Industrial Policies Till 1991 – Indian Economy – Free PDF Download



Industrial Policy Resolution of 1948

  • It defined the broad contours of the policy delineating the role of the State in industrial developmentboth as an entrepreneur and authority.
  • It made clear that India is going to have a Mixed Economic Model.
  • It classified industries into four broad areas:
    • Strategic Industries (Public Sector)
    • Basic/Key Industries (Public-cum-Private Sector)
    • Important Industries (Controlled Private Sector)
    • Other Industries (Private and Cooperative Sector)
  • The Industries (Development and Regula­tion) Actwas passed in 1951 to implement the Industrial Policy Resolution, 1948.

Industrial Policy Statement of 1956 :

  • It was regarded as the “Economic Constitution of India” or “The Bible of State Capitalism”.
  • The 1956 Policy empha­sised the need to expand the public sector, to build up a large and growing coop­erative sector and to encourage the separation of ownership and management in private in­dustries and, above all, prevent the rise of pri­vate monopolies.
  • IPR, 1956 classified industries into three categories
    • Schedule A-consisting of 17 industries was the exclusive responsibility of the State.
    • Schedule B-consisting of 12 industries, was open to both the private and public sectors;
    • Schedule C-All the other industries not included in these two Schedules constituted the third category which was left open to the pri­vate sector.
    • The IPR 1956, stressed the importance of cottage and small scale industries
  • The Resolution also called for efforts to maintain industrial peace;
  • Criticism:The IPR 1956 came in for sharp criticism from the private sector since this Resolution reduced the scope for the expan­sion of the private sector significantly.
    • The sector was kept under state control through a system of licenses.

Industrial Policy Statement, 1977

  • The main thrust of this policy was the effective promotion of cottage and small industrieswidely dispersed in rural areas and small towns.
  • The small sector was classified into three groups—cottage and household sector, tiny sector and small scale industries.
  • It prescribed different areas for large scale industrial sector-Basic industries,Capital goods industries, High technology industries and Other industries outside the list of reserved items for the small scale sector.
  • It restricted the scope of large business houses so that no unit of the same business group acquired a dominant and monopolistic position in the market.
  • It put emphasis on reducing the occurrence of labour unrest. The Government encouraged the worker’s participation in managementfrom shop floor level to board level.
  • Criticism:There was an absence of effective measures to curb the dominant position of large scale units and the policy did not envisage any socio­economic transformation of the economy for curbing the role of big business houses and multinationals.
  • Industrial Policy of 1980sought to promote the concept of economic federation, to raise the efficiency of the public sector and to reverse the trend of industrial production of the past three years and reaffirmed its faith in the Monopolies and Restrictive Trade Practices (MRTP) Act and the Foreign Exchange Regulation Act (FERA).




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