REPORT OF THE NATIONAL COMMISSION ON LABOUR
cooperated with the Government, tomake India self-sufficient in the matterof its food requirements.3.2This economic expansioncontributed to a steady and impressivegrowth in India’s GNP. With theexception of 4 years, India experienceda positive rate of growth. As a result,India’s per capita Net National Product(NNP) in 1999-2000 was 2.75 timeshigher than that of 1951. The rate of growth before 1980 was 1.2% percapita. Thereafter, it grew at the rate of 2.4%, and between 1950-90, by 3.2%on average every year. Between 1993-94 and 1999-2000, it registered anaverage rate of growth of 4.8% peryear.3.3A variety of promotional policieswere followed by the Government toachieve this success. In the early years,Indian industry thrived within protectivetariff walls. The policy was toencourage Indian industries and thoughforeign technical collaborations wereencouraged, direct foreign investmentin any corporate body was restricted to40%. In 1991, this policy was changedcompletely and foreign majorityinvestment was encouraged in a varietyof industries, import restrictions wereremoved, customs tariff was broughtdown and the doors of the Indianeconomy were opened for foreigncompetition.3.4In this chapter, we will brieflytrace the developments that took placein the field of industrial economic policyof India during these years. The year1991 will now be regarded as alandmark in the economic history of India. Therefore, a more detailedreview of the economic policies after1991, and their effect on Indianeconomy has been attempted in thenext chapter.
INDUSTRIAL POLICY ANDINCENTIVES SINCE 1947
3.5After India became independentin 1947, the country embarked upon anambitious plan of industrialdevelopment and encouraged thesetting up of new industries and theexpansion of existing industries.3.6We may briefly recapitulatesome of the steps that were taken toachieve these objectives.3.7PROTECTION TO INDIANINDUSTRIES: India is probably one of the few countries in the world whichused its import policy for the healthydevelopment of local industries.Barring the first few years afterIndependence, the country was facinga shortage of foreign exchange, andbecause of this shortage, imports hadto be restricted. Imports of consumergoods were, therefore, disallowed. A