Industrial Policy
Faculty – Lovely School Of Business
LPU
Learning Outcome…
Understanding of…
 Concept of Industrial Policy
 Main objectives of industrial policy
 Role & functions of Department of
Industrial policy & promotion
 Industrial Policy 1991
Industrial Policy
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It covers rules, regulations, principles,
policies, & procedures laid down by
government for regulating & controlling
industrial undertakings in the country.
It prescribes the respective roles of the
public, private, joint, cooperative large,
medium & small scale sectors for the
development of industries.
Industrial Policy Contd...
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It incorporates fiscal & monetary
policies, tariff policy, labor policy.
It shows the government attitude not
only towards external assistance but
also toward public & private sectors.
Main Objectives
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To maintain a sustained growth in
productivity
To enhance gainful employment
To prevent undue concentration of
economic power
Main Objectives
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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
Introduction of DIPP
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The Department of Industrial Policy &
Promotion was established in 1995 and
has been reconstituted in the year 2000
with the merger of the Department of
Industrial Development.
Role & Function of DIPP
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Encouragement to foreign technology
collaborations at enterprise level and
formulating policy parameters for the
same;
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Administration of Industries
(Development & Regulation) Act, 1951
Role & Function of DIPP
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Formulation of policies relating to
Intellectual Property Rights in the fields
of Patents, Trademarks, Industrial
Designs and Geographical Indications
of Goods and administration of
regulations, rules made there under
Role & Function of DIPP
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Promoting industrial development of
industrially backward areas and the
North Eastern Region including
International Co-operation for industrial
partnerships and
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Promotion of productivity, quality and
technical cooperation.
Industrial Policies
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Industrial Policy Resolution of 1948
Industrial Policy Resolution of 1956
Industrial Policy Resolution of 1973
Industrial Policy Resolution of 1977
Industrial Policy Resolution of 1980
The New Industrial Policy of 1991
Industrial Policy 1991
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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.
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Industrial Policy 1991
In pursuit of the industrial objectives,
Government decided to take a series of
initiatives in respect of the policies relating
to the following areas:
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Industrial Licensing
Foreign Investment
Foreign Technology Agreements
Public Sector Policy
MRTP Act
Industrial Licensing Policy
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The Industrial Policy Resolution of 1956
identified the following three categories of
industries:
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Those that would be reserved for development in
public sector.
Those that would be permitted for development
through private enterprise with or without State
participation.
Those in which investment initiatives would
ordinarily emanate from private entrepreneurs.
Industrial Licensing Policy
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Industrial Licensing is governed by the
Industries (Development & Regulation)
Act, 1951.
Industrial licensing was abolished for all
industries, except those specified (18
industries), irrespective of levels of
investment.
Foreign Investment
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Limit on foreign equity holdings raised from
40% to 51% in a wide range of industries
Foreign Equity Proposals need not to be
accompanied by Foreign Technology Transfer
Agreement
Procedure for FDI streamlined by creating a
Foreign Investment Promotion Board to
consider individual application case by case
Foreign Technology Agreements
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Foreign technology agreements in highpriority industries upto Rs. 1 crore were given
automatic permission.
No permission was required for hiring foreign
technicians and foreign testing of
indigenously developed technologies.
Public Sector Policy
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List of industries reserved for the public (Schedule
A) reduced from 17 to 8
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List of sector reserved for dominance by public
sector (Schedule B) effectively abolished
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Disinvestment in selected public sector enterprise to
raise finance for development, bring in greater
accountability & help create a new culture in their
working for improved efficiency
MRTP Act
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Removed the threshold limits of assets in respect of MRTP
companies and dominant undertakings
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Eliminated the requirement of prior approval of Central
Government for
Establishment of new undertakings
Expansion of undertakings
Merger, Amalgamation and Takeover
Appointment of Directors under certain circumstances.
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The newly empowered MRTP Commission will be authorised
to initiative investigations on complaints received from
individual consumers or classes of consumers in regard to
monopolistic, restrictive and unfair trade practices.