Indian Policies and Structure

1. MODULE 6
(Part 1)
INDUSTRIAL POLICIES AND STRUCTURES
(Only Classification of Industries)

2. M6 – EFM - SYLLABUS
Industrial Policies and Structure: Classification of
Industries based on Ownership, Industrial Policies,
New Industrial Policy 1991; Private Sector- Growth,
Problems and Prospects, SSI- Role in Indian Economy.
Industry Analysis: Textiles, Electronics, Automobile,
FMCG, Telecom, Pharm. FDI in Retail, Infrastructure,
Pharma, Insurance, Banking & Finance and
Automobile. Globalization and Indian Business
Environment: Meaning and Implications, Phases,
Impact of Globalization on Indian Economy across
Sectors. Foreign Trade: Trends in India’s Foreign
Trade, Impact of WTO on India’s Foreign Trade.

3. CLASSIFICATION OF INDUSTRIES
Introduction: The objective of any firms is
business, and business are represented are
represented by one or more persons, based on
their Business Ownership.
Business Ownership refers to holding of a
business enterprise, by an individual or group
or a body of corporate to perform a business
activity.

4. Classification of Industries based
on Ownership
● Public Enterprises, (Public Limited Firms)
● Joint Sectors, (Partnership Firms)
● Private Enterprises, (Private Limited Firms)
● Service Sector, (Service Industry)
● Co-operative Society

5. Classification of Industries based
on Ownership
1. PUBLIC ENTERPRISES: (Public
Limited Firms):
The term public enterprises, refers to
such Industrial and Commercial
Enterprises which are owned and
controlled by the Central and/ or State
Government.

6. 1. PUBLIC ENTERPRISES:
(Public Limited Firms)
Features of Public Enterprises:
1. Govt. Ownership (Estd as per company act),
2. Govt. Management,
3. Govt. Control,
4. Objective of Public Utility,
5. Public responsibility,
6. Govt. Financed and
7. Controlled by the board of directors.

7. Merits and Demerits
Merits of Public Limited Company:
● Huge Investments,
● Vast employment opportunities,
● Social Responsibility,
● Industrialization in large scale
● Secured and security to the people,
● Easier to market Globally.
Demerits of Public Limited Company:
●
There are very less demerits:
● Very gradual and slow decision making,
● Loss making organizations still function,
● Much formalities to be maintained.

8. 1. PUBLIC ENTERPRISES:
(Public Limited Firms)
4 TYPES OF PUBLIC ENTERPRISES:
1. Government Undertaking,
2. Departmental Undertaking,
3. Development Board, and
4. Public Corporation.

9. 1. PUBLIC ENTERPRISES:
(Public Limited Firms)
4 TYPES OF PUBLIC ENTERPRISES:
1. Government Undertaking:
● It is established as per companies act,
● It has a seperate legal entity,
● Capital investment can be 51% (Govt) and other by private/ other
sources,
● Controlled by the Govt of India,
● Employee salary is as per Govt rules and regulations.
● Has a independent financial policy functioning as per the budget
allocated.

10. 1. PUBLIC ENTERPRISES:
(Public Limited Firms)
4 TYPES OF PUBLIC ENTERPRISES:
2. Departmental Undertaking:
● Functions under the control of the Ministry,
● Employees are employed as per govt rules and
regulations,
● Unlike Public, Departmental Undertakings have
direct funding from the Central Govt,
● All rules are as per the Government policies.

11. 1. PUBLIC ENTERPRISES:
(Public Limited Firms)
4 TYPES OF PUBLIC ENTERPRISES:
3. Development Board: A pulic enterprise can be as
'Development Board' which is the mixture of Public and
Departmental undertakings. It is established as per
Development Board Act 2013.
Objectives of Development Board:
● Plans for Public Welfare and Quick performance,
● Encourages high rate of economic growth,
● Planning helps to reduce wastage of resources,
● The distribution of income (Pricing policy) is more
equal,

12. 1. PUBLIC ENTERPRISES:
(Public Limited Firms)
4 TYPES OF PUBLIC ENTERPRISES:
4. Public Corporation: (Also called as 'Statutory
Corporation', it is established with seperate special act enacted by the
parliment or legislature)
● Features of Public Corporation:
● Its a seperate act passed in the parliment and is formed,
● It has a seperate legal existence,
● It is totally owned by the Government,
● It follows all rules and regulations as per the union government,
● It has independence in financial issues,
● Its controlled by the Board of Directors appointed by the Govt.

13. 2. Joint Sectors, (Partnership
Firms)
Joint sector is based on the concept of MIXED
ECONOMY, which means joint partnership
between the union government and state
government, also private promoters.
The Industrial Policy Resolution of 1956, sowed
the seed of joint sector by advocating
Government Participation in the Equity Capital
of Private Sector Enterprises to promote
socially determined pattern of Industrial Growth.

14. 2. Joint Sectors, (Partnership
Firms)
Advantages of Joint Sector:
1. Large financial resources,
2. Limited Liabilities,
3. Professional Management,
4. Large scale production,
5. Research and Development.

15. 2. Joint Sectors, (Partnership
Firms)
Disadvantages of Joint Sector:
1. Difficulty in formation,
2. Excessive Government Control,
3. Delay in policy decisions.

16. 3. Private Enterprises, (Private
Limited Firms)
Private Enterprises refer to the basis
of a free market capitalist system
under which a business unit is
established, owned, and operated by
private individuals for profit, instead of
by or for any government or its
agencies.

17. 3. Private Enterprises, (Private
Limited Firms)
Advantages of Private Enterprises:
1. Capital raised by share holders,
2. Limited liabilities,
3. Continuity of ownership/ existence,
4. Direct control,
5. High Quality at low price.

18. 3. Private Enterprises, (Private
Limited Firms)
Disadvantages of Private Enterprises:
1. Limited Resources,
2. Poor protection to shareholders members,
3. No valuation of investment,
4. Lack of public confidence.

19. 4. Service Sector, (Service
Industry)
Service sector refers to the part of the
economy that includes individuals and
businesses that produce services
rather than goods.

20. 4. Service Sector, (Service
Industry)
Service Sectors include:
1. Education,
2. Finance and Insurance Services,
3. Medical and Health Care,
4. Public Utilities, (Water, Primary health, Electricity etc)
5. Communications,
6. Tours and Travels,
7. Transport and so on...

21. 4. Service Sector, (Service
Industry)
Advantages of Service Sector:
1. Customer oriented,
2. Faster Services,
3. Results are quicker,
4. Faster growth and establishment,
5. Flexible during economic downswing
economy. (Adjustments)

22. 4. Service Sector, (Service
Industry)
Disadvantages of Service Sector:
1. Difficulty in getting skilled labors,
2. Trade deficit, if more imports in compared to
exports,

23. 5.Co-operative Society
● A co-operative enterprises is an autonomous
association of 'persons united voluntarily to
meet a common Economic, Social and Cultural
needs and aspirations' through a jointly owned
and demographically controlled.

24. 5.Co-operative Society
Featurers of Co-operative Society:
1. Its a voluntary organization,
2. Members are free to leave with their capital
invested, as per permissable clauses/
provisions.
3. Minimum 10 members form a co-operative
society, and their is no limit for maximum
members.
4. Registration of society is mandatory,

25. 5.Co-operative Society
Featurers of Co-operative Society:
5. A registered co-operative society is a
seperate legal entity.
6. Co-operative societies are subject to
provisions of co-operative societies act 1912 or
the state co-operative societies act.
7. The liability of each member is limited to the
capital contributed.

26. 5.Co-operative Society
Featurers of Co-operative Society:
8. The shares of co-operative societies are not
transferable, but can be returned to society.
9. Being a seperate entity, the existence of
society is not effected by death, retirement of its
members.

27. 5.Co-operative Society
Advantages of co-operative society:
1. More members can form greater amount of
capital easily,
2. Limited liabilities to each members,
3. Better service to employees,
4. Limited liability,
5. Continuity of existence.

28. 5. Co-operative Society
Disadvantages of Co-operative Society:
1. Inability to collect sufficient capital,
2. Inability to provide efficient managerial
services,
3. Organizational set-up limitations.