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BEP 114
Meaning
• Rules, regulations, principles, policies, and procedures
laid down by GOI for regulating, developing, and
controlling industrial undertakings in the country
• Prescribes roles of the public, private, joint, and co-
operative sectors for the development of industries
• Indicates role of large-, medium-, and small-scale
sector.
• Incorporates fiscal and monetary policies, tariff policy,
labor policy, and the govt. attitude towards foreign
capital, role to be played by MNC in the development
of industrial sector
Objectives
• Achieving a socialistic pattern of society
• Preventing undue concentration of economic power
• Achieving industrial development
• Achieving economic growth
• Reducing disparities in regional development
• Developing heavy and capital goods industry
• Providing opportunities for gainful employment
• Expanding the public sector for achieving socialism
Objectives
• Achieving faster economic growth
• Achieving a self-sustained economy
• Alleviating poverty
• Protecting and developing a healthy small
scale sector
• Building up a large and growing co-
operative sector
• Updating technology and modernization of
industry
• Liberalization and globalization of economy
Industrial Policies
• Industrial Policy Resolution of 1948
• Industrial Policy Resolution of 1956
• Industrial Policy Statement of 1973
• Industrial Policy Statement of 1977
• Industrial Policy Statement of 1980
• Industrial Policy of 1991
Industrial Policy Resolution
of 1956
• 30th April, 1956
• Classification of industry under three heads – Schedule A,
Schedule B, Schedule C
• Positive approach towards industrialization in many ways:
Rapid industrial growth backed by balanced regional development
Appropriate manpower development and industrial harmony b/w
public, private, large and small sectors – basic ideals of the policy
SSI encouraged to take up some items of Schedule A
Providing exclusive incentive system, direct subsidies, and
different ial tax rates protected the SS sector
New Industrial Policy 1991
• July 24, 1991 & August 6, 1991
• Major aspects:
Industrial licensing removed except in 18 items
Direct foreign investment upto 51% of equity
allowed in high-priority industries
Threshold of assets of MRTP companies and
dominant undertakings removed.
Automatic clearance introduced for import of
capital goods, provided foreign exchange
requirement for such import are met through
foreign equity
New Industrial Policy 1991
Automatic permission for foreign technology
agreements in high priority industries upto sum of
Rs. 1 crore granted
Foreign equity proposals need not be accompanied
by foreign technology agreement
Existing and new industrial units provided with
broad banding facility to produce any article as
long as no additional investment in P&M is
involved.
Pre-eminent role of PSU in eight core areas
including arms and ammunitions, oil, rail transport,
and mining of coal and mineral.
New Industrial Policy 1991
Part of government’s shareholding in PSU is
proposed to be disinvested which will be offered
to MFs, FIs, general public, and workers.
Chronic loss-making PSU to be referred to BIFR for
formulation of revival schemes
A simplified procedure for new projects was
introduced to manufacture goods not covered by
compulsory licensing. Even substantial expansion
of a project requires submitting a memorandum in
prescribed form to secretariat for industrial
approvals.
Areas covered
• Industrial Licensing
• Foreign Investment
• Technology transfer and import of
foreign technology
• Public Sector policy
• Policy related to MRTP
• An exclusive SSI policy