India's Industrial Policy: LPG Reforms 1991, Make in India, PLI, SEZ

India’s industrial policy evolution — from License Raj to LPG reforms to modern initiatives like Make in India and PLI — is a core Kerala PSC topic. Expect 2-3 questions per Graduate Level paper.

1. Pre-1991 Industrial Policy (License Raj Era)

Policy	Year	Key Feature
Industrial Policy Resolution	1948	Mixed economy; state control of key industries
Industries (Development and Regulation) Act	1951	Industrial licensing introduced
Industrial Policy Resolution	1956	”Economic Constitution of India”; classified industries into 3 schedules
MRTP Act	1969	Monopolies and Restrictive Trade Practices Act — controlled large firms
Industrial Policy	1977	Emphasis on small-scale industries
Industrial Policy	1980	Partial liberalisation; focus on productivity

1956 Industrial Policy — Three Categories

Schedule	Ownership	Examples
Schedule A (17 industries)	Exclusive state monopoly	Arms, atomic energy, railways, air transport
Schedule B (12 industries)	State-led with private participation	Chemicals, fertilisers, antibiotics
Schedule C	Private sector (with licensing)	All other industries

2. LPG Reforms 1991

Aspect	Detail
Crisis trigger	Balance of Payments crisis; forex reserves fell to cover only 2 weeks of imports
PM	P.V. Narasimha Rao
Finance Minister	Dr. Manmohan Singh
Date	New Industrial Policy announced 24 July 1991

What LPG Stands For

Component	Meaning	Key Measures
Liberalisation	Removing government controls	Abolished industrial licensing (except 6 industries); MRTP Act diluted
Privatisation	Reducing public sector monopoly	Disinvestment of PSUs; reserved sectors reduced
Globalisation	Opening economy to world	FDI liberalised; trade barriers reduced; rupee devalued

Key Reforms of 1991

Reform	Detail
Industrial licensing abolished	Retained only for 6 industries (alcohol, cigarettes, defence, hazardous chemicals, drugs, electronics/aerospace)
Public sector reserved list	Reduced from 17 to 8 (later to 3: atomic energy, railways, defence)
FDI limits raised	Automatic approval up to 51% in many sectors
MRTP Act	Threshold limit removed; later replaced by Competition Act 2002
Disinvestment	Selling government stake in PSUs
Trade reforms	Import licensing largely abolished; tariffs reduced
Exchange rate	Dual exchange rate (1992), then unified market rate (1993)

3. Make in India

Aspect	Detail
Launched	25 September 2014 (by PM Modi)
Logo	A lion made of cog wheels
Objective	Transform India into a global manufacturing hub; increase manufacturing share to 25% of GDP
Sectors covered	25 sectors initially (automobiles, textiles, pharma, electronics, defence, food processing, etc.)
Key enablers	FDI liberalisation, ease of doing business, single-window clearance
Make in India 2.0	Focus on 27 sectors with advanced manufacturing

4. Startup India

Aspect	Detail
Launched	16 January 2016
Objective	Build a strong ecosystem for nurturing startups
Key benefits	Tax holiday (3 years out of first 10), self-certification for labour/environment laws, Fund of Funds (Rs 10,000 crore)
DPIIT recognition	Department for Promotion of Industry and Internal Trade registers startups
Definition of startup	Entity up to 10 years from incorporation; turnover under Rs 100 crore in any financial year
India’s rank in startup ecosystem	3rd largest globally (after USA and China)

5. Production Linked Incentive (PLI) Scheme

Aspect	Detail
Announced	November 2020 (expanded)
Total outlay	Rs 1.97 lakh crore (across all sectors)
Duration	5 years per sector
Objective	Boost domestic manufacturing, reduce imports, create employment
Incentive type	Cash incentive (4-6% of incremental sales) to manufacturers

PLI Sectors (14 Sectors)

Sector	Allocated Amount (Rs Crore)
Mobile phones and electronics	40,951
Automobiles and auto components	25,938
ACC Battery (Advanced Chemistry Cell)	18,100
Telecom and networking products	12,195
Textile products	10,683
Food processing	10,900
Pharma (bulk drugs)	15,000
Solar PV modules	24,000
White goods (AC, LED)	6,238
Specialty steel	6,322
IT hardware (laptops, servers)	17,000
Medical devices	3,420
Drones	120
Advanced high-efficiency solar cells	(part of solar allocation)

6. Special Economic Zones (SEZ)

Aspect	Detail
First SEZ in India	Kandla (Gujarat), 1965 — originally called Export Processing Zone (EPZ)
SEZ Act	2005 (came into effect February 2006)
Objective	Boost exports, attract FDI, generate employment
Tax benefits	Income tax exemption: 100% for first 5 years, 50% for next 5 years, 50% of ploughed-back profit for next 5 years
Developer benefits	Customs duty exemption, GST exemption on inter-unit transactions
Nodal authority	Board of Approval (under Commerce Ministry)
Largest SEZ	Mundra SEZ (Adani), Gujarat
IT/ITES SEZ	Minimum area 10 hectares; Multi-product SEZ: 500+ hectares

SEZ in Kerala

SEZ	Location	Sector
Cochin SEZ (CSEZ)	Kakkanad, Kochi	Multi-product (first in Kerala, est. 1984 as EPZ)
Kinfra Techno Industrial Park	Kochi	Electronics
Infopark SEZ	Kochi	IT/ITES

7. Industrial Corridors

Corridor	Route	Status
Delhi-Mumbai Industrial Corridor (DMIC)	Delhi to Mumbai (1,504 km along DFC)	Most advanced; multiple nodes operational
Chennai-Bengaluru Industrial Corridor (CBIC)	Chennai to Bengaluru	Under development
Amritsar-Kolkata Industrial Corridor (AKIC)	Amritsar to Kolkata (along Eastern DFC)	Under development
Bengaluru-Mumbai Economic Corridor (BMEC)	Bengaluru to Mumbai	Under development
Vizag-Chennai Industrial Corridor (VCIC)	Visakhapatnam to Chennai	Part of East Coast corridor

National Industrial Corridor Development Corporation (NICDC) — nodal agency for all corridors.

8. Other Key Industrial Initiatives

Initiative	Year	Objective
Atmanirbhar Bharat	2020	Self-reliant India — Rs 20 lakh crore package during COVID
Skill India	2015	Train 40 crore people in different skills by 2022
Digital India	2015	Digital infrastructure, governance, and empowerment
Ease of Doing Business reforms	Ongoing	India rose from 142nd (2014) to 63rd (2020) in World Bank rankings
Competition Act	2002	Replaced MRTP Act; Competition Commission of India (CCI) established
National Manufacturing Policy	2011	Raise manufacturing to 25% of GDP; create National Investment and Manufacturing Zones (NIMZ)
One District One Product (ODOP)	2018	Promote district-specific products

9. Key Organisations

Organisation	Role
DPIIT (Dept for Promotion of Industry and Internal Trade)	Industrial policy, startup registration, FDI policy
NITI Aayog	Policy think tank (replaced Planning Commission in 2015)
CCI (Competition Commission of India)	Anti-monopoly, fair trade
SIDBI	Small Industries Development Bank of India — financing MSMEs
NABARD	Rural and agriculture development
Invest India	National investment promotion agency

10. PSC Quick Recall Table

Question	Answer
LPG reforms year?	1991
Finance Minister during 1991 reforms?	Dr. Manmohan Singh
PM during 1991 reforms?	P.V. Narasimha Rao
Make in India launched?	25 September 2014
Make in India logo?	Lion made of cog wheels
First SEZ in India?	Kandla, Gujarat (1965 as EPZ)
SEZ Act year?	2005
PLI total outlay?	Rs 1.97 lakh crore
Startup India launched?	16 January 2016
MRTP Act replaced by?	Competition Act 2002
Planning Commission replaced by?	NITI Aayog (2015)
DMIC stands for?	Delhi-Mumbai Industrial Corridor
India’s World Bank Ease of Business rank (2020)?	63rd
Industries still requiring license (2024)?	Defence, hazardous chemicals, cigarettes/alcohol, electronics aerospace, industrial explosives