On 24th July, 1991 , Government of India announced its New Industrial Policy . The broad features of this new industrial policy were :
- The number of industries under compulsory licensing were reduced to 6 by the Government .
- Many public sector industrial enterprises were subject to disinvestment .
- In order to encourage Foreign Direct Investment (FDI) the policy towards foreign capital was liberalized and 100 % FDI was permitted in many segments .
- In order to facilitate technological development , the process of automatic permission for technological agreements with foreign companies was put into practice .
- The Foreign Investment Promotion Board (FIPB) was established with a purpose of promoting and channelizing foreign investments in India .
This policy primarily aimed at realizing these goals :
- First , to liberate the Indian industries from the restraints of licensing system . – Liberalization
- Second , to reduce the role of public sector in the economy . – Privatization
- Third , to promote Foreign Private Participation in industrial development of the economy . – Globalization .
