SUBBMITTED TO:- KINJAL MISTRY MADAM

MACRO ECONOMIC & BUSINESS ENVIRONMENT

Industrial Policy

Group Member

Mukesh Baraiya 14MBA006Bhadresh Beladiya 14MBA008Ajay Chauhan 14MBA012Keval Patel 14MBA062Manish Prajapati 14MBA082Yatin Patel 14PGDM019

Industrial Policy

What is industrial policy ? Industrial policy is a statement which

defines the role of government in industrial development.

The industrial policy thus formally indicates the spheres of activity of the public and the private sectors.

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.

Industrial Policy Contd...

It incorporates fiscal & monetary policies, tariff policy, labor policy.

It shows the government attitude not only towards external assistance but also toward public & private sectors.

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

Introduction of DIPP

The Department of Industrial Policy & Promotion was established in 1995 and has been reconstituted in the year 2000 with the merger of the Department of Industrial Development.

Role & Function of DIPP

Encouragement to foreign technology collaborations at enterprise level and formulating policy parameters for the same;

Administration of Industries (Development & Regulation) Act, 1951

Role & Function of DIPP

Formulation of policies relating to Intellectual Property Rights in the fields of Patents, Trademarks, Industrial Designs and Geographical Indications of Goods and administration of regulations, rules made there under

Role & Function of DIPP

Promoting industrial development of industrially backward areas and the North Eastern Region including International Co-operation for industrial partnerships and

Promotion of productivity, quality and technical cooperation.

Industrial Policies

Industrial Policy Resolution of 1948Industrial Policy Resolution of 1956Industrial Policy Resolution of 1973Industrial Policy Resolution of 1977Industrial Policy Resolution of 1980The 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 (18 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 up to Rs. 1 crore were given automatic permission.

No permission was required for hiring foreign technicians and foreign testing of indigenously developed technologies.

Public Sector PolicyList of industries reserved for the public

(Schedule A) reduced from 17 to 8

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

MRTP Act

Removed the threshold limits of assets in respect of MRTP companies and dominant undertakings

Eliminated the requirement of prior approval of

Central Government for Establishment of new undertakings Expansion of undertakings Merger, Amalgamation and Takeover Appointment of Directors under certain circumstances.

The newly empowered MRTP Commission will be authorized to initiative investigations on complaints received from individual consumers or classes of consumers in regard to monopolistic, restrictive and unfair trade practices.

Conclusion

Industrial Policy of 1948 which adopted mixed economic system approach, where in public and private sectors were to operate together but the ground practicalities insisted to frame another Industrial Policy within short period of time.

The 1956 Industrial Policy Resolution gave effective space to the centrally controlled industries, State controlled industries and Joint ventures for industrial development. The Policy Resolution introduced the proposals to liberalize the Industrial Policy by relaxations to MRTP and FERA Acts, re- defining the investment limits, de- licensing and exemption to same categories of industrial sector, incentives for export promotion, broad banding of industries, introduction of cottage industries and several other financial concessions

The New Industrial Policy of 1991 became liberalization, globalization and privatization and towards this end, the Government introduced three sets of reforms:- first, deregulation, delicencing, decontrol and de-bureaucratisation of industrial licensing system; two, liberalization of foreign trade and currency transactions and third, institute several measures to facilitate foreign direct investment inflows. All these measures were launched in the year 1991 and since then, further liberalizations have been introduced every year with each new budget.

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