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• 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 co-operative sectors for the development of industries. • It also indicates the role of the large, medium and small scale sector.
• It incorporates fiscal and monetary policies, tarrif policy, labour policy, and the government attitude towards foreign capital, and
• Role to be played by multinational corporations in the development of the industrial sector.
Objectives of Industrial Policies
Industrial policy statements have been announced from 1948 onwards . A number of objectives have been projected by the Government of India while making industrial policy declarations. Some of the important objectives can be identified as follows:
• • • • • • •
Achieving a socialistic pattern of society Preventing undue concentration of economic power Achieving industrial development Reducing disparities in regional development Developing heavy and capital goods industry Providing opportunities for gainful employment Expanding the public sector for achieving socialism
• • • • • • Achieving a self-sustained economy Achieving faster economic growth Alleviating poverty Protecting and developing a healthy smallscale sector Updating technology and modernization of industry Liberalization and globalization of economy Many measures have been adopted by the central government for the accomplishment of these industrial policy objectives. .
India’s Industrial Policies from 1948 to 1991 .
. The present statement of industrial policy is inspired by these very concerns.Pandit Jawaharlal Nehru laid the foundations of modern India. were as follows: • Rapid agricultural and industrial development of the country • Rapid expansion of opportunities for gainful employment • Progressive reduction of social and economic disparities • Removal of poverty and attainment of self-reliance These objectives remain as valid today as at the time Pandit Nehru first set them out before the nation. The goals and objectives set out for the nation by Pandit Nehru on the eve of Independence. and represents a renewed initiative towards consolidating the gains of national reconstruction at this crucial stage. Any industrial policy must contribute to the realisation of these goals and objectives at an accelerated pace. It is due to his initiative that India now has a strong and diversified industrial base and is a major industrial nation of the world.
The production and control of atomic energy and Ownership and management of railway transport Further in any emergency. Items under central government control – Manufacture of arms and ammunition.Industrial Policy Resolution of 1948 The Government of India announced its first industrial policy resolution on 6 April.1948. . the Government would always have the power to take over any industry vital for national defense. The policy resolution laid stress on the role of the state in the development of industry. The industrial activities were divided into four broad areas: 1.
Items under the state government control ( which in this context. State Governments and other Public Authorities like Municipal Corporations ) Coal Iron and Steel. Shipbuilding.2. • • • • • • . Manufacture of telephone. Mineral oils. includes Central. excluding radio receiving sets. telegraph and wireless apparatus. Aircraft manufacture.
3. would be planned and regulated by the Central government The following are such basic industries: Salt Automobiles and tractors Electric engineering Other heavy machinery Machine tools Heavy chemicals. Fertilizers and pharmaceuticals and drugs Rubber manufactures Power Cotton and woolen textiles Cement Sugar Paper and Newsprint Air and Sea transport. Items of basic importance. and so on .
cloth and agricultural implements. The State will also progressively participate in this field.4. These industries are particularly suited for the utilization of local resources and for the achievement of the local self-sufficiency in respect of certain types of essential consumer goods like food. Highlights of the Policy: The 1948 resolution accepted the importance of small and cottage industries in industrial development. . Items for Private Sector: The rest of the industrial field will normally be open to private enterprise. nor will it hesitate to intervene whenever the progress of an industry under private enterprise is unsatisfactory .
cheap power.The healthy expansion of cottage and small scale industries depends upon a number of factors like the provision of raw materials. Most of these are receiving the attention of the Governments . as the education of the worker in the use of the best available technique. . technical advice. and where necessary. safeguards against intensive competition by large scale manufacture.
• • • The constitution of India has been enacted. Planning has proceeded on an organised basis. These important developments necessiate a fresh statement of industrial policy.Industrial Policy Resolution 1956 Introduction: Eight years have passed since the declaration of Industrial policy 1948. . guaranteeing certain fundamental rights and enunciating Directive Principles of State Policy. These eight years have witnessed many Important changes and developments in India. Parliament has accepted the socialist pattern of society as the objective of social and economic policy. more particularly as the Second Five Year Plan will soon be placed before the country. and the first Five Year Plan has recently been completed.
The 1956 Policy was regarded as the “ economic constitution of India “. economic and political. social." . it is stated that – "The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice.This policy also emphasised that industrial development of the country should be guided by the Directive Principles laid down in the Constitution. shall inform all the institutions of the national life. Directive Principles: In its Directive Principles of State Policy.
Further that"The State shall. men and women equally. that there is equal pay for equal work for both men women. that the ownership and control of the material resources of the community are so distributed as best to sub serve the common good. . direct its policy towards securing: that the citizens. that childhood are protected against exploitation and so on. in particular. that the operation of the economic system dies not result in the concentration of wealth and means of production to the common detriment. have the right to an adequate means of livelihood.
To expand cottage. To reduce the disequilibrium in the distribution of income and wealth. To build a cooperative sector. village and small-scale industry.Objectives of the 1956 Industrial Policy • • • • • • • • To accelerate the rate of growth and speed up industrialisation. To expand public sector. To develop heavy and machine industry. To curtail the concentration of economic power in few hands. To achieve balanced regional development and other socio-economic objectives. .
. which are essential and require investment on a scale which only the state.The adoption of the socialist pattern of society as the national objective. having regard to the part which the State would play in each of them. Nevertheless. Other industries. and to make a selection of industries in the development of which it will play dominant role. should be in the public sector. therefore. or in the nature of public utility services. there are limiting factors. It should also be remembered that it is always open to the State to undertake any type of industrial production. the Government of India have decided to classify industries into three categories. has. to assume direct responsibility for the further development of industries over a wider area. After considering all aspects of the problem in consultation with the Planning Commission. as well as the need for planned and rapid development. which make it necessary at this stage for the state to define the field in which it will undertake sole responsibility for further development. require that all industries of basic and strategic importance.
.Features of the Policy The 1956 resolution divided industries into three categories: • Monopoly of the State • Mixed Sector • Industries left for Private Sector Monopoly of the State In this list (Schedule A) industries the future development of which will be the exclusive responsibility of the State were included.
10. manganese ore.Railway transport. crome-ore.Coal and lignite.Atomic energy. Minerals specified in the Schedule to the Atomic Energy (Control of production and Use) Order.Telephones and telephones cables. 13.Mining of iron ore. 5. 2. lead.Arms and ammunition.Mineral oils. gold and diamond. 4.SCHEDULE A 1.Shipbuilding.Heavy electrical plant including large hydraulic and steam turbines. . 12.Iron and Steel. telegraph and wireless apparatus 17.Heavy castings and forgings of iron and steel. gypsum. 11.Aircraft. zinc etc. 15. 7. 16.Mining and processing of copper. 14. sulphur.Generation and distribution of electricity. 9.Air transport. 1953. 3. 8.Heavy machinery 6.
 The word ous metals include steel and pig iron (which contain a few percent of carbon) and alloys of ir s is used to indicate metals other than iron and alloys that do not contain an appreciable am .Mineral oil is one of a number of inexpensive byproducts that are made from petroleum. Sometimes referred to as paraffin oil. ferrous is an adjective used to indicate the presence of iron. or liquid petroleum.
generally take the initiative in establishing new undertakings. therefore.Mixed Sector In this list (Schedule B) 12 industries were included. but in which private enterprise will also be expected to supplement the efforts of the State. . These will be progressively State-owned and in which the State will.
Aluminum and other non-ferrous metals not included in Schedule A. Antibiotics and other essential drugs. Carbonisation of coal. Road transport. Machine tools. Sea transport. dye-stuffs and plastics. Basic and intermediate products required by chemical industries such as the manufacture of drugs. . Ferro-alloys and tool steels. Fertilizers Synthetic rubber. Chemical pulp.• • • • • • • • • • • • SCHEDULE B All other minerals except ‘minor minerals’ as defined in Section 3 of the Minerals Concession Rules 1949.
The major producers in the India heavy chemical industry: Pidilite Industries Limited Asian Paints Balmer Lawrie Indian Petrochemical Corporation Limited Ciba Specialty Chemicals ION Exchange Gujarat Narmada Valley Fertilizers Company Rallis United Phosphorus IFFCO Bayer CropScience Limited Hindustan Lever Limited Reliance Industries Limited Clariant India BASF India .