Industrial Policy Resolution 1956

Date : 4.5.2020
Sub  : Economics
Class : 12
Day   : 1
Period : 7
Time    : 12:20pm -1pm

Learning Outcomes

• Meaning of IPR 1956
• Why was the IPR 1956 introduced
• Impacts of the IPR 1956
• 3 categories of schedules of IPR 1956

A very good morning students 

Thank you for logging in

Today we will be doing a very important topic The Industrial Policy Resolution 1956

Industrial Policy Resolution , 1956 laid down the following main Objectives

• To accelerate the rate of growth and to speed up industrialisation
• To develop heavy and machine making industries
• To expand Public sector
• To reduce disparities in income and wealth and to prevent monopoliesand concentration of wealth

Features of Industrial Policy Resolution 1956

1 Three -Fold Classification

1. First category included 17 industries whose development would be the exclusive resposibility of the state ( Central Government).
2. Second category included 12 industries.They were progressively owned by the state and new industries would be set up by the state.The Privatr sector would be expected only to supplement the effort of the state.
3. The third category included the remaining industries.These industries were left open to the Private Sector.

2. Industrial Licensing - A very important provision of the Licensing policy was that no new industry could be established without obtaining a license from the government.

-- Establishment of industries in backward regions was promoted.Thus it was easy to set up industries in backward regions.

-- License was made compulsory even for expansion of existing plants or diversifying of the production.

--- Overall direction of the industrial licensing policy was to maintain state control over Private sector so that it could work for Social Interest.

3. Industrial Concessions : The Private entrepreneurs were offered many types of Industrial concessions. Ex - Tax holiday for newly established industrial units in backward regions  and power supply to  industries at concessional rates.

4.Development of Small Scale Industries : Small Scale Industries (SSI) generate employment.

--- SSI were given high priority to achieving the goals of employment and equity.

---Since these industries could not compete with Big Industrial firms these firms the production of a number of products were reserved.

--- they were also given concessions such as lower excise duty and Bank loan at lower interest rates. 

Please go through the video link given below to understand the topic better.

https://www.youtube.com/watch?v=BIwDJbRA-WU&t=791s