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Industrial policy,1991

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Industrial policy,1991MANAGERIAL ECONOMICS

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Industrial policy,1991

  1. 1. PRESENTATION ONINDUSTRIAL POLICY, 1991 MASTER OF SOCIAL WORKS-II YR
  2. 2. SYNOPSIS• MEANING: INDUSTRIAL POLICY• OBJECTIVES OF INDUSTRIAL POLICY• OBJECTIVES OF NEW INDUSTRIAL POLICY• FEATURES OF NIP• INDUSTRIAL POLICIES• POSITIVES AND WATCH-OUTS
  3. 3. MEANING: INDUSTRIAL POLICY 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 cooperative sectors for the development of industries. It also indicates the role of the large , medium , and small sector . It incorporates fiscal and monetary policies, tariff 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.
  4. 4. OBJECTIVES OF INDUSTRIAL POLICY Accelerating the overall rate of Preventing monopolies and growth through industrialization. concentration of industrial Expanding the industrial base in power. relation to industrialization needs of the country. Creating competitive conditions Generating employment and and encouraging the growth of reducing poverty. entrepreneurship Promoting balanced industrial development. Promoting linkages with others sectors of the economy. Assisting small enterprises Encouraging the growth of industrial research and development
  5. 5. OBJECTIVES OF NEW INDUSTRIAL POLICY Attainment of international competitiveness. Revival of Development of weak units. backward areas. Full utilization Encouraging of plant competition capacities to within Indian generate industry. employment. Efficient use of productive resources.
  6. 6. FEATURES OF NIP• De-reservation of Public Sector: The number of industries reserved for public sector was reduced to 8 industries. At present, there are only three industries reserved for public sector which include. (a) Atomic energy (b) Railways, and (c) specified Minerals.• De-licensing: -The most important features of NIP, 1991 was the abolition of industrial licensing of all industries except six industries. The six industries are of social and strategic concern. The six industries are 1. Hazardous Chemicals. 2. Alcohol 3. Cigarettes 4. Industrial Explosives 5. Defense Products, and 6. Drug and pharmaceuticals.• Disinvestment of public sector: -The NIP 1991 permitted disinvestment of public sector units. Disinvestment is a process of selling government equity in PSUs in favour of private parties. Disinvestments aim at certain objectives. (1) To provide better customer Service. (2) To make effective use of disinvestment funds. (3) To overcome the problem of political interference. (4) To enable the government to concentrate on social development.
  7. 7. FEATURES OF NIP,1991 (cont…..)• Foreign Investment: Approval will be given for direct foreign investment up to 51 percent foreign equity in high priority industries . There shall be no bottlenecks of any kind in this process• Foreign Technology Agreements: Automatic permission will be given for foreign technology agreements in high priority industries up to a lump sum payment of Rs. 1 crore, 5% royalty for domestic sales and 8% for exports, subject to total payment of 8% of sales over a 10 year period from date of agreement or 7 years from commencement of production. No permission will be necessary for hiring of foreign technicians, foreign testing of indigenously developed technologies.• MRTP Act: Emphasis will be placed on controlling and regulating monopolistic, restrictive and unfair trade practices. Simultaneously, 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.
  8. 8. FEATURES OF NIP,1991 (cont…..)• Public Sector Policy: The priority areas for growth of public enterprises in the future will be the following: Essential infrastructure goods and services. Exploration and exploitation of oil and mineral resources. Technology development and building of manufacturing capabilities in areas which are crucial in the long term development of the economy and where private sector investment is inadequate. Manufacture of products where strategic considerations predominate such as defense equipment.
  9. 9. INDUSTRIAL POLICIES Industrial Industrial policy policy resolution resolution of 1991 of 1948 Industrial Industrial policy policy resolution resolution of 1980 of 1956 Industrial Industrial policy policy resolution resolution of 1977 of 1973
  10. 10. Positives & Watch- Outso POSITIVES:• De-licensing of most industries will help entrepreneurs to quickly seize business opportunities.• Removal of controls under the MRTP Act will facilitate expansion and growth.• There will be greater inflow of foreign capital and technology due to easing of restrictions.• Burden on the public sector will be reduced.o WATCH-OUTS:• . The bureaucracy has a tendency to attempt to defeat measures aimed at deregulations.• Foreign investors still regard the policy and procedural system in India confusing. Rather many feel that policy and development environment in China is superior to India.• Distortion in Industrial pattern would occur due to slow pace of investment in few basic and strategic industries. Absence of a mechanism would slow down the development of backward areas
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Industrial policy,1991MANAGERIAL ECONOMICS

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