Salient Features of Industrial Policy Resolution, 1948

The first important industrial policy statement was made in the Industrial policy Resolution (IPR), 1948. The main thrust of IPR, 1948 was to lay down the foundation of mixed economy whereby the private and public sector was accepted as important components in the development of industrial economy of India. IPR, 1948 gave public sector vast area to operate. Government took the role of catalytic agent of industrial development.

1) Classification of Industries

The policy divided the industries into four broad categories-

a. Strategic Industries (Public Sector)

This category included three industries in which Central Government had monopoly. These included Arms and ammunitions; Atomic energy and Rail transport.

b. Basic / Key Industries (Public-cum-Private Sector)

Six industries viz. coal, Iron and Steel, Aircraft manufacturing, Ship-building, Manufacture of telephone, telegraph and wireless apparatus, and Mineral oil were designated as “Key Industries” or “Basic Industries”.

It was decided that the new industries in this category will henceforth only be set-up by the Central Government. However, the existing private sector enterprises were allowed to continue.

c. Important Industries (Controlled Private Sector)

18 industries were kept in the “Important Industries” category. Such important industries included heavy chemicals, sugar, cotton textile and woolen industry, cement, paper, salt, machine tools, fertilizer, rubber, air and sea transport, motor, tractor, electricity etc. These industries will continue to remain under private sector however; the central government will have general control over them.

d. Other Industries (Private Sector)

All other industries which were not included in the above mentioned three categories were left open for the private sector. However, government could impose controls on these industries also if any of them was not working satisfactorily.

2) Control over Foreign Capital

The role of foreign capital for industrial development was recognized. But Govt. took full control over foreign capital to watch the interests of nation.

3) Development of infrastructure

Special stress was laid on development of roads, railways, electricity and irrigation etc.

4) Cottage and Small scale industries

Rapid development of these industries was emphasized in order to use local resources generating employment and production of consumer goods.