Industrial Policy 1948
After having attained independence, the Government of India declared its first Industrial Policy on 6th April, 1948. The Industrial Policy 1948 was presented in the parliament by then Industry Minister Dr. Shyama Prasad Mukherjee. The main historical importance of this policy is that it ushered India in the system of Mixed Economy.
Four Fold Classification of Industries
Under this policy, the large industries were classified in four categories viz. Strategic Industries, Basic / Key industries, Important Industries and other industries which respectively referred to Public Sector; Public-cum-Private Sector; Controlled Private Sector and Private & Cooperative sector. They have been discussed below:
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
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.
Important Industries (Controlled Private Sector)
Eighteen industries were kept in the “Important Industries” category. Such important industries included heavy chemicals, sugar, cotton textile and woollen industry, cement, paper, salt, machine tools, fertiliser, rubber, air and sea transport, motor, tractor, electricity etc. These industries will continue to remain under private sector however, the central government, in consultation with the state government, will have general control over them.
Other Industries (Private and Co-operative 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.
Other features of Industrial Policy 1948
Apart from the four fold classification of the industries; the Industrial Policy 1948 endeavoured to protect cottage & small scale industries by according them priority status. It also emphasised on establishing harmonious industrial relations; gave high priority to fair wage rates; social security to workers and their participation in management. The industrial policy 1948 had acknowledged the significance of foreign capital for industrialisation of the country, but it was decided that the control should remain with Indian hands.
With this policy, India ushered into a mixed economy taking the society on socialistic pattern. The core idea was to keep the strategic and basic industries under the exclusive ownership / control of Government. The central and state governments had a virtual monopoly in railroads and exclusive rights to develop minerals, iron ore etc. The 18 important industries were to be developed under direct control and regulation of the government.