INDUSTRIAL POLICY

WHAT IS INDUSTRIAL POLICY? The Industrial Policy of a country, sometimes denoted IP, is its official strategic effort to encourage the development and growth of part or all of the manufacturing sector as well as other sectors of the economy. The government takes measures “aimed at improving the competitiveness and capabilities of domestic firms and promoting structural transformation.” A country's infrastructure (transportation, telecommunications and energy industry) is a major part of the manufacturing sector that often has a key role in IP.

MAJOR OBJECTIVES OF IPRapid Industrial DevelopmentBalanced industrial StructurePrevention of Concentration of Economic

PowerBalanced Regional Growth

Rapid Industrial Development

The industrial policy of the Government of India is aimed at increasing the tempo of industrial development. It seeks to create a favourable investment climate for the private sector as well as mobilise resources for the investment in public sector. In its way the government seeks to promote rapid industrial development in the country.

Balanced industrial Structure

• The industrial policy is designed to correct the prevailing lopsided industrial structure. Thus, for example, before independence, India had some fairly developed consumer goods industries. But the capital goods sector was not developed at all and basic and heavy industries were by and large absent.

• So the industrial policy had to be framed in such a manner that these imbalances in the industrial structure are corrected.

Prevention of Concentration of Economic Power

The industrial policy seeks to provide a framework of rules, regulations and reservation of spheres of activity for the public and the private sectors. This is aimed at reducing the monopolistic tendencies and preventing concentration of economic power in the hands of a few big industrial houses.

Balanced Regional Growth

Industrial policy also aims at correcting regional imbalances in industrial development. It is quite well-known that some regions in the country are industrially quite advanced e.g., Maharashtra and Gujarat while others are industrially backward, like Bihar, Orissa. It is the task of industrial policy to work out programmes and policies which lead to industrial development or industrial growth.

RESOLUTION OF INDUSTRIAL POLICY OF INDIA

INDUSTRIAL POLICY RESOLUTION 1948 (6th April )

INDUSTRIAL POLICY RESOLUTION 1956 (30th April)

INDUSTRIAL POLICY 1973 (2nd Feb)INDUSTRIAL POLICY 1977 (23rd Dec)INDUSTRIAL POLICY STATEMENT OF July,1980INDUSTRIAL POLICY 1991 (24TH July)

INDUSTRIAL POLICY RESOLUTION 1948 (6th April )

The Industrial Policy 1948 was presented in the parliament by then Industry Minister Dr. Shyama Prasad Mukherjee.OBJECTIVESOutlined the approach to industrial growth and

development.Emphasized the importance of securing a continuous

increase in production and ensuring its equitable distribution.

INDUSTRIAL POLICY RESOLUTION 1956 (30th April)

This resolution adopted by the Indian Parliament in April 1956. It was the first comprehensive statement on industrial development of India. The 1956 policy continued to constitute the basic economic policy for a long time.OBJECTIVES Improvement in the living standards and working condition for the mass of

the people, Reduction in income and the wealth disparities.Prevention of private monopolies and concentration of economic power in

diff. fields in the hands of small numbers of individual.

CONTINUED…Progressively predominant and direct responsibilities for the state in setting

up new industrial undertakings and developing transport facilities.Undertake state training on an increasing scale.Equal opportunity for the private sector to develop and expand.The need for planned and rapid development.Private sector to develop on the principle of cooperation.The adoption of the socialist pattern of the society as the national objective.The state can take any type of industrial production.

INDUSTRIAL POLICY 1973 (2nd Feb)

In the Industry Policy Statement 1973, the term “Core Industries” was included. It referred to the 6 Core Industries: Iron and Steel Industry Cement, Coal, Crude Oil ,Oil Refining and Electricity .They were called the basic industries or infrastructure industries.OBJECTIVESProvide for a closer interaction between agricultural and industial sector.Highest priority to the generation and transmission power.Proposal for special legislation to protect cottage and household

industries.

INDUSTRIAL POLICY 1977 (23rd Dec)The Industrial Policy Statement 1977 was announced by Janata Government led by Morarji Desai on 23 December, 1977. This policy was later replaced by incumbent Congress Government in 1980. This was the first time when a non-congress government was ruling dispensation at centre.OBJECTIVES Producing inputs needed by a large number of smaller units and making adequate marketing

arrangements, Upgrading the technology of smaller units. Promoting the development of the system of linkage between nucleus large plants and the

satellite ancillaries.

INDUSTRIAL POLICY STATEMENT OF July,1980

Congress (I) came back to power in 1980 indicated to thrust in Industrial Policy of 1956. On 25 July, 1980 the new Industrial Policy was announced.OBJECTIVES Revitalisation of the Public sector Economic Federalism Economic Federalism  Promotion of rural industries Removal of regional imbalances  Industrial sickness Regulation of Unauthorised Excess Capacity

INDUSTRIAL POLICY 1991 (24TH July)

For a faster growth of industry, it was necessary that even these impediments should be removed. The new government by Shri Narasimha Rao, which took office in June 1991, announced a package of liberalisation measures under its Industrial Policy on July 24, 1991.

OBJECTIVES

Liberalising the industry from the regulatory devices such as licenses and controls. Enhancing support to the small scale sector. Increasing competitiveness of industries for the benefit of the common man. Ensuring running of public enterprises on business lines and thus cutting their losses. Providing more incentives for industrialisation of the backward areas, and Ensuring rapid industrial development in a competitive environment.

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