14-11-2012, 01:20 PM
A TRAINING REPORT ON Industrial Policy Since 1991
The New Industrial Policy 1991 by Aman panwar.docx (Size: 34.01 KB / Downloads: 36)
Industrial Policy Since 1991
The Industrial Policy announced on July 24, 1991 heralded the economic reforms in India and sought to drastically alter the industrial scenario in our country. The most visible sign of the country’s economic crisis in early 1991 was:
Extremely low foreign exchange reserves of Rs. 2400 crore (just enough to buy from abroad only three weeks requirements.)
Inflation was as high as 13.5%
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.
The salient features of this policy are as follows:
1. Except some specified industries (security and strategic concerns, social reasons, environmen¬tal issues, hazardous projects and articles of elitist consumption) industrial licensing would be abol¬ished.
2. Foreign investment would be encouraged in high priority areas up to a limit of 51 per cent equity.
3. Government will encourage foreign trad¬ing companies to assist Indian exporters in export activities.
4. With a view to injecting the desired level of technological dynamism in Indian industry, the gov¬ernment will provide automatic approval for tech-nology agreements related to high priority indus¬tries.
5. Relaxation of MRTP Act (Monopolies and Restrictive Practices Act) which has almost been rendered non-functional.
INDUSTRIAL POLICY HIGHLIGHTS
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 larger 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% in the Seventh Plan period.
Government is pledged to launching 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. Such a society can be built if India grows as part of the world economy and not in isolation.
While 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 development and utilisation of indigenous capabilities in technology and manufacturing as well as its upgradation to world standards.
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 system, development of the capital markets and increasing competitiveness for the benefit of the common man. The spread of industrialisation to backward areas of the country will be actively promoted through appropriate incentives, institutions and infrastructure investments.