idract 1951

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Industrial Development and

Regulation Act

• By R.Suresh

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Introduction

• Growth of the industrial sector at a higher

rate and on a sustained basis is a major

determinant of a country's overall economic

development. In this regard, the

Government of India has issued industrial

policies, from time to time, to facilitate andfoster the growth of Indian industry and

maintain its productivity and

competitiveness in the world market.

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Objectives

• The main objectives of the Act is to empower the

Government:- (i) to take necessary steps for the

development of industries; (ii) to regulate the pattern and direction of industrial development;

(iii) to control the activities, performance and

results of industrial undertakings in the public

interest. The Act applies to the 'ScheduledIndustries' listed in the First Schedule of the Act.

However, small scale industrial undertakings and

ancillary units are exempted from the provisions

of this Act.

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Objectives

• The Act is administered by the Ministry of

Industries & Commerce through its Department of

Industrial policy and promotion. The DIPP isresponsible for formulation and implementation of

promotional and developmental measures for

growth of the industrial sector. It monitors the

industrial growth and production, in general, andselected industrial sectors, such as cement, paper

and pulp, leather, tyre and rubber, light electrical

industries, consumer goods, consumer durables,

light machine tools etc..

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IDRA….

• In particular its also responsible for

facilitating and increasing the foreign direct

investment (FDI) inflow into the country aswell as for encouraging acquisition of

technological capability in various sectors

of the industry.

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Provisions of the Act

• Establishment of a 'Central Advisory

Council' for the purpose of advising the

Central Government on matters concerningthe development of the industries, making

of any rules and any other matter connected

with the administration of the Act. Itsmembers shall consist of representatives of

the owners of industrial undertaking,

employees, consumers, primary suppliers,

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Main provisions of the Act

• Establishment of a 'Development Council'

for the purpose of development of any

scheduled industry or group of scheduledindustries. This council shall consist of the

members representing the interests of the

owners, employees, consumers, etc. and persons having special knowledge of

matters relating to the technical or other

aspects of the industries.

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• The development council shall perform the following

functions assigned to it by the Central Government:- (i)

recommending targets for production, co-ordinating

production programmes and reviewing progress from time

to time. (ii) suggesting norms of efficiency with a view to

eliminating waste, obtaining maximum production,

improving quality and reducing costs. (iii) recommending

measures for securing the fuller utilisation of the installedcapacity and for improving the working of the industry,

particularly of the less efficient units

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• promoting arrangements for better

marketing and helping in the devising of a

system of distribution and sale of the produce of the industry which would be

satisfactory to the consumer. (v) promoting

the training of persons engaged or proposing engagement in the industry and

their education in technical or artistic

subjects relevant thereto, etc.

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Licensing

• The IDRA empowers the Central

Government to regulate the development of

industries by means of licensing withsuitable exemptions as decided by the

Government. Accordingly, the entry into a

business or the expansion of an existing business may be regulated by licensing

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Licensing

• A licence is a written permission from the

Government to an industrial undertaking to

manufacture specified articles included inthe Schedule to the Act. It contains

particulars of the industrial undertaking, its

location, the articles to be manufactured, itscapacity on the basis of the maximum

utilisation of plant and machinery, and other

appropriate conditions which are

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IDRA…

• The power of control entrusted to the Central

Government under the Act extends to that of the

take over of the management of the whole or any part of an industrial undertaking which fails to

comply with any of the directions mentioned

above. The Government can also take over the

management of an undertaking which is beingmanaged in a manner highly detrimental to the

scheduled industry concerned or to the public

interest

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IDRA…

• Further, the Central government can take

over the management of industrial

undertaking owned by a company under liquidation, with the permission of the High

Court, if the Government is of the opinion

that the running or restarting the operationsof such an undertaking is necessary for the

maintaining or increasing the production,

supply or distribution in the public interest

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IDRA..

• In today's scenario, only 6 categories of

industries require industrial licensing under

the Industries (Development andRegulation) Act, 1951 (IDRA). Such

industries file an Industrial Entrepreneur

Memoranda (IEM) with the Secretariat of Industrial Assistance (SIA),Department of

Industrial Policy and Promotion to obtain an

acknowledgement.

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Information Technoly Act 2000

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Introduction

• Digital Technology and new communication

systems have made dramatic changes in our lives.

• We are all increasingly using computers to create,transmit and share information in the electronic

form instead of the traditional paper documents.

• A revolution is occuring in the way people

transact and also do business

• Business and consumers are increasingly using

computers to create,transmit and store

information instead of traditional paper.

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Introduction

• It is cheaper,easier to store ,retrieve and

speedier to communicate….earlier post

cards, inland letters etc

• Although people are aware of these

advantages ,they are reluctant to conduct

business or conclude any transaction in theelectronic form due to lack of appropriate

legal framework.

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Introduction

• Two principal hurdles which stand in the

way of facilitating elctronic commerce and

electronic governance are the requirementsas to writing and signature for legal

recognition.

• The Law of evidence is traditionally basedupon paper based records and oral

testimony.

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Introduction

• Since electronic commerce eliminates the

need for paper based transactions,hence to

facilitate e commerce, the need for legalchanges have become an urgent

necessity.International trade through the

medium of e commerce is growing rapidlyin the last few years and many countries

have switched over from traditional paper

based commerce to e commerce.

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Introduction

• The united nations commission on

International Trade Law…adopted the

model law on electronic commerce in 1996.

• The General assemble of UN IN 1997

recommended that all states should have or

give favourable considerations to the saidmodel.when they act or revise their laws.

• Changes expected in IPC, IEA etc..to provide for

necessary changes in the various provisions

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Introduction

• Which deal with offences relating to

documents and paper transactions.

Electronic fund transfers, give legal sanctityfor books of account to be maintained in the

electronic form by banks.

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Information Technology Act 2000

• An act to provide for transactions carried

out by means of electronic data interchange

and other means of elctroniccommunication , commonly referred to as

Electronic commerce which involve the use

of alternatives to paper based methods of communication with the Government

agencies and further to amend the Indian

Penal code the Indian Evidence act

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Some definitions

• The Bankers Book evidence act 1891(for

maintianng records) and the Reserve bank

of India act 1934.

• Communication device – means all cell

phones ,personal digital assistance or

combination of both or any other deviseused to communicate,send transmit any text,

video, audio or image

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Some definitions..

• Cyber café…means any facility from where access

to the internet is ofered by any person in the

ordinary couse of business to the memebrs of the public..

• Cyber security means protecting information,

equipment ,devices, computer resources

.communication device and information stored

therein from unauthorised access disclosure

disruption modification or destruction

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Data

• Data means a representation of information

,knowledge,facts,concepts or instructions which

are being prepared or have been prepared in aformalised manner..and is intended to be

processed..in a computer system..and may in

anyform..including computer print outs,magnetic

or optical storage media ,punched cards ,punchedtapes etc or stored internally in the memeory of

the computer ..

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Digital Signature..

• Digital signature means authentication of

any electronic record by a subscriber by

means of an electronic method or procedure in accordance with the provisions

of section 3…

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Computer

• ‘Computer’ means any electronic, magnetic,

optical or other high speed data processing device

or system which performs logical, arithmetic andmemory functions by manipulations of electronic,

magnetic or optical impulses, and includes all

input, processing, storage, computer software or

communication facilities which are connected or related to the computer in a computer in a

computer system or computer network.

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Computer network

• ‘Computer network’ means the inter -

connection of one or more computers or

computer systems or communication devicethrough-

• The use of satellite, microware, terrestrial line wire, wireless or

other communication media; and

• Terminals or a complex consisting of two or more inter-

connected computers or communication device whether or not

the inter-connection is continuously maintained

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Computer resource

• ‘Computer resource’ means computer,

computer system, computer network, data,

computer data base or software.

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Electronic signature

• ‘Electronic signature’ means authentication

of any electronic record by a subscriber by

means of the electronic specified in theSecond Schedule and includes digital

signature.

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Section 3

• Digital signature and electronic signature..

• Any subscriber may authenticate an

electronic record by affixing his digital

signature.

• The authntication of the elctronic record

shall be effected by the use of asymmetriccrypto sytem and hash function which

envelop and tranform the initial elctronic

record into another electronic record

idract 1951

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