Jaya Mam Ppt (Industrial Policy) Ethics

8/2/2019 Jaya Mam Ppt (Industrial Policy) Ethics

http://slidepdf.com/reader/full/jaya-mam-ppt-industrial-policy-ethics 1/47

INDUSTRIAL

POLICY OF INDIA

PRIYANKA KUMARI

ROLL NO 29

B. ETHICS AND ENVT.



INDUSTRIAL POLICY OF INDIA

1. INDUSTRIAL POLICY RESOLUTION1948 (6 April, 1948)

2. INDUSTRIAL POLICY RESOLUTION

(30th April, 1956)3. INDUSTRIAL POLICY FEB 2, 1973

4. INDUSTRIAL POLICY DEC 23, 1977

5. INDUSTRIAL POLICY STATEMENTOF JULY, 1980

6. INDUSTRIAL POLICY, JULY 24, 1991

GOI Industrial Policies 2



1. INDUSTRIAL POLICY

RESOLUTION 1948

(6 April, 1948)The Resolution emphasized at the following:

1. The importance to the economy of securinga continuous increase in production

2. Its equitable distribution

3. State must play of progressively activerole in the development of Industries




INDUSTRIAL POLICY

RESOLUTION 1948…2

4. It laid down that besides arms and ammunition,

atomic energy and railway transport, which

would be the monopoly of the CentralGovernment, the State would be exclusively

responsible for the establishment of new

undertakings in six basic industries-except

where, in the national interest, the State itself found it necessary to secure the cooperation of

private enterprise




INDUSTRIAL POLICY

RESOLUTION 1948…3

5. The rest of the industrial field was left

open to private enterprise though it was

made clear that the State would alsoprogressively participate in this field





RESOLUTION (30th April, 1956)

1. Improving living standards and working

conditions for the mass of the people

2. To reduce disparities in income and

wealth

3. To prevent private monopolies and

concentration of economic power in

different fields in the hands of small

numbers of individuals




INDUSTRIAL POLICY

RESOLUTION, 19564. The State will progressively assume a

predominant and direct responsibility for

setting up new industrial undertakingsand for developing transport facilities

5. Undertake State trading on an increasing

scale6. At the same time private sector will havethe opportunity to develop and expand






INDUSTRIAL POLICY

RESOLUTION, 1956

10. All industries of basic and strategicimportance, or in the nature of public utilityservices, should be in the public sector

11. It is always open to the State to undertake anytype of industrial production

12. Categorization of industries:

i) In the first category will be industries the futuredevelopment of which will be the exclusiveresponsibility of the State




INDUSTRIAL POLICY

RESOLUTION, 1956ii) The second category will consist of

industries which will be progressively

state-owned and in which the State will,therefore, generally take the initiative in

establishing new undertakings, but in

which private enterprise will also beexpected to supplement the efforts of the

State




INDUSTRIAL POLICY

RESOLUTION, 1956

iii) The third category will include all theremaining industries, and their futuredevelopment will, in general, be left to theinitiative and enterprise of the private sector

13.The Government of India would stress the roleof cottage and village and small scale industriesin the development of the national economy

14. Disparities in levels of development betweendifferent regions should be progressivelyreduced





FEBRUARY 2, 1973

1. The Industrial Policy Resolution of 1956 still remained valid, but certainstructural distortions had crept in the

system2. The new policies were hence directed

towards removing these distortions

3. It provided for a closer interactionbetween the agricultural and industrialsectors




INDUSTRIAL POLICY, 1973

4. Accorded the highest priority to the

generation and transmission of power

5. An exhaustive analysis of industrial

products was made to identify products

which are capable of being produced in

the small scale sector

6. The list of industries exclusively

reserved for the small scale sector was

expanded from 180 items to more than

500 items





7. Within the small scale sector, a tiny sector

was also defined with investment in

machinery and equipment upto Rs.1 lakh and

situated in towns with a population of lessthan 50,000 according to 1971 census figures,

and in villages

8. Special legislation to protect cottage and

household industries was also proposed to be

introduced





9. It was also decided that compulsory exportobligations, merely for ensuring the foreign

exchange balance of the project, would no

longer be insisted upon while approving new

industrial capacity

10. In the areas of price control of agricultural

and industrial products, the prices would beregulated to ensure an adequate return to the

investor





DECEMBER 23, 1977

1. Industrial Policy Highlights onproducing inputs needed by a large

number of smaller units and making

adequate marketing arrangements

2. The nucleus plant would also work for

upgrading the technology of small units

3. The Government would promote thedevelopment of a system of linkages

between nucleus large plants and the

satellite ancillaries GOI Industrial Policies 16




4.To boost the development of small scaleindustries, the investment limit in the case of tiny units was enhanced to Rs.2 lakh, of a smallscale units to Rs.20 lakh and of ancillaries toRs.25 lakh

5.A scheme for building buffer stocks of essentialraw materials for the Small Scale Industries wasintroduced for operation through the Small

Industries Development Corporations in theStates and the National Small IndustriesCorporation in the Centre





6. Industrial processes and technologies

aimed at optimum utilisation of energy or

the exploitation of alternative sources of energy would be given special assistance,

including finance on concessional terms.


5 THE INDUSTRIAL POLICY



5. THE INDUSTRIAL POLICY

STATEMENT OF JULY, 1980

It was based on the Industrial Policy Resolution of 1956:

(i) Optimum utilisation 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;




Industrial Policy Statement of

1980(vii) Promotion of economic federalism

through equitable spread of investment

and dispersal of returns;

(viii) Consumer protection against high

prices and bad quality




6. INDUSTRIAL POLICY,

JULY 24, 1991

1. Government is pledged to launching areinvigorated struggle for social and

economic justice, to end poverty and

unemployment and to build a modern,

democratic, socialist, prosperous andforward-looking India

2. Such a society can be built if India grows aspart of the world economy and not in isolation





3. While Government will continue to follow thepolicy of self-reliance, there would be greater

emphasis placed on building up our ability to

pay for imports through our own foreign

exchange earnings.

4. Government is also committed to development

and utilisation of indigenous capabilities intechnology and manufacturing as well as its

upgradation to world standards.





5. Government will continue to pursue a soundpolicy framework encompassingencouragement of entrepreneurship,

development of indigenous technologythrough investment in research anddevelopment, bringing in new technology,dismantling of the regulatory system,development of the capital markets and

increasing competitiveness for the benefit of the common man





6. The spread of industrialisation to backward

areas of the country will be actively promoted

through appropriate incentives, institutions and

infrastructure investments

7. Government will provide enhanced support to

the small-scale sector so that it flourishes in an

environment of economic efficiency and

continuous technological upgradation





8.Foreign investment and technologycollaboration will be welcomed to obtainhigher technology, to increase exports and toexpand the production base

9.Government will endeavour to abolish themonopoly of any sector or any individualenterprise in any field of manufacture, excepton strategic or military considerations andopen all manufacturing activity to competition





10. The Government will ensure that the public

sector plays its rightful role in the evolving

socioeconomic scenario of the country.

Government will ensure that the public

sector is run on business lines as envisaged

in the Industrial Policy Resolution of 1956

and would continue to innovate and lead in

strategic areas of national importance





11.Government will fully protect theinterests of labour, enhance their welfareand equip them in all respects to dealwith the inevitability of technologicalchange

12. Labour will be made an equal partnerin progress and prosperity.

13. Workers’ participation in managementwill be promoted





14. Workers cooperatives will be encouraged toparticipate in packages designed to turn aroundsick companies

15. The major objectives of the new industrialpolicy package will be to build on the gainsalready made, correct the distortions orweaknesses that may have crept in, maintain a

sustained growth in productivity and gainfulemployment and attain internationalcompetitiveness





16. Need to preserve the environment and

ensure the efficient use of available

resources

17. Government’s policy will be

continuity with change





18. In pursuit of the above objectives, Government

have decided to take a series of initiatives in

respect of the policies relating to the following

areas:A. Industrial Licensing

B. Foreign Investment

C. Foreign Technology AgreementsD. Public Sector Policy

E. MRTP Act




INDUSTRIAL POLICY 1991

ISSUES

• Govt . recognizes the need for• social and economic justice, to end poverty and

unemployment and to build a modern, democratic,

socialist, prosperous and forward-looking India

• India to grow as part of the world economy and not inisolation

• Government will provide enhanced support to the small-

scale sector so that it flourishes in an environment of economic efficiency and continuous technological up

gradation



The spread of industrialization to backward areas

of the country will be actively promoted

through appropriate incentives, institutions andinfrastructure investments.

Foreign investment and technology collaboration

will be welcomed to obtain higher

technology, to increase exports and to expand the

production base.

progress and prosperity

Workers’ participation in management will be

promoted



Industrial Policy

1991• Objective:

Remove regulatory system

Incentives for industries in backward areasTo Run the PSUs on business lines

Encourage Entrepreneurship

Link Indian economy to global marketDevelop indigenous technology

Promote productivity & employment

generation33



Initiatives Taken in New Economic Policy

New Economic Policy (1991)

Industrial Sector Reforms

Public Sector Policy

Industrial Licensing Policy

MRTP Act

External Trade Reforms

Foreign Investment

Foreign Technology

Agreements



1991 Policy Initiatives

1. Industrial Licensing Policy

2. Public sector Policy

3. Foreign Investment

4. Foreign Technology Agreements

5. MRTP Act




INDUSTIAL LICENSING POLICY

Industrial Licensing - It is required to establish, to manufacture goods at a

specific location before 1991.

In the new policy licensing requirement was abolished

except for

1. Distillation & Brewing of alcoholic drinks

2. Manufacturing Cigarettes & Tobacco

substitutes

3. All types of electronic aerospace & Defence equipments

4. Industrial Explosives

5. Certain Hazardous chemicals

Exempted factories have to furnish a memorandum to Industries

department

Location:

In the new policy projects can be established at any location except cities .

In a city of 1 million population it has to be established 25kms away from

city. 36



List of Industries

• Reserved for the Public Sector

• Compulsory Industrial Licensing



Public sector policy

Number of Industries reserved for public sector reduced to 8 and

then to 2 ( Atomic energy & Railway )

Growth of PSUs in the following Priority sectors

1.Essential infrastructure Goods & Services

2. Exploration & Exploitation of Oil & Mineral resources

3. Strategic Defense equipments

4. Technology development & building of manufacturing

capabilities in areas which are crucial for economic development

Autonomy through MOU – Navaratnas Bringing down government equity to 26 % in non-Priority sector

PSUs

Close down PSUs which can not be revived

Fully protect the interest of workers

38



FOREIGN INVESTMENT

Foreign Investment allowed up to 51 % of Equitycapital in FERA companies

Foreign Investment allowed up to 26 % of Equity

capital in Defense productions sector.

Up to 100 % in certain sectors ( real estate ) Stock market opened for foreign investment

EXIM Policy liberalized , tariffs reduced , lifted import

restrictions

Foreign exchange rate policy liberalized , Rupee was

made fully convertible on current account and then

recently partly on capital account.

39



FOREIGN TECH. AGREEMENTS

1. In order to inject the desired level of technological dynamism in Indianindustry Automatic permission will be given for foreign technology

agreements in high priority industries (list attached) up to a lump sum payment

of Rs. 1 crore, 5% royalty for domestic sales and 8% for exports, subject to

total payment of 8% of sales over a 10 year period from date of agreement or 7

years from commencement of production.

2. In respect of industries other than those in below list, automatic permission

will be given subject to the same guidelines as above if no free foreign

exchange is required for any payments.

3. No permission will be necessary for hiring of foreign technicians, foreign

testing of indigenously developed technologies.

40



MRTP ACT

The government will not scrutiny the investment decisions of

MRTP companies

Prior approval of MRTP companies for expansion not required

Restrictions on merger, acquisition and transfer of shares will be

replaced

MRTP commission will be strengthened to take action against

restrictive & unfair trade practice. MRTP commission will be

empowered to enquire into the complaints of customers

MRTP Act is replaced by Competition Law

41

I d t i l P li Ch



Industrial Policy Changes

Pre-1991 Policy Current Policy

Industrial Licensing was the new rule Licensing is an exception

Public sector monopoly/dominance in

strategic, basic and heavy industries All but two industries are open to the

private sector

MRTP Act restriction on entry and

growth of large companies No such restrictions

Foreign investment allowed only in

select industries that too subject tonormally, a ceiling of 40% of total

equity and prior permissions

Foreign investment allowed in a large

number of industries, including up to100% or equity in many of them.

Automatic route available subject to

specified conditions.

Restrictive policy towards foreign

technology Very liberal policy towards foreign

technology

Reservation of large number of

products for small scale sector

Reservation list is being pruned.



Evaluation of New Economic Policy - 1991

Positive Aspects:

Fulfilled a long-felt demand of the corporate sector for declaring invery clear terms that licensing was abolished for all industries except18 industries which included coal, petroleum, sugar, motor cars,cigarettes, hazardous, chemicals, pharmaceuticals and some luxuryitems

Business houses intending to float new companies or undertakesubstantial expansion were not required to seek clearance from theMRTP Commission

Bottlenecks created by the bureaucracy were struck down by this

singular decision of the Government

NIP unshackled many of the provisions, which acted as brakes on thegrowth of large private corporate sector

Overall relief in the dismantling of industrial licensing and regime of

controls

E l i f N E i P li




Negative Aspects:

Policy regarding Foreign Capital:

Assertions by critics assert that the welcome foreign capitalmay lead us to selling of our sovereignty to multinationals

Prudence demanded that utmost care to be taken to inviteforeign capital in high priority industries only

Monitoring of payment of dividends by RBI

Public Sector Policy:

The govt. should concentrate on improving the performance of the redeemable and surplus generating public sector enterpriseswhich constitute 85% of the investment




Social Security Policy

Industrial Policy sidetracked issues and generated a fear in themind of the workers that the govt. was not sincere in protectingthe interests of the workers

Govt. of India could successfully go in for shedding its load of

loss-making enterprises and help the working class to assume theownership role and nurse these enterprises to health

MRTP Policy

Failure of MRTP to break the monopolistic or Oligopolisticcharacter of the Indian market



Lessons from India:

• Industrial Policy should not be about:

• Controlling Prices• Controlling Quantity

• Specifying Geographical Location of Activity

• Preemption by Public Sector



THANK YOU

47

Documents

Jaya Mam Ppt (Industrial Policy) Ethics