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Industrial Policies-Meaning
Rules, regulations, principles, policies and procedures laiddown by government for regulating, developing, andcontrolling industrial undertakings in the country.
It prescribes roles of the public, private, joint, and co-operative sectors.
It incorporates fiscal and monetary policies, labor policy,and the government attitude towards foreign capital.
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Objectives of Industrial Policies
To accelerate the rate of economic growth and to speed
up industrialization.
Providing opportunities for gainful employment
Eradication of poverty
Protecting and developing a healthy small scale sector
Updating technology and modernization of industry
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Industrial Policy Resolution-1948
1. State Monopolies: included the manufacture ofarms and ammunitions, the production and controlof atomic energy and the ownership of railways
2. Basic industries: government will take over thebasic industry sector undertakings by payingcompensation which is fair and equitable.
3. Private Industries: Rest of the industrial field open toprivate enterprise though the State would alsoprogressively participate in this field.
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Industrial policies in India--1956
The Background
The first five year plan ( 1951-52 to 55-56) was completed. Optimism was
running high
First General election completed
Second Five year plan : Rapid Industrialization, infrastructure and
institution building to priority
Lack of confidence in private sector
Public sector Commending heights
Self reliance : Apprehension towards foreign capital.
.
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Industrial policy-1956
New classifications of industries:
a) Schedule A: Those exclusive for state(17 categories) ,
Arms and ammunitions, atomic energy andrailways..
b) Schedule B: Those which were progressively stateowned(12 categories) but private expected to
supplement.c) Schedule C: All remaining industries left private
sector.
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Industrial policy-1956
Fair and non-discriminatory treatment for privatesector.
Encouragement to village and small-scale enterprises.
Change in attitude towards foreign capital.
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Industrial Policy -1991
The New Policy has four features:Liberalization, privatization, globalization .
Policy focus is on
Deregulating Indian industry;Allowing the industry freedom and flexibility in
responding to market forces. Providing a policy that facilitates and fosters growth of
Indian industry.
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Industrial Policy -1991Industrial Licensing :
Restricted to only certain industries viz
alcohol, cigarettes ,hazardous chemicals, aerospace, defense equipments ,drug and
pharmaceuticals( excluding bulk drugs).
Public sector policy:priority areas for growth of public enterprises in future would be:a) Essential infrastructure goods and services.b) Oil and mineral resources.
c) Technology development and building manufacturing capabilitieswhere private sector investment is inadequate.
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Industrial Policy -1991
Liberalization of Foreign Investment:
Policy towards foreign capital and technology has beenmodified very significantly.
Advantages:
a) technology transfer
b) marketing expertise,
c) introduction of modern managerial techniques
d) new possibilities for promotion of exports.
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Industrial Policy -1991MRTP ACT:
The principal objectives are:
Prevention of concentration of economic power .
Prohibition of monopolistic , restrictive and unfair tradepractices.
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Industrial reforms
Introduction:
The term economic reforms refers to policy reformsundertaken by the central govt. since 1990 to attaincertain significant achievements through the mainapproaches which are as follows:
Stabilization
Restructuring
Globalization
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Major Economic Reforms
Fiscal Reforms:
Reducing the Fiscal Deficit
Banking Sector
Import Licensing Export Orientation
Tax Reforms Direct Tax
Indirect Tax Resource Generation through Divestment
Structural Economic Reforms
Reorientation of Planning
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Banking Reforms
Changing in rate SLR and CRR
Entry of Public and Private Sector in capitalmarket
Operational Flexibility
Relaxation in Licensing of Private Bank
Improve standard of supervision , audit andtechnology
Interest rate deregulation and financialrepression.
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Industrial Reform
Industrial licensing
Foreign Technology
MRTP limit Technological Development
Development of small scale industries
Right of Labor
Foreign Investment
Self reliance
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Significant Consequences
Higher rate of growth
Rapid growth of secondary and tertiary Sectors
Increase in Export and Imports Improved Balance of Payments
Rise in value of Rupee
Less reliance on foreign borrowings
Overall development of Indian economy
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Growth Rate
5.6
1.3
5.1
5.9
7.3 7.3
7.8
4.8
6.5
6.1
90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00
Growth ate
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Indicators Of External Sector
Year Growth of Exports-BOP(%)
Growth ofImports-BOP(%)
Exports/imports(%)
90-91 9 14.4 66.2
95-96 20.3 21.6 74
00-01 21.1 4.6 78.5
2005-2006 23.4 32 67
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WPI Inflation Rate
11.3 11.3
10.110.6
5.4
13
3.1
5.1
3.6
8.1
3.9
4.7
0
2
4
6
8
10
12
14
Primary aarticaes Power Fuel Light Lubricants Manf. Products All comodities
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Conclusion
Policies & reforms have put the Indian economy on ahigher growth path.
Equally important to resolve the immediate liquidityproblem.
To restore the economy on the path of rapid andhealthy economic growth.
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Bibliography
Books Referred; Indian economy reforms Since 1990
Indian economy since 1945
Indian Economy
Indian Economic crises
Role of Manmohan singh in Economic reforms
www.Wikipidia.com
www.Google.com
www.planningcommision.gov.in www.rbi.org.in
www.slideshare.com
www.sribd.com
http://www.wikipidia.com/http://www.google.com/http://www.rbi.org.in/http://www.slideshare.com/http://www.sribd.com/http://www.sribd.com/http://www.sribd.com/http://www.sribd.com/http://www.sribd.com/http://www.sribd.com/http://www.slideshare.com/http://www.slideshare.com/http://www.slideshare.com/http://www.slideshare.com/http://www.slideshare.com/http://www.rbi.org.in/http://www.rbi.org.in/http://www.rbi.org.in/http://www.rbi.org.in/http://www.rbi.org.in/http://www.rbi.org.in/http://www.rbi.org.in/http://www.google.com/http://www.google.com/http://www.google.com/http://www.google.com/http://www.google.com/http://www.wikipidia.com/http://www.wikipidia.com/http://www.wikipidia.com/http://www.wikipidia.com/http://www.wikipidia.com/8/4/2019 Business Environ (1)
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The Indian IT Industry
Until 1991 the IT sector was growing at sluggish pace.The private sector was subjected to numerous controlsand had restricted access to technology
The economic reforms of 1991 changed the Indianbusiness context from one of state-centered, control
orientation to a free, open market orientationespecially for hi-tech companies.
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The Indian software exports increased from US$128million in 1991 to US$6.2 billion in 2001.
The Indian domestic software sales increase fromUS$115 million to US$ 2 billion in the same period.
An ideal example is Infosys which grew from Rs. 1million and 12 employess in 1982 to about Rs. 90million and 300 employees in 1992, to Rs. 19.5 billionand over 10,000 employees in 2001.
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The phenomenal growth rate of Indias software exports, with (ten-year rolling)
average annual growth never dropping below 30%, and overall exports
exceeding US$36bn in 2008/09:
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Software Exports as a Percentage of Total
Exports
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The much higher growth rate of Indian IT exports compared to production for
the domestic market. As a result, the share of exports in total IT output has
risen from 19% in 1991/92 to 69% in 2008/09:
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IT Sector Contribution to GDP
GDP: $1.209 trillion (2008 Estimate)GDP Growth: 6.7% (2009)GDP per capita: $1016
GDP by sector (2008 Estimate):
Agriculture: 17.2%Industry: 29.1%Services: 53.7%
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QUESTIONS