11796625 New Industrial Policy

8/6/2019 11796625 New Industrial Policy

1/37

Group 9

Section B


2/37

An industrial policy is any government

regulation or law that encourages theongoing operation of, or investment in, a

particular industry.


3/37

Rapid agricultural and industrialdevelopment of country

Rapid expansion of opportunities foremployment

Progressive reduction of social and

economic disparities, removal of povertyand attainment of self-reliance.


4/37

1948:Emphasized the importance of securing a

continuous need of production and its equitabledistribution

1956: Acceleration of the rate of economic growthand the speeding up of industrialization

1973:Identified high-priority industries whereinvestment from large industrial houses and

foreign companies would be permitted.


5/37

1977: Laid emphasis on decentralization and on therole of small-scale, tiny and cottage industries.

1980: Focused attention on the need for promotingcompetition in the domestic market, technological

upgradation and modernization

1985-86: Aimed at increasing productivity, reducingcosts and improving quality.


6/37

Designed in 2 parts:-

1. July 24th1991,concerned largeindustries including medium sized

industries

2. August 6th

1991,dealt with smallindustries


7/37

To end poverty and unemployment and to build amodern, democratic, socialist, prosperous andforward-looking India.

Such a society can be built if India grows as part of theworld economy and not in isolation.

Up gradation to world standards in terms ofmanufacturing and technology.

To provide enhanced support to the small-scale sector.

To enhance foreign investment and technologycollaboration, to obtain higher technology, to increaseexports and to expand the production base.


8/37

To abolish the monopoly of any sector or any

individual enterprise.

To ensure that the public sector plays itsrightful role.

All sectors of industry whether small,

medium or large, belonging to the public,

private sector or cooperative sector will beencouraged to grow and improve on their

past performance.


9/37

Government has decided to take a series of

initiatives in respect of the policies relating to

the following areas.

Industrial Licensing.

Foreign Investment Foreign Technology Agreements.

Public Sector Policy

MRTP Act.


10/37

Encourage and assist Indian entrepreneurs toexploit and meet the emerging domestic and

global opportunities and challenges.This can be done only if the role played by

the Government were to be changed fromthat of only exercising control to one of

providing help and guidance. Industrial licensing abolished for all

industries, except those specified,irrespective of level of investment.


11/37

Compulsory licensing for reasons related

to security and strategic concerns, social

reasons, problems related to safety and

over-riding environmental issues,

manufacture of products of hazardous

nature and articles of elitist consumption.


12/37


13/37

In locations other than cities of more than 1million population, there will be no requirementof obtaining industrial approvals from theCentral Government except for industries

subject to compulsory licensing

Existing units will be provided a new broadbanding facility to enable them to produce anyarticle without additional investment

The exemption from licensing will apply to allsubstantial expansions of existing units


14/37

To bring advantages of technology transfer,

marketing expertise, introduction of modern

managerial techniques and new possibilities

for promotion of exports.

Decided to provide approval for direct

foreign investment upto 51% foreign equity inAnnexure 1 industries


15/37

To encourage foreign trading companiesto assist us in export activities

To negotiate with world's largestinternational manufacturing andmarketing firms and provide the avenuesfor large investments in the development

of industries and technology in thenational interest.


16/37

To remove unnecessary governmentalinterference in the relationship between

suppliers and user of technology.Automatic approval of technological

agreements.

Greater competitive pressure will also induce

our industry to invest much more in researchand development

No clearance needed for foreign techniciansand testing


17/37


18/37

Public ownership and control

Preventing the concentration ofeconomic power, reducing regional

disparities and ensuring that planned

development serves the common good

Industrial Policy Resolution of 1956


19/37

Atomic Energy.

Coal and lignite.

Arms and ammunition and allied items of defense equipment,Defense aircraft and warships.

Mineral oils.

Mining if iron ore, manganese ore, chrome ore, gypsum,sulphur, gold and diamond.

Mining of copper, lead, zinc, tin, molybdenum and wolfram.

Minerals specified in the Schedule to the Atomic Energy

(Control of Production and Use) Order, 1953. Railway transport


20/37

New approach to public sector needed & following wereconsidered as priority areas

Essential infrastructure goods and services. Exploration and exploitation of oil and mineral resources.

Technology development and building of manufacturingcapabilities in areas which are crucial in the long termdevelopment of the economy and where private sectorinvestment is inadequate.

Manufacture of products where strategic considerationspredominate such as defense equipment.

At the same time the public sector will not be barredfrom entering areas not specifically reserved for it.


21/37

Industries based on low technology, smallscale and non-strategic areas, inefficientand unproductive areas, areas with low or

nil social considerations or publicpurpose, will be reviewed

Those public enterprises which are in highpriority areas or are generating good orreasonable profits will be provided amuch greater degree of managementautonomy through the system ofmemoranda of understanding(MOU)


22/37

Sick public enterprises which are unlikely tobe turned around will, for the formulation ofrevival schemes, be referred to the Board for

Industrial and FinancialReconstruction(BIFR), or other similar high level institutions

created for the purpose.

In order to raise resources and encourage

wider public participation, a part of thegovernment's shareholding in the publicsector would be offered to mutual funds,financial institutions, general public andworkers.


23/37

Boards of public sector companies would bemade more professional and given greaterpowers.

There will be a greater thrust on performanceimprovement through the Memoranda of

understanding (MOU) systems through whichmanagements would be granted greaterautonomy and will be held accountable.

To facilitate a fuller discussion on performance,the MOU signed between Government and thepublic enterprise would be placed in Parliament.


24/37

(Monopolies and Restrictive Trade

Practices Act)


25/37

Prevention of concentration of economic power to

the common detriment, control of monopolies, and

Prohibition of monopolistic and restrictive and

unfair trade practices. The MRTP Act will be restructured by eliminating

the legal requirement for prior governmental

approval for expansion of present undertakings and

establishment of new undertakings.


26/37

The newly empowered MRTP Commission will

be authorized to initiate investigations suo

moto or on complaints received from

individual consumers or classes of consumersin regard to monopolistic, restrictive and

unfair trade practices.

Necessary comprehensive amendments were

made in theMRT

PA

ct in this regard and forenabling the MRTP Commission to exercise

punitive and compensatory powers.


27/37

Overlooking Employment

Unresolved Issues:-

a) To reorient industrial production

b) To re-examine the viability of

engineering industry

c) Linkages between the industry and

agriculture

No exit provision for entrepreneurs


28/37

Little for labour

Administrative hurdles

Little for R&D

Uncertain Prospects for SSI:-a) Credit supply

b) Integration of production

c) Forces of competition


29/37


30/37

On 11th Feb 2000, Automatic approval was made

available for the following:

Up to 74%

FD

I inAdvertising sector.

Up to 100% FDI in Film industry

With a view to further liberalizing the FDI

regime, the Government also permitted FDI upto 100% on the automatic route in the

advertising sector.


31/37

Govt in 2002 permitted FDI up to 100% for

development of integrated townships, including

housing,commercial premises,resorts,city and

regional level urban infrastructure facilitiesOn 5th July 2002, As part of the ongoing

liberalization of the FDI regime, the

Government decided to allow FDI up to

100% in tea sector, including tea

plantation


32/37

On 12th January 2005,govt. decided that new proposals forforeign investment/technical collaboration would be allowedsubject to the following guidelines:

Prior approval of the Government would be required only in

cases where the foreign investor has an existing jointventure or trademark agreement in the 'same' field. The onusto provide requisite justification as also proof to the

satisfaction of the Government that the new proposal would or

would not in any way jeopardize the interests of the existing

joint venture or trademark partner or other stakeholders wouldlie equally on the foreign investor and the Indian partner


33/37

On 13th January 2006, govt. decided to allow

FDI up to 49% with prior approval of theGovernment for setting up Up-linkingteleports;

FDI up to 100% with prior approval of theGovernment for Up-linking a Non-News &

Current Affairs TVChannel;


34/37

The following industries require compulsoryindustrial license:

Distillation and brewing of alcoholic drinks.

Tobacco and manufactured tobaccosubstitutes;

Electronic Aerospace and defense equipment

Industrial explosives

Hazardous chemicals(HCN,phosgene,isocyanides etc)


35/37


36/37

MRTP Act : 14 Restricted trade practices

Now : Only 4

Cartelization and sharing of territories

Restricting production and supply

Collusive bidding Predatory pricing


37/37

11796625 New Industrial Policy

Documents

Transcript of 11796625 New Industrial Policy