Since Independence, India has several industrial policies to her credit. These are discussed as follows:
IPR 1958: The IPR, 1948, for the first time, accepted the importance of small-scale industries in the overall industrial development of the country. It was realized that small-scale industries are particularly suited for the utilization of local resources and for the creation of employment opportunities. However, they have to face acute problems of raw materials, capital, skilled labour, marketing, etc. Since a long period of time. Therefore, the emphasis was laid in the IPR, 1948 that these problems of small-scale enterprises should be solved by the central government with the Co-operation of the state government. In nutshell, the main thrust of IPR 1948, as far as small-scale enterprises were concerned was protection.
IPR, 1956: The IPR 1956 provided that along with continuing policy support to the small sector, it also aimed at to ensure that decentralized sector acquires sufficient vitality to self-supporting and its development is intergraded with that of large-scale industry. To mention some 128 items were reserved for exclusive production in the small sector. Besides, the small-scale industries (SSIB) constituted a working group in 1959 to examine and formulate a development plan for small-scale industries during the third five-year plan, 1961-61. In the third five year plan period, specific development projects like rural industries projects and industrial estates projects were started to strengthen the small-sector.
Thus, to the earlier emphasis of ‘protection’ was added development. The IPR 1956 for small-scale industries aimed at “protection plus development” In a way, the IPR 1956 initiated the modern SSI in India.
IPR, 1977: During the two decades after the IPR 1956, the economy witnessed lopsided industrial development skewed in favor of large and medium sector, on the one hand, and increase in unemployment, on the other. This situation led to a renewed emphasis on industrial policy. This gave emergence to IPR 1977. The policy statement categorically mentioned.
“The emphasis on industrial policy so far has been mainly on large industries, neglecting cottage industries completely, and policy relegating small industries to a minor role. The main thrust of the new industrial policy will be on effective promotion of cottage and small-scale industries widely dispersed in rural areas and small towns. It is the policy of the government that whatever can be produced by small and cottage industries must only be so produced.”
The IPR 1977 accordingly classified small sector into three categories.
i) Cottage and Household Industries: Which provide self-employment on a large scale.
ii) Tiny Sector: Incorporating investment in industrial units in plant and machinery up to Rs. 1 lakh and situated in towns with a population of less than 50,000 according to 1971 census.
iii) Small-scale Industries: Comprising of industrial units with an investment of up to Rs. 10 Lakhs and in case of ancillary units with investment up to Rs. 15 Lakhs.
IPR 1980: The Government of India adopted a new industrial policy resolution (IPR) on July 23, 1980. The main objective of IPR 1980 was defined as facilitating an increase in industrial production through optimum utilization of installed capacity and expansion of industries. As to the small sector, the resolution envisaged.
i) Increase in Investment ceilings from Rs. 1 Lakhs to Rs. 2 Lakhs in case of tiny units, from Rs. 10 Lakhs to Rs. 20 Lakhs in case of small-scale units and from Rs.15 Lakhs to Rs. 25 Lakhs in case of ancillaries.
ii) Introduction of the concept of nucleus plants to replace the earlier scheme of the District industry centers in each industrially backward district to promote the maximum small-scale industries there.
iii) promotion of village and rural industries to generate economic viability in the village, well compatible with the environment.
Thus the IPR 1980 re-emphasized the spirit of the IPR 1956. The small-scale sector still remained the best sector for generating wage and self-employment based opportunities in the country.
IPR 1990: The IPR 1990 was announced during June 1990 As to the small-scale sector, the resolution continued to give increasing importance to small-scale enterprises to serve the Objective of employment generation. The important elements included in the resolution to boost the development of the small-scale sector were as follows.
i) The investment ceiling in plant and machinery for small-scale industries (Fixed in 1985) was raised from Rs. 35 Lakhs to Rs. 60 Lakhs and correspondingly, for ancillary units from Rs. 45 Lakhs to Rs. 75 Lakhs.
ii) Investment ceiling for tiny units had been increased from Rs. 2 Lakhs to Rs. 5 Lakhs provided the unit is located in an area having a population of 50,000 as per 1981 census.
iii) As many as 836 items were reserved for exclusive manufacture is a small-scale sector.
iv) A new scheme of central investment subsidy exclusively for the small-scale sector in rural and backward areas capable of generating more employment at the lower cost of capital had been mooted and implemented.