Industrial Policy Statement, 1980

Objectives of the Policy

[1] Optimum utilisation of installed capacity

[2] Higher productivity

[3] Higher employment levels

[4] Removal of regional disparities

[5] Strengthening of agricultural base

[6] Promotion of export oriented industries

[7] Consumer protection against high prices and poor quality


Policy measures were announced to revive the efficiency of public sector undertakings (PSUs) by developing the management cadres in functional fields viz., operations, finance, marketing and information system.

Foreign investment via the technology transfer route was allowed.

Special incentives were granted to industrial units which were engaged in industrial processes and technologies aiming at optimum utilization of energy and the exploitation of alternative sources of energy.

The investment limit to define Small Scale Industries was increased to boost the development of this sector.

In case of tiny sector the investment limit was raised to Rs.2 lakh; for small scale unit the investment limit was raised from Rs.10 lakh to Rs.20 lakh and for ancillaries from Rs.15 lakh to Rs. 25 lakh.

The ‘MRTP Limit’ was revised upward to 50 crore to promote setting of bigger companies.

The policy statement provided liberalized measures in the licensing in terms of automatic approval to increase capacity of existing units under MRTP and FERA.

Industrial policy, 1980 focused attention on the need for promoting competition in the domestic market, technological up gradation and modernization.

The policy statement emphasized the necessity to promote suitable industries in the rural areas in order to generate bigger employment and for raising per capita income of the rural people without disturbing ecological balance in rural areas.