Professional Documents
Culture Documents
POLICY
What is Industrial Licensing?
Industrial policy means rules, regulations, principles, policies and
procedures laid down by government for regulating, developing
and controlling industrial undertakings in the country.
It prescribes the respective roles of the public, private, joint and
co-operative sectors for the development of industries.
Incorporates fiscal and monetary policies, tariff policy, labour
policy and government attitude towards foreign capital, and role to
be played by multinational corporations in the development of the
industrial sector.
Government of India has formulated policies for industrial growth
and development.
History of Industrial Licensing
Pre- Independence
1. East India company
2. First World War
3. Second world war
East India company
The Britishers came to India in the year 1600 as
traders of the East India company. During the
British rule in India, government policy towards
industry and business was indifferent. The first
century of British rule saw the decline of nearly
all indigenous industries for many reasons –
technological, economic and political.
Modern industrial enterprises in India developed
after 1850.Its earliest manifestations came in
the wake of the construction of railways, which
made it essential to have modern workshops for
repair and maintenance of the rolling stock.
First World War
The outbreak of the First World War brought an end to the policy of
hostility between British Bengal Chamber of Commerce and the
government and forced on the government a more progressive policy
that included selective encouragement of some industries and
protective tariff.
In 1916 the famous Indian Industrial Commission was set up to
examine and report the possibilities of further industrial development
in India, and submit recommendations for a permanent policy of
industrial stimulation.
Its proposals were based upon the fundamental principles that in the
future the government must play an active part in the industrial
development of the country.
Second World War
This was the time when major watershed in the development
of government business relations in India. India became the
main base of the Allied War efforts in the Far Eastern and
Middle Eastern fronts its industrial development received a
tremendous boost from the substantial orders for locally
manufactured goods and through setting up of a large number
of new industrial units in fields hitherto in conceivable.
During the two brief years that intervened between the end of
the war(1945) and independence(1947), government efforts
were mostly directed at dealing with shortages that developed
in large numbers of items both consumers goods and essential
war materials.
Post Independence
Government's Role
Pandit Jawaharlal Nehru laid the foundation of modern India The goal
and objectives set out for the nation by Pandit Nehru on the eve of
independence were :
1. Within the small scale sector, a tiny sector was also defined with investment in
machinery and equipment up to Rs.1 lakh and situated in towns with a population of
less than 50,000 according to 1971 census figures, and in villages.
2. Special legislation to protect cottage and household industries was also proposed to
be introduced.
3. It was also decided that compulsory export obligations, merely for ensuring the
foreign exchange balance of the project, would no longer be insisted upon while
approving new industrial capacity.
4. In the areas of price control of agricultural and Industrial products, the prices would
be regulated to ensure an adequate return to the investor.
INDUSTRIES POLICY
RESOLUTION, 1980
A. Industrial Licensing
B. Foreign Investment
C. Foreign Technology Agreements
D. Public Sector Policy
E. MRTP
A. INDUSTRIAL LICENSING
POLICY
Automatic clearance if (where imported capital good is required)
A license is initially valid for two years and production as per the
licensed capacity must start within the specified period.
Objectives of Industrial Licensing
The basic objectives of industrial licensing are as follows:
Regulating the industrial capacity as per targets set for Planned economy.
This policy had not been consistent with the industrial policy
Resolution of 1956.i.e., no specific instruction had been given to the
licensing authorities about keeping in view the general objective of
preventing concentration of economic power and monopolistic
tendencies
Promotion of large industrial houses, and
Usage of some unethical practices followed by a section of large
business houses, for example, multiple applications in different names
for the same items.
Industrial Licensing Policies1970-1980
Industrial licensing Policy of 1970
Assets exceeding Rs. 35 crore, was abandoned, in its place the definition adopted by sec. 20
of the MRTP Act, i.e., the assets of a company by itself or along with assets of inter
connected undertakings amounting to Rs. 20 crore and above was accepted.
The list of the core industries defined by the 1970 policy also substantially enlarged.
There were also some procedural changes in October 1973, creating a Project Approval
Board (PAB) to deal with composite applications
Seeking approval under the four major hurdles, i.e., licensing, MRTP, capital goods, and
Foreign Investment Board.
Industrial Licensing Policy of 1977
industrial licensing abolished for all projects except for short list of
industries related to security, strategic concerns, social reasons,
hazardous chemicals, overriding environmental reasons, items of elitist
consumption
Industries reserved for small scale sector will continue to be reserved , areas
where security & strategic concerns predominate will be reserved for public
sector
Public Sector :
Anshul Goyal 62
Uma Sharma 72
Sanjay Gaur 82
Rituja Thakur 92
Submitted To:
Amber 102
Mrs. Shilpa Jain
Id Mohammad