9.4         ndian      onom
                left open for private sector investment—               supposed to take up the initiatives with a more
                with many of them having the provision                 expansive follow up by the private sector. This
                of compulsory licencing.                               schedule also carried the provisions of compulsory
          (v) There was a 10 year period for review of                 licencing. It should be noted here that neither
                the policy.                                            the states nor the private sector had monopolies
                                                                       in these industries unlike Schedule A, which
     inDustriAl Policy resolution, 1956                                provided monopoly to the Centre.3
     The government was encouraged by the impact                       (iii) Schedule C
     of the industrial policy of 1948 and it was only                  All industrial areas left out of Schedules A and
     after eight years that the new and more crystallised              B were put under this in which the private
     policies were announced for the Indian industries.                enterprises had the provisions to set up industries.
     The new industrial policy of 1956 had the                         Many of them had the provisions of licencing and
     following major provisions.                                       have necessarily to fit into the framework of the
                                                                       social and economic policy of the state and were
     1. Reservation of Industries                                      subject to control and regulation in terms of the
     A clear-cut classification of industries (also known              Industries Development and Regulation (IDR)
     as the Reservation of Industries) were affected                   Act and other relevant legislations.4
     with three schedules:                                                   The above classification of industries had
     (i) Schedule A                                                    an in-built bias in favour of government-owned
                                                                       companies (i.e., the CPSUs) which went according
     This schedule had 17 industrial areas in which                    to the ideas of the planning process, too. Thus,
     the Centre was given complete monopoly. The                       expansion of the public sector became almost a
     industries set up under this provision were known                 directive principle of economic policy and the
     as the Central Public Sector Undertakings (CPSUs)                 PSUs did expand in the coming times.5
     later getting popularity as ‘PSUs’. Though the                          It was this industrial policy in which the then
     number of industries were only 17, the number of                  PM Pandit Jawaharlal Nehru had termed the
     PSUs set up by the Government of India went to                    PSUs the ‘temples of modern India’, symbolically
     254 by 1991. These included those industrial units                pointing to their importance.6 There was a time
     too which were taken over by the government                       soon after Independence when the PSUs were
     between 1960 to 1980 under the nationalisation                    regarded as the principal instrument for raising
     drives.2 These industries belonged to Schedules B                 savings and growth in the economy.7 The rapid
     and C (other than Schedule A).
                                                                           3.   The Central government had always the option to set
     (ii) Schedule B                                                            up an industry in any of these 12 industrial areas. This
                                                                                happened in the coming years via two methods first,
     There were 12 industrial areas put under this
                                                                                through nationalisation and second, through the joint
     schedule in which the state governments were                               sector.
                                                                            .    ndustrial olicy esolution,               cto er .
         2.  The nationalisation of industrial units allowed the
                                                                           5.   V. M. Dandekar, Forty Years After Independence in
             government to enter the unreserved areas, which
                                                                                Bimal Jalan edited Indian Economy: Problems and
             consequently increased its industrial presence. Though
                                                                                Prospects, enguin oo s, ew elhi,               , p. .
             the nationalisation was provided a highly rational
             official reason of e e          ic e efi the private          6.   This statement we get in the Second Five Year Plan
             sector always doubted it and took it as an insecurity and          (1956–61), too.
             major unseen future hurdle in the expansion of private        7.   Bimal Jalan, India’s Economic Policy ew elhi
             industries in the country.                                         Penguin Books, 1992), p. 23.