The 1977 policy gave highest priority to the small scale and tiny industries. It lays down rules and procedures that would govern the growth and pattern of industrial activity. In the year 1922 the Government of India had set up Indian Stores Department to buy goods required by the Government departments from Indian manufacturers. None of the earlier industrial policies, either explicitly or implicitly, had made reference to international technology and manufacturing capabilities in the context of domestic industrial development Ministry of Commerce and Industry, 2001. District Industries: Centres were set up to serve as focal points of small- sector development. Most of the industries have closed down in the last few years due to tough competition from multi nationals who have unparalleled financial and political power. A system of licensing was accordingly introduced under the Industries Development and Regulation Act, 1951.
The broad-banding concept was introduced so that flexibility is granted to the industries to decide the product mix without applying for a new license. Management scholars described Privatization as the transfer of control of ownership of economic resources from the public sector to the private sector. This review will be in respect of industries based on low technology, small scale and non-strategic areas, inefficient and unproductive areas, areas with low or nil social considerations or public purpose, and areas where the private sector has developed sufficient expertise and resources. Emphasis would be placed on evolution of managerial cadres in functional field of operations, marketing, finance, communication systems. Government launched its new economic policy which has three important features such as Liberalization, Privatization and Globalization. Industrial Policy Statement, 1977 : The main elements of the new policy were: 1.
This category of public sector units accounts for almost one third of the total losses of central public enterprises. In 1991, far reaching changes were made in the 1956 industrial policy. In 1991 it had gone up to 24 percent. War-time industries were assured of continued protection from foreign competition and financial assistance. The various elements constitute an economic policy. Approach towards Foreign Collaboration: In areas where technological know-how is not needed, existing collaboration will not be renewed and foreign companies operating in such fields will have to modify their character and activities in conformity with national priorities, within the framework of the Foreign Exchange Regulation Act. It helped to built up the vast base of capital goods, intermediate goods and basic goods industries over a period of time.
It seeks to create a favourable investment climate for the private sector as well as mobilise resources for the investment in public sector. Â· Manufacture of products where strategic considerations predominate such as defence equipment. These goals seemed particularly justified, given the long experience of these countries with colonialism and the agricultural nature of their economies. One question is which kinds of industrial policy are most effective in promoting economic development. The Gains: The liberalization process has aided the free movement of goods and services that has led to better industrial performances.
The policy failed either to restrict big business or multinationals. Raw hides and skins, leather, chamois leather and patent leather. Indira Gandhi swept the poll and a new Government under Mrs. It is expected to strengthen the capital market by following appropriate trade policies. Main Features of the Act: a Factories with a capital of more than Rs. Today, the State has other instruments of intervention, particularly fiscal and monetary instruments.
Small scale industries have been virtually overlooked. It implies greater sovereignty to the business enterprises in decision-making and removal of government interference. The core industries, industries having direct linkages with such core industries and industries with a long-term export potential will be counted among critical, basic and strategic industries. More recently, the rapid growth of East Asian economies, or the , has also been associated with active industrial policies that selectively promoted manufacturing and facilitated technology transfer and industrial upgrading. In view of the considerations outlined above Government have decided to take a series of measures to unshackle the Indian industrial economy from the cobwebs of unnecessary bureaucratic control. To summarize, it can be reviewed that economy of country depends on industrialization. Further licences for large-industries should be strictly regulated.
The fear of competition of outside powers in Indian market, the non-availability of military supplies, the desire to involve co-operation of Indian capitalists for their war-efforts compelled the British Government to adopt a pioneering policy of supporting the establishment of certain basic and exportable goods industries. Large industries were permitted to start operations in rural and backward areas with a view to developing those areas and enabling the growth of small industries around. All sector of industry whether small, medium or large, belonging to the public, private or cooperative sector will be encouraged to grow and improve on their past performance. Drugs and Pharmaceuticals According to Drug Policy. The government removes a regulation when businesses complain it interferes too much with their ability to compete, especially with foreign companies. Prepare a clause in the existing Industrial Policy of India to deal with the above stated problem.
Similarly the public sector will also be allowed entry in areas not reserved for it. The list of items reserved for small-sector was raised from 180 to 807. They should be made to rely on their own internal resources for new schemes. Industrial licenses are regulated under the Industries Development and Regulation Act 1951. Engineering and industrial plastic products. The purpose of deregulation is to permit a particular industry to raise greater competition, create a freer marketplace and expectantly enhance economic growth both within that marketplace and in general. Government is also committed to development and utilisation of indigenous capabilities in technology and manufacturing as well as its upgradation to world standards.
Growth, Size, Investment, Turnover and Profits: There has been, therefore, spectacular increase in number, size and direction of public enterprises with vast amount of capital invested and providing numerous opportunities for employment. Once competitive enough, these restrictions are lifted to expose the selected industries to the international market. The committee therefore called for rational approach to licensing. Development of Small-Scale Sector: The main thrust of the new industrial policy was an effective promotion of cottage and small industries. The resolution assigned complementary role to small-scale and cottage industries.
In small-scale units, it is raised from Rs. Cottage and household industries which provide self-employment; tiny sector and small-scale industries. Its time-honoured objectives are well-stated and well-stressed again. Massive investments have been made over the past four decades to build a public sector which has a commanding role in the economy. Regulation of Unauthorised Excess Capacity: In the private sector, capacity expansion up to 25 percent of installed capacity would be automatically available to the overall capacity including regularised excess capacity. But the capital goods sector was not developed at all and basic and heavy industries were by and large absent. Profitability alone should not become the sole yardstick to measure efficiency 2.