INDUSTRIAL POLICY OF INDIA REFORMS SINCE

1991

A SEMINAR ON BUSINESS ENVIRONMENT

DIGIN GEORGEDRISYA .C .PFAZEEN RASHEED . A. KGREESHMA . V .S

WE…

INTRODUCTION OBJECTIVES HIGHLIGHTS OF POLICY AREAS MERITS LIMITATIONS IMPACT OF INDUSTRIAL POLICY

CONTENT

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 cooperative sectors for the development of industries. It also indicates the role of the large , medium , and small sector . It incorporates fiscal and monetary policies, tariff policy , labor policy and the government attitude towards foreign capital, and role to be played by multinational corporations in the development of the industrial sector.

MEANING: INDUSTRIAL POLICY

Industry has played A central role in India’s developmental effort. Industry has enjoyed A special position as the sector that would lead India in to modern world .It reduces economic dependence on other countries and generate other income needed to eliminate poverty.

NEW INDUSTRIAL POLICY AN INTRODUCTION

Nehru laid the foundation of modern India . The goals and objectives set out for the nation by Nehru. Rapid agricultural and industrial

development of our country Rapid expansion of opportunities for

gainful employment Progressive reduction of social and

economic disparity Removal of poverty and attainment of

self reliance

Industrial policy resolution of 1948

Industrial policy resolution of 1956

Industrial policy resolution of 1973

Industrial policy resolution of 1977

Industrial policy resolution of 1980

Industrial policy resolution of 1991

INDUSTRIAL POLICIES

Continuous increase in production Ensuring the equitable distribution of revenue Improvement of role of small and cottage

industries Outlined the approach to industrial growth

and development Emphasized the importance of securing a

continuous increase in production and ensuring its equitable distribution.

INDUSTRIAL POLICY 1948-MAIN OBJECTIVES

To accelerate the rate of economic growth. To expand the public sector, develop heavy and

machine making industry To increase employment opportunities To prevent creation of monopolies To build up A large and growing pvt. Sector To expand the cottage, village,and small scale

industries To achieve balanced industrial development

INDUSTRIAL POLICY 1956-OBJECTIVES

Certain structural distortions called for policy changes in IPR 1956

Provide for a closer interaction between the agricultural and industrial sectors

Identify products to be reserved for the small scale sector: list of industries exclusively reserved for the small scale sector expanded from 180 items to more than 500 items.

INDUSTRIAL POLICY 1973-MAIN OBJECTIVES

Highest priority to the generation and transmission of power.

Identify high priority industries. Attract foreign companies in our country.

Within the small scale sector, a tiny sector was also defined with investment in machinery andequipment up to Rs.1 lakh & located in townswith a population < 50,000 according to1971 census figures, and in villages.

INDUSRIAL POLICY 1977-MAIN OBJECTIVES

Proposal for special legislation to protect cottage and household industries

Emphasis on decentralization and role of small scale industries.

Prevention of monopoly and concentration of economic power

Maximum production of consumer goods.

Promoting competition in the domestic market Technology up gradation and modernization. Encourage foreign investment in high

technological areas. To maximize production. To strengthen agricultural base by giving priority

to agro based industries. Consumer protection against high prices and bad

quality goods.

INDUSTRIAL POLICY 1980-MAIN FEATURES

Self reliance to build on the many sided gains already made

Encouragement to Indian entrepreneurship, promotion of productivity and employment generation

Removing the regulatory system and other weakness

Increasing the competitiveness of industries for the benefit of the common man

Enhanced support to the small scale sector

INDUSTRIAL POLICY 1991 -OBJECTIVES

Conti… Incentive for the Industrialization of backward

areas Ensure running of public sector undertakings

on business lines and cut their losses Development of indigenous technology through

greater investment in R&D and bringing in new technology to help Indian manufacturing units attain world standards

Protect the interest of workers

Conti… Abolish the monopoly of any sector in any field of

manufacture except on strategic or security grounds

To link Indian economy to the global market so that we acquire the ability to pay for imports and to make us less dependent on aid.

De reservation of industries for the public sector De licensing Abolition of phased manufacturing program Removal of mandatory convertibility clause Amendment of monopolies restrictive trade practices Encouragement to foreign investment Change of policy in small scale industry

HIGHLIGHTS OF 1991 POLICY

Industrial licensing policies Foreign investment Foreign technology agreement Public sector policy MRTP act

AREAS OF INDUSTRIAL POLICIES BY GOVT.

Competitive industry Freedom to entrepreneurs Liberalization Performance of govt. Undertaking Integration with world economy Open the economy

MERITS OF INDUSTRIAL POLICY 1991

No priority to backward area No solutions for sickness of industries Reduction in the expected foreign investment Surrender to IMF Offloading of 20% equity in profit making

LIMITATIONS OF INDUSTRIAL POLICY

Changes in technology Product diversity Market concentration Geographical dispersion Destabilization of protected environment Export-a matter of survival All round competition Buyer’s market

IMPACT OF CHANGES IN GOVT. POLICY IN BUSINESS AND INDUSTRY

CONCLUSION

ESSENTIALS OF BUSINESS ENVIRONMENT- K. ASWATHAPPA - HIMALAYA PUBLISHING HOUSE- SEVENTH EDITION -2000

BUSINESS ENVIRONMENT- SURESH BEDI-

REFERENCES

QUERIES?

THANK YOU