The Industrial Policy is based on the following principles:

1.full safeguards to be provided to protect lawful investment of foreign and local capital.
2.there will be no restriction on private investment in any sector except in some defence oriented and sensitive areas.
3.the government's role in management of industry is to rapidly shift to regulatory role to encourage private investment.
Public sector investments will continue in sensitive industries and in industries where private capital is shy or profits are
low, such as defence, hydro power projects, communications, steel, infrastructure development. Policy of mixed
economy, called public-private-partnership will also continue.
4.accelerate and balanced industrial development in all the regions, specially in the backward and rural areas is to be
ensured.
5.investment in setting up industries in traditional sectors such as textiles, sugar, will be shifted to heavy engineering, value
added and hi-tech industries.
6.collateral requirements for providing credits to professionals and small investors for setting up industries, improvements in
technologies, development of construction industry is to be relaxed and use of insurance guarantees for construction
industry will be encouraged.
7.setting up of small factories and workshops by engineers, artisans, craftsmen, and skilled workers is to be encouraged
and availability of credit for them will be facilitated by setting up separate banks for entrepreneurial development and for
artisans.
8.system of providing small credit facilities at the lowest strata of the society to generate income without collateral on the
pattern of Grameen Bank of Bangladesh is to be introduced.
9.multinational joint ventures will be encouraged to improve foreign investment.
10.establishment of export oriented industries will be given preference.
11.effective steps will be taken to stop smuggling to protect local industries.
12.to encourage spread of industries away from major towns emphasis will be laid on accelerated development of
infrastructural facilities, electricity and communication at new centers.
13.emphasis will be on expanding competition and creating new opportunities for the private sector by encouraging
government to phase out controls over prices and investment decisions, reduce subsidies, and other special incentives
which prevent competition from spurring efficiency and innovation. Trade and incentives policy reforms will be
introduced to promote exports, foster increased competition and encourage domestic and foreign private investment.


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