INDUSTRIAL POLICY

Presentation On
By - Industrial Dominators
NISHANT
PARUL
JANVI
MEGHNA
It covers rules, regulations, principles,
policies, & procedures laid down by
government for regulating & controlling
industrial undertakings in the country.

It incorporates fiscal & monetary policies,
tariff policy, labor policy.

Industrial Policy

It prescribes the respective roles of the public,
private, joint, cooperative large, medium &
small scale sectors for the development of
industries.

It shows the government attitude not only
towards external assistance but also toward
public & private sectors.
To achieve optimal utilization of human
resources
To attain international competitiveness and
To transform India into a major partner and
player in the global arena
Main Objectives

INDUSTRIAL POLICY RESOLUTION
1948 (6 April, 1948)
The Resolution emphasized at the following:

1. The importance to the economy of securing a
continuous increase in production

2. Its equitable distribution


3. State must play of progressively active
role in the development of Industries

4.The rest of the industrial field was left open to
private enterprise though it was made clear that the
State would also progressively participate in this
field

INDUSTRIAL POLICY RESOLUTION
(30th April, 1956)
1. Improving living standards and working
conditions for the mass of the people
2. To reduce disparities in income and wealth
3.To prevent private monopolies and concentration
of economic power in different fields in the hands of
small numbers of individuals
4. The State will progressively assume a
predominant and direct responsibility for setting up
new industrial undertakings and for developing
transport facilities

5. Undertake State trading on an increasing scale

6. At the same time private sector will have the
opportunity to develop and expand
INDUSTRIAL POLICY FEB. 2, 1973
1. It provided for a closer interaction between
the agricultural and industrial sectors
2. Accorded the highest priority to the generation and
transmission of power
3. An exhaustive analysis of industrial products was
made to identify products which are capable of
being produced in the small scale sector

4. The Industrial Policy Resolution of 1956 still
remained valid, but certain structural
distortions had crept in the system
5. The new policies were hence directed towards
removing these distortions


6. The list of industries exclusively reserved for
the small scale sector was expanded from 180
items to more than 500 items
INDUSTRIAL POLICY DEC. 23, 1977
1. Industrial Policy Highlights on producing inputs
needed by a large number of smaller units and
making adequate marketing arrangements
2. The nucleus plant would also work for upgrading
the technology of small units
3. The Government would promote the development
of a system of linkages between nucleus large
plants and the satellite ancillaries
4.To boost the development of small scale
industries, the investment limit in the case of tiny
units was enhanced to Rs.2 lac, of a small scale
units to Rs.20 lac.

5.A scheme for building buffer stocks of essential
raw materials for the Small Scale Industries was
introduced for operation through the Small
Industries Development Corporations in the States
and the National Small Industries Corporation in
the Centre.
INDUSTRIAL POLICY, JULY 24, 1991
1. Government is pledged to launching a
reinvigorated struggle for social and economic
justice, to end poverty and unemployment and to
build a modern, democratic, socialist, prosperous
and forward-looking India

2. Such a society can be built if India grows as part of
the world economy and not in isolation

3. While Government will continue to follow the
policy of self-reliance, there would be greater
emphasis placed on building up our ability to pay
for imports through our own foreign exchange
earnings.
4. Government is also committed to development and
utilization of indigenous capabilities in technology
and manufacturing as well as its up gradation to
world standards.
5.Foreign investment and technology
collaboration will be welcomed to obtain higher
technology, to increase exports and to expand the
production base

6.Government will endeavor to abolish the
monopoly of any sector or any individual
enterprise in any field of manufacture, except on
strategic or military considerations and open all
manufacturing activity to competition
7.Government will fully protect the interests of labor,
enhance their welfare and equip them in all
respects to deal with the inevitability of
technological change
8. Labor will be made an equal partner in progress
and prosperity.
9. Workers participation in management will be
promoted

WHAT IS THE MEANING OF FDI ?
The Foreign Direct Investment Means Cross Border
Investment Made By A Resident In One Economy In
An Enterprise In Another Economy, With The
Objective Of Establishing A Lasting Interest In The
Investee Economy.
FDI Is Also Described As Investment Into The
Business Of A Country By A Company In Another
Country. Mostly The Investment Is Into Production
By Either Buying A Company In The Target Country
Or By Expanding Operations Of An Existing Business
In That Country. Such Investments Can Take Place
For Many Reasons, Including To Take Advantage Of
Cheaper Wages, Special Investment Privileges (E.G.
Tax Exemptions) Offered By The Country.
WHY COUNTRIES SEEK FDI ?
(A) Domestic Capital Is Inadequate For
Purpose Of Economic Growth;
(B) Foreign Capital Is Usually Essential, At
Least As A Temporary Measure, During The
Period When The Capital Market Is In The
Process Of Development;
(C) Foreign Capital Usually Brings It With
Other Scarce Productive Factors Like Technical
Know How, Business Expertise And Knowledge
WHAT ARE THE MAJOR BENEFITS OF FDI :
(A) Improves Forex Position Of The Country;
(B) Employment Generation And Increase In Production ;
(C) Help In Capital Formation By Bringing Fresh
Capital;
(D) Helps In Transfer Of New Technologies, Management
Skills, Intellectual Property
(E) Increases Competition Within The Local Market And
This Brings Higher Efficiencies
(F) Helps In Increasing Exports;
(G) Increases Tax Revenues
WHY FDI IS OPPOSED BY LOCAL PEOPLE OR
DISADVANTAGES OF FDI :
(A) Domestic Companies Fear That They May Lose Their
Ownership To Overseas Company
(B) Small Enterprises Fear That They May Not Be Able To
Compete With World Class Large Companies And May Ultimately
Be Edged Out Of Business;
(C) Large Giants Of The World Try To Monopolise And Take
Over The Highly Profitable Sectors;
(D) Such Foreign Companies Invest More In Machinery And
Intellectual Property Than In Wages Of The Local People;
(E) Government Has Less Control Over The Functioning Of Such
Companies As They Usually Work As Wholly Owned Subsidiary Of
An Overseas Company;
BRIEF LATEST DEVELOPMENTS
ON FDI (ALL SECTORS INCLUDING
RETAIL):-
2011 December :
(I) The Indian Government Removed The 51
Present Cap On FDI Into Single-brand Retail
Outlets And Thus Opened The Market Fully To
Foreign Investors By Permitting 100 Present
Foreign Investment In This Area.
2012 - September : The Government Approved
The
(A) Allowed 51% Foreign Investment In Multi-
brand Retail,
(B) Relaxed FDI Norms For Civil Aviation
And Broadcasting Sectors. FDI Cap In
Broadcasting Was Raised To 74% From 49%;
(C) Allowed Foreign Investment In Power
Exchanges
2012 October : In The Second Round Of
Economic Reforms, The Government Cleared
Amendments To Raise The FDI Cap
(A) In The Insurance Sector From 26% To
49%;
(B) In The Pension Sector It Approved A 26
Present FDI;
Now, Indian Parliament Will Have To Give Its
Approval For The Final Shape,

Thank you.