Question

Bring out the weakness of new industrial policy 1991

Answer 1

i. Absence of suitable policy for exports:

Today, the high-tech industries are receiving a similar emphasis as was granted to their basic industry counterparts in the past based on the infant industry argument. In the environment of limited export incentives and regulated labour markets there seems little reason to believe that today’s infants will provide an engine for growth consistent with the present targets.

ii. Distortions in industrial pattern owing to selective inflow of investments:

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. This is mainly due to the low rate of return in these sectors, which is less than that in the new or ‘sunrise’ industries (e.g. IT sectors). Such distortions in the investment pattern need to be rectified for ensuring balanced growth of industries in the country.

Answer 2

The weaknesses of new industrial policy 1991 are as follows:

1)Labour problems that were faced because of the displacement of labours and also simultaneously efforts were seen for modifying the technology.

2)All the technological innovations had failed because of the absence of major objectives and innovations that were difficult to take place.