For the economic growth of a country, industrial policy is a very important factor. These industrial policies refer to the strategies that the government adopts for the industrial development of a nation. The first industrial policy in India was amended in the year 1948. This policy brought up the change in the industrial environment of the country. The main objective of the industrial policy is to make the Indian economy globalize. It also provides a free market domestically.
Industrial Policies of 1948
The first policy of newly independent India was industrial policy resolution of 1948. In this policy, the main focus was on the states. They have to play an active role in the development of industries.
The government in this policy stressed more on the socialistic view of society. This policy was in force for 8 years. Some of the other of IPR in 1948 were
- To provide a large number of employment opportunities.
- To increase production in order to meet the needs of a growing population.
- Establishing the social order where equality and justice to everyone.
- Promoting the rapid rise in the standard of living of citizens. Possible by exploiting various resources of the nation.
Learn more about Industries of India and World here in detail
Industrial Development Act, 1951
This act was passed in 1991 by the parliament. To regulate and control the development of industries in India. Some of the objectives of this act were
- Preventing the monopoly and concentration of the industries.
- Protecting the small entrepreneurs from the competition of the larger industries.
- Regulating industrial production and investment on the basis of planned targets and priorities.
- Balancing regional development. Keeping in mind the view to reduce the level of disparity for the various regions of the country.
There were two provisions that the act laid down. These were reformative provisions and restrictive provisions. Reformative includes constructive measures, control on distribution and supply. Price, and direct control and regulation by the government.
While restrictive provisions include the measures that are essential for curbing unfair practices. This included inquiry of the listed companies and licensing.
Also, registering of the industrial undertaking, and cancelation of registration license.
New Industrial Policy of 1991
This new policy was introduced in the year 1991. In this time, the country was suffering from severe economic instability. The objective of this policy was to accelerate economic growth and increase efficiency.
Features of New Industrial Policy of 1991
Dispersing of the industries
This is turn favored heavily to industries that are based on agriculture. It was done by introducing the incentives to attract the industries to backward regions and villages.
Strengthing the private sector
Making the field of public sector contract. Abolishment of the license for various large industries. Making the role of public sector limited.
Promoting the small scale industries
This ensured that the payment for the sale of SSIs is speedy. To enhance the supply of risk capital to SSIs, the limited partnership was allowed.
Practice Questions on Industrial policies
Q. The new industrial policy to strengthen the private sector was introduced in the year
A. 1951 B. 1948 C. 1991 D. 1956
Answer: C. 1991
Q. The main focus of the industrial policy resolution in 1948 was to
A. Make the state play an important role in industrial development
B. Strengthing the private sector
C. Liberalizing the way for foreign investments
D. All of the above
Answer: A. Make the state play an important role in industrial development