Maintain sustain gains those are already made. Correct the distortion or weaknesses that might

have crept in.

Maintain a sustained growth in productivity and gainful employment.

Attain International Competitiveness.

Abolition of Industrial Licensing :

Industrial policy in India has been governed by the Industries (Development Regulation) Act 1951.

Initially Licensing policy has been abolished in all industries except (18 industries)

With the passage of time, only 5 industries out of 18 industries are under licensing system remaining were delicensed. Industries are under license as:

Alcohol, Cigarettes, Hazardous Chemicals, Electronics aerospace and Defence Equipment.

In respect of delicensed industry:

No approval is required from the government to start business.

However Entrepreneurs are required to submit an Industrial Entrepreneur Memorandum (IEM) to the Secretariat for Industrial Approvals (SIA) with the value of investment on plant and machinery of

such unit is above Rs. 10 Crore.

The 1956 Resolution had reserved 17 Industries for the Public Sector.

1991 New Industrial Policy reduced this number to 8. As:

1) Arms & Ammunition 2) Atomic Energy 3) Coal & Ignite 4) Mining of iron ore, manganese ore, chrome ore, gypsum ore, sulphur, gold and diamond 5) mineral oils 6) mining of copper, lead, zinc, tin 7) Rail Transport 8)Minerals for atomic energy.

Since May 9, 2001, the government opened up arms and ammunition sector also to the private sector.

Now only 3 industries reserved exclusively for the public sector. AS:

1) Atomic Energy, 2) Minerals specified in the schedule to the atomic energy control of production. 3)Rail Transport.

In policy, there was suggestion to review the PSU those are in low technology, and small-scale for advice about rehabilitation and reconstruction.

The government has also announced its intention to offer a part of Govt. shareholding in the public sector enterprise to mutual funds, financial institutions and general public. Since 1991-92 till 2010 Govt. has raised Rs. 99,739 crore.

New Industrial Policy prepared a list of high technology and high investment priority industries for foreign direct investment upto 51 percent foreign equity under Automatic route (prior approval is not required) from FIPB only is required.

The limit for investment was subsequently raised from 51 percent to 74 percent an then 100 percent.

Presently, FDI is permitted upto 100 percent on the automatic route in most of the sector subject to sectoral rules applicable.

FDI is prohibited in the following areas:

Atomic Energy, Lottery Business, Gambling & betting

Industrial Location Policy Liberalised: As per Policy, in cities with a population of

more than 1 million, polluting industries required to be located outside 25 km. of the periphery.

However, industries of a non-polluting nature such as electronics, computer software and printing may be located within 25 kms of the periphery in a city.

A large part of industrial investment in India is financed by loans from banks and financial institutions.

These institutions have followed a mandatory practice of including a convertibility clause of their loans into equity. It was unwarranted threat to private firms of takeover by financial institutions.

It is being abolished by New Industrial Policy 1991