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By Kunal Upadhyay
๏ฝ The Industrial Policy announced on July 24, 1991
๏ฝ The most visible sign of the countryโ€™s economic crisis in
early 1991 was:
๏ฝ This policy expanded the scope of the private sector by
opening up most of the industries for the private sector
and did away with the entry and growth restrictions. The
most important initiatives are with respect to the virtual
scrapping of industrial licensing and registration policies,
an end to the monopoly law and a welcoming approach
to foreign investments.
๏ฝ To maintain a sustained growth in productivity;
๏ฝ To enhance employment;
๏ฝ To achieve optimal utilization of human
resources;
๏ฝ To attain international competitiveness
๏ฝ Protect the interests of workers
๏ฝ Development of original technology through greater
investment in R&D and bring in new technology to
help Indian manufacturing units Incentive for
industrialization of backward areas
๏ฝ Ensure running of PSUs on business lines and cut
their losses
๏ฝ Stop the monopoly of any sector in any field of
manufacture except on strategic or security
grounds.
๏ฝ To transform India into a major partner and player in
the global arena.
๏ฝ Policy has abolished the industrial licensing
system for all industries expect 18 specified
industries
Coal Petroleum
Sugar Motor car
Cigarettes Drugs
Pharmaceuticals Electronic equipment
Dangerous chemical
๏ฝ As per amendments made in 1993, 1996, 1997
and 1998-99, as many as 13 industries have been
delicensed.
โ—ฆ At present only 5 industries remain under the preview of
industrial licensing
โ—ฆ Alcohol
โ—ฆ Cigarettes
โ—ฆ hazardous chemicals
โ—ฆ Electronic aerospace
โ—ฆ Defense tools and Industrial explosive
๏ฝ In case of cities having population of more than 1population of more than 1
million, NO industrial approval required from themillion, NO industrial approval required from the
central governmentcentral government (expect from licensing)
๏ฝ In case of cities with population of more than 1population of more than 1
million, industries like non-polluting industriesmillion, industries like non-polluting industries
such as electronic computer, software printing, willsuch as electronic computer, software printing, will
be allowed outside 25 kms.be allowed outside 25 kms.
๏ฝ Order to reduce overcrowding in cites and to
enable the industries to move to rural or backward
regions, suitable incentive and investment well
designed.
๏ฝ The mandatory provision of convertibility clause
enabling financial institutions to convert loans into
equity share
๏ฝ The entry of foreign investors in the form of direct
equity investment has been allowed up to 51% of
total investment in projects.
๏ฝ For access to the world markets for attract foreign
investment and advanced technology, Govt. setup
special Foreign Investment Board.
๏ฝ promotions of exports call for a systematic
exploration of world market through highly
professional marketing activities.
๏ฝ Ease the entry of foreign technology
๏ฝ Automatic approval for foreign technology
agreement related to high priority industries.
๏ฝ Indian companies to develop relationship with the
supplies of foreign technology on a continuing
basis and make their decisions on the basis
๏ฝ Essential infrastructure goods and services.
๏ฝ Exploration and Development of oil and minerals
resources
๏ฝ Technology development and building of manufacturing
๏ฝ Strategic considerations predominate such as, defense
equipments, atomic energy, railway
๏ฝ Review of industries like
โ—ฆ Low technology
โ—ฆ Small Scale Industries
๏ฝ Review of inefficient and unproductive area
๏ฝ area with low social consideration or public
purpose and are where private sector has
developed
๏ฝ To prevent such concentration of economic power
which damaging to public interest and to control
monopolistic trend
๏ฝ To prohibit monopolistic, restrictive and unfair
practices
๏ฝ De-licensing of most industries will help
entrepreneurs to quickly seize business
opportunities.
๏ฝ Removal of controls under the MRTP Act will
facilitate expansion and growth.
๏ฝ There will be greater inflow of foreign capital and
technology due to easing of restrictions.

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B.B.A-SEM-2-GSI-Industrial policy 1991

  • 2. ๏ฝ The Industrial Policy announced on July 24, 1991 ๏ฝ The most visible sign of the countryโ€™s economic crisis in early 1991 was: ๏ฝ This policy expanded the scope of the private sector by opening up most of the industries for the private sector and did away with the entry and growth restrictions. The most important initiatives are with respect to the virtual scrapping of industrial licensing and registration policies, an end to the monopoly law and a welcoming approach to foreign investments.
  • 3. ๏ฝ To maintain a sustained growth in productivity; ๏ฝ To enhance employment; ๏ฝ To achieve optimal utilization of human resources; ๏ฝ To attain international competitiveness ๏ฝ Protect the interests of workers
  • 4. ๏ฝ Development of original technology through greater investment in R&D and bring in new technology to help Indian manufacturing units Incentive for industrialization of backward areas ๏ฝ Ensure running of PSUs on business lines and cut their losses ๏ฝ Stop the monopoly of any sector in any field of manufacture except on strategic or security grounds. ๏ฝ To transform India into a major partner and player in the global arena.
  • 5. ๏ฝ Policy has abolished the industrial licensing system for all industries expect 18 specified industries Coal Petroleum Sugar Motor car Cigarettes Drugs Pharmaceuticals Electronic equipment Dangerous chemical
  • 6. ๏ฝ As per amendments made in 1993, 1996, 1997 and 1998-99, as many as 13 industries have been delicensed. โ—ฆ At present only 5 industries remain under the preview of industrial licensing โ—ฆ Alcohol โ—ฆ Cigarettes โ—ฆ hazardous chemicals โ—ฆ Electronic aerospace โ—ฆ Defense tools and Industrial explosive
  • 7. ๏ฝ In case of cities having population of more than 1population of more than 1 million, NO industrial approval required from themillion, NO industrial approval required from the central governmentcentral government (expect from licensing) ๏ฝ In case of cities with population of more than 1population of more than 1 million, industries like non-polluting industriesmillion, industries like non-polluting industries such as electronic computer, software printing, willsuch as electronic computer, software printing, will be allowed outside 25 kms.be allowed outside 25 kms.
  • 8. ๏ฝ Order to reduce overcrowding in cites and to enable the industries to move to rural or backward regions, suitable incentive and investment well designed. ๏ฝ The mandatory provision of convertibility clause enabling financial institutions to convert loans into equity share
  • 9. ๏ฝ The entry of foreign investors in the form of direct equity investment has been allowed up to 51% of total investment in projects. ๏ฝ For access to the world markets for attract foreign investment and advanced technology, Govt. setup special Foreign Investment Board. ๏ฝ promotions of exports call for a systematic exploration of world market through highly professional marketing activities.
  • 10. ๏ฝ Ease the entry of foreign technology ๏ฝ Automatic approval for foreign technology agreement related to high priority industries. ๏ฝ Indian companies to develop relationship with the supplies of foreign technology on a continuing basis and make their decisions on the basis
  • 11. ๏ฝ Essential infrastructure goods and services. ๏ฝ Exploration and Development of oil and minerals resources ๏ฝ Technology development and building of manufacturing ๏ฝ Strategic considerations predominate such as, defense equipments, atomic energy, railway
  • 12. ๏ฝ Review of industries like โ—ฆ Low technology โ—ฆ Small Scale Industries ๏ฝ Review of inefficient and unproductive area ๏ฝ area with low social consideration or public purpose and are where private sector has developed
  • 13. ๏ฝ To prevent such concentration of economic power which damaging to public interest and to control monopolistic trend ๏ฝ To prohibit monopolistic, restrictive and unfair practices
  • 14. ๏ฝ De-licensing of most industries will help entrepreneurs to quickly seize business opportunities. ๏ฝ Removal of controls under the MRTP Act will facilitate expansion and growth. ๏ฝ There will be greater inflow of foreign capital and technology due to easing of restrictions.