Industrial licensing policy 1991. Strengths and Weaknesses of New Industrial Policy, 1991 2023-01-01
Industrial licensing policy 1991
Rating:
5,8/10
1716
reviews
The Industrial Licensing Policy of 1991 was a major economic reform measure implemented by the Government of India in order to liberalize and deregulate the country's industrial sector. Prior to this policy, the Indian government had a highly interventionist approach to industrial development, with strict controls on the establishment and expansion of industries, particularly in certain sectors such as heavy engineering, petrochemicals, and defense production.
The Industrial Licensing Policy of 1991 sought to reduce the role of the government in the industrial sector and create a more conducive environment for private investment and entrepreneurship. As part of this policy, the government eliminated the requirement for industrial licenses in a majority of sectors, and reduced the number of industries that required licenses from 18 to 6. These six sectors were defense, atomic energy, railways, hazardous chemicals, explosives, and telecommunication.
The Industrial Licensing Policy of 1991 also introduced several other significant changes to the regulatory environment for industry in India. It liberalized the rules for foreign investment, allowing foreign companies to invest in the country and setting up their own subsidiaries or joint ventures with Indian companies. It also relaxed the rules for technology collaboration between foreign and Indian companies, allowing more flexibility in the transfer of technology.
The Industrial Licensing Policy of 1991 had a number of important consequences for the Indian economy. It paved the way for a rapid expansion of the country's industrial sector, with a significant increase in the number of new industries being set up and a surge in private investment. The policy also helped to improve the competitiveness of Indian industry, as companies were no longer restricted by the heavy regulatory burden of the past.
However, the Industrial Licensing Policy of 1991 also had its critics, who argued that the policy went too far in its liberalization of the industrial sector and that it led to a decline in the quality of Indian industry. Some also argued that the policy disproportionately benefited large, well-established companies at the expense of smaller, more innovative firms.
Overall, the Industrial Licensing Policy of 1991 was a significant milestone in the economic development of India, and it played a key role in shaping the country's industrial landscape over the past three decades. It helped to unleash the entrepreneurial potential of the Indian people and set the stage for the country's emergence as a major global economic power.
Summary of New Industrial Policy, 1991
Main features of the policy are: a Liberal policy b All controls on foreign trade have been removed c Open competition has been encouraged. Is announced by the Industry Ministry 2. Industrial licensing is not needed in location other than cities having a population of more than one million, as per the 1991 census. In this New Economic Policy P. The era of Red Tapism just ended after the end of industrial licensing. Distortions in industrial pattern owing to selective inflow of investments: ADVERTISEMENTS: In the current phase of investment following liberalisation, while substantial investments have been flowing into a few industries, there is concern over the slow pace of investments in many basic and strategic industries such as engineering, power, machine tools, etc. It means that to start an industry, one has to go for license and waiting only in the case of these few selected industries.
Next
Industrial Policy 1991 [q6ngmm33yjnv]
List of all Five Year Plans of India Main Measures Adopted in the New Economic Policy Due to various controls, the economy became defective. This resulted in rapid industrial growth and a rapid increase in the GDP of India. The policy caused big changes including emergence of a strong and competitive private sector and a sizable number of foreign companies in India. Public Sector: In regard to the public sector, the new industrial policy provides as follows: ADVERTISEMENTS: i. Advantages of New Industrial Policy,1991: The new industrial policy of 1991 provided to be quite advantageous for the Indian economy and some of its major advantages are listed below. Under which GOI has provided ease in foreign trade and investment. Narasimha Rao on July 24, 1991.
Next
Industrial Policy 1991
The New Industrial Policy of 1991 comes at the center of economic reforms that launched during the early 1990s. Production capacity remained under-utilized. The Board should perform a promotional role so that domestic firms can derive the benefits of international markets. Also, the Public Sectors Undertaking that was in the loss were sold to private sectors. The new Industrial Policy goes all out to woo foreign capital. Number of industries reserved for public sector was reduces from 17 to 2. Is expected to provide clarity of the several aspects relating to the sector 4.
Next
New Industrial Policy 1991
Also, the private sector has been awarded more opportunities, even providing some from the reserved public sector units. In India, industrial licenses are regulated by the IDRA, 1951 Act, and are approved by the Secretarial of Industrial Assistance SIA on the recommendation of the licensing committee. The new policy contained policy directions for reforms and thus for LPG Liberalization, Privatization and Globalization. In order to accelerate Industrial Policy, 1991. A dedicated reform policy for the public sector including the disinvestment programme were launched under the NIP 1991. It wanted to increase the participation of private players in the all sectors of the economy. Liberalisation Removal of Industrial Licensing and Registration: Previously private sector had to obtain license from Govt.
Next
Salient Features of New industrial policy 1991
The resultant growth process was therefore not sustainable in a longer timeframe. In 1986, the scheme was further liberalised by reducing the cut-off limit to 80 per cent capacity utilisation. New Growth Centres of industrial activity emerged 4. Step taken for Privatisation: The following steps are taken for privatisation: 1. ADVERTISEMENTS: Let us make an in-depth study of the features and comments of the Industrial Policy of 1991. A dedicated reform policy for the public sector including the disinvestment programme were launched under the NIP 1991. If, we make an analytical study of the special features of Industrial Policy 1991, it becomes clear that several fundamental changes have been, made, in this policy.
Next
New Economic Policy of 1991: Objectives, Features and Impacts
This has created long delays in the start up of industries. Whereas some reservation for the public sector is being retained, there would be no bar for areas of exclusivity to be opened up to the private sector selectively. This step will enable MRTP Companies to establish new undertakings, and effect plans of expansions, mergers, amalgamations and takeovers without prior government approval. Repatriation of dividends by companies with foreign equity will have to be met through export earnings over a period of time. To sum up, there is a need for reviewing certain provisions of the policy to make it more meaningful and effective.
Next
Short notes on Industrial Policy, 1991
Following changes are introduced in Industrial Licensing: i. Former Prime Minister Manmohan Singh is considered to be the father of New Economic Policy NEP of India. Industrial licensing is not required not only for new units but also for new products, as also substantial expansion and change of the location for existing units. Under a PMP, a concerned enterprise has to progressively replace imported materials, parts, and components with materials, parts and components produced in house or by other Indian firms. The internal liberalisation has been accompanied by a policy of maintaining an open access to imports to permit modernisation and technological upgrading in Indian industry, which again will reduce costs and promote international competition.
Next
The Industrial Policy of 1991 (NIP): Features and Comments
All e cepting 18 industries were freed from licensing. However after the launch of NIP, in 1991 the reservation policy was abolished that providing equal opportunity to the private sector to invest in these key industries. Maintain a sustained growth in productivity 4. To ensure rapid and continuous growth of industries, GOI enacted IDR Industries development and regulation Act in 1951. So let's discuss this. This would eliminate the requirement of prior approval of the Central Government for establishment of new undertakings, merger, amalgamation, takeover and appointment of directors under certain circumstances.
Next
Industrial Policy 1991 [5143vw2gz9nj]
Salient Features of the NIP: The NIP does away with licensing for all major industries, irrespective of the investment level, proposes liberal foreign investment, dispenses with MRTP clearances but curbs unfair trade practices and emphasises technological up-gradation. Private sector has given welcome in major industries that were previously reserved for the public sector. This is expected to inject much more competition into the system, creating incentives for reducing costs. List of Sectors reserved for Public Sectors in India Can Indian Government repay the External Debt by Printing New Currency? Private sector has given welcome in major industries that were previously reserved for the public sector. Narasimha Rao government reduced the import duties, opened reserved sector for the private players, devalued the Indian currency to increase the export. The Policy has brought comprehensive changes in economic regulation in the country.
Next
Industrial Licensing in India: Norms and Policy
Foreign investment would be encouraged in high priority areas up to a limit of 51 per cent equity. A specially empowered Board will be constituted to negotiate with large international firms called multinational corporations MNCs and encourage direct foreign investment in select areas. Large industries are now permitted to manufacture items, including bread, pickles and chutneys, mustard oil, groundnut oil, wooden furniture, firework, steel chairs and tables, padlocks, stainless steel and aluminum utensils, glass bangles, exercise books and registers, wax candles, laundry soap, safety matches, agarbattis, etc. This fact has been well collaborated by the letters of intent so far approved. Under industrial deregulation, most of the industrial sectors was opened to the private sector as well. .
Next