COMPARE THE INDUSTRIAL

DEVELOPMENT IN INDIA WITH

CHINA & JAPAN

ToProf. Kunwar Milind Singh

ByDipali Jain
Rhythm Uppal
Section -A

MEANING OF INDUSTRIAL POLICY

It

prescribes the respective roles of the public, private,

joint, and co-operative sectors for the development of
industries.
It

also indicates the role of the large, medium and small

scale sector.
It

incorporates fiscal and monetary policies, tariff policy, labor

policy, and the government attitude towards foreign capital .
Role

to be played by multinational corporations in the

OBJECTIVES OF INDUSTRIAL POLICY

Achieving

a socialistic pattern of society

Preventing undue concentration of economic power

Achieving

industrial development

Reducing disparities in regional development

Developing heavy and capital goods industry

Providing opportunities for gainful employment

Expanding

the public sector for achieving socialism

Achieving a self-sustained economy

Achieving faster economic growth

Alleviating poverty

Protecting and developing a healthy small- scale sector

Updating technology and modernization of industry

Liberalization and globalization of economy

MEASURES OF INDUSTRIAL POLICY

Liberalization of Industrial Licensing Policy

Introduction of Industrial Entrepreneurs
Memorandum
Liberalization of Location Policy
Policy of Small Scale Industries
Non- Resident Indian Scheme
Electronic Hardware Park Scheme

INDIAS INDUSTRIAL POLICIES FROM 1948

TO 1991

Industrial policy 1948

Items

under central government control

Items

under the state government control

Items

of basic importance, would be planned and

government .

regulated by the Central

HIGHLIGHTS OF THE POLICY

Policy accepted the importance of small and cottage industries

in industrial development.

These industries are particularly suited for the utilization of

local resources and for the achievement of the local selfsufficiency in types of essential consumer goods like food,etc.
The

provision of raw materials, cheap power, technical advice,

and safeguards against intensive competition by large scale

manufacture, the education of the worker in the use of the best
available technique. Most of these are receiving the attention of
the Governments .

INDUSTRIAL POLICY 1956

After the adoption of the Constitution and the socio-economic
goals, the Industrial Policy was comprehensively revised and
adopted in 1956.
Sought to accelerate the rate of economic growth and speed up
industrialization to achieve a socialist pattern of society. Capital
was scarce & the base of entrepreneurship not strong enough.
Hence, the gave primacy to the role of the State to assume a
predominant and direct responsibility for industrial development

OBJECTIVES
To

reduce disparities in income and wealth.

To

prevent private monopolies and concentration of economic

power.
Development
Undertake

of transport facilities and new industries.

State trading on an increasing scale.

Planned

and rapid development.

Expand

public sector.

Disparities

in levels of development between different regions

should be progressively reduced.

INDUSTRIAL POLICY 1977

Emphasis

on producing inputs needed by a large number

of smaller units and making adequate marketing

arrangements.
Upgrading

the technology of small units.

Promoting

the development of a system of linkages between

nucleus large plants and the satellite ancillaries

The

development of small scale industries, the investment limit

in the case of tiny units was enhanced to Rs.2 lakh, of a small

scale units to Rs.20 lakh and of ancillaries to Rs.25 lakh.

Building

buffer stocks of essential raw materials for the Small

Scale Industries for operation through the Small Industries

Development Corporations in the States and the National Small
Industries Corporation in the Centre.

INDUSTRIAL POLICY 1991

De-reservation
Industrial

of Public Sector

licensing

Disinvestment
Government

of Public sector

recognizes the need for Labour

Foreign

Investment.

Foreign

Technology Agreements.

Public

Sector Policy.

MRTP Act.

Objectives Of New Industrial Policy

Attainment of International competitiveness

Development of backward areas

Revival of weak units

Full utilization of plant capacities to generate employment

Efficient use of productive resources

Encouraging competition within Indian industries .

CHINAS INDUSTRIAL POLICY FROM 1978 TO

2012

As

figure 1,initial efforts by China's government at

crafting national industrial policy were launched in the

late 1980s. The quantity and sectoral coverage of
national programs, however, remained strikingly limited
until the mid-2000s.
Between

1989 and 2004, we only find individual sectoral

restructuring programs. Even advocates of industrial

policy in the Chinese government have assessed these
early programs as costly.
Only

the past decade brought a marked rise in national

programs from 2004, and a veritable surge from 2009 on.

Between 1993 and 2012, administrative and policy

competencies in industrial policy-making were shuffled back
and forth between the State Planning Commission and the
State Economic Commission, including their renamed and
reorganized successor organs, in a five-year rhythm. Top
leaders obviously did not trust any single organ to fulfil the
industrial policy mission even-handedly. Instead, decisionmakers at the top tried to instrumentalist bureaucratic
reorganizations to advance specific agendas. The adaptation
of industrial policy in China thus became an unsteady, winding
process that was shaped and delayed, but eventually not
terminated or derailed, by bureaucratic politics. In retrospect,
the core agenda proved to be stronger and more constant
than the bureaucratic turf wars suggest: Industrial policy
continued to exert a very strong attraction on diverse policymakers and administrators who were all eager to defend their
claim to government guidance of economic development and
therefore their own indispensability and authority.

INDUSTRIAL POLICY OF JAPAN

A

complicated

system

of Industrial

Policies was

devised

by

the Japanese Government after World War II and especially in the 1950s
and 1960s.
The

goal was to promote industrial development, and it cooperated

closely for this purpose with private firms.

The

objective of industrial policy was to shift resources to specific

industries in order to gain international competitive advantage for Japan.

These

policies and methods were used primarily to increase the

productivity of inputs and to influence, directly or indirectly, industrial

investment.

COMPARISON

INDIA VS CHINA
On the basis of
The

Current economic status China on 2nd position and India on 11th position.

GDP per

capita In China it is $6600, In India it is $ 3100.

Agriculture

China has more advanced techniques than India.

Stock

Market- China market lacks transparency whereas India market provides more
financial transparency.

Unemployment

Rate - China has an unemployment rate of 4.30% while India has 10.70%

INDIA VS JAPAN

Unemployment Rate - The unemployment rate in India is 8.5%

and Japan is 4.4%.

GDP

per capita The GDP per capita in Japan is $32,600 while

in India it is $3,100.

Literacy Rate - Literacy rate of India is 66% and Japan is 91%

Economic

Preview

ABOUT DIPP
The Department of Industrial Policy & Promotion,
established in 1995, was reconstituted in the
year 2000 with the merger of the Department of
Industrial Development .
The Department of Industrial Policy and
Promotion is responsible for the formulation and
administration of overall Industrial Policy in India

THE ROLE AND FUNCTIONS OF THE DEPARTMENT OF

INDUSTRIAL POLICY AND PROMOTION PRIMARILY
INCLUDE:
Formulation

and implementation of industrial policy and strategies for

industrial development in conformity with the developmental needs and
national objectives in order to make the Indian industry internationally
Competitive.
Monitoring

and stimulation of industrial growth, in general, and

performance of industries specifically assigned to it, in particular, and
guidance in the creation of an enabling environment, infrastructure, and
technology transfer/collaborations on all industrial and technical matters.

Encouragement

to foreign technology collaborations at

enterprise level and formulation of policy parameters for the
same for enhancing productivity with reference to
international benchmarking and by commissioning
competitive studies.
Promotion

and facilitation of Foreign Direct Investment

(FDI) in India and mitigating investor grievances through
coordinated grievance resolution mechanism.

SEZ Setup By The Government

The Government of India formulated a successful policy for setting up

Special Economic Zones (SEZs) in India in 2006.

SEZs are specially delineated duty free enclaves for the purpose of trade,
operations, duty and tariffs.

SEZ are exempted from customs and excise duties

The objectives of SEZs are generation of additional economic activity;

promotion of exports of goods and services; promotion of investment from
domestic and foreign sources; creation of employment opportunities and
development of infrastructure facilities.