What are Industrial Policies?
Government efforts to encourage economic growth by helping business and industries.
India has seen a total of 6 industrial policies designed to shape the nation's economic landscape.
Historical Policies (1-5)
1. First Industrial Policy (1948)
Divided industries into 4 Categories:
- Category A: Exclusive monopoly of government (Railways, Electricity, Atomic Energy).
- Category B: Monopoly of states on new undertakings (Coal, Iron, Steel).
- Category C: Major industries like Cotton and Steel regulated by government.
- Category D: Remaining industries given to private enterprises.
2. Second Industrial Policy (1956)
Also known as the Economic Constitution of India.
- Private sector controlled via licensing.
- Schedule A: Public Sector.
- Schedule B: Mixed Sector.
- Schedule C: Private Sector.
3. Third Industrial Policy (1977)
- Extension of the 1956 policy focusing on employment for the poor.
- Gave priority to Small Scale Industries.
- Created a new unit called the "tiny unit".
- Imposed restrictions on MNCs (Multinational Companies).
4. Industrial Policy (1980)
- Promoted competition in the domestic market.
- Focused on liberalisation.
5. Industrial Policy (1990)
- Restored government monopoly in certain areas.
- Focused specifically on machine-building industries.
6. New Economic Policy (1991)
The era of major structural reforms.
- De-reservation: Reducing sectors reserved for the government.
- De-licensing: Simplifying rules for starting businesses.
- LPG Reforms: Liberalisation, Privatisation, and Globalisation.
Major Industries in India
Steel Industry
- 1st Small Scale: Kulti, West Bengal (1870).
- 1st Large Scale: TISCO (Tata Iron and Steel Company), Jamshedpur, Jharkhand (1907).
- Public Owned: Rourkela, Odisha (1954).
Cotton Industries
- 1st Attempt: Fort Gloster, Calcutta (1818) - Failed.
- 2nd (Successful): Bombay Spinning & Weaving Company (1853).
Practice Quiz
How many industrial policies has India had in total?
4
5
6
7
Which industrial policy is also known as the 'Economic Constitution of India'?
First (1948)
Second (1956)
Third (1977)
New Economic Policy (1991)
Under the First Industrial Policy (1948), which of the following was an exclusive monopoly of the government?
Coal
Iron
Railways
Steel
Which policy introduced the 'tiny unit' and gave priority to small-scale industries?
1956 Policy
1977 Policy
1980 Policy
1991 Policy
The introduction of LPG reforms (Liberalisation, Privatisation, Globalisation) happened under which policy?
1980 Policy
1990 Policy
1991 New Economic Policy
1977 Policy