The presentation on Industrial Policy of India, Fiscal Policy of India and Licensing Policy of India and can be used to learn and present as economics assignment

1. Presentation
on
Industrial Policy
Fiscal Policy
and
Licensing Policy
of
Government of India
Presented By
Prasoon Verma

2. Industrial Policy Of
Government

3. New Industrial Policy of the Government:
 Liberalization
 Deregulation and
 Privatisation

4. Main features
Objectives of the Industrial Policy of the Government are –
 To maintain a sustained growth in productivity;
 To enhance gainful employment;
 To achieve optimal utilisation of human resources;
 To attain international competitiveness
 To transform India into a major partner and player in the
global arena.
 Lessened Government control and freelance to private
Enterprises.
 Capital Markets opened for private Entrepreneurs.
 Simplification of licensing policy.
 Opportunity to purchase foreign exchange at market prices.
 Right to take independent decisions regarding the market.
 Widened liberty in the field of business and trade.

5. 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.

6. Impact of Liberalization on Indian Economy:
 Increase in Employment.
 Arrival of New Technology or Development of Technology.
 Development of Infrastructure.
 Identity at World Level.
 Increase Our Currency Value (INR).
 GDP Growth.
 Increase Consumption and Adaptation of New Lifestyle.
 Increment in Competition.
 Increment in Foreign Investor.

7. Advantages of Deregulisation
 Deregulation offers the consumer in the form of lower prices, more
providers and better products.
 When the company faces fewer restrictions, it might be able to explore
opportunities that the government had previously not allowed or
severely restricted.
 The businesses are left to themselves to determine their operational
processes and strategic imperatives without the government interfering
in their working.
 The businesses interact and interface with the customers directly
without the state setting the agenda or the action plan.
 Deregulation in an emergent market economy means that the state is
giving full play to market forces as opposed to centralized planning those
results in greater efficiencies for the businesses and more profits as well.
 Entry of Private Players
 Businesses can focus on their core competencies without having to
submit themselves to constant scrutiny and constant pressure from the
government.

8. Advantages of privatization:
1. Efficiency, Absences of political interference, Quality service,
Systematic marketing Use of freedom technology.
2. Accountability.
3. Innovation.
4. Research and development.
5. Infrastructure.

9. Fiscal Policy Of Government

10. Meaning of Fiscal Policy
The fiscal policy is concerned with the raising of government
revenue and incurring of government expenditure. To generate
revenue and to incur expenditure, the government frames a
policy called budgetary policy or fiscal policy.
So, the fiscal policy is concerned with government expenditure
and government revenue.
Fiscal policy has to decide on the size and pattern of flow of
expenditure from the government to the economy and from the
economy back to the government.

11. Objectives of fiscal policy adopted by the Government of
India:
1. To mobilise adequate resources for financing various programmes
and projects adopted for economic development.
2. To raise the rate of savings and investment for increasing the
rate of capital formation;
3. To promote necessary development in the private sector through
fiscal incentive;
4. To arrange an optimum utilisation of resources;
5. To control the inflationary pressures in economy in order to attain
economic stability;

12. 6. To remove poverty and unemployment;
7. To attain the growth of public sector for attaining the objective of socialistic
pattern of society;
8. To reduce regional disparities; and
9. To reduce the degree of inequality in the distribution of income and wealth.
In order to attain all these aforesaid objectives, the Government of India has
been formulating its fiscal policy incorporating the revenue, expenditure and
public debt components in a comprehensive manner.
Fiscal Policy and Economic Development:
One of the important goals of fiscal policy formulated by the Government of
India is to attain rapid economic development of the country.
To attain such economic development in the country, the fiscal policy of the
country has adopted the following two objectives:
1. To raise the rate of productive investment of both public and private sector of
the country.
2. To enhance the marginal and average rates of savings for mobilizing adequate
financial resources for making investment in public and private sectors of the
economy.
The fiscal policy of the country is trying to attain both these two objectives
during the plan periods.

13. Merits or Advantages of Fiscal Policy of India:
The following are some of the important merits or advantages of fiscal policy of
Government of India:
1. Capital Formation:
Fiscal policy of the country has been playing an important role in raising the rate of
capital formation in the country both in its public and private sectors. The gross
domestic capital formation as per cent of GDP in India has increased from 10.2 per
cent in 1950-51 to 22.9 per cent in 1980-81 and then to 24.8 per cent in 1997-98.
Therefore, it has created a favourable impact on the public and private sector
investment of the country.
2. Mobilisation of Resources:
Fiscal policy of the country has been helping to mobilize considerable amount of
resources through taxation, public debt etc. for financing its various developmental
projects. The extent of internal resources mobilisation for financing plan has
increased considerably from 70 per cent in 1965-66 to around 90 per cent in 1997-
98.
3. Incentives to Savings:
The fiscal policy of the country has been providing various incentives to raise the
savings rate both in household and corporate sector through various budgetary
policy changes, viz., tax exemption, tax concession etc. Accordingly, the saving rate
has increased from a mere 10.4 per cent in 1950-51 to 23.1 per cent in 1997-98.

14. 4. Inducement to Private Sector:
Private sector of the country has been getting necessary inducement from the
fiscal policy of the country to expand its activities. Tax concessions, tax
exemptions, subsidies etc. incorporated in the budgets have been providing
adequate incentives to the private sector units engaged in industry, infrastructure
and export sector of the country.
5. Reduction of Inequality:
Fiscal policy of the country has been making constant endeavor to reduce the
inequality in the distribution of income and wealth. Progressive taxes on income
and wealth tax exemption, subsidies, grant etc. are making a consolidated effort
to reduce such inequality. Moreover, the fiscal policy is also trying to reduce the
regional disparities through its various budgetary policies.
6. Export Promotion:
The Fiscal policy of the government has been making constant endeavor to
promote export through its various budgetary policy in the form of concessions,
subsidies etc. As a result, the growth rate of export has increased from a mere 4.6
per cent in 1960-61 to 10.4 per cent in 1996-97.
7. Alleviation of Poverty and Unemployment:
Another important merit of Indian fiscal policy is that it is making constant effort
to alleviate poverty and unemployment problem through its various poverty
eradication and employment generation programmes, like, IRDP, JRY, PMRY, SJSRY,
EAS etc.

15. Licensing Policy Of
Government

16. License-”An Authorization to used the licensed material”
In India, there are some regulations
and restrictions with regard to establishing industries in
certain categories. This is done by making it mandatory
to obtain licenses before setting up such an industry.
Department of Industrial Policy &
Promotion(DIPP) is responsible for formulation and
implementation of promotional and developmental
measures for the growth of the industrial sector, keeping
in view the national priorities and socio-economic
objectives.

17. Industrial Licensing was also abolished for all except short list of 18
industries in New Industrial Policy 1991.
This number was further pruned to six industries.
Currently (2016), only five industries are under compulsory licensing
mainly on account of environmental, safety and strategic considerations.
They are:
Distillation and brewing of alcoholic drinks Cigars and cigarettes of
tobacco and manufactured tobacco substitutes.
Electronic Aerospace and defence equipment: all types. Industrial
explosives including detonating fuses, safety fuses, gun powder,
nitrocellulose and matches. Specified Hazardous chemicals i.e. (i)
Hydrocyanic acid and its derivatives, (ii) Phosgene and its derivatives and
(iii) Isocyanates & diisocyanates of hydrocarbon, not elsewhere
specified(example Methyl isocyanate) Regarding Alcoholic products,
production of rectified spirit exclusively for industrial use falls under the
Centre’s purview while in the case of potable alcohol, states have last
word.
So, DIPP is not the licensing authority in case of potable alcohol.

18.  Zoning and Land Use Regulation and Environmental
Legislation will continue to regulate industrial
locations.
 Appropriate incentives and the design of investments in
infrastructure development will be used to promote the
dispersal of industry particularly to rural and backward areas
and to reduce congestion in cities.
 Existing units will be provided a new broad banding facility
to enable them to produce any article without additional
investment.
 The exemption from licensing will apply to all substantial
expansions of existing units.
 The mandatory convertibility clause will no longer be
applicable for term loans from the financial institutions for
new projects.

19. Thank You