Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Trimester I
2010
Introduction
The Industrial Policy indicates the respective roles of the public,
private, joint and co-operative sectors; small, medium and large
scale industries.
It underlines the national priorities and the economic development
strategy.
It also spells the Government’s policy towards industries- their
establishment, functioning, growth and management; foreign capital
and technology, labor policy, tariff policy etc. in respect of the
industrial sector.
Build a large and heavy public sector and manage the same
effectively
Develop heavy and machine making industries
Rural Industrialization
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, apart from
redefining the role of the public sector. Words like “dramatic”, revolutionary”
and “drastic have been used to describe this policy.
.
The New Industrial Policy 1991
(contd…)
Main features :Objectives of the Industrial Policy of the Government are –
to maintain a sustained growth in productivity;
to enhance employment;
to achieve optimal utilization of human resources;
to attain international competitiveness
Development of indigenous technology through greater investment in R&D
and bring in new technology to help Indian manufacturing units Incentive for
industrialization of backward areas
Ensure running of PSUs on business lines and cut their losses
Protect the interests of workers
Abolish the monopoly of any sector in any field of manufacture except on
strategic or security grounds.
to transform India into a major partner and player in the global arena.
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.
The New Policy has four features:
Liberalisation; privatisation, globalisation and stabilisation
The New Industrial Policy 1991
(contd…)
Redefinition of the role of the Public Sector:
The number of industries reserved for the public sector was reduced to eight
and it was later pruned to two ie atomic energy and railway transport.
The priority areas for growth of public enterprises will be the essential infrastructure
goods and services industry; exploration 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. The policy also seeks selective
privatization and withdrawal of the public sector from industries.
Also, in respect of public sector enterprises, the following measures were adopted:
Portfolio of public sector investments to be reviewed periodically with a view to
focus the public sector on strategic, high tech and essential infrastructure.
Public enterprises which are chronically sick and unlikely to be turned around to
be referred to the Board for Industrial and Financial Reconstruction (BIFR) for
formulation of revival / rehabilitation schemes.
In order to encourage wider public participation, a part of the Government’s
shareholding in the public sector would be offered to mutual funds, financial
institutions and the general public.
Board of PSU to be more professional and have greater powers.
Thrust to be on performance improvement and management would be granted
more autonomy in operation.
The New Industrial Policy 1991
Industrial Licensing:
(contd…)
Industrial Licensing was governed by the Industries Development &
Regulation Act, 1951.
Watch- outs :
However, de-bureaucratization is a challenging task. The bureaucracy has a
tendency to attempt to defeat measures aimed at deregulations.
The policy environment is much more conducive for both domestic and foreign
investment than in the past. However, a host of countries are now trying to woo
foreign investment with a much more conducive economic environment than in
India. Also, cultural factor do also tend to tilt the balance in favor of other
nations.
Further, 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.
Evaluation of the New Industrial
Policy
This Policy has been criticized on the following grounds:
economy.
B. Growing Indian Transnational Corporations:
Indian firms to enjoy flexibility in entry and exit. Freedom to diversify and
E. Human Development
Primary education made compulsory.
F. Clean Environment:
Arrest damage to environment
H. Improvements to Governance:
Rationalize electricity prices
Bring in legal reforms that ensure inexpensive and speedy justice and at