The Eighth Plan was formulated under a new environment when a number of reforms in industrial, fiscal, trade and foreign investment policies have been introduced in the economy. Hence, there is an emphasis on quantitative targets and the planning has become more ‘indicative’.
In view of the new Industrial Policy of July 1991 the Eighth Plan has put more emphasis on private sector in the process of industrial development. This is consistent with the general philosophy of placing greater reliance on competitiveness of industries and efficiency of operations.
The size of individual companies, which is very small by international standards, will be allowed to grow through expansions, amalgamations, mergers, etc.
There would be greater integration of the indigenous production with the rest of the world. Those components/sub-assemblies whose production is uneconomic, will be imported. On the other hand, components/sub-assemblies with economic and profitable production would be encouraged to augment exports.
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There would be joint ventures abroad to exploit the complementarities of resource endowments in this country and the concerned foreign country.
With above guidelines the total outlay envisaged in the Eighth Plan for industrial and mineral programmes in the public sector was Rs. 44,337 crores of which Rs. 34,842 crores were for Union government and Rs. 9,495 crores for states and union territories. Village and small scale industries were allocated a total of Rs. 4,778 cores while large- medium industries attracted an allocation of Rs. 26,900 crores. Amongst the individual industries Rs. 14,580 crores were allocated to iron and steel, besides Rs. 2,770 crores for heavy industry. The basic purpose of this allocation was to upgrade technology in this sector and raise it to international levels.
The Flan envisaged a growth rate of 7.5 per cent for industrial production which were to be obtained through liberalisation in licensing policy, removing controls, encouraging the role of market forces, attracting private entrepreneurs and foreign capital. Plan also aimed at encouraging private sector to invest in such industries like electricity, transport and communication, mining and quarrying, metals, heavy industry and commercial activities.