Industrial Policies in India

India’s industrial policies have evolved over time to address the changing needs of the economy, promote industrial growth, and ensure equitable development. Here’s an overview of key Industrial Policies in India:

1. Industrial Policy Resolution (IPR) 1948:

• Objective: To lay the foundation for industrial development post-independence.
• Key Features:
  • Focused on the development of basic industries like steel, coal, and power.
  • Encouraged private sector participation in industries, with a significant role for the government in core sectors.
  • Emphasized self-reliance and reducing foreign dependence.

2. Industrial Policy Resolution (IPR) 1956:

• Objective: To lay a framework for the planned development of the Indian industry, with an emphasis on public sector dominance.
• Key Features:
  • Divided industries into three categories:
    1. Public Sector: Industries that would be exclusively under government control.
    2. Private Sector: Industries that could be developed by private enterprises but under regulation.
    3. Mixed Sector: Industries where both public and private sectors could play a role.
  • Focused on building the public sector as the main engine of industrial growth.
  • Encouraged large-scale industries and aimed at reducing foreign influence.
  • Set up institutions like the Planning Commission to guide industrial growth.

3. Industrial Policy of 1977:

• Objective: To provide a more liberal approach and encourage private sector participation.
• Key Features:
  • Relaxed restrictions on the private sector, allowing it to participate more actively in industrial growth.
  • Set up the concept of Small-Scale Industries (SSI), aiming to promote entrepreneurship and employment.
  • Encouraged modernization and technology upgradation.
  • Introduced measures to make industries more efficient and competitive.

4. Industrial Policy of 1991 (Liberalization Era):

• Objective: To liberalize the economy and integrate it with global markets.
• Key Features:
  • De-licensing: Removal of licensing requirements for most industries except for a few strategic sectors like defense, atomic energy, and railway transport.
  • Privatization: Reduced the role of the public sector, allowing more space for the private sector.
  • Foreign Direct Investment (FDI): Allowed increased FDI in key sectors to encourage technology transfer and capital inflow.
  • Deregulation: Phased out many controls, including those on production, pricing, and marketing.
  • Focused on encouraging competition and improving efficiency.

5. New Industrial Policy (1999):

• Objective: To create a competitive environment by promoting reforms and modernizing industries.
• Key Features:
  • Liberalization of the economy: More extensive FDI and trade policy reforms.
  • Infrastructure development: Strong emphasis on building infrastructure to support industrial growth.
  • Promotion of export-oriented industries: Measures to encourage the export sector through fiscal incentives.
  • Encouragement of industrial clusters: Special Economic Zones (SEZs) were set up to promote exports and create industrial hubs.

6. National Manufacturing Policy (2011):

• Objective: To increase the share of the manufacturing sector in GDP to 25% and create 100 million jobs by 2022.
• Key Features:
  • Focused on manufacturing growth through the development of a National Investment and Manufacturing Zones (NIMZs) network.
  • Encouraged the use of clean technologies and energy-efficient processes.
  • Skill development: Aimed to create a skilled workforce to support the manufacturing sector.
  • Promoted MSMEs (Micro, Small, and Medium Enterprises) by providing incentives and access to technology.

7. Make in India (2014):

• Objective: To position India as a global manufacturing hub and increase the ease of doing business.
• Key Features:
  • Focused on sectors like defense, aerospace, automotive, textiles, chemicals, and IT.
  • Simplified the regulatory framework to encourage both domestic and foreign investments.
  • Introduced FDI reforms to attract global manufacturers.
  • Provided incentives for innovation and entrepreneurship through various schemes like the Start-up India initiative.

8. Atmanirbhar Bharat Abhiyan (2020):

• Objective: To make India self-reliant in critical industries, reduce dependency on imports, and boost domestic manufacturing.
• Key Features:
  • Focus on creating resilient supply chains and enhancing domestic capabilities in various sectors.
  • Introduction of incentives and production-linked schemes to promote domestic manufacturing and exports.
  • Support for MSMEs through financial assistance and regulatory relief.
  • Local value addition: Encouraged the use of local products and services to support the manufacturing industry.

9. Production-Linked Incentive (PLI) Scheme (2020):

• Objective: To promote domestic manufacturing and exports in various sectors, including electronics, pharmaceuticals, and automobiles.
• Key Features:
  • Offered financial incentives to companies that meet specified production and export targets.
  • Encouraged innovation, technology adoption, and the establishment of world-class manufacturing facilities.

10. National Policy on Electronics (2019):

• Objective: To promote India as a global hub for electronics manufacturing.
• Key Features:
  • Focused on enhancing the domestic manufacturing of electronics and reducing dependence on imports.
  • Encouraged research and development in the electronics sector, offering incentives to manufacturers.
  • Promoted the creation of a robust ecosystem for the design, development, and production of electronic products.