AMIYA BAGCHI * ARU.N GHOSH "' SREEMANTA DASGUPTA ^^ Industrial Policy and the Economy THE INDUSTRIAL policy that has been initiated in 1985, by the Government of India is the culmination of a policy of drift which commenced around 1966. Today, the policy is characterized by total surrender of the policy of self reliance, and a reversal of the growth policy based on India's natural endowment. What are the major planks of the present industrial policy of the Government of India? Putting the most favourable interpretation of the various policy decisions announced recendy, they may be briefly surnmed up as below: (a) That Indian industry should be fully competitive with industry abroad, and should, therefore be opened up to the full blast of international competition through a liberal import policy; (however, this is not strictly followed through); (b) That to this end, Indian industry should be free to import whatever technology it wishes to; (c) That the consumer should have a free choice in regard to all types of consumer goods (including luxury consumption goods); in respect of which, therefore, all restraints on production should be withdrawn; (d) That in view of the inadequacy of home demand, Indian industry should seek markets abroad, and as a result develop in the light of demand for Indian goods abroad; (e) That the public sector should stand on its own; and where unable to do so, should either be privatized or suffer a slow death; and (f) That sick industries may also be allowed to die; or industry may be allowed to retrench labour in order to avoid sickness; and taken over units should be handed back to their erstwhile owners. The Government's industrial policy has not, of course, been spelt out in so many words. But the various policy measures pursued, in particular the import liberalization measures adopted, the tax adjustments made in favour of a number of specific large scale industries, the policy adjustments affected in the name oftechnolop^y import, and the treatment meted out to public sec- * Centre for Studies in Social Sciences, Calcutta ** Vice-chairman, State Planning Board, Govt. of West Bengal, Calcutta *** Economist. State Planning Board, Govt. of West Bengal .Calcutta