Question

In which of the following Industrial policies were the major changes introduced ?

• Liberalisation of licensed capacity.
• Relaxation of industrial licensing.
• Industrialisation of backward areas.

Select the correct answer using the codes given below

• A. Industrial policy resolution, 1956.
• B. Industrial policy statement, 1977.
• C. Industrial policy of 1980.
• D. Industrial policy of 1991.

Answer 1

Answer:

D. Industrial policy of 1991.

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:

1. Liberalization: The policy aimed to reduce government control and intervention in various industries and promote market forces.

2. 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.

3. Foreign Investment: The policy allowed for increased foreign direct investment (FDI) in various sectors, opening up the Indian economy to foreign capital and technology.

4. Import Liberalization: There were efforts to liberalize imports, making it easier for Indian companies to access foreign technology and inputs.

5. Export Promotion: Measures were introduced to promote exports, including incentives and export-oriented units (EOUs).

6. Technology Upgradation: The policy emphasized the importance of technological advancement and encouraged industries to adopt modern and efficient technologies.

7. Revival of sick industries: Steps were taken to address the issue of industrial sickness and promote the revival of sick industries.