Evaluation of New Industrial Policy:
New industrial policy was a new experience for India. On the one hand, it provided an environment conducive to the industry and allowed its wings to spread, whereas, on the other hand, it opened the door for MNCs and sent a clear message to Indian companies to either perform or perish. In this way, the evaluation of new industrial policy takes place, it opened up many avenues for the industry, which began to take advantage of Indian companies and became global players such as Ranbaxy, Asian Paints, Aditya Vikram Birla Group.
Example: Today Asian Paints operates in 27 countries and Tata Tea has acquired international tea brand Tetley.
In the last 15 years, India has seen drastic changes. People who had seen the 70s and 80s would not have thought that they had to wait for weeks to get a telephone line in 1990, and by 1998 they could get a phone on the spot and carry it in their pockets. By mid-2005, the number of mobile connections exceeded the number of basic phone users.
Also read: New Industrial Policy 1991
Today, India has one of the largest grass-roots refineries in the world, namely Reliance, and the country now exports aviation fuel. The Indian economy has shifted from mini-factories to economies, from scarce economies to surplus economies in many products.
This liberalization has proven to be a great boon to the service sector. Today, the service sector produces more than 50% of India’s GDP. India is becoming a manufacturing hub as many companies shift their manufacturing utilities to India. This includes companies such as GE, Nokia, and Dupont.
India is becoming the world’s back office as more countries shift their back-office functions to India. New job opportunities have been created in new economic industries such as telecommunications, software, call centers, biotechnology, education, and media. As competition increases, the quality of manufactured goods has improved. Earlier India was producing substandard products but now it sets the benchmark for the products.
Also read: Industrial Policy 1977
Critics say that there is no evidence of a positive growth rate after liberalization, as the growth in industrial output fell from 7.8 percent per year in the pre-reform period 1980s to 6.6 percent in the 1990s. But the 1990s were a decade of change and a process, which takes time. There is a huge difference in the quality and level of production of the 1980s and 1990s. The biggest criticism of the new industrial policy is that MNCs may soon take over Indian companies. This is true to a certain extent:
1. Coca Cola bought Parle’s five leading soft drinks brands – ThumsUp, Limca, Gold Spot, Citra, and Maaza in September 1993 for US$40 million as part of a strategy to re-enter India.
2. Pepsi acquired Uncle Chipps
3. HLL bought modern bread, Lakme, Tomko, Kisan.
Also read: Industrial Policy 1956
But this is only one side of the picture. On the other hand, many Indian corporations also have MNCs. Videocon recently acquired Thompson’s film tube plant and the Indian side of Electrolux. Asian Paints also acquired Berger International. While this threat is true to a certain extent, it is very difficult for Indian companies to compete with the financial strength of MNCs. India has moved from excessive security to very low security.
Also read: Industrial Policy 1948