Question

What was the shift happened to public sector due to 1991 industrial policy?

Answer 1

-Industrial policies are like booms which give a definite shape to industrialization through rules,

policies, principles and procedures controlling industrial houses. It incorporates the fiscal policy, monetary

policy, tariff policy and labour policy etc. Since the early eighties, various attempts have been made to liberalize

the industrial policy framework. The new industrial policy of 1991 has entirely liberalized the industrial policy

itself. The basic objectives of this policy were: Abolition of the Industrial licensing, on Public Sector,

Monopolistic and Restrictive Trade Practice limit and free entry to foreign investment and technology. Not only

this, Industrial Location Policy is liberalized in addition to Abolition of Phased Manufacturing, Programmers for

the New Projects and Removal of Mandatory Convertible Clause. The government has taken various initiatives

for liberalizing foreign trade, currency transactions and to facilitate foreign direct investment inflows. These

economic reforms have a great impact on the development of the industries. For further improvement,

liberalization steps are introduced in every year’s budget for improvement in industrial growth so that industries

become more efficient and capable of facing global competition. This paper studies the impact of new industrial

policy and new provisions on industrial performance.