Post-1991 Industrial Policy Developments

(From Liberalisation to Present Day)

⚠️ Note:

Since 1991, India has not announced a single, consolidated “Industrial Policy” document like the ones in 1948, 1956, or 1991.
Instead, industrial development has been guided by a series of sectoral policies, reforms, and initiatives, reflecting the needs of a market-driven and globalised economy.

🔶 National Manufacturing Policy (2011)

🔹 Objective:

To increase the share of manufacturing in GDP from ~16% to 25% by 2025, and create 100 million jobs.

🔹 Key Features:

• Creation of National Investment and Manufacturing Zones (NIMZs).
• Single-window clearances.
• Easier land acquisition norms (in NIMZs).
• Focus on green manufacturing.

🧠 Why it matters:

This was the first formal attempt post-1991 to design a manufacturing-focused industrial strategy.

🔶 Make in India (2014)

🔹 Launched by: PM Narendra Modi in 2014.

🔹 Objective: To transform India into a global manufacturing hub and attract FDI in 25 priority sectors.

🔹 Key Measures:

• Opening up FDI in defence, railways, and construction.
• De-licensing and de-regulation across industries.
• Promoting India’s image globally through branding.

🔹 Outcomes:

• India became one of the top FDI destinations globally.
• Boosted investor confidence in defence, electronics, and automobiles.

🔶 Start-Up India (2016)

🔹 Aim: To build a strong ecosystem for innovation and entrepreneurship.

🔹 Key Incentives:

• Tax exemptions for startups.
• Self-certification for labour and environment laws.
• Establishment of a Fund of Funds to support venture capital.

🔶 Ease of Doing Business Reforms (2014–2020)

🔹 Measures Taken:

• Introduction of Insolvency and Bankruptcy Code (IBC).
• GST implementation (indirect tax reform).
• Digitisation of compliance (e.g., online approvals, faceless assessments).

🔹 Outcome:

India’s World Bank Ease of Doing Business Rank jumped from 142 in 2014 to 63 in 2020.

• However, the World Bank discontinued the index in 2021 due to concerns over data integrity.
• In 2024, the Business Ready (B-READY) report was introduced as a new framework for assessing regulatory environments.

🔶 Production Linked Incentive (PLI) Scheme (2020–Present)

🔹 Objective:

To boost domestic manufacturing and make Indian products globally competitive.

🔹 Key Points:

• Financial incentives to manufacturers based on incremental output.
• Launched initially in 13 sectors, including:
  • Electronics,
  • Pharmaceuticals,
  • Textiles,
  • Automobiles and components,
  • Renewable energy, etc.

🔹 Significance:

• Attracts both domestic and global manufacturers.
• Aims to integrate Indian industry into global supply chains.

🔶 Industrial Corridor Development

🔹 Projects like:

• Delhi-Mumbai Industrial Corridor (DMIC),
• Amritsar-Kolkata Industrial Corridor (AKIC),
• Chennai-Bengaluru Industrial Corridor (CBIC).

🔹 Purpose:

To create state-of-the-art infrastructure with plug-and-play industrial zones, multimodal transport, and smart cities.

🔶 Draft New Industrial Policy (2018 – under consultation)

Although not yet formally adopted, the Department for Promotion of Industry and Internal Trade (DPIIT) released a draft New Industrial Policy.

🔹 Key Proposals:

• Emphasis on Industry 4.0, automation, AI, IoT.
• Integrated logistics and infrastructure development.
• Promotion of sunrise sectors (e.g., renewables, EVs, semiconductors).
• Strengthening MSMEs and boosting exports.

🧠 This policy is still in draft stage and expected to replace the 1991 policy officially.

🔶 Recent Reforms (2020–Present)

📌 Post-COVID Industrial Push:

Under Atmanirbhar Bharat Abhiyan, India focused on:

• Self-reliance in key industries (pharma, defence, electronics),
• Promotion of domestic supply chains,
• Push for cluster-based development in MSMEs.

📘 Summary Table: Post-1991 Industrial Policy Initiatives

Year	Initiative	Focus Area
2011	National Manufacturing Policy	Boosting manufacturing share in GDP
2014	Make in India	Global manufacturing hub, FDI
2016	Start-Up India	Entrepreneurship and innovation
2014–20	Ease of Doing Business Reforms	Regulatory simplification
2020	PLI Scheme	Incentives for production output
2010s–	Industrial Corridors	Infrastructure-led industrialization
2018 (Draft)	New Industrial Policy	Industry 4.0, competitiveness
2020–Present	Atmanirbhar Bharat	Self-reliance and import substitution

🧠 Final Insight:

India’s industrial policy after 1991 has become more reform-based and sector-specific, focusing on:

• Competitiveness,
• Ease of business,
• Global integration, and
• Tech-driven growth.

While we await a formal new policy, India’s journey has been marked by decentralised but consistent industrial reform.

🧾 Comparative Table of Major Industrial Policies/Reforms in India

Policy Year	Political Context	Focus / Ideology	Classification of Industries	Role of Public Sector	Role of Private Sector	Key Features	Criticism / Limitations
1948	Post-independence (Nehru govt.)	Mixed Economy Model	4 Categories: Strategic, Basic/Key, Important, Other	Dominant role, esp. in Strategic & Basic	Allowed in controlled sectors	First policy, set broad framework, IDRA 1951	Vague operational clarity, dominance of PSUs began
1956	Nehruvian Socialism	Socialist, State Capitalism	3 Schedules (A – State only, B – Mixed, C – Private)	Expanded significantly; “Economic Constitution”	Restricted to Schedule C	Strong pro-PSU tilt, anti-monopoly, small scale emphasis	Criticized for restricting private growth and License Raj
1977	Janata Govt. (Post-Emergency)	Gandhian + Decentralized	Focused on small industries, no new classification	Emphasized decentralization, not expansion	Limited to non-monopolistic areas	3-tier Small Sector (cottage, tiny, small scale), labour participation	Ineffective control on monopolies, lacked economic vision
1980	Congress (Indira Gandhi)	Centralization + Revival	No reclassification	Emphasis on reviving PSU efficiency	Reaffirmed MRTP & FERA controls	Pushed industrial growth and central control	No major reforms, continued control regime
1991	Economic crisis, Congress (PVNR & Manmohan)	Liberalisation, Globalisation	Removed classification, de-regulated economy	Strategic retreat to 5 core sectors (now only 2)	Opened up all sectors with FDI	De-licensing, FDI, Disinvestment, MRTP ended	Jobless growth, industrial imbalance, pollution issues
2011	UPA II	Sectoral focus, Manufacturing push	Introduced NIMZs	Infrastructure enabler	Boost to private manufacturing	National Manufacturing Policy	Manufacturing GDP share remained stagnant
2014 (Make in India)	NDA Govt. (Modi)	FDI + Manufacturing Hub	Sector-specific push	Facilitator (PPP, infra)	100% FDI in many sectors	Branding India globally, reforms for business	Bureaucratic delays, limited ground-level boost
2020 (PLI Scheme)	Post-COVID Response	Self-reliance + Exports	No classification, incentive-led	Policy supports only	Direct production-based incentives	PLI in 13+ sectors, attract global supply chains	Uneven access, risks of subsidy-dependency

🧠 Key Evolution Themes Across Industrial Policies:

Phase	Nature	Summary
1948–1980	State-led Industrialisation	Emphasis on socialism, public sector dominance, small-scale protection
1991	Structural Break / Liberalisation	Entry of MNCs, deregulation, end of License Raj, export-oriented growth
Post-1991	Reform-driven, Sectoral Focus	FDI, privatisation, infrastructure, incentives like PLI and industrial corridors
Post-2014	FDI + Self-reliance	Make in India, Start-Up India, Atmanirbhar Bharat, PLI — mix of global + local
Current Trend	Digital + Green + Competitive India	Draft New Industrial Policy (2018) focuses on Industry 4.0, sustainability, innovation

✅ Ideal Use for UPSC:

• Use the chronological flow to answer evolution-based questions.
• Use the comparative chart in GS3 (Economy) or Geography Optional answers.
• Highlight continuity and change in India’s policy strategy over decades.