3. Industrial Policy
What is industrial policy ?
Industrial policy is a statement which defines the
role of government in industrial development.
The industrial policy thus formally indicates the
spheres of activity of the public and the private
sectors.
4. Industrial Policy
It covers rules, regulations, principles,
policies, & procedures laid down by
government for regulating &
controlling industrial undertakings in
the country.
It prescribes the respective roles of the
public, private, joint, cooperative large,
medium & small scale sectors for the
development of industries.
5. Industrial Policy Contd...
It incorporates fiscal & monetary policies,
tariff policy, labor policy.
It shows the government attitude not only
towards external assistance but also
toward public & private sectors.
6. Main Objectives
To achieve optimal utilization of human
resources
To attain international competitiveness
and
To transform India into a major partner
and player in the global arena
7. Introduction of DIPP
The Department of Industrial Policy &
Promotion was established in 1995 and
has been reconstituted in the year 2000
with the merger of the Department of
Industrial Development.
8. Role & Function of DIPP
Encouragement to foreign technology
collaborations at enterprise level and
formulating policy parameters for the
same;
Administration of Industries
(Development & Regulation) Act, 1951
9. Role & Function of DIPP
Formulation of policies relating to
Intellectual Property Rights in the fields
of Patents, Trademarks, Industrial
Designs and Geographical Indications of
Goods and administration of regulations,
rules made there under
10. Role & Function of DIPP
Promoting industrial development of
industrially backward areas and the
North Eastern Region including
International Co-operation for
industrial partnerships and
Promotion of productivity, quality and
technical cooperation.
11. Industrial Policies
Industrial Policy Resolution of 1948
Industrial Policy Resolution of 1956
Industrial Policy Resolution of 1973
Industrial Policy Resolution of 1977
Industrial Policy Resolution of 1980
The New Industrial Policy of 1991
12. Industrial Policy 1991
Policy focus is on –
Deregulating Indian industry;
Allowing the industry freedom and
flexibility in responding to market
forces and
Providing a policy regime that
facilitates and fosters growth of Indian
industry.
13. Industrial Policy 1991
In pursuit of the industrial objectives,
Government decided to take a series of initiatives
in respect of the policies relating to the following
areas:
Industrial Licensing
Foreign Investment
Foreign Technology Agreements
Public Sector Policy
MRTP Act
14. Industrial Licensing Policy
The Industrial Policy Resolution of 1956 identified
the following three categories of industries:
Those that would be reserved for development in public
sector.
Those that would be permitted for development through
private enterprise with or without State participation.
Those in which investment initiatives would ordinarily
emanate from private entrepreneurs.
15. Industrial Licensing Policy
Industrial Licensing is governed by the
Industries (Development & Regulation)
Act, 1951.
Industrial licensing was abolished for all
industries, except those specified (18
industries), irrespective of levels of
investment.
16. Foreign Investment
Limit on foreign equity holdings raised from 40%
to 51% in a wide range of industries
Foreign Equity Proposals need not to be
accompanied by Foreign Technology Transfer
Agreement
Procedure for FDI streamlined by creating a
Foreign Investment Promotion Board to consider
individual application case by case
17. Foreign Technology Agreements
Foreign technology agreements in high-priority
industries up to Rs. 1 crore were given automatic
permission.
No permission was required for hiring foreign
technicians and foreign testing of indigenously
developed technologies.
18. Public Sector Policy
List of industries reserved for the public (Schedule A)
reduced from 17 to 8
List of sector reserved for dominance by public
sector (Schedule B) effectively abolished
Disinvestment in selected public sector enterprise to
raise finance for development, bring in greater
accountability & help create a new culture in their
working for improved efficiency
19. MRTP Act
Removed the threshold limits of assets in respect of MRTP
companies and dominant undertakings
Eliminated the requirement of prior approval of Central
Government for
Establishment of new undertakings
Expansion of undertakings
Merger, Amalgamation and Takeover
Appointment of Directors under certain circumstances.
The newly empowered MRTP Commission will be authorized
to initiative investigations on complaints received from
individual consumers or classes of consumers in regard to
monopolistic, restrictive and unfair trade practices.
20.
21. Conclusion
Industrial Policy of 1948 which adopted mixed economic system
approach, where in public and private sectors were to operate together
but the ground practicalities insisted to frame another Industrial Policy
within short period of time.
The 1956 Industrial Policy Resolution gave effective space to the
centrally controlled industries, State controlled industries and Joint
ventures for industrial development. The Policy Resolution introduced
the proposals to liberalize the Industrial Policy by relaxations to MRTP
and FERA Acts, re- defining the investment limits, de- licensing and
exemption to same categories of industrial sector, incentives for export
promotion, broad banding of industries, introduction of cottage
industries and several other financial concessions
22. The New Industrial Policy of 1991 became
liberalization, globalization and privatization and
towards this end, the Government introduced three
sets of reforms:- first, deregulation, delicencing,
decontrol and de-bureaucratisation of industrial
licensing system; two, liberalization of foreign trade
and currency transactions and third, institute several
measures to facilitate foreign direct investment
inflows. All these measures were launched in the year
1991 and since then, further liberalizations have been
introduced every year with each new budget.