(i) The role of
State enterprise vis-a-vis private enterprise. The basic
principle embodied in the policy was that State must play a
progressively active role in the development of industries. It was,
however, duly recognised that in the circumstances then prevailing in
the country, it was not advisable for the State to take over existing
units and it was, therefore, decided to concentrate on new units and
existing units already under its control. The private sector was to
be properly regulated and directed and was assigned an important role
in the situation then obtaining in the country.
Allocation of industries to private and public sectors. Keeping
in view the broad principles enunciated above, the Policy Resolution
divided the industries into the following four categories for the
purposes of their allocation as between private enterprise an State
(a) Strategic an basic industries. The
manufacture of arms and ammunition, production and control of atomic
energy, and the ownership an management of railway transport were
made the “exclusive monopoly of the State”. These industries
were even earlier, wholly in the public sector.
and key industries. These included coal, iron and steel aircraft
manufacture, ship-building, manufacture of telephone, telegraph and
wireless apparatus, etc. The existing units in these industries were
to be allowed to continue in the private sector for a period of ten
years at the end of which the position was to be reviewed and the
question of nationalization was to be decided, if necessary. As for
the new units it was laid down that the State would be exclusively
responsible for their establishment.
(c) Private sector
industries subject to control and regulation by the Government. In
this category were placed twenty important industries of the country
which were to continue in the private sector though they were to
function subject to control and regulation by the Government. These
industries included heavy chemicals, sugar, cotton and woollen
textiles, cement, paper, salt, machine tools, etc., all of which were
considered important in the national interest.
private and co-operative sector industries. The rest of the
industries not covered by any of the categories mentioned above were
to be private enterprise-individual as well as co-operative-though
they were to be under the general control of State.
The rule of small-scale and cottage industries. The Policy
Resolution afforded due recognition to the importance of small-scale
and cottage industries in the economy of the country. It was
visualized that they would be organised on co-operative lines and
would be integrated and coordinated with large industries.
toward better Industrial relations. In keeping with the
recommendations of the Industries Conference of 1948, the Industrial
Policy Resolution of 1948 accepted profit-sharing and other schemes
meant to associate labour with the management of industry as steps in
the direction of more cordial Industrial relations in the country.