Marketing Knowledge: New Industry Policy for IBPS and SBI Interviews

Marketing Knowledge: Industries and Industrial Policy

Definition of Industry:
Industry refers to an economic activity concerned with the processing of raw materials and manufacture of goods in factories are often classified based on their principal product Ex:- steel industry, auto-mobile industry, textile industry etc. The product of industries can be consumer goods (Goods, which finally consumed by consumers) like textiles, cosmetics etc or producer goods (Goods used by manufacturers for producing some other goods) like machinery, tools, equipment etc.

Importance of Industry's:
The industry sector of the economy is important for a country for many reason like. Rapid growth of national income is possible only through industrialisation as growth in agriculture is limited by factors including natural factors. Industries can provide better quality and more employment than the agriculture sector. Value addition in the industrial sector can earn more foreign exchange than simply exporting raw materials. The industrial sector provides goods for the development of basic infrastructure of the country like power, telecom etc, which then provides the basis for the growth of other sectors like agriculture and services. National security requires that products for defence and other strategic sectors be produced within the country itself, so as to guard against adverse eventualities like sanctions, wars etc.

The concept of "Industrial Policy" is comprehensive and it covers all those producers, principles, policies rules and regulations which control the industrial undertakings of a country and shape the pattern of industrialisation. It incorporate fiscal and monetary policies, the tariff policy, Labour policy and Government's attitude not only towards external assistance, but the public and private sectors also.


New Industrial Policy (NIP), 1991

The Government of India announced the New Industrial Policy on 24th July, 1991. The main objective of this policy is to unshackle the Indian industrial economy from administrative and legal controls. Its main aim is to raise industrial efficiency to the international level through substantial deregulation of the industrial sector of the country. An industrial policy provides guidelines for the effective co-ordination of the activities of various sectors of the economy. When India achieved independence in 1947, the national consensus was in favour of rapid industrialisation of the economy, which was seen not only as the key to economic development, but also economic sovereignty. The industrial licensing was abolished irrespective of the level of investment, except for 18 specified industries like defence, atomic energy etc. Since then, most of these industries were de-licensed and now only three industries fall under the purview of industrial licensing.

In the subsequent years, India's Industrial Policy evolved through successive Industrial Policy Resolutions and Industrial Policy Statements. Specialise priorities for industrial development were also laid down in the successive five year plans.