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BBA 1st Year Business Environment Industrial Policy Short Question Answer

3. To protect small scale and cottage industries from the competition.

4. To check and prevent the monopoly and concentration of economic power.

5. To encourage the establishment of new economic units.

6. To encourage the use of latest technology and methods.

7. To encourage new entrepreneurs to come forward.

8. To promote industrial development in the manner those sectoral and regional balances may be maintained.

Q. 7. Give salient features of licensing policy, 1991.

Ans. In industrial policy 1991, a number of changes were announced regarding licensing policy. These changes are as under:

1. New policy has abolished all industrial licensing except for 18 industries (now only 6) related to security and strategic concerns.

2. Under new policy, only 8 industries (now only 3) will be reserved for public sector.

3. Permission will not be required to set up a new industrial undertaking.

4. Permission will not be required if an industry is being established in area of more than 1 million population.

5. A new board banding facility will be provided to existing units so that they may produce commodity according to dernand.

6. Existing units will nt be required to obtain license for their expansion programmes.

7. System of phased manufacturing programmes has been abolished.

Q. 8. Write down a note on the small scale sector industrial policy with its salient features.

Ans. The government announced a new policy for the small scale sector on 6th August, 1991. The policy ensures many ricentives for the small sector. The main thrust of the new policy is to induce the small-scale units to contribute to the economy in terms ofhigher output, employment and exports.

Salient Features: The salient features of the new policy are listed below:

1. Investment Ceiling: The policy has increased the investment limit in plant and machinery forsmafl scale unitfrom33 1akhsto6Olakhs.

At present the investment limit for both small scale and ancillary units is 3 crore and for tiny sector investment limit was ftxed at 27 Iakhs.

2. Export Development Centre in SIDO: To promote export from the small scale sector the policy proposed on Export Development Centre in SIDO. The SIDO has been recognised as the nodal agency to support small scale industries in export promotion.

3. Technology Development Cell in SIDO : The policy also proposed to set-up a Technology Development Cell (TDC) in SIDO which could provide technology inputs to improve productivity and competence of products of small scale sector.

5. National Equity Fund Scheme: It has been decided to widen the scope of the National equity Fund Scheme t. aver projects upto 10 lakhs for equity support.

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