FIRST INDUSTRIAL POLICY OF INDIA 1948

Adopting the path of liberalization and Globalization Government of India declared its new industrial policy in 1991. Earlier to it Government has announced such policies in 1948, 1956, 1973, 1977, and 1980. The aim of new industrial policy declared on July 24, 1991 was to correct the distortions and weakness of the Industrial Structure of the country that had developed after independence, raise industrial efficiency to the international level; and accelerate industrial growth.

Salient Features of Earlier Policies:

Since independence industrial activity in India is carried on according to the industrial policy statements made by the Government from time to time.

Industrial policy resolution 1948:

This industrial policy was designed to achieve the following objectives:

1.         to establish a social order wherein justice and equality of opportunity shall be secured to all the people;

2.         to promote standard of living of people by exploiting resources;

3.         to increase both agriculture and industrial production;

4.         to offer employment opportunities to all.

In this policy Industries were classified into four broad categories:

(1)   Sole Ownership of the Central Government: central government would have the sole ownership, control and management on the manufacture of arms and ammunitions, atomic energy and railways.;

(2)    Reserved for the Public Sector: The second category, compromising coal, iron, and steel manufacturers of telephones telegraphs and wireless machines, other than radio sets. New units in this category of industries would be set up by the government only.

(3)    Regulated by States: Industries included in the third category were of basic importance and therefore would be planned and regulated by the state. The industries were salt, automobiles, machines tools, chemical, fertilizers, non-ferrous metals, rubber manufacturers, power and industrial alcohol, cotton, and woolen textiles, current, sugar, paper, news print, air and sea transport, minerals and industries related to defence.

(4)   Private sector: Fourth category included all remaining industries, which were left to the initiative of private sector (individuals well as cooperatives).Private sector was free to own, control and manage these industries without the intervention of the state. However state had the authority to supervise these industries too. The main thrust of the policy was to lay the foundation of a mixed economy in which both private and public enterprises would together to accelerate industrial development in the country.