benefitted as they were made free from the MRTP Act and FERA. The government delicensed industries which were located in the areas that were declared as backward. The concept of broad banding was introduced. This gave flexibility to the manufacturers in production as the products could be designed as per the demands of the market.
Industrial Policy A new industrial policy was introduced by the P.V.Narasimha Rao government in July . This was a landmark in the economic history of the nation because the government had introduced its policy of liberalization. The Act from centralized bureaucratic control. The conditions of public enterprises was reexamined as they showed very less rate of growth.
So, entrepreneurs were freed from restriction of MRTP Act and restrictions on direct foreign investment was removed. The Indian economy was integrated with the world economy through this policy of liberalization. Major reforms were introduced in the areas of industrial licensing, foreign investment, foreign technology, public sector policy and MRTP Act. Changes were made with regard to industrial licencing which was abolished for many industries.
As per the new Act, industries were included for compulsory licensing. Some of the industries in this category were coal and lignite, petroleum, sugar, industrial explosives, hazardous New Economic Policy was introduced in India on July , under Prime Ministership of P.V. Narasimha Rao, Dr. Manmohan Singh the Finance Minister is regarded as the Father of New Economic Policy of India.
chemicals, electronic aerospace and defence material, drugs and pharmaceuticals etc..It comprised of industries which were related to security concerns, health, environment etc. In , three more industries were removed from the list of industries under the compulsory licensing. They were motor cars, white goods (which include refrigerators, washing machines, air conditioners etc.) and raw hides and skins and patent leather.