Government Steps to Promote Large Scale Industries

Indian Government has adopted following important steps for the development of large scale industries in the post independent era:

1. Expansion of Infrastructural Base. Government has paid special attention to the development and expansion of infrastructural facilities in India. Consequently, we find development in the field of electricity, machinery and equipment, transport and communication services, monetary and financial institutions etc. As a result the industrial sector of the country has become more modern and strong.

2. Promotion of Public Sector Industries. Just after Independence, government established a number of important industries in the public sector. It has stressed on the expansion of public sector in different plans. As a result of government policy, public sector industries have undoubtedly played an important role in the industrial development of post-independent India. At present there are a number of industries under public sector. Prominent among them are: Steel Authority of India Ltd.; Sindri Fertiliser Factory; Indian Oil Corporation, Hindustan Machine Tools; Bharat Heavy Electricals Ltd. etc.

During the period of planning both the number of public sector industries and the capital investment in them have increased a lot. But they proved unsuccessful in maintaining the high levels of productivity and managerial efficiency. Thus, this sector has failed to fulfil the expectations of the country. It is, therefore, required that we should pay more attention to the improvement of the working of the public sector. Now for the last few years the policy of promoting private sector industries has again been adopted.

3. Foreign Collaboration. During plan-period foreign collaboration has undoubtedly been sought but simultaneously efforts have also been made to keep the economy free from the clutches of foreign ownership and control. Many industries have been set up in India with the help of foreign capital and foreign technology.

4. Financial Institutions. A number of financial institutions have been set up to meet the financial requirements of large scale industries. For instance, Industrial Financial Corporation of India (IFCI), Industrial Credit and investment Corporation of India (ICICI). Industrial Development Bank of India (IDBI), Industrial Reconstruction Bank of India (IRBI), etc. These financial institutions provide credit facilities at reasonable terms to large scale industries according to their needs.

5. Improvement in Technology. For the development of large scale industries measures to use modern and efficient production techniques have been adopted, New scientific and technological experiments and researches related to the field of industries have been conducted. In this regard efforts have been made mainly in two directions: (i) In adopting the high technology of developed countries. (ii) In developing appropriate technology suitable to the conditions of our country. For this a number of technical institutions have been set up by the government and the work of research and development has also been promoted.

6. Tax and other Concessions. For industrial development government announces from time to time, concessions also such as tax concessions, credit facilities, land for the factory at concessional rates, special concessions and benefits for the establishment of industries in backward regions.

7. Special Encouragement to Export Industries. Government has adopted a number of measures for the promotion of export industries. Such industries have been allowed to import raw materials, machinery and equipments etc. for their requirements and they have also been given
special tax concessions.

8. New industrial Policy. In order to give more push to the industrial development, government announced a New Industrial Policy in July 1991. The main provisions of this new policy were : reduction of areas reserved for public sector, delicensing of a number of large scale industries, removal of investment controls on large business houses, liberalisation of foreign investment policy and import policy, development of backward areas etc. In short, it is a liberalised industrial policy.

The major objectives of this policy are : (a) Full utilisation of the capablities of entreprenerus; (b) Encouragement for technology upgradation: (c) Improvements in efficiency and productivity by removing all regulations and hurdles in their way; (d) Massive help for modemisation of plant and equipment; (e) Increase in the competitive strength of the Indian industries.

For the purpose of technology upgradation and modernisation, government has set-up two funds (a) the Technology Upgradation Fund, and b) the Capital Modernisation Fund.
Besides this some measures have also been adopted to make available raw materials to the large scale industries, to reduce industrial disputes and industrial unrest in order to improve industrial relations.

Thus, government has initiated a number of measures for the development of large scale industries in the country. But keeping in view the requirements of the country, the development in this sector is not up to the mark. Hence in coming years we have to speed up our efforts in this field.