INDUSTRIAL POLICY 1991 Govt recognizes the need for

INDUSTRIAL POLICY 1991 • Govt. recognizes the need for – social and economic justice, to end poverty and unemployment and to build a modern, democratic, socialist, prosperous and forward-looking India – India to grow as part of the world economy and not in isolation – Greater emphasis placed on building up ability to pay for imports through our own foreign exchange earnings – development and utilization of indigenous capabilities in technology and manufacturing as well as its up gradation to world standards.

INDUSTRIAL POLICY 1991 • Sound policy framework encompassing encouragement of entrepreneurship, development of indigenous technology through investment in research and development, bringing in new technology, dismantling of the regulatory system, development of the capital markets and increasing competitiveness for the benefit of the common man.

INDUSTRIAL POLICY 1991 • The spread of industrialization to backward areas of the country will be actively promoted through appropriate incentives, institutions and infrastructure investments. • Government will provide enhanced support to the small-scale sector so that it flourishes in an environment of economic efficiency and continuous technological up gradation

INDUSTRIAL POLICY 1991 • Foreign investment and technology collaboration will be welcomed to obtain higher technology, to increase exports and to expand the production base. Government will endeavor to abolish the monopoly of any sector or any individual enterprise in any field of manufacture, except on strategic or military considerations and open all manufacturing activity to competition.

INDUSTRIAL POLICY 1991 • The Government will ensure that the public sector plays its rightful role in the evolving socioeconomic scenario of the country. Government will ensure that the public sector is run on business lines as envisaged in the Industrial Policy Resolution of 1956 and would continue to innovate and lead in strategic areas of national importance.

INDUSTRIAL POLICY 1991 • Government will fully protect the interests of labour, enhance their welfare and equip them in all respects to deal with the inevitability of technological change Labour will be made an equal partner in • progress and prosperity • Workers’ participation in management will be promoted

INDUSTRIAL POLICY 1991 • Workers cooperatives will be encouraged to participate in packages designed to turn around sick companies. • The major objectives of the new industrial policy package will be to build on the gains already made, correct the distortions or weaknesses that may have crept in, maintain a sustained growth in productivity and gainful employment and attain international competitiveness.

INDUSTRIAL POLICY 1991 • Need to preserve the environment and ensure the efficient use of available resources. • Government’s policy will be continuity with change

INDUSTRIAL POLICY 1991 • In pursuit of the above objectives, Government have decided to take a series of initiatives in respect of the policies relating to the following areas. A. Industrial Licensing. B. Foreign Investment. C. Foreign Technology Agreements. D. Public Sector Policy. E. MRTP Act.

INDUSTRIAL POLICY 1991 • Industrial licensing: – Modified industrial licensing policy to ease restrictions on capacity creation, respond to emerging domestic & global opportunities by improving productivity – Abolished industrial licensing for most industries but for 18 categories – Small scale sector reserved • Foreign Investment: – FDI (up to 51% foreign equity) permitted in high priority industries (high investment and advanced technology) & export oriented companies

INDUSTRIAL POLICY 1991 • Foreign Technology Agreements: • Towards technological dynamism, automatic approval for technological agreements related to high priority industries; eased procedures for hiring foreign technical expertise • Public Sector Policy: Restructuring pubic sector units, raise resources through pubic participation PSUs, refer sick units to Board of Industrial & Financial Reconstruction • MRTP Act: • Abolished scrutiny of investment decision of MRTP companies etc.

Current Scenario: • Substantial changes: – Only six industries require compulsory licensing – Only three industries reserved for the public sector – Relation of restriction on FDI: FDI up to 100 % under automatic route for most manufacturing activities in Special Economic Zones; FDI ceiling in pvt banking sector up to 74%; oil exploration (100%); natural gas and LNG pipelines (100%); telecom (74%) • Small Scale industries sector: reduced # of items reserved from 821 (1991) to 506 (2005)

Lessons from India: • Industrial Policy should not be about: – – – Controlling Prices Controlling Quantity Specifying Geographical Location of Activity Preemption by Public Sector Policy Body, Regulatory Body and Service Provider being Government Agencies

Industrial Policy cannot be Viewed in Isolation Education • Schooling → Vocational Technical Education → Entry into Innovation • Public – Private – Partnership Models • Open Science Model, Licence Model, Innovation Model • Industry – Academia Collaboration • Office of Sponsored Projects: Funding agreements • Office of Technology Transfer: Patenting and licensing Workforce → Employment ↔ Life Long Learning • Typology of Higher Education Institutions technology Global Cooperation Fiscal • Open Source Drug Discovery is a CSIR Team India Consortium with Global Partnership with a vision to provide affordable healthcare to the developing world. http: //www. osdd. net/ • Tax Incentives for R&D Expenditure • Funding for Industry – Academia Collaboration • Transparent Process (Metrics for Evaluation) for Funding Basic Research Vs Applied Research