India has had several industrial policies over the years, aimed at promoting industrial growth and development in the country.
These industrial policies have had varying degrees of success in promoting industrial growth and development in India. While some policies have led to significant progress in specific sectors, others have faced challenges and limitations in their implementation.
Major industrial policies of India:
- Industrial Policy Resolution, 1948: This was the first industrial policy of independent India, which aimed at promoting balanced regional development, promoting small and medium industries, and ensuring that private enterprises contributed to the overall economic development of the country.
- Industrial Policy Resolution, 1956: This policy aimed at promoting state-led industrial development, with the government playing a major role in the establishment and growth of industries. It also focused on the development of public sector enterprises, and the promotion of import substitution.
- Industrial Policy Statement, 1973: This policy aimed at promoting the growth of large industries, with a focus on heavy industries such as steel, cement, and machinery. It also emphasized the need for the development of backward regions and the promotion of small and medium enterprises.
- New Industrial Policy, 1991: This policy marked a significant shift towards liberalization and globalization, with a focus on promoting private sector-led growth and reducing the role of the state in industrial development. It aimed at promoting competition, removing barriers to entry, and encouraging foreign investment.
- Industrial Policy, 1997: This policy aimed at promoting the development of industries in specific sectors such as information technology, telecommunications, and pharmaceuticals. It also emphasized the need for environmental sustainability and the promotion of small and medium enterprises.
- National Manufacturing Policy, 2011: This policy aimed at promoting the growth of the manufacturing sector in India, with a focus on creating jobs, enhancing productivity, and increasing the share of manufacturing in GDP. It emphasized the need for infrastructure development, innovation, and technology upgradation.
- Make in India Initiative, 2014: This initiative aimed at promoting India as a global manufacturing hub and attracting foreign investment. It focused on improving the ease of doing business in India, promoting innovation, and creating jobs.
Make in India
Make in India is an initiative launched by the Government of India in September 2014 to encourage domestic and foreign companies to manufacture their products in India. The program is aimed at creating job opportunities, enhancing the skillset of the workforce, and making India a global manufacturing hub. The initiative focuses on promoting 25 key sectors, including automobiles, biotechnology, chemicals, construction, defense manufacturing, electrical machinery, food processing, IT and BPM, leather, mining, oil and gas, pharmaceuticals, ports, railways, renewable energy, roads and highways, textiles and garments, tourism and hospitality, wellness, and others.
The Make in India initiative was launched with the objective of transforming India into a global manufacturing hub by providing a conducive environment for investment, modernizing the country’s infrastructure, simplifying procedures for doing business, and encouraging innovation and entrepreneurship. The initiative aimed to increase the share of manufacturing in the country’s GDP from 16% to 25% by 2022 and create 100 million additional jobs in the manufacturing sector.
The program was accompanied by a series of policy measures and initiatives to create an investor-friendly environment in the country. The government made several changes to the FDI policy to attract foreign investment in the manufacturing sector. The minimum capital requirement for foreign companies to set up a subsidiary in India was lowered from USD 20 million to USD 2 million for the construction and development sector. Foreign investors were also allowed to hold up to 100% equity in certain sectors, such as railways, defense manufacturing, and medical devices. The government also introduced the ‘Ease of Doing Business’ initiative to simplify procedures and reduce the time taken to set up a business in India.
In addition to policy measures, the government also launched several flagship programs under the Make in India initiative. The government launched the National Manufacturing Policy to promote the growth of the manufacturing sector in the country. The program aimed to create a conducive environment for investment, promote innovation, and develop world-class infrastructure. The government also launched the Skill India initiative to enhance the skillset of the workforce and make them industry-ready.
The Make in India initiative has had a mixed impact on the country’s manufacturing sector. While the initiative has helped in attracting foreign investment and creating job opportunities, the actual growth in the manufacturing sector has been limited. The share of manufacturing in the country’s GDP has increased marginally from 16% in 2014 to 17% in 2019. The program has faced several challenges, such as the lack of adequate infrastructure, the slow pace of regulatory reforms, and the high cost of doing business in the country.
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