BBA 1st Year Business Environment Industrial Policy Short Question Answer

(i) If total fixed assets of an industrial undertaking exceed 5 crore R 15 crore in case of non FERA and non MRTP] it must be registered with technical development director.

(ii) No new industrial unit mentioned in schedule 1 of the act could be established or expanded without a licence from central government.

(iii) If an industrial unit obtains registration on the basis of misrepresentation or does not commence production within the stipulated time its registration may be cancelled.

(iv) Government could make investigations into certain specified industries.

2. Corrective Provisions : These provisions aim at solving the problems and improving the performance of industrial undertaking. Provisions are: If central government is dissatisfied with management of any industrial undertaking or management is against public-policies, government is empowered to prescribe, price, methods of production, volume of production and distribution channel.

3. Constructive Provisions These provisions add to the positive and constructive contribution of industries in industrial and economic development of the country. Provisions are:

(i) Establishment of central advisory council.

(ii) Formation of review sub-committee.

(iii) Formation of standing Committee of Central Advisory Council.

(iv) Formation of  Development Council.

(v) Appointment of industrial panels.

(vi) Collection of data.


Q. 10. What is the future plan of government inprivatisation?

Ans. The following are the points of the future plan of government in privatisation:

(a) Strengthening strategic units.

(b) Privatising non-strategic units by:

(1) Gradual disinvestment (2) Strategic sale.

(c) Devising suitable rehabilitation package for weak units.

The recommendations of the disinvestment commission mainly relate to disinvestment of 43 PSUs. It has already submitted 8 reports. The recommendations are in various stages of implementation. It is proposed to raise 10,000 crore through disinvestment programme. This amount is expected to be used for social and infrastructure sectors.
With a view to reduce the burden on budget on account of implementation of voluntary retirement scheme, government will encourage PSUs to issue bonds to the workers opting for VRS.

Q. 11. Give some arguments against privatisation.

Ans. (a) Privatisation of PSiJs in India will go against the accepted goal of socialism. Hence, it is argued that nless we change our socialistic ideology we cannot go for any scheme of privatisation.

(b) Prlvatisation would become a stabling block in achievement of goals of planned economic development. Further the success of planning depends to a great extent on the growth of PSUs.

(c) Privatised enterprises will be less willing to provide uneconomic services.

(d) Privatisation will lead to concentration of economic power that leads to concentration of political power, which will adversely affect the country in the long run.

Q. 12. What are the various forms of privatisation 7 Discuss any three forms of privatisat tion

Ans. (a) Cold privatisation (b) Managerial privatisation (c) Denationalization (d) Contracting out (e) Franchising (I) Divestiture (g) Leasing.

1. Managerial Privatisation: While the ownership of PSUs remains with the government, the top executives and the board of directors are drawn from the private sector.

2. Franchising PSUs may develop new technology in products/services which are then franchised to private sector companies for more production.

3. Leasing: In this case, the ownership remains with the PSUs. They lease out the assets, particularly idle and underutilized ones, to the private sector.

Q. 13. What are the main objectives of liberalization?

Ans. (a)To free the industry from excessive regulatory pressure.

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