Industrial Policy Statement 1991 #1

Pandit Jawaharlal Nehru laid the foundation of a modern India. His vision and determination has left a lasting impression on every facet of national endeavour since Independence and is due to his initiative that India now has a strong and diversified industrial base and is a major industrial nation of the world. The national goal and objectives on the eve of Independence, namely the rapid agricultural and industrial development of the country, rapid expansion of opportunities for gainful employment, progressive reduction of social and economic disparity , removal of poverty and attainment of self-reliance remain as valid today as at the time of Pandit Nehru first set them before the nation. All industrial policies must contribute to the realisation of these goals and objectives at an accelerated pace. The present industrial policy is inspired by these very concerns and represents a renewed initiative towards consolidating the gains of national reconstruction at this crucial stage.
1948 Industrial Policy Resolution outlined the approach to industrial growth and development. It emphasised the importance to the economy of securing a continuous increase in production and ensuring the equitable distribution. After adopting the Constitution with socio-economic goals, the Industrial Policy as comprehensively revised and adopted in 1956. To meet new challenges it was modified through statements in 1973, 1977 and 1980. The Industrial Policy of 1956 had its objective the acceleration of the rate of economic growth and the speeding up of industrialisation as a means of achieving a socialistic pattern of society. By that time, capital as scarce and the base of entrepreneurship was not strong enough, hence, the industrial policy resolution gave primacy to the role of the State to assume a predominant and direct responsibility for industrial development.
1973 Industrial Policy statement, inter alia, identified high priority industries where investment from large industrial houses and foreign companies would be permitted.
The Industrial Policy Statement of 1977 laid emphasis on decentralisation and the role of small- scale tiny and cottage industries. The Industrial Policy Statement of 1980 focused attention on the need for promoting competition in the domestic market, technology up-gradation and modernisation. It laid the foundation of increasingly competitive export base and for encouraging foreign investment in high technology areas. This found expression in the Sixth Five Year Plan which bore the distinct stamp of Indira Gandhi. It was Indira Gandhi who emphasised the need for productivity to be the central concern in all economic and production activities.
These policies created a climate for rapid industrial growth in the country. Thus, on the eve of Seventh Five Year Plan, a broad based infrastructure had been built up. Basic industries were established, high degree of self-reliance in a number of items, raw materials, intermediates, finished goods had been achieved. New Growth Centres of industrial activities had emerged, as new generation of entrepreneurs. Large number of engineers, technicians and skilled workers had also been trained. The Seventh Plan recognised the need to consolidate on these strength and to make initiatives to prepare Indian industry to respond effectively to the emerging challenges. A number of policy and procedural changes were introduced in 1985 and 1986 under the leadership of Rajiv Gandhi, aimed at increasing productivity, reducing costs and improving quality. The accent was on opening the domestic market to increased competition and readying our industry to stand on its own in the face of international competition. The public sector was freed from a number of constraints and given a large measure of autonomy. The technological and managerial modernisation of industry was pursued as the key instrument for increasing productivity and improving our competitiveness in the world. The net result of all these changes was that Indian industry grew by an impressive average annual growth rate of 8.5% during this plan period.
Government pledged to launch 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. If India grows, as part of the world economy and not in isolation can now be built.
The 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. Government is also committed to develop and utilisation of indigenous capabilities in technology and manufacturing as well as its up gradation to world standard.
Government will continue to pursue a sound policy framework encompassing encouragement of entrepreneurship, development of indigenous technology through investment in research and development, bringing in new technology, dismantling of the regulatory systems, development of the capital market and increasing competitiveness for the benefit of the common man. Spreading of industries in backward areas will be actively promoted through appropriate incentives, institutions and infrastructure investments.
Government will enhance support to the small-scale sector so that it flourished in an environment of economic efficiency and continuous technological up gradation.
FDI and technological collaboration will be welcomed to obtain higher technology, to increase exports and to expand the production base.
Government will also endeavour to abolish the monopoly of any sector any individual enterprise in any field of manufacture, except on strategic or military consolidation and open all manufacturing activity to competitive.

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