REVIEW OF INDUSTRIAL POLICIES UPTO 1986

For a better understanding of the Indian economy, it is advisable to look into the various industrial polices. The official stances keep changing with every upcoming industrial policy. Understanding these policies become even more important to understand the finer aspects of the reform process which the country will commence by the early 1990s. Here, a brief review of India’s industrial policies are being dicussed to serve the purpose.

Industrial Policy Resolution, 1948

Announced on 8 April, 1948 this was not only the first industrial policy statement of India, but also decided the model of the economic system (i.e., the mixed economy), too. Thus, it was the first economic policy of the country. The major highlights of the policy are given below:

(i) India will be a mixed economy.1

(ii) Some of the important industries were put under the Central List such as coal, power, railways, civil aviation, arms and ammunition, defence, etc.

(iii) Some other industries (usually of medium category) were put under a State List such as paper, medicines, textiles, cycles, rickshaws, two- wheelers, etc.

(iv) Rest of the industries (not covered by either the central or the state lists) were left open for private sector investment—with many of them having the provision of compulsory licencing.

(v) There was a 10 year period for review of the policy.

Industrial Policy Resolution, 1956

The government was encouraged by the impact of the industrial policy of 1948 and it was only after eight years that the new and more crystallised policies were announced for the Indian industries. The new industrial policy of 1956 had the following major provisions.