The Industrial Policy Resolution of 1948 divided Indian industries into four groups - with strategic industries under exclusive state control, key industries gradually transferring to state control, some industries allowed for private sector with regulation, and all others private. It emphasized small-scale industries. The 1951 Industries Act further regulated industrial development according to five-year plans, protected small enterprises, and sought balanced regional growth. The 1956 resolution classified industries into schedules for state-run, state-private, and primarily private sectors. The 1971 policy favored small-scale sectors like household and tiny industries. The 1980 policy aimed to improve public sector management and productivity while promoting exports and backward regions.
Industrial policy is a document that sets the tone in implementing, promoting the regulatory roles of the government. It was an effort to expand the industrialization and uplift the economy to its deserved heights. It signified the involvement of the Indian government in the development of the industrial sector.
Industrial policy is an important document that sets the tone in implementing, promoting the regulatory roles of the government.
It was an effort to expand the industrialization and uplift the economy to its deserved heights.
It signified the involvement of Indian government in the development of industrial sector.
Industrial growth of a country is guided and regulated through its industrial policies.
An industrial policy (IP) or industrial strategy of a country is its official strategic effort to encourage the development and growth of all or part of the economy, often focused on all or part of the manufacturing sector.
Industrial policy is a document that sets the tone in implementing, promoting the regulatory roles of the government. It was an effort to expand the industrialization and uplift the economy to its deserved heights. It signified the involvement of the Indian government in the development of the industrial sector.
Industrial policy is an important document that sets the tone in implementing, promoting the regulatory roles of the government.
It was an effort to expand the industrialization and uplift the economy to its deserved heights.
It signified the involvement of Indian government in the development of industrial sector.
Industrial growth of a country is guided and regulated through its industrial policies.
An industrial policy (IP) or industrial strategy of a country is its official strategic effort to encourage the development and growth of all or part of the economy, often focused on all or part of the manufacturing sector.
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5. Industrial Policy resolution 1948(BEFORE REFORM 1948-1980)
India has a mixed economy which means that the public and private sector exist
together.
Therefore, it is important that the government declares industrial policies which
clearly indicate the sphere of the State and the private enterprises.
On April 30, 1948, the Government of India passed a policy resolution – The
Industrial Policy Resolution, 1948 (IPR, 1948).
6. It divided the industrial sector into four broad groups:
Group 1 – Basic and strategic industries like arms and ammunition, atomic
energy, railways, etc. Further, these were in the exclusive monopoly of the
State.
Group 2 – Key industries like coal, iron and steel, shipbuilding, manufacture
of telegraph, telephone, mineral oils, etc. The State took over the exclusive
responsibility of al future developments in these industries. Also, the existing
industries were allowed to function for 10 years. After the end of the tenure,
the State would review and take adequate decisions.
7. Group 3 – A total number of 18 industries including automobiles, tractors,
machine tools, etc. The private sector was allowed to open these industries
subject to government regulation and supervision.
Group 4 – All the remaining industries. However, the government can
participate or intervene if the need arises.
8. The IPR, 1948 also emphasized the importance of small-scale and cottage
industries in India. To implement the IPR, 1948, the Government passed the
Industries (Development and Regulation) Act in 1951.
9. Industries (Development & Regulation) Act, 1951.
The Industries Act was passed by the Parliament on October 1951 to control and regulate the
process of Industrial development in the country. The Acts main task was to regulate the
Industrial sector.
The specific objectives of the Act were:
• Regulation of Industrial Investment and Production according to Five Year Plans.
• Protection of small-scale enterprises from giant enterprises.
• Prevention of Monopolies and concentration of ownership of industries in few hands.
• Balanced Growth and Equitable development of all the regions.
• It was also believed that the State is best suited to promote balanced growth by; channelizing
investment in the most important sectors; Correlate supply and demand; eliminate
competition; ensure optimum utilisation of social capital.
10. On April 30, 1956, the Government revisited the IPR, 1948 and announced the
Industrial Policy Resolution, 1956 (IPR, 1956). There were three reasons
behind the revision:
The introduction of the Constitution of India
The adoption of a planning system
The Parliament‘s declaration of adopting a socialist pattern of the society
Industrial Policy Resolution, 1956
11. According to the IPR, 1956, the industries were classified in the following
categories:
Schedule A – A list of 17 industries as the exclusive responsibility of the
State. Of these, four industries, namely arms and ammunition, atomic
energy, railways, and also air transport become Central Government
monopolies and the rest under State Governments.
Schedule B – A list of 12 industries open to both the public and private
sectors. However, these industries are progressively State-owned.
12. Schedule C – All the remaining industries. The private sector had the primary
initiative of development. However, they needed to fit within the economic and
social priorities and policies of the Government. Further, they were subject to
the provisions of the Industries (Development and Regulation) Act, 1951.
The IPR, 1956 also stressed the importance of small-scale and cottage industries
for expanding employment opportunities.
13. Industrial Policy 1971
A Statement in the Parliament in December 1977 modified the Industrial Policy.
The main thrust was in favor of the small-scale sector. Further, this was classified
into three sub-sectors:
Household and Cottage industries which provided large-scale self-employment.
Tiny sector industries, if the investment amount was below a specified limit.
Small-scale industries, which were larger than the first two categories but had
investment within certain limits.
14. Apart from recognizing the need to improve the management of the public
sector, the IPR, 1980 provided certain clarifications and extensions.
• Optimum utilization of installed capacity
• Higher productivity and more employment
• Preferential treatment for industrially backward units to remove regional
disparities
• Promotion of export-oriented and also import-substitution industries
• Extending a preferential treatment to agro-related industries to increase the
agriculture base of the economy.
INDUSTRIAL POLICY 1980
