Industrial policy of 1991
- The major changes related to the liberalization of licensed capacity and relaxation of industrial licensing were introduced in the Industrial Policy of 1991.
- This policy marked a significant shift in India's economic policies, moving away from a highly regulated and controlled economy towards a more open and market-oriented approach.
- The reforms in 1991 aimed to promote economic liberalization and globalization.
Objectives of New Industrial Policy 1991
- New Industrial Policy of 1991 aimed to promote efficiency and provide facilities for market forces.
- The core idea was abbreviated into 'LPG'
L – Liberalization (Reduction in Government Control.)
P – Privatization (Increasing the Private Sector's Role & Scope.)
G – Globalisation (Economic Integration between India and the rest of the world)
Key features of Industrial Policy of 1991 included:
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Liberalization: The policy aimed to reduce government control and intervention in various industries and promote market forces.
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Industrial Licensing: It significantly reduced the number of industries that required industrial licensing, effectively freeing many sectors from the need for government approval to start or expand businesses.
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Foreign Investment: The policy allowed for increased foreign direct investment (FDI) in various sectors, opening up the Indian economy to foreign capital and technology.
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Import Liberalization: There were efforts to liberalize imports, making it easier for Indian companies to access foreign technology and inputs.
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Export Promotion: Measures were introduced to promote exports, including incentives and export-oriented units (EOUs).
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Technology Upgradation: The policy emphasized the importance of technological advancement and encouraged industries to adopt modern and efficient technologies.
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Revival of sick industries: Steps were taken to address the issue of industrial sickness and promote the revival of sick industries.
