INDUSTRIAL POLICY 1991
•Govt . recognizes the need for
–social and economic justice, to end poverty andunemployment and to build a modern, democratic,socialist, prosperous and forward-looking India
–India to grow as part of the world economy and not inisolation
–Greater emphasis placed on building up ability to payfor imports through our own foreign exchangeearnings
– development and utilization of indigenous capabilitiesin technology and manufacturing as well as itsup gradation to world standards.
INDUSTRIAL POLICY 1991
•Sound policy framework encompassingencouragement of entrepreneurship, developmentof indigenous technology through investment inresearch and development, bringing in newtechnology, dismantling of the regulatory system,development of the capital markets and increasingcompetitiveness for the benefit of the commonman.
INDUSTRIAL POLICY 1991
•The spread of industrialization to backward areasof the country will be actively promotedthrough appropriate incentives, institutions andinfrastructure investments.
•Government will provide enhanced support to thesmall-scale sector so that it flourishes in anenvironment of economic efficiency andcontinuous technological up gradation
INDUSTRIAL POLICY 1991
•Foreign investment and technology collaborationwill be welcomed to obtain highertechnology, to increase exports and to expand theproduction base.
Government will endeavor to abolish themonopoly of any sector or any individualenterprise in any field of manufacture, except onstrategic or military considerations and open allmanufacturing activity to competition.
INDUSTRIAL POLICY 1991
•The Government will ensure that the public sectorplays its rightful role in the evolvingsocioeconomic scenario of the country.Government will ensure that the public sector isrun on business lines as envisaged in the IndustrialPolicy Resolution of 1956 and would continue toinnovate and lead in strategic areas of nationalimportance.
INDUSTRIAL POLICY 1991
•Government will fully protect the interests oflabour, enhance their welfare and equip them inall respects to deal with the inevitability oftechnological changeLabour will be made an equal partner in
•progress and prosperity
•Workers’ participation in management will bepromoted
INDUSTRIAL POLICY 1991
•Workers cooperatives will be encouraged toparticipate in packages designed to turn aroundsick companies.
•The major objectives of the new industrial policypackage will be to build on the gains alreadymade, correct the distortions or weaknesses thatmay have crept in, maintain a sustained growth inproductivity and gainful employment and attaininternational competitiveness.
INDUSTRIAL POLICY 1991
•Need to preserve the environment and ensure theefficient use of available resources.
•Government’s policy will be continuity withchange
INDUSTRIAL POLICY 1991
•In pursuit of the above objectives, Governmenthave decided to take a series of initiatives inrespect of the policies relating to the followingareas.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 oncapacity creation, respond to emerging domestic & globalopportunities by improving productivity
–Abolished industrial licensing for most industries but for 18categories
–Small scale sector reserved
•Foreign Investment:
–FDI (up to 51% foreign equity) permitted in high priorityindustries (high investment and advanced technology) &export oriented companies
INDUSTRIAL POLICY 1991
•Foreign Technology Agreements:
•Towards technological dynamism, automatic approvalfor technological agreements related to high priorityindustries; eased procedures for hiring foreign technicalexpertise
•Public Sector Policy:
Restructuring pubic sector units, raise resourcesthrough pubic participation PSUs, refer sick units toBoard 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 % underautomatic route for most manufacturing activities inSpecial Economic Zones; FDI ceiling in pvt bankingsector up to 74%; oil exploration (100%); natural gasand LNG pipelines (100%); telecom (74%)
•Small Scale industries sector: reduced # of itemsreserved 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 Providerbeing Government Agencies
Industrial Policy cannot be Viewed in Isolation
Education
•Schooling → Vocational \ Technical Education → Entry intoWorkforce → Employment ↔ Life Long Learning
•Typology of Higher Education Institutions
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 licensingtechnology
GlobalCooperation
•Open Source Drug Discovery is a CSIR Team India Consortiumwith Global Partnership with a vision to provide affordablehealthcare to the developing world. http://www.osdd.net/
Fiscal
•Tax Incentives for R&D Expenditure
•Funding for Industry – Academia Collaboration
•Transparent Process (Metrics for Evaluation) for Funding BasicResearch Vs Applied Research