09 Conclusion 2

280
CONCLUSION
The 1948 Industrial Policy was in force for eight years and during
this period private investment in industries increased considerably. The
Govern,ment implemented the policy in a pragmatic manner and in national
interest the private foreign investors were permitted to start oil refineries.
There was, however, one weakness in the policy and its implementation. No
p~iq,riti~s ~ere laid. down, and even if laid down w·ere riot followed.in.pradice.
The result was a drop ofindustrial production, slowing down of the process
of capital formation and a certain amount of industrial depression.
Indian economy is a mixed economy. By mixed economy I mean
where public sector and private sector go side by side. Although mixed
economy has to function under a number of controls which are like to result
in fractions and bottle necks. However, the main merit of the 1948 Industrial
Policy lies in its sincere endeavour to prepare the ground for a mixed or
controlled economy in which both private and state enterprise are assigned
distinct spheres of action. This mixed economy idea forms the basis on .
which industrial programmes of our Five Year Plans have been formulated.
Between 1948 and 1950 niany important developments took place in India~
The constitution of India was enacted guaranteeing certain Fundamentals
Rights and enunciating Directive principles of State Policy. The Government
of India accepted the socialist pattern of society as the objective of social
and economic policy.

281
The 1956 Industrial Policy has been hailed as the· "economic
constitution" of India. This policy was the moving spirit forward
industrialisation in the policy framework of the Second, Third and Fourth
Plans consequently, it was instrumental in expanding both the public and
private sectors side by side. Although, there was no mention of the role of
foreibrn private investment in the Resolution with the result that multinational
corporations continued to thrive on the liberal policy of the government. The .
Resolution also failed to prevent concentration of monopoly and economic
power, and reduce regional disparities.
· It must be admitted ~hat if a socialist pattern of socialist is to be
established - if economic and social justice is to· be ensured - then· the
Government must have to play the dominant role in the Industrial development
of the country.
In short, the 1956 Resolution laid down a firm but broad-based as
well as flexible foundation for the future industrial transformation in the country.
The expansion of industry in the Third Plan is envisaged to be governed by
the Industrial Policy Resolution of April 1956. As in the Second Plan, the
roles of the public and private sectors have been conceived of as
supplementary and complementary to one another.
In September 1964, The Finance Minister announced in Lok Sabha

· · -that industrial policy in the Fourth Plan will continue to . be on the lines set out
in the Industrial Policy Resolution of 1956. Even the Industrial Policy of
1970 is not an entirely new policy but a mere reiteration of the Industrial
282
Policy Resolution of 1956. What has been done is to stress further the need
for expanding the role of the public sector in the economy. The new licensing
· policy of 1970 and the Industrial Policy Statement of 1973 will not mark any
improvement in the working of the original policies. The Government has
not made any imp~ovement over the system already working. The Industrial
Policy has not made any improvement in the direction of:
(i) There should be a satisfactory criterion in the form of production
largest for granting industrial licence; (ii) The import substitution policy should
work in co-ordiantion with the licensing policy; (iii) foreign collaboration and
domestic technology should be fully co-ordinated and the licensing policy
should take their. respective interests into consideration; (iv) re.gional l;>alal)~ed
.
development and dispersal of industries along with checking the growth of
concentration of economic power should be some of the few important
·objectives oflicensing policy, and above all, there should be a design prepared
by the planning commission in respect of the future industrial pattern of the
country. Our planning machinery remains the same, our licensing system is
the same. There is no extra responsibility on any of them.
The I 973 Policy Resolution has kept the concept of joint sector as
hazy as ever. The main idea behind the joint sector is to use it as a promotional
instrument. It appears that this promotional concept is the logical consequence
of transitional socialism which has become the basic foundation of our type
of mixed economy. The Industrial Policy ofF ebruary, 197 3 should be viewed
as a supplement to the Industrial Licencing Policy of1970. Therefore it paid

283
greater attention in defining the role of the private sector with particular
reference to the larger industrial houses. But it virtually failed to identify the
joint sector with a view to making use of private expertise and resources in
line with the Government's socio-economic objectives.
The Government Policy in the sphere of industry has been governed
by the Industrial Policy Resolution of 1956. The growth of per capita national
income during the last I 0 years (from 1976 to 1977 except for the year 1976)
has been about 1.5 per cent annum and is clearly inadequate to meet the
needs of a developing economy. The 1977 Industrial Policy primarily directed

. -- ' .. .. .. - ·--- -- ·- -·-
tow!}rds removing the distortions of the past so that the genuine aspirations
of the people can be met within a time-bound programme of economic
development. Though 1977 Industrial Policy could not be implemented for
long because the Janate mle lasted a short while.
The new Industrial Policy Statement of 1980 is a very comprehensive
document which tries to cover almost every aspect of the Indian economy
relating to industry. It spells out a number of positive steps to encourage and
improve the perfonnance of the private sector such as automatic growth of
capacity, regularisation of excess capacity, liberalisation of licensing and
simplifying licensing procedures, import of advanced technology, and
provision for R and D. The Industrial Policy of 1980 is contradictory. On
the one hand, it raises the limit on the utilisation of industrial capacity for the
private sector and on the other hand, it insists that monopoly houses would
not be allowed to grow. .,~:

284
The Government of India announced the New Industrial Policy on
May 3 1, 1990 and made a case for the growth of the small-scale industries
just on the lines of the steps taken by the .Janata Government of 1977. An
effort has been made to permit blanket liberalisation with a view to accelerate
the !:,TTOwth of the medium and large-scale sector. The New Industrial Policy
is a curious amalgam ofthe philosophy of the Janata Dal and the philosophy
of indiscriminate liberalisation followed by Rajiv Gandhi. During the period
of economic liberalisation the number of foreign collaborations in electronics
has been increasing at a much faster rate than in the industrial sector as a
whole. The Indian economy has been undergoing much change especially
_~ ~ince 1991 . The Government of India, init.iated N_ew ~~Of!om.ic Poli9y (t{EP)
on July 1991. The NEP and its structural adjustment programme profess to
make India industry more competitive - both domestically and globally. The
·-New Industrial Policy Statement (NIP) is in a number of ways a major
departure in as much as it has sounded the-death knell to almost three decades
of indicative planning in the industrial sector.
In conclusion I can say that the Government oflndia will be capable
of developing in industry if it adopts a more liberalised industrial policy. It
should develop our industry with the help of foreign technologies. Similarly,
the government should also make a serious effort to develop our internal
technologies through researches. Besides, regarding establishing different
industries _in our country, the government should try its best to attract foreign
industrialists by giving then various industrial facilities.

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280

this period private investment in industries increased considerably. The

Govern,ment implemented the policy in a pragmatic manner and in national

of capital formation and a certain amount of industrial depression.

Indian economy is a mixed economy. By mixed economy I mean

The constitution of India was enacted guaranteeing certain Fundamentals

Rights and enunciating Directive principles of State Policy. The Government

of India accepted the socialist pattern of society as the objective of social

and economic policy.

The 1956 Industrial Policy has been hailed as the· "economic

constitution" of India. This policy was the moving spirit forward

industrialisation in the policy framework of the Second, Third and Fourth

Plans consequently, it was instrumental in expanding both the public and

corporations continued to thrive on the liberal policy of the government. The .

Resolution also failed to prevent concentration of monopoly and economic

power, and reduce regional disparities.

· It must be admitted ~hat if a socialist pattern of socialist is to be

established - if economic and social justice is to· be ensured - then· the

In short, the 1956 Resolution laid down a firm but broad-based as

The expansion of industry in the Third Plan is envisaged to be governed by

roles of the public and private sectors have been conceived of as

supplementary and complementary to one another.

In September 1964, The Finance Minister announced in Lok Sabha

in the Industrial Policy Resolution of 1956. Even the Industrial Policy of

improvement in the working of the original policies. The Government has

Policy has not made any improvement in the direction of:

(i) There should be a satisfactory criterion in the form of production

domestic technology should be fully co-ordinated and the licensing policy

concentration of economic power should be some of the few important

by the planning commission in respect of the future industrial pattern of the

the same. There is no extra responsibility on any of them.

instrument. It appears that this promotional concept is the logical consequence

as a supplement to the Industrial Licencing Policy of1970. Therefore it paid

line with the Government's socio-economic objectives.

The Government Policy in the sphere of industry has been governed

needs of a developing economy. The 1977 Industrial Policy primarily directed

of the people can be met within a time-bound programme of economic

development. Though 1977 Industrial Policy could not be implemented for

long because the Janate mle lasted a short while.

The new Industrial Policy Statement of 1980 is a very comprehensive

relating to industry. It spells out a number of positive steps to encourage and

improve the perfonnance of the private sector such as automatic growth of

capacity, regularisation of excess capacity, liberalisation of licensing and

simplifying licensing procedures, import of advanced technology, and

provision for R and D. The Industrial Policy of 1980 is contradictory. On

not be allowed to grow. .,~:

The Government of India announced the New Industrial Policy on

of indiscriminate liberalisation followed by Rajiv Gandhi. During the period

of economic liberalisation the number of foreign collaborations in electronics

·-New Industrial Policy Statement (NIP) is in a number of ways a major

departure in as much as it has sounded the-death knell to almost three decades

of indicative planning in the industrial sector.

In conclusion I can say that the Government oflndia will be capable

of developing in industry if it adopts a more liberalised industrial policy. It

technologies through researches. Besides, regarding establishing different

industrialists by giving then various industrial facilities.

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