The Industrial Policy Resolution of 1956 aimed to accelerate industrialization in India. It classified industries into three schedules based on the role of the state: Schedule A included industries like steel and mining that would be under exclusive state control. Schedule B included industries like machine tools and fertilizers that the state would increasingly establish public sector units in. Other industries were left open to the private sector. The resolution also emphasized developing cottage and small-scale industries to promote employment and reduce regional disparities. It stressed the importance of industrial peace and expanding technical education.
The Industrial Policy Resolution of 1956 aimed to accelerate industrialization in India. It classified industries into three schedules based on the role of the state: Schedule A included industries like steel and mining that would be under exclusive state control. Schedule B included industries like machine tools and fertilizers that the state would increasingly establish public sector units in. Other industries were left open to the private sector. The resolution also emphasized developing cottage and small-scale industries to promote employment and reduce regional disparities. It stressed the importance of industrial peace and expanding technical education.
The Industrial Policy Resolution of 1956 aimed to accelerate industrialization in India. It classified industries into three schedules based on the role of the state: Schedule A included industries like steel and mining that would be under exclusive state control. Schedule B included industries like machine tools and fertilizers that the state would increasingly establish public sector units in. Other industries were left open to the private sector. The resolution also emphasized developing cottage and small-scale industries to promote employment and reduce regional disparities. It stressed the importance of industrial peace and expanding technical education.
Industrial policy is an important instrument through which the government regulates the industrial activity in an economy. The main aim of industrial policy is to direct the pattern of industrial development and the speed of industrialisation in accordance to the economic programme of the government. Therefore, industrial policy spells out the role of government in the development of industries, role of public enterprises, role of private enterprises, etc. The 1956 Resolution laid down the following objectives of industrial policy: (a) To accelerate the rate of growth and to speed up industrialisation; (b) To develop heavy industries and machine making industries; (c) To expand public sector; (d) To reduce disparities in income and wealth; e)To build up a large and growing cooperative sector; and income in the hands of small To prevent monopolies and concentration of wealth and a
number of individuals. The features of Industrial Policy Resolution of 1956 were: 1. New Classification of Industries. Industries were classified into three schedules depending
upon the role of the State:
of the State. a) Industries whose future development would be the includedresponsibility exclusive defence industries, heavy 17 such industries were listed in Schedule 'A' which industries dustries like steel, mahinoru like steel. machinery, haa heavy electricals, mining industries ore, bauxite liron ore d..abrios (iron and other petroleum, important minerals), energy and power (atomic energY Coay
electricity generation, etc.), transport and communication, etc.
(b) Industries in which the State would te sector units increasingly establish new units ou ndustries would be allowed to expand existine units and set up new units. Lz were included in u Schedule B'. These were machine tools, ferroalloys, non-ferrous metals, fertilizers, drugs and pharmaceuticals, dye stuffs and plastic, road aand ocean ocean transport, synthetic rubber, etc. (c) Other residual industries were left open to the private sector. In this category, the a e the power to start any new undertaking in public interest. 2. Stress on the Role of Cottage and Small-scale Industries. The 1956 resolutionrecogOr uie the critical role of cottage and small-scale industries in economic development Country. 3. Reduction in Regional Disparities. The disparities in the level of different regions should be progressively reduced. Facilities for development between development will be made available to the industrially backward areas. 4. Emphasis on Industrial Peace. The need for maintenance and promotion of industria peace and cordial relations between employers and employees was stressed. Reasonable wages, good working conditions and participative management were given emphasis. 5. Technical Education and Training. Need was felt to develop technical and management education and training facilities to meet the growing needs for technical and managerial personnel in industrial units. 2.5.7 Small Scale Industry (SSI) ne investment limit for small scale industries and ancillary units is 1 crore. However, t ntare technology upgradation and enhance competitiveness, the investment limit (in plant and acinery) has been raised from 1 crore to 5 crores in respect of 69 items reserved for c T u r e in the small scale sector and for all tems in the drugs and pharmaceuticals sector. Role of Small Scale Industries ois have found their economic rationale in the Mahalanobis model which forms the theoretical Dasis of India's second and subsequent five year plans. It focussed on the development of highly capltal-intensive large scale basic and means to heavy industries. It underlined the development of S5Is as a promote employment. Role of SSIs and cottage industries is clear from the . Labour Intensive. SSIs are labour intensive in following: labour and are best suited character, i.e., they require more units ot for solving the problem of unemployment. 2. 3. Self-employment. SSIs provide opportunities for self-employment. Less Capital Intensive. SSIs are less capital intensive, amount of capital to i.e., they require relatively smaller SSI is best suited to produce a commodity. In a country like India where capital is scarce, bring about industrial development. 4. Import Light. SSIs are import light, i.e., low import reduces the need for foreign intensity in the capital structure of SSI capital. 5. Export Promotion. SSls offer vast opportunities for great demand in advanced countries. export promotion. These goods are in 6. Equal Distribution of Income. SSIs can serve more even distribution of income and wealth as compared to large-scale industries. 7. Decentralisation of Industries. SSIs bring about decentralisation of promote the objective of regional development. industries and, thus. 8. Seed Beds for Large-scale Industries. SsIs provide all the essential raw materials to 4h large-scale industries which are needed for their development. 9. Sustaining Agricultural Development. The development of Ssls will divert labor f om agriculture to industries which will bring about a more desirable occupational struch will relieve agriculture from pressure of population. Ssls can bring about nd development through promotion of agro-based industries like agricultural ural agricultural machinery, machin repairs and service workshops, etc.