Silent Features of New Industrial Policy of 1991!
After Independence, the first-industrial policy was declared on 6th April, 1948, which was based on mixed and controlled economy in India and clearly divided the industrial sectors into public and private sectors. Later on this policy was replaced by other industrial policy of 1956, with the objectives of socialistic pattern of society in the country. Though the government had declared a number of new industrial policies accepted the 1956 industrial policy resolution as its base.
In June 1991, Narsimha Rao Government took over charge and the wave of reforms and liberalization was observed in the economy. In this new atmosphere of economic reforms the government declared broad changes in Industrial Policy on 24th July, 1991. This Industrial Policy initiatives undertaken by the government since July 1991 have been designed to build on the past industrial achievements and to accelerate the process of making Indian industry internationally competitive.
It recognizes the strength and maturity of the industry and attempts to provide the competitive stimulus for higher growth. The thrust of these initiatives has been to increase the domestic and external competition through extensive application of market mechanisms and facilitating forging of dynamic relationship with foreign investors and suppliers of technology.
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In this new ‘Industrial Policy of 1991’ major changes have been introduced during the last few years is ‘new’ to Indian economy such as:
a. Industrial licensing system has been almost abolish. No license is required from the government.
b. Producers are free to decide their scale and level production.
c. Imports of almost all the goods are freely allowed without any restriction.
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d. MRTP Act has been liberalized.
e. Doors have been left open for MNC’s. These are given automatic approval.
f. Whole of the economy has been left open to the private capital. Exclusive reservation for the public sector has been cut down to only areas of strategic importance.
g. Foreign exchange regulation has been almost totally dispensed with.