
relating
to the following
areas:
1.
Industrial Licensing.
2.
Foreign Investment.
3.
Foreign
Technology
Agreements.
4.
Public
Sector
Policy.
5.
MRTP
Act.
This study material explores the meaning, objectives, and evolution of industrial policies in India from 1948 to 1991. It discusses the role of industrial policies in achieving socialistic patterns of society, promoting industrial development, reducing regional disparities, and more.
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Disclaimer: The study material provided to our students of BBA of Department of Business Management is solely for the purpose of teaching and learning and has been obtained from varied sources. I do not claim for the originality of the content /resources/reading materials (PPTs, PDfs, You Tube Contents, Book Pdfs, Videos) shared as my own creation, as the contents/reading resources are a compilation from varied sources including open access sources and these are shared for the instructional and learning purpose by the students. I acknowledge and thankful to the sources, websites content writers and authors for their generosity in hosting their contents for wider dissemination and use. Dr. Rahil Yusuf Zai DoBM, IGNTU
Industrial Policy | Meaning Industrial policy means rules, regulations,principles,policies and procedureslaid down by governmentfor regulating,developing,and controlling industrialundertakingsin the country. It prescribesthe respective roles of the public, private, joint, and co-operativesectors for the developmentof industries. It also indicates the role of the large, medium and small scale sector.
Industrial Policy | Meaning It incorporatesfiscal and monetary policies,tariff policy, labour policy, and the government attitude towards foreign capital, and Role to be played by multinational corporationsin the developmentof the industrialsector.
Industrial Policy | Objectives Industrial policy statements have been announced from 1948 onwards. Anumber of objectives have been projected by the Government of India while making industrial policy declarations. Some of the important objectives can be identified as follows: 1. Achieving a socialistic pattern of society. 2. Preventing undue concentration of economic power. 3. Achieving industrial development. 4. Reducing disparities in regional development.
Industrial Policy | Objectives Providing opportunities for gainful employment. Achieving a self-sustained economy. Achieving faster economic growth. Alleviating poverty. 6. 7. 8. 9. 10. Protecting and developing a healthy small- scale sector. 11. Updating technology and modernization of industry. 12. Liberalization and globalization of economy.
Industrial Policies from 1948 to1991 Industrial Policy Resolution 1948 (6April, 1948); Industrial Policy Resolution (30April, 1956); Industrial Policy Feb 2, 1973; Industrial Policy Dec 23, 1977; Industrial Policy Statement of July, 1980; Industrial Policy, July 24, 1991.
Industrial Policy Resolution 1948 (6 April, 1948) The Governmentof India announcedits first industrialpolicy resolutionon 6April,1948. The policy resolutionlaid stress on the role of the state in the developmentof industry. The industrial activitieswere divided into four broad areas: Items under central government control Manufacture of arms and ammunition,The production and control of atomic energy, Ownership and management of railway transport, etc. 1.
Industrial Policy Resolution 1948 (6 April, 1948) Items under the state government control Coal, Iron and Steel,Aircraft manufacture, Shipbuilding, Manufacture of telephone, telegraph and wireless apparatus, excluding radio receiving sets, Mineral oils, etc. Items of basic importance (planned & regulated by central government) Salt,Automobiles and Tractors, Electric Engineering, Other Heavy Machinery,Machine Tools, Heavy Chemicals,Fertilizers and Pharmaceuticals,Power, Cotton and Woollen Textiles, Cement, Sugar, Paper and Newsprint, etc. 2. 3.
Industrial Policy Resolution 1948 (6 April, 1948) Items for Private Sector The rest of the industrial field will be open to private enterprise. It also emphasisedon securing a continuous increasein productionand its equitable distribution. Importancewas given to small scale and cottageindustries. 4.
Industrial Policy Resolution (30 April, 1956) Industrial Policy Resolution (30April, 1956) was also regarded as the Economic Constitutionof India . Major Objectives of Industrial Policy Resolution(30April, 1956) are as follows: Improving living standards and working conditions for the mass of the people. To reduce disparities in income and wealth. To prevent private monopolies and concentration of economic power. 1. 2. 3.
Industrial Policy Resolution (30 April, 1956) Development of transport facilities. The State will progressivelyassume a predominant and direct responsibility for setting up new industrial undertakings and for developingtransport facilities. Undertake State trading on an increasing scale. Planned and rapid development. Expand public sector. Disparities in levels of development between different regions should be progressively reduced. 4. 5. 6. 7. 8. 9.
Industrial Policy Feb 2, 1973 The Industrial Policy Resolutionof 1956 still remainedvalid, but certain structural distortionshad crept in the system. The new policies were hence directed towards removingthese distortions. It provided for a closer interactionbetween the agriculturaland industrial sectors. Accordedthe highest priority to the generation and transmissionof power.
Industrial Policy Feb 2, 1973 Special legislationto protect cottage and householdindustrieswas also proposedto be introduced. It was also decidedthat compulsoryexport obligations,merelyfor ensuring the foreign exchangebalance of the project, would no longerbe insisted upon while approving new industrialcapacity.
Industrial Policy Dec 23, 1977 Industrial Policy Dec 23, 1977 Highlightson producinginputs needed by a large numberof smallerunits and making adequate marketing arrangements. To boost the developmentof small scale industries,the investmentlimit in the case of tiny units was enhanced to Rs.2 lakh, of a small scale units to Rs.20 lakh and of ancillariesto Rs.25 lakh.
Industrial Policy Dec 23, 1977 Industrial processes and technologiesaimed at optimumutilisationof energy or the exploitationof alternative sources of energy would be given special assistance,including finance on concessionalterms.
Industrial Policy Statement of July, 1980 Industrial Policy Statement of July, 1980 was based on Industrial Policy Resolution(30 April, 1956). The major objectivesare as follows: Optimum utilisation of installed capacity. Maximum production and achieving higher productivity. Higher employment generation. Promotion of export-oriented industries. 1. 2. 3. 4.
Industrial Policy Statement of July, 1980 Consumerprotection against high prices and bad quality. Correction of regional imbalances. Strengthening of the agricultural base through agro based industriesand promotion of optimum inter-sectoral relationship. 5. 6. 7.
Industrial Policy, July 24, 1991 Government is pledged to launching a reinvigorated struggle for social and economic justice, to end poverty and unemployment and to build a modern, democratic, socialist, prosperous and forward-looking India. Such a society can be built if India grows as part of the world economy and not in isolation. While Government will continue to follow the policy of self-reliance, there would be greater emphasis placed on building up our ability to pay for imports through our own foreign exchange earnings.
Industrial Policy, July 24, 1991 Government is also committed to development and utilisation of indigenous capabilities in technology and manufacturing as well as its upgradation to world standards. Government will continue to pursue a sound policy framework encompassing 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.
Industrial Policy, July 24, 1991 The spread of industrialisation to backward areas of the country will be actively promoted through appropriate incentives,institutions and infrastructure investments. Foreign investment and technology collaboration will be welcomed to obtain higher technology, to increase exports and to expand the production base. Labour will be made an equal partner in progress and prosperity. Workers participation in management will be promoted.
Industrial Policy, July 24, 1991 Need to preserve the environment and ensure the efficient use of available resources. Maintain sustained growth in productivity and gainful employment and attain international competitiveness. In pursuit of the above objectives, Government have decided to take a series of initiatives in respect of the policies relating to the following areas: Industrial Licensing. Foreign Investment. Foreign TechnologyAgreements. Public Sector Policy. MRTPAct. 1. 2. 3. 4. 5.
