It encourages the ongoing operation or investment in a particular industry.

It refers to the government policy towards industries their establishment, functioning, growth and management. It indicate the areas of large, medium and large scale sectors. In 1948, after independence govt introduce the industrial policy resolution. 1991 July Mr.P.V Narashima Rao announced this policy.

 Encouragement to Indian entrepreneurship

promotion of productivity and employment generation. Removing the regulatory system and other weakness. Incentives for the industrialization of the backward area. Protect the interest of workers Enhanced support to the small-scale sectors. Increasing the competitiveness of industries for the benefit of common man.

1.Industrial licensing: It is a unique instrument of direct control designed to implement a major part of the industrial policy. The industries act 1951, though which licensing system is operated it empowers the new investment ,expansion of licensed units and production of new articles.

Planned industrial development through appropriate regulations and controls. Directing industrial investment in accordance with plan priorities. Ensuring government control over industrial activities in india. Utilizing full capacity of large scale industries. Utilizing appropriate technology.

2.Foreign investment: The advantage of technology transfer, marketing expertise, introduction of modern managerial techniques and export promotion.51% high priority includes 34 broad areas like metallurgy, hotel and tourism industry.

3.Foreign technology Agreements:

Foreign technology collaborations are permitted either through the automatic route under delegated powers exercised by the Reserve Bank of India (RBI) or by the Government. Automatic Route The Reserve Bank of India, through its regional offices, accords automatic approval to all industries for foreign technology collaboration agreements subject to

the lump sum payments not exceeding US $ 2 Million; royalty payable being limited to 5 per cent for domestic sales and 8 per cent for exports, subject to a total payment of 8 per cent on sales over a 10 year period; and the period for payment of royalty not exceeding 7 years from the date of commencement of commercial production, or 10 years from the date of agreement, whichever is earlier. These royalty limits are net of taxes and are calculated according to standard conditions.

For foreign technology agreements in respect of hotel and tourism related industries, automatic approval is granted if up to 3% of the capital cost of the project is proposed to be paid for technical and consultancy services including fees for architecture, design, supervision, etc.; up to 3% of the net turnover is payable for franchising and marketing/publicity support fee, and up to 10% of gross operating profit is payable for management fee, including incentive fee.

Government Route For the following categories, Government approval would be necessary: proposals attracting compulsory licensing; items of manufacture reserved for the small scale sector; proposals involving any previous joint venture, or technology transfer/trademark agreement in the same or allied field in India. The definition of "same" and allied field would be as per 4 digit NIC 1987 Code and 3 digit NIC 1987 Code; extension of foreign technology collaboration agreements (including those cases which may have received automatic approval in the first instance); proposals not meeting any or all of the parameters for automatic approval as given above.

4.Public sector policy: It was playing the strategic role in indian economy. They are enjoying a prefrential treatment from the government and played a important role in GDP of the country. Memorandum of understanding: It were signed with PSU. It started in 1987-88 with four public enterprises presently more than 100 PSU are covered by MOU.

BIFR: Board of industrial and financial reconstruction to advise the government on whether to invest further in PSU to close them down or to divest government stake in them.

5.MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT (MRTP ACT) The Monopolistic and Restrictive Trade Practices Act, 1969, was enacted To ensure that the operation of the economic system does not result in the concentration of economic power in hands of few, To provide for the control of monopolies, and To prohibit monopolistic and restrictive trade practices. The MRTP Act extends to the whole of India except Jammu and Kashmir.

Unless the Central Government otherwise directs, this act shall not apply to: Any undertaking owned or controlled by the Government Company, Any undertaking owned or controlled by the Government, Any undertaking owned or controlled by a corporation (not being a company established by or under any Central, Provincial or State Act, Any trade union or other association of workmen or employees formed for their own reasonable protection as such workmen or employees, Any undertaking engaged in an industry, the management of which has been taken over by any person or body of persons under powers by the Central Government, Any undertaking owned by a co-operative society formed and registered under any Central, Provincial or state Act,