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The industrial sector in India, including construction, is an important contributor to the growth with the sector accounting for 31.1 % of the total gross value added in 2016 to 2017. A strong and robust industrial and manufacturing sector helps in promoting domestic production exports and Employment all of which can be catalyst for higher growth in the economy.


At the time of Independence, the Indian economy was facing severe problems of illiteracy, poverty, low per capita income, industrial backwardness, and unemployment. After India attained its Independence in 1947, a sincere effort was made to begin an era of industrial development. The government adopted rules and regulations for the various industries. This industrial policy introduction proved to be the turning point in Indian Industrial history. The industrial policies of India were also framed to meet the challenges as an end and to give direction to obtain economic development and growth through industrialization after independence.

The first important industrial policy statement was made in the industrial policy resolution, 1948 .the main thrust of the IPR was to lay down the foundation of mixed economy whereby the private and public sector was accepted as important components in the development of industrial economy of India.
The policy divided the industries into four broad categories- with exclusive state monopoly-
It included Industries engaged in the activity of Atomic Energy, Railways and arms and ammunition.

  1. Industries in the mixed sector- it included the industries where private and public sector were allowed to operate. the government was allowed to review the situation to acquire any existing private undertaking.
  2. Industries with government control- it included the the industries of national importance and so needs to be registered. Eighteen such industries were put under this category for example fertilizers, heavy chemical, heavy machinery, etc.

Industries under private sector– Industries that not covered by the above categories fill in this category in order to regulate the industry and to promote plant Industrial Development according to the IPR 1948, the industrial development and Regulation Act in 1951 was passed to arm the government with sufficient power.

the IPR of1956 was meant to give a concrete shape to the mixed economy model and the ideology of socialist pattern of society.
The important provisions were as follows-
1.the IPR, 1956, divided the industries into the following three categories-

  1. Schedule A industries-the Industries that were the Monopoly of state or Goverment. It included 17 Industries. The private sector was allowed to operate in these Industries is national interest so required. The reserved industries were arms and ammunition and allied items of defence equipment atomic energy iron and steel heavy casting and foregoing of iron and steel heavy plant and machinery required for iron and steel production for mining for machine to manufacture and for such other basic industries as may be specified by the central government, heavy electric plant including large hydraulic and steam turbines ,coal and lignite gypsum, sulphur, gold and diamond. and processing of copper ,lead ,zinc ,Dinam and wool farm, mineral specified in the schedule to the atomic energy. Order 1953 aircraft ,air transport, railway transport, commercial buildings ,telephone cables, telegraph and wireless apparatus and generation and distribution electricity.
  2. schedule B industries:
    In this category of industry state was allowed to establish new units but the private sector was not denied to set up or expand existing units in this category 12 industries were included for example chemical industry Fertilizer industry synthetic rubber and ammonium and many more.
    3.schedule C industries:
    Industries are not mentioned in the above two categories formed part of a scheduled c the IPR 1956 emphasised the mutual existence of public and private sector industries.
  3. Encouragement to small scale and cottage industry:
    In order to strengthen the small-scale sector supportive measures were suggested in terms of cheap credit subsidies reservation etc.
  4. Emphasized on reduction of regional disparities:
    Fiscal concession were granted to open industries in backward region public sector enterprises were given greater role to develop These areas.

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