What is the New Industrial Policy?

The New Industrial Policy is progressive & dynamic in character. On 24th July, 1991, the Prime Minister of India, Shri. P.V. Narsimha Rao announced a new policy called the New Industrial Policy. The policy was a revolutionary policy and was announced with the following objectives.
(1) To bring improvement & efficiency in Indian industries.
(2) To encourage internal competitions.
(3) To bring consciousness among Indian producers.
(4) To introduce liberalization for integrating Indian economy with the world economy.
(5) To remove restrictions of investment and foreign direct investment.
(6) To prepare industries to face international challenges through the process of globalization.
(7) To improve the performance of public sector through professional management & autonomy.

The New Industrial Policy took bold decisions to end the license rule. It removed many outdated provisions, which restricted the growth of private sector. The policy was welcomed by business sector and it opened the ways of liberalization and globalization. New Industrial Policy is also known as the New Economic Policy. It aims at liberalization of Indian industries. Government from time to time keeps on amending the existing policies or frame new policies. These policies have a far reaching & long term impact on business organizations. The Government of India has also laid down various policies like industrial policy, pricing policy, fiscal policy, etc. for the industries operating its business in India.

In the New Industrial Policy, the government has introduced radical changes in Industrial, labor, financial, foreign exchange and other policies, with the purpose of making Indian business more competitive in the world market. The government with the help of new industrial policy has strengthened the economic structure and has linked Indian economy with World economy. The impact of New Industrial Policy can be easily witnessed on Indian Economy. Due to liberalization & globalization, Indian markets are opened to foreign manufacturers & superior qualities of goods are supplied to consumers. Massive entry of Multinational Companies is witnessed because of New Industrial Policy.

The business organizations have become more alert due to supply of superior quality of goods, introduction of modern technology & greater employment opportunities by multinational companies. The doors of public sectors are opened for multinational companies always. The government is also trying to attract foreign companies. The period from 1991 to 2005 had proved to be boon for India and Indian industries.

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