With the gradual liberalization of the 1956 Industrial policy in the mid-eighties, the tempo of industrial development started picking up. But the industry was still feeling the burden of many controls and regulations. For a faster growth of the industry, it was necessary that even these impediments should be removed. The new government by Shri Narasimha Rao, which took office in June 1991, announced a package of liberalization measures under its Industrial Policy on July 24, 1991. Major Objectives of India’s New Industrial Policy 1991 are as follows
Objectives: The New Industrial Policy, 1991 seeks to liberate the industry from the shackles of the licensing system Drastically reduce the role of the public sector and encourage foreign participation in India’s industrial development. The broad objectives of New Industrial Policy are as follows:
i) Liberalising the industry from the regulatory devices such as licenses and controls.
ii) Enhancing support to the small-scale sector.
iii) Increasing the competitiveness of industries for the benefit of the common man.
iv) Ensuring running of public enterprises on business lines and thus cutting their losses.
v) Providing more incentives for industrialization of the backward areas, and
vi) Ensuring rapid industrial development in a competitive environment.