Industrialpolicy fdi

  • View

  • Download

Embed Size (px)

Text of Industrialpolicy fdi


    Swapna Hegde, IMED

  • Sop 6

    Swapna Hegde, IMED

  • Industrial Policy IP Indicate the respective roles of the public, private, joint and cooperative sectors

    It emphasizes upon the small, medium and large scale industries and underline the national priorities and the economic development strategy

    It also states Govt's policy towards foreign capital and technology, labor and tariff policy.

    In fact industrial and economic development to a very extent remain guided, regulated and fostered by the industrial policy

    Swapna Hegde, IMED

  • Industrial Policy RevolutionIndustrial Policy Resolution of 1948Industrial Policy Resolution of 1956Industrial Policy Resolution of 1973Industrial Policy Resolution of 1977Industrial Policy Resolution of 1980

    Swapna Hegde, IMED

  • IPR 1948 Main FeaturesThis policy contemplated Indian economy a mixed economy reserving a sphere for the private sector and another for public sector.The industries were divided into four categories: a) The manufacturing of arms and ammunitions, atomic energy and railways were to be in the exclusive control of Central Government b) The second category covered coal, iron and steel, aircraft manufacturing, ship building, manufacturing telephones, telegraphs and wireless apparatus excluding radio receiving sets and mineral oils. (New undertakings in these industries could henceforth be undertaken by the State)

    Swapna Hegde, IMED

  • c) The third category was made up of industries of such basic importance that the Central Govt. would feel it necessary to plan and regulate them It included basic industries like salt, automobiles, tractors, prime movers, electric engineering, heavy machinery, machine tools, heavy chemicals, fertilizers, electrochemical industries, non ferrous metals, rubber, manufactures, power and industrial alcohol, cotton and woolen textiles, cement, sugar, paper and news print, air and sea transport, minerals and industries relating to defense. d) A fourth category comprising the remainder of the industrial field was left open to the private enterprises, Individuals as well as co-operatives

    Swapna Hegde, IMED

  • IPR 1956 Main ObjectivesTo accelerate the rate of growth and speed up industrialization

    To develop heavy industries and machine making units

    To expand public sector

    To reduce disparities in income and wealth

    To build up a large growing cooperative sector

    To prevent monopolies and concentration of the wealth and income in a few hands

    Swapna Hegde, IMED

  • IPR 1956 Salient FeaturesNew classification of industries

    -Monopoly of the State -Mixed sector of public and private enterprise -Industries left for private sector

    Mutual dependence of public and private sectors

    Assistant and control of private sector

    Encouragement of Small scale and Cottage industries

    Reduction of Regional disparities

    Development of technical and managerial personal

    Industrial Peace

    Swapna Hegde, IMED

  • IPR 1956 - Critical AssessmentSocialistic pattern and Mixed economy as expression of industrial development;

    IPR 1956 stated clearly the inherent right of the State to acquire any industrial undertaking;

    Economic development was more explicitly equated with State enterprise

    Swapna Hegde, IMED

  • IPR -1977In December, 1977 the new IPR was announced

    An instrument to do away with the so-called shortcomings of IPR 1956;

    Major Listed shortcomings: Increased unemployment, increased urban rural disparities, Stagnation of Investment, Very industrial output and Widespread industrial sickness.

    Swapna Hegde, IMED

  • IPR - 1980objectives:

    (i) Optimum utilization of installed capacity;(ii) Maximum production and achieving higher productivity;(iii) Higher employment generation;(iv) Correction of regional imbalances;(v) Strengthening of the agricultural base through agro based industries and promotion of optimum inter- sectoral relationship;(vi) Promotion of export-oriented industries;(vii) Promotion of economic federalism through equitable spread of investment and dispersal of returns; and(viii) Consumer protection against high prices and bad quality

    Swapna Hegde, IMED

  • Why new economic policy 1991?Rapid agricultural and industrial development of IndiaRapid expansion of opportunities for gainful employmentProgressive reduction of social and economic disparitiesRemoval of poverty Attainment of self-reliance.

    Swapna Hegde, IMED

  • De-reservation of Public Sector: The number of industries reserved for public sector was reduced to 8 industries. At present, there are only three industries reserved for public sector which include. Atomic energy Railwaysspecified Minerals.

    De-licensing: -abolition of industrial licensing of all industries except six industries. The six industries are of social and strategic concern. The six industries are 1. Hazardous Chemicals. 2. Alcohol 3. Cigarettes 4. Industrial Explosives 5. Defense Products, 6. Drug and pharmaceuticals.

    Swapna Hegde, IMED

  • Disinvestment of public sector: Disinvestment is a process of selling government equity in PSUs in favors of private parties. Foreign technology agreement

    Foreign Investment: Approval will be given for direct foreign investment up to 51 percent foreign equity in high priority industriesMRTP Act: Emphasis will be placed on controlling and regulating monopolistic, restrictive and unfair trade practices.

    Swapna Hegde, IMED

  • Swapna Hegde, IMED

  • Swapna Hegde, IMED

  • Swapna Hegde, IMED

  • Decisions of the GovernmentIn view of the considerations outlined above the Government decided to take a series of measures to unshackle the Indian industrial economy from the cobwebs of unnecessary bureaucratic control. These measures complement the other series of measures being taken by Government in the areas of trade policy, exchange rate management, fiscal policy, financial sector reform and overall macro economic management.

    Swapna Hegde, IMED

  • Public Sector Public sector investments will be reviewed with a focus on the sector on high-tech and essential infrastructure. Where as some reservation for the public sector and private sector selectively. Similarly the public sector will also be allowed entry in areas not reserved for it.

    Public enterprises which are chronically sick and which are unlikely to be turned around will, for them formulation of new schemes, be referred to the Board for Industrial and Financial Reconstruction (BIFR), or other similar high level institutions created for the up liftment's.

    A social security mechanism created to protect the interests of workers likely to be affected by such rehabilitation packages.

    Industrial area, industrial estate, semi urban industrial estate / rural work-shed, industrial growth centre, industrial area established under joint sector, integrated infrastructure development centre, industrial park, Special Economic Zone, Various Industrial Area, Industrial park to growth of the nation.

    Swapna Hegde, IMED

  • In order to raise resources and encourage wider public participation, a part of the government's shareholding in the public sector would be offered to general public .

    Boards of public sector companies would be made more professional and given greater powers.

    There will be a greater trust on performance improvement

    Technical expertise on the part of the Government would be upgraded

    Public enterprises producing a very low rate of return on the capital invested resulting in a burden rather than being an asset to the government

    Implementing new technology for sustain good position with high competitive market .

    Swapna Hegde, IMED

  • Measures

    Portfolio of public sector investments reviewed with a view to focus the public sector on strategic, high tech and essential infrastructure

    Public Enterprises which are chronically sick and which are unlikely to be turned around referred to the Board for Industrial and Financial Reconstruction (BIFR) for revival/rehabilitation schemes

    Part of the governments shareholdings in the public sector would be offered to mutual funds, financial institutions, the general public and workers to raise resources and encourage wider public participation

    Swapna Hegde, IMED

  • Essential infrastructure goods and services

    Exploration and exploitation of oil and mineral resources

    Technology development and building of manufacturing capabilities in areas, which are crucial in the long term development of the economy and where private sector investment is inadequate

    Installing professionalism in board of public sector companies

    Greater thrust on performance improvement and greater autonomy to management

    Swapna Hegde, IMED


    Arms and ammunition and allied items of defense equipment, Defiance aircraft and warships.Atomic Energy.Coal and lignite.Mineral oils.Mining if iron ore, manganese ore, chrome ore, gypsum, sulphur, gold and diamond.Mining of copper, lead, zinc, tin, molybdenum and wolfram.Minerals specified in the Schedule to the Atomic Energy (Control of Production and Use) Order, 1953.Railway transport.

    Swapna Hegde, IMED

  • Stone crusher / manufacturing of ballast Coal and Coke briquette, coal screening Lime powder, lime chips, dolomite powder and all types of mineral powderCrushing, grinding and pulverizing of all type of minerals Manufacturing of LimeMotor cars.Pap