This was a licensing policy.
It aimed at solving the shortcomings of the licensing policy started by the Industrial Policy of 1956.
In April 1964, the Government of India appointed a Monopolies Inquiry Commission “to inquire into the existence and effect of concentration of economic power in private hands.”
On the basis of recommendation of the commission, Monopolistic and Restrictive Trade Practices Act (MRTP Act), 1969 was enacted.
Monopolies and Restrictive Trade Practices (MRTP) Act was introduced to enable the Government to effectively control the concentration of economic power.
The firms with assets of 25 crores or more were put under obligation of taking permission from the Government of India before any expansion, greenfield venture and takeover of other firms (as per the MRTP Act).
Such firms came to be known as the ‘MRTP Companies’.
The new Industrial Licensing Policy of 1970 classified industries into four categories.
 Core Sector— consisted of basic, critical and strategic industries.
 Heavy Investment Sector— comprised projects involving an investment of more than Rs.50 million.
 Middle Sector— consisted of projects with investment in the range of Rs.10 million to Rs.50 million.
 Delicensed Sector— in which investment was less than Rs.10 million and was exempted from licensing requirements.
The industrial licensing policy of 1970 confined the role of large business houses and foreign companies to the core, heavy and export-oriented sectors.
Click the following links to read more:
- Industrial Policy Resolution, 1948
- Industrial Policy Resolution, 1956
- Industrial Policy Statement, 1973
- Industrial Policy Statement, 1977
- Industrial Policy Statement, 1980
- New Industrial Policy, 1991