By Kunal Upadhyay

The Industrial Policy announced on July 24, 1991

The most visible sign of the country’s economic crisis in early 1991 was:

This policy expanded the scope of the private sector by opening up most of the industries for the private sector and did away with the entry and growth restrictions. The most important initiatives are with respect to the virtual scrapping of industrial licensing and registration policies, an end to the monopoly law and a welcoming approach to foreign investments.

To maintain a sustained growth in productivity;

To enhance employment; To achieve optimal utilization of human

resources; To attain international competitiveness Protect the interests of workers

Development of original technology through greater investment in R&D and bring in new technology to help Indian manufacturing units Incentive for industrialization of backward areas

Ensure running of PSUs on business lines and cut their losses

Stop the monopoly of any sector in any field of manufacture except on strategic or security grounds.

To transform India into a major partner and player in the global arena.

Policy has abolished the industrial licensing system for all industries expect 18 specified industries

Coal Petroleum

Sugar Motor car

Cigarettes Drugs

Pharmaceuticals Electronic equipment

Dangerous chemical

As per amendments made in 1993, 1996, 1997 and 1998-99, as many as 13 industries have been delicensed.◦ At present only 5 industries remain under the

preview of industrial licensing◦ Alcohol◦ Cigarettes ◦ hazardous chemicals◦ Electronic aerospace◦ Defense tools and Industrial explosive

In case of cities having population of more population of more than 1 million, NO industrial approval than 1 million, NO industrial approval required from the central government required from the central government (expect from licensing)

In case of cities with population of more population of more than 1 million, industries like non-polluting than 1 million, industries like non-polluting industries such as electronic computer, industries such as electronic computer, software printing, will be allowed outside 25 software printing, will be allowed outside 25 kms. kms.

Order to reduce overcrowding in cites and to enable the industries to move to rural or backward regions, suitable incentive and investment well designed.

The mandatory provision of convertibility clause enabling financial institutions to convert loans into equity share

The entry of foreign investors in the form of direct equity investment has been allowed up to 51% of total investment in projects.

For access to the world markets for attract foreign investment and advanced technology, Govt. setup special Foreign Investment Board.

promotions of exports call for a systematic exploration of world market through highly professional marketing activities.

Ease the entry of foreign technology

Automatic approval for foreign technology agreement related to high priority industries.

Indian companies to develop relationship with the supplies of foreign technology on a continuing basis and make their decisions on the basis

Essential infrastructure goods and services.

Exploration and Development of oil and minerals resources

Technology development and building of manufacturing

Strategic considerations predominate such as, defense equipments, atomic energy, railway

Review of industries like◦ Low technology◦ Small Scale Industries

Review of inefficient and unproductive area

area with low social consideration or public purpose and are where private sector has developed

To prevent such concentration of economic power which damaging to public interest and to control monopolistic trend

To prohibit monopolistic, restrictive and unfair practices

De-licensing of most industries will help entrepreneurs to quickly seize business opportunities.

Removal of controls under the MRTP Act will facilitate expansion and growth.

There will be greater inflow of foreign capital and technology due to easing of restrictions.