2.1.1.2. Industries (Development and Regulation) Act (IDRA), 1951

IDRA, 1951 is the key legislation in the industrial regulatory framework. It gave powers to the government to regulate the industry in a number of ways. The main instruments were the regulation of capacity (and hence output) and power to control prices. It specified a schedule of industries that were subject to licensing. Even the expansion of these industries required prior permission of the government, which meant that the output capacity was highly regulated. The Government was also empowered to control the distribution and prices of output produced by industries listed in the schedule. The IDR Act gave very wide powers to the Government. This resulted in more or less complete control of the industrial development of the country by the bureaucracy.

The main provisions of the IDRA, 1951 were:

♤ All existing undertakings at the commencement of the Act, except those owned by the Central Government were compulsorily required to register with the designated authority.

♤ No one except the central Government would be permitted to set up any new industrial undertaking “except under and in accordance with a licence issued in that behalf by the Central Government.”

♤ Such a license or permission prescribed a variety of conditions, such as, location, minimum standards in respect of size and techniques to be used, which the Central Government may approve.

♤ Such licenses and clearances were also required in cases of ‘substantial expansion’ of an

existing industrial undertaking.