Business Environment

2. The term industrial policy refers to the government’s
policy towards industries their establishment,
functioning, growth and management. The policy will
indicate the respective areas of the large, medium
and small scale sectors. The industrial development
of a country will be shaped, guided, fostered,
regulated and controlled by its industrial policy.
The concept of industrial policy is the broad concept
and it covers all those principle policies rules and
regulations which control the industrial undertaking of
a country.

3. Till 1990, our country had achieved a strong
structure. We are self depended in various consumer
goods. But our industries are still not successful in
generating sufficient employment and reduce
poverty. Our technology is also not up to world level.
Keeping in views this factors government declared
the industrial policy, 1991 to achieve international
competitiveness. It was announced in 24 July, 1991

4. 1. Industrial Policy – 1948
2. Industrial Policy – 1956
3. Industrial Policy – 1977
4. Industrial Policy – 1980
5. Industrial Policy – 1990
6. Industrial Policy - 1991

5. A number of objectives have been projected by the
Government of India while making industrial policy declarations.
Some of the important objectives are as follows:
1. To achieve industrial development.
2. To achieve economic growth.
3. To develop heavy and capital goods industry.
4. To expand the public sector.
5. To achieve faster economic growth.
6. To achieve self-sustained economy.
7. To protect and develop a healthy small sector.
8. Updation of technology and modernization of economy.
9. Building up a large and growing cooperative sector.
10.Liberalization and globalization of economy.

6. The main targets of new industrial policy, 1991 were removal
of poverty, reducing regional imbalances and making India a self
depend country.
OBJECTIVES:
1. To decentralize the sector.
2. To deregulate and debureaucratise the sector.
3. To review all statutes, regulations and procedures and effect
suitable modification, wherever necessary.
4. To promote small enterprise, especially industries in the tiny
sector.
5. To motivate small and sound enterpreneurs to set up new green
enterprises in the country.
6. To maintain a sustained growth in productivity and attain
competitiveness in the market economy, especially in the
international markets.
7. To industrialize the backward areas of the country.

7. To achieve these objectives, Industrial policy, 1991
introduced changes with respect to:
1.Industrial licensing
2.Foreign investment
3.Foreign technology agreement
4.Public sector policy
5.MRTP Act

8. 1. Competition between unequal. Relatively small Indian firms have to
compete with large foreign firms with huge resources and vast
experience.
2. The pattern and direction of development are determined mostly by
market forces, rather than by larger national interests.
3. Increasing presence of foreign firms would cause drain of income from
India to abroad.
4. Ecological deterioration, delicensing could result indiscriminate
industrial location and resources depletion, industrial location and
resources depletion, causing ecological problems and heavy social
costs.
5. Increasing FII (Foreign Institutional Investors) investment would mean
that, the Indian stock market is increasingly influenced by foreign
players. This would also mean spanning away of profits of Indian firms
by foreign players