Industrial Policies

What are the industrial policies?

An industrial policy (IP) or industrial strategy of a country is its official strategic
effort to encourage the development and growth of all or part of the economy,
often focused on all or part of the manufacturing sector.

What are the significance of industrial policy?

The main objective of any industrial policy is to augment the industrial
production and thereby enhance the industrial growth which leads to economic
growth by optimum utilization of resources; modernization; balanced industrial
development; balanced regional development (by providing concessions for
industrial 

What are the implications of industrial policy on Indian economy post

independence?

It creates employment, promotes research and development, leads to

modernization and ultimately makes the economy self-sufficient. In fact,
industrial development even boosts other sectors of the economy like the
agricultural sector (new farming technology) and the service sector.

What is the new industrial policy?

New Industrial Policy of the Government: liberalization, deregulation and
privatisation. The Industrial Policy specifies the relevant roles of the public,
private, joint and co-operative sectors; small, medium and large scale industries.
It emphasises the national significances and the financial development strategy.
How does industrial policy impact on the economy and industry?
In addition, by using a set of means, such as credit, taxation, subsidies and entry
threshold reduction, industrial policy can decrease market failures caused by
factors such as externalities and imperfect market mechanism, improve resource
allocation efficiency and promote industrial development
What are the main objectives of industrial policy of 1991?
 NEW INDUSTRIAL POLICY-1991

1. To liberalise the economy

2. To increase employment opportunities

3. To encourage foreign assistance and co partnership

4. To make the public sector more competitive

5.To increase the production and productivity, give encouragement to industries

6. To liberate the economy from various government restrictions

7. Industrial development of backward areas

8. To give liberty to private sector to work independently

9. To make development for modern competitive economy

10. To give encouragement for expansion of production capacity

11. To increase export and liberalise {facilitate) imports.

Objectives of the Industrial Policy

The quest for industrial development started soon after independence in 1947.
The Industrial Policy Resolution of 1948 defined the broad contours of the policy
delineating the role of the State in industrial development both as an
entrepreneur and authority. This was followed by comprehensive enactment of
Industries (Development & Regulation) Act, 1951 (referred as IDR Act) that
provides for the necessary framework for implementing the Industrial Policy and
enables the Union Government to direct investment into desired channels of
industrial activity inter alia through the mechanism of licensing keeping with
national development objectives and goals.
The main objectives of the Industrial Policy of the Government are:

(i) to maintain a sustained growth in productivity;

(ii) to enhance gainful employment;
(iii) to achieve optimal utilisation of human resources;
(iv) to attain international competitiveness; and
(v) to transform India into a major partner and player in the global
arena.

To achieve these objectives, the Policy focus is on deregulating Indian

industry; allowing freedom and flexibility to the industry in
responding to market forces; and providing a policy regime that
facilitates and fosters growth. Economic reforms initiated since 1991
envisages a significantly bigger role for private initiatives. The policy
has been progressively liberalized over years to at present, as would
be evident in subsequent paragraphs.