9.6           ndian      onom
     was to benefit the poor in the form of cheaper                         (iii) For the redressal of the prohibited
     goods). Similarly, the older and well-established                               and restricted practices of trade, the
     industrial houses were capable of creating hurdles                              government did set up an MRTP
     for the newer ones with the help of different kinds                             Commission.
     of trade practices forcing the latter to agree for
     sell-outs and takeovers. A number of committees                     inDustriAl Policy stAtement, 1973
     were set up by the government to look into the                      The Industrial Policy Statement of 1973
     matter and suggest remedies.11 The committees on                    introduced some new thinking into the economy
     industrial licencing policy review not only pointed                 with major ones being as follows:
     out several shortcomings of the policy, but also                          (i) A new classificatory term i.e., core
     accepted the useful role of industrial licencing.12                             industries was created. The industries
     Finally, it was in 1969 that the new industrial                                 which were of fundamental importance
     licencing policy was announced which affected                                   for the development of industries were
     the following major changes in the area:                                        put in this category such as iron and steel,
           (i) The Monopolistic and Restrictive Trade                                cement, coal, crude oil, oil refining and
                 Practices (MRTP) Act was passed. The                                electricity. In the future, these industries
                 Act intended to regulate the trading and                            came to be known as basic industries,
                 commercial practices of the firms and                               infrastructure industries in the country.
                 checking monopoly and concentration of                      (ii) Out of the six core industries defined by
                 economic power.                                                     the policy, the private sector may apply
          (ii) The firms with assets of Rs. 25 crore or                              for licences for the industries which were
                 more were put under obligation of taking                            not a part of schedule A of the Industrial
                 permission from the Government of                                   Policy, 1956.14 The private firms eligible
                 India before any expansion, greenfield                              to apply for such licences were supposed
                 venture and takeover of other firms (as                             to have their total assets at Rs. 20 crore or
                 per the MRTP Act). Such firms came to                               more.
                 be known as the ‘MRTP Companies’.                          (iii) Some industries were put under the
                 The upper limit (known as the ‘MRTP                                 reserved list in which only the small or
                 limit’) for such companies was revised                              medium industries could be set up.15
                 upward to Rs. 50 crore in 1980 and Rs.                     (iv) The concept of ‘joint sector’ was
                 100 crore in 1985.13                                                developed which allowed partnership
                                                                                     among the Centre, state and the private
       11.      here were four specific committees set up on this issue,
              namely Swaminathan Committee (1964), Mahalanobis
                                                                                     sector while setting up some industries.
              Committee (1964), R.K. Hazari Committee (1967) and                     The governments had the discretionary
              S. Dutt Committee (1969). The Administrative Reform                    power to exit such ventures in future.
              Commission           also pointed out the short comings
              of the industrial licencing policy perpetuated since         14.    Out of the six core industries only the cement and iron
              1956.                                                               & steel industries were open for private investment
       12.    Dutt Committee ew elhi overnment of ndia,                           with the rest fully reserved for the central public sector
              1969).                                                              investment.
       13.    The upward revision was logical as it was hindering          15.    This is considered a follow up to such suggestions
              the organic growth of such companies—neither the                    forwarded by the Industrial Licensing Policy
              capacity addition was possible nor an investment for                Inquiry Committee S. utt, Chairman             ew elhi
              technological upgrading.                                              overnment of ndia,          .