Page 55 - DMGT401Business Environment

Business Environment

Notes 8. To encourage R&D and to bring new technology to produce world class products and
services.

9. To link Indian economy with the global economy.
10. To encourage big business houses and projects to achieve economies of scale.
11. Increase competitiveness of the industry to benefit the common man and the nation.
12. Rapid development of infrastructure, specially roads and electricity, with active
participation of the private sector and FDI.

Radical Steps of the New Industrial Policy

The New Industrial Policy took radical steps in the following areas:
1. Industrial Licensing
2. Foreign Investment

3. Foreign Technology Agreement
4. Public Sector Policy
5. MRTP Act

1. Industrial Licensing: Industrial licensing is governed by Industries (Development and
Regulation) Act, 1951. It is a very effective tool used by the government to regulate the
private sector. Over the years it has become a tool for exploitation. The NIP did away with
licensing in a big manner.
It abolished all industrial licensing, irrespective of the level of investment, except for 18
industries related to security and strategic concern, social reasons, concerns related to
safety and overriding environmental issues, manufacture of products of hazardous nature
and articles of elitist consumption. Later this list was trimmed, and as of now license is
required only for 6 items listed in Annexure II. These are as follows:

List of Industries for which Industrial Licensing is Compulsory under Industries
(Development & Regulation) Act, 1951:
(a) Distillation and brewing of alcoholic drinks.

(b) Cigars and cigarettes of tobacco and manufactured tobacco substitutes.
(c) Electronic Aerospace and defense equipment.
(d) Industrial explosives including detonating fuses, safety fuses, gun powder,
nitrocellulose and matches.
(e) Hazardous chemicals:
(i) Hydrocyanic acid and its derivatives.

(ii) Phosgene and its derivatives.
(iii) Isocyanates and disocyanates of hydrocarbon, not elsewhere specified (example:
Methyl Isocyanate).

(f) Drugs and Pharmaceuticals (according to modified Drug Policy issued in September,
1994 and subsequently amended in February, 1999).

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