What were the main achievement and failtures in the industry field in the pre 1991.

Dear Student,
Introduction:
During the pre 1991 era, the industrial policy put greater emphasis on the state intervention in the field of industrial development.These policies have no doubt created a diversified industrial structure but also caused a number of inefficiencies, distortion and rigidities in the system.
The government launched various policies like Industrial policy resolution ,1948; Industries (Development and Regulation)Act,1951; Industrial policy Resolution,1956; Industrial Policy Statement,1973,1977 and Industrial policy 1980.
Achievements in the industry field in the pre 1991:
Given below are the few achievements that can be pointed out:

1. Protection and development of Indian industries: Local industries were given shelter from international competition by introducing partial physical ban on the imports of products and high imports tariffs.
2. Import substitution policy: Government used its import policy for the healthy development of local industries.In the first few years after independence, the country faced acute shortage of foreign exchange and to save scarce foreign exchange import-substitution policy was initiated in which government encouraged the production of imported goods.
3. Financial Structure: In order to boost the financial structure,Government set up a number of development banks whose principal function was to provide medium and long term investments.Various institutions like IFCI, ICICI, IDBI, UTI and LIC were established during that time.
4. Encouragement to small scale industries: Government encouraged small scale industries by providing a number of support measures for its growth like credit, marketing, technology, fiscal, financial amd infrastructural support.
5. Reduction of Regional Disparities: Fiscal concessions were granted to open industries in backward regions.Public sector enterprises were given a greater role to develop these areas.
6. Development of Public sector:The government made huge investments in providing infrastructure and basic facilities to industries.This was achieved by establishing public sector enterprises in key sectors such as power, heavy machinery, banking, telecommunications etc.

Failures in the industry field in the pre 1991:
Some failures during the pre 1991 era are listed below:

1. The public sector industries by incurring huge losses caused drain of several scarce national resources.
2. Domestic industries failed to achieve international quality standards.
3. Foreign exchange depleted to a very low level.Growth started showing signs of stagnation across all sectors of the economy.
4. Industrial licensing system promoted inefficiency and resulted in the high cost economy.
5. Due to considerable discretionary powers vested in the licensing authorities the system tended to promote corruption.
6. Impact on the entry of new firms due to licensing can be seen and this adversely affected the competition.

Regards,