Industrial Policy 1948, 1956, 1991 — Policy Changes

Entry	Year	Description	Impact
Industrial Policy Resolution 1948	1948	Established the mixed economy framework, classifying industries into four categories: state monopoly, state-controlled, regulated private, and free private. It was the first formal statement on industrial policy post-independence.	Laid the foundation for state intervention in strategic sectors while allowing private enterprise. It was a transitional policy, setting the stage for more assertive state control.
Industries (Development and Regulation) Act (IDRA)	1951	Provided the legal framework for the government to regulate industrial development, including licensing, registration, and control over production, prices, and distribution. It was crucial for implementing the IPR 1956.	Empowered the government to implement the 'License Raj' system, giving it extensive control over private sector operations, which later became a major impediment to growth.
Industrial Policy Resolution 1956	1956	Adopted a 'socialist pattern of society' as the national objective, significantly expanding the public sector's role and reserving 17 key industries exclusively for the state. It formalized the industrial licensing system.	Led to the establishment of a strong heavy industrial base and self-reliance but also fostered inefficiencies, corruption, and a lack of competition due to pervasive state control and the License Raj.
Monopolies and Restrictive Trade Practices (MRTP) Act	1969	Enacted to prevent the concentration of economic power, control monopolies, and prohibit restrictive trade practices. It required large industrial houses to seek government approval for expansion or new ventures.	Further tightened government control over large private businesses, adding another layer of regulation and contributing to the 'License Raj' environment, often stifling growth and innovation.
Foreign Exchange Regulation Act (FERA)	1973	A highly restrictive law aimed at conserving foreign exchange and regulating foreign investment and transactions. It imposed strict controls on foreign companies operating in India and Indian companies dealing with foreign exchange.	Limited foreign investment and technology inflow, contributing to India's isolation from the global economy and hindering modernization and competitiveness.
New Industrial Policy 1991	1991	A radical shift towards liberalization, privatization, and globalization (LPG). It abolished industrial licensing for most industries, dereserved many public sector industries, liberalized foreign investment, and amended the MRTP Act.	Dismantled the License Raj, opened the economy to global competition, boosted industrial growth, attracted FDI, and fundamentally transformed India's economic landscape towards a market-oriented system.
MRTP Act Amendment and Competition Act	1991 (MRTP), 2002 (Competition Act)	The NIP 1991 amended the MRTP Act, shifting its focus from controlling monopolies based on asset size to regulating unfair trade practices. Later, the Competition Act, 2002, replaced MRTP, explicitly promoting competition and preventing anti-competitive practices.	Fostered a more competitive market environment, encouraging efficiency and innovation by removing barriers to entry and growth for large firms, aligning with global best practices.
Foreign Exchange Management Act (FEMA)	1999	Replaced the restrictive FERA, 1973. FEMA aimed to facilitate external trade and payments and promote the orderly development and maintenance of the foreign exchange market in India.	Significantly eased foreign investment and international financial transactions, further integrating India into the global economy and supporting the objectives of the NIP 1991.

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