Importance of Industrial Policy

Importance of Industrial Policy

Importance of an industrial policy can be explained through following points:

• Deployment of Natural Resources
• Augment Industrial Production
• Modernisation
• Balanced Industrial Development
• Balanced Regional Development
• Coordination between Basic and Consumer Industries
• Coordination between Small Scale and Large Scale Industries
• Area Determination
• Cordial Industrial Relations
• Proper Utilisation of Foreign Assistance/investment

Deployment of Natural Resources

The industrial policy helps in full deployment of natural resources of the country. It helps in identifying, collecting and using resources properly. It facilitates increase in national income of the country.

Augment Industrial Production

The main objective of the industrial policy is to augment industrial production of the country. It provides an impetus to rapid development of industries and industrial growth.

Modernisation

The industrial policy encourages modernisation for increasing industrial output and productivity. It envisages the use of modem and latest production techniques in industrial sector. It facilitates maximum output at minimum cost of production.

Balanced Industrial Development

The industrial policy envisages balanced industrial development of the country. It also facilitates balanced development of various sectors of the economy.

Balanced Regional Development

The industrial policy helps in balanced regional development of the country. The industrial policy may contain provisions regarding providing facilities or concessions for rapid development of industrially backward areas/regions of the country.

Coordination between Basic and Consumer Industries

The balanced development of basic and consumer industries is essential for economic growth. The industrial policy encourages development of basic and key industries on the one hand, while attention is paid to the development of consumer industries also on the other. Thus, by balanced and coordinated development of both types of industries it provides a pace to economic growth.

Coordination between Small Scale and Large Scale Industries

The industrial policy plays a vital role in coordinated development of small scale or cottage industries and large scale industries. These industries can be made mutually helpful to each other through the provisions of industrial policy.

Area Determination

The industrial policy determines the area of operation under public and private sector. Proper direction can be shown to private sector through the country’s industrial policy.

Cordial Industrial Relations

A comprehensive industrial policy is needed to establish cordial relations between workers and management. Cordial industrial relations are essential for rapid and sustainable industrialisation.

Proper Utilisation of Foreign Assistance/investment

An appropriate industrial policy envisages to attract foreign capital and entrepreneurs. It helps rapid industrial development of the country; a well thought of industrial policy checks the demerits of “foreign assistance. The foreign aid can be used in the national interest if an appropriate industrial policy is pursued by the country.