Briefly discuss why the Industrial Policy of 1956 is referred to as the ‘Economic Constitution’ of the country?

Briefly discuss why the Industrial Policy of 1956 is referred to as the ‘Economic Constitution’ of the country?


Solution:

The Industrial Policy of 1956 is referred to as the `Economic Constitution’ of the country. Private sector is a junior partner. Public sector to play a leading role as a senior partner to develop heavy and basic industries to play a leading role as a senior partner to develop heavy and basic industries as well as infrastructure. Private sector worked under the misconception that the Damocles’ swear was hung on its head. This was an incorrect perception of IPR 1956. Rather a permanent place was provided for the private sector. By developing heavy industry and infrastructure, the State created a congenial environment for the development of the private sector. Later development by the Industrial Licensing Policy Inquiry Committee (1969) indicated that under one pretext or another, several areas reserves for the public sector were opened to the private sector. Private sector investment zoomed forward, along with public sector expansion. Industrial Policy Statement, 1977 - Policy drafted by the Ghanaians in the Janata Party. The main aim of the policy was to correct the distortions in the implementation of the Industrial Policy (1956). Major distortions:
(a) Unemployment has incre4ased
(b) rural-urban disparities have widened
(c) rate of real investment has stagnated.
Chief features:
Major thrust on the development of small industries.
• Reservation list increased from 180 to 807 items.
• District Industries Centres to be set up so that the services and support required
• Khadi and village Industries Commission to be strengthened.
• Appropriate technology to be developed for small and village industries.
Areas for Large Scale Sector:
Large sector should be related to minimum basic needs programme via dispersal of small and village industries. Large industries should strengthen the agricultural sector. Approach towards Large Business Houses – Large houses to rely on internally generated resources fro financing new projects or expanding existing projects. They should not depend on public financial institutions and banks. Larger role for the Public Sector – Besides producing important and strategic goods, public sector be expanded to act as a stabilizing force for maintaining supplies of essential consumer goods.
Foreign Collaborations:
In areas where technological know-how is not needed, existing foreign collaborations will not be renewed. As a rule, majority interest in ownership and control to remain in Indian hands, though the governmental make exceptions in highly export-oriented and/or sophisticated technology areas. Sick Units – Sick units to be helped in the interest of protecting employment, but no blanket assurance was given to take-over every sick unit. Units which are non-viable and continue to make losses year after year, may not be helped.