The industrial policy as a driver of the Indian economy’s development

Cover Page

Cite item


The aim of this research is the Indian industrial policy in 1950-2010s, its main direction and perspectives of its future evolution. The methodological basis of the study is such methods as induction and deduction, analysis and synthesis. The systematic approach to the overall study of the Indian economy and the Indian industrial policy in particular has become the base of this research. The author thoroughly analyses its main specific features during the pre-reform period, as well as identifies the causes and the nature of its transformation at the beginning of the 1990s. At the same time the author underlines that taking into account the national-specific features of a mixed society, the industrial policy of the prereform stage facilitated the successful holding of industrialization during which the industrial sector has become the fastest growing sector of the Indian economy. The author underlines the main directions of the New Industrial Policy, 1991 , among which the most important ones are the following: abolition industrial licensing, the reduction of the public sector in the national economy, amendment of Monopolies and Restrictive Trade Practices Act, 1969 , attraction of foreign direct investment and advanced technologies, liberalization of industrial policy at the local level and the replacement the Foreign Exchange Regulation Act, 1973 , by the Foreign Exchange Management, 1999 . Apart from that the author examines the most representative theories of the Indian economists (R. Agraval and C. Rangarajan) which made a significant contribution to working out the industrial policy in 1990s. The author also draws attention to the main elements of a future ready industrial policy discussed in India at the present time. The author stresses that for all its diversity at different stages of socio-economic development the Indian industrial policy always based on both the economic and social components (the New Industrial Policy, 1991 , also added the ecological component). It means that accelerating the annual economic growth rate, the Indian industrial policy has contributing to solving a wide range of social tasks - from the creation of new jobs to poverty and undernourishment alleviation. The article also presents statistical data on the dynamics of gross domestic savings and gross domestic capital formation in the Indian economy, annual average economic growth rates in India from 1990-1991 to 2016-2017 financial year as well as the Indian GDP by industry of origin in 2000-2017.

About the authors

Natalia V Galischeva

MGIMO University of the Ministry of Foreign Affairs of the Russian Federation

Author for correspondence.

Doctor of Economics, Head of Department of the World Economy

76 Vernadskogo prospect, Moscow, 119454, Russian Federation


  1. Agraval R. (2002). Business Environment. 2nd Edition. New Delhi, Excel Books. 818 p.
  2. Department of Industrial Policy and Promotion, Ministry of Commerce and Industry. (2017). Industrial Policy – 2017. A Discussion Paper.
  3. Indiya 1985–1986: Ezhegodnik [India 1985–1986: Yearbook]. (1987). Moscow, Glavnaya redaktsiya vostochnoy literatury Publ. 383 p. (In Russ.)
  4. Industrial Policy Resolution, 1948. Retrieved from
  5. Industrial Policy Resolution, 1956. Retrieved from
  6. Malyarov O.V. (2013). Gosudarstvennyy sector ekonomiki Indii [Public sector of the Indian economy]. Moscow, Instityt vostokovedeniya RAN Publ. 360 p. (In Russ.)
  7. Medovoy A.I., Galischeva N.V. (2009). Ekonomika Indii [The Indian Economy]. Moscow, MGIMO-Universitet Publ. 352 p. (In Russ.)
  8. Misra S.K., Puri V.K. (2001). Indian Economy – Its Development Experience. 19th Revised and Enlarged Edition. New Delhi, Himalaya Publishing House. 955 p.
  9. Planning Commission, Government of India. (2007). Report of the Working Group on Competition Policy. 105 p.
  10. Rangarajan C. (2004–2005). Disinvestment: Strategies and Issues. In Uma Kapila (Ed.), Indian Economy since Independence. 16th Edition (pp. 531–536). New Delhi, Academic Foundation.
  11. Shenoy B.R. (1963). Indian Planning and Economic Development. Bombay, Asia Publishing House. 152 p.
  12. Uma Kapila. (Ed.). (2004–2005). Indian Economy since Independence. 16th Edition. New Delhi, Academic Foundation. 1040 p.
  13. Venkateswaran R.J., Mithani D.M. (1989). Rajiv Gandhi: Economic Perspective Towards 21st Century. Bombay, Himalaya Publishing House. 239 p.

Copyright (c) 2019 Galischeva N.V.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

This website uses cookies

You consent to our cookies if you continue to use our website.

About Cookies