The Industrial Policy Resolution 1977, also known as the New Industrial Policy (NIP), was a policy document adopted by the Government of India in July 1977. It marked a significant shift in India's economic policy, as it marked the abandonment of the previous policy of import substitution and the adoption of a more open and market-oriented economic policy.
Prior to the NIP, the Indian economy was heavily controlled and regulated, with a focus on import substitution, which aimed to reduce the country's dependence on imports by promoting the production of domestic substitutes. This policy was implemented through a range of measures such as tariffs, quotas, and licensing requirements, which made it difficult for foreign firms to enter the Indian market and for domestic firms to access technology and inputs.
However, by the 1970s, it had become clear that the import substitution policy had not been successful in achieving its objectives. The economy had remained stagnant, and the country was facing a balance of payments crisis. In this context, the NIP was adopted with the aim of promoting industrial growth and modernizing the economy.
The NIP marked a significant shift in the direction of economic policy, as it marked the abandonment of the import substitution policy and the adoption of a more open and market-oriented policy. The NIP allowed for the entry of foreign firms into the Indian market, and encouraged domestic firms to access technology and inputs from abroad. It also liberalized the licensing regime, making it easier for firms to set up businesses and expand their operations.
The NIP also recognized the role of the private sector in driving economic growth, and encouraged the expansion of private enterprise through the removal of controls on private investment. It also introduced a number of measures to support small and medium enterprises, such as the establishment of the Small Industries Development Bank of India (SIDBI) to provide credit and support to these firms.
Overall, the NIP played a significant role in transforming the Indian economy and paving the way for the country's economic growth in the decades that followed. It opened up the economy to foreign investment and competition, and encouraged the expansion of the private sector. While the NIP was not without its challenges and controversies, it was a key turning point in India's economic development and helped to lay the foundations for the country's current status as a major player in the global economy.
Most Important Elements of India’s Industrial Policy Statement, 1977
Proposal to set up in each district an agency called "District Industry Centre" DIC to serve as a focal point of development for small-scale and cottage industries. Such enterprises were provided a much greater degree of management autonomy through the system of memoranda of understanding. Basically, the Industrial Policy Resolution of 1991 delineated developmental, deregulatory and de-bureaucratic measures and underscored the need to shift from subsidized and cheap credit to a system which would ensure acceptable flow of credit on timely and normative basis to the small scale industrial sector. That is why the policy is taken more as a process than a policy. The important elements included in the resolution to increase the development of small-scale sector were as follows: I.
A separate wing of IDBI was to be set up to provide financial assistance to small scale industries. The Industrial Policy of 1980 emphasized a more capital-intensive pattern of development, and hence attempted a variety of deregulation measures aimed at assisting the major sector. As a result, the number of factories from 1,12,286 during 1991 92 increased to 1,58,877 during 2009-10; number of workers increased from 62. Contemporary policy measures for small scale and cottage Industries: 1. Measures were needed to make these enterprises more growth oriented and technically dynamic. Further in any emergency, the Government would always have the power to take over any industry vital for national defence. While some of the elements of that Resolution in regard to desirable pattern of industrial development still remained valid, the results of actual policies in the industrial field had not been upto the expectations or declared objectives.
Other important features: The role of foreign capital in industrial development of theeconomy was recognised but the need for regulating and controlling it according to the needs of the domestic economy was deemed essential. . It gave importance to the economy of securing a continuous increase in production and ensuring its equitable distribution. Cottage and Household Industries which provide self-employment on a large scale. The main goal of setting up DICs was to promote under a single roof all the services and support required by small and village businesspersons.
In order to improve the competitiveness of the products manufactured in the small-scale sector; programmes of technology up gradation will be executed under the umbrella of an apex Technology Development Centre in Small Industries Development Organisation SIDO. Industrial Policy Resolution 1991 18 P a g e Policy measures initiated in the first three decades since Independence facilitated the establishment of basic industries and establishing up of a broad based infrastructure in the country. The Congress party returned to power. This situation led to a transformed emphasis on industrial policy. Reservation of certain items only for village and small scale industries.
To know more about the Competition Commission of India , check the linked article. All other minerals except minor minerals as defined in Section 3 of the Minerals Concession Rules 1949. The Industrial policy act of 1948, 1951, and 1956 has got demons on their share that has constantly established License Raj in the Country. The Government attached high priority to the building up of a professional cadre of managers in the public sector who were given the necessary autonomy and entrusted with the task of providing dynamic and efficient management to such enterprise. Presently only three sectorsare reserved for central government. Our industrial strategy, therefore, must be responsive to the objective of creating an industrial base, which was sufficiently diversified and sufficiently strong to withstand the vagaries of international trade and aid relationship.
Government Policies, Government Policies For Development, Small
It downplayed the employment goal. Statistics about the Manufacturing Sector With the development of the economy, the percentage of people engaged in industry is increasing, and its contribution to the net GDP of India is increasing as well. Reservation of 504 items for exclusive production in small-scale sector. It was stated that those units which were non-viable and continue to make losses year after years, may not be helped. For this it is essential that the technique of production should be constantly improved and the pace of transformation being regulated so as to avoid as far as possible, technological unemployment. It is important to note that the earlier system of phased manufacturing, run on an administrative case-by-case basis, was made non-applicable for new projects.
The statement stated that foreign companies that diluted their foreign equity up to 40 per cent under Foreign Exchange Regulation Act FERA 1973 were to be treated at par with the Indian companies. This policy structured the nature of the economy till 1991. Instead, emphasis was on controlling and regulating monopolistic, restrictive and unfair trade practices rather than making it expansion, establishment of new undertakings, merger, amalgamation and takeover and appointment of certain directors. This gave advent to IPR 1977. Agricultural base was to strengthen by providing preferential treatment to agro based industries. The basic drive of this resolution was to make simpler regulations and procedures by delicensing, deregulating, and decontrolling. It advocated strengthening their management and developing management cadres in the areas of finance, marketing, and so on.
Investment ceiling for small units had been increased from Rs. Development of Appropriate Technology: The Industrial Policy, 1977 emphasised the need for developing industrial technology that was appropriate in Indian context in the sense that it makes more use of our abundant labour resources without compromising efficiency in production. This was to be called the District Industries Centre. In certain other lines of production, like agricultural implements, textile accessories, and parts of machine tools, it should have been possible to produce components on a cottage industry scale and assemble these into their final product at a factory. Schedule A - Those industries which were to be an exclusive responsibility of the state. It expanded the list of items reserved for exclusive production in the small scale sector from 180 to more than 500.
[Solved] Industrial Policy resolution, 1977 focussed on
This is aimed at reducing the monopolistic tendencies and preventing concentration of economic power in the hands of a few big industrial houses. In India, they have emerged as a dynamic sector of Indian economy through their important contribution to GDP, industrial production and export. Apart fromsocializing the means of production in strategic areas, public sector sought to provide a countervailing power to the growth of large houses and large enterprises in the private sector. It should also be remembered that it is always open to the State to undertake any type of industrial production. The Industrial Policy 1977 also proposed a number of measures to curb disproportionate growth of large business houses, vigorous use of Monopolies and Restrictive Trade Practices MRT P Act to curb monopoly power of big industries and dispersal of industries away from the metropolitan areas. Such cooperatives should be encouraged in every way and the State should give constant attention to the development of cottage and village and small scale industry" Industrial Policy Resolution, 1956.
6 Chief Features of Industrial Policy Resolution of 1977 (India)
Similarly, in order to increase the agricultural productivity by adaptation of modern technology and agronomic practices to our own conditions, important inputs had to come from our industrial sector. INDUSTRIAL POLICY RESOLUTION 19568 Page The setting was favourable for the Industrial Policy 1956. The investment ceiling in plant and machinery for small-scale industries fixed in 1985 was raised from Rs. Since costs of delay are heavy and detrimental to the process of development, every effort was made to improve administrative arrangements so as to ensure further speedy and orderly approval procedures. The main focus of the policy package was: I. The advancement of small scale industries has been one of the major objectives of economic planning in India. The service sector is contributing the highest share to Indian GDP.