Project Planning and Control

The Industrial Development and Regulation Act 1951

The Industrial Development and Regulation Act was passed by the parliament in October 1951 and it has been amended several times, ever since. This act extends to the whole of India. The provisions of this Act apply to all those industrial undertakings which are defined as such under this act. Moreover, the provisions apply to industrial undertakings, manufacturing any of the items included in the “Scheduled industries”, which are those industries which are included in the First Schedule of the act. Thus, the Act defines an industrial undertaking as any undertaking pertaining to a scheduled industry carried on in one or more factories by any person or authority including the Government. For the purposes of this Act, a factory is the place where manufacturing process is being carried on :

  • With the aid of power, provided that 50 or, more workers are working or were working on any day of the preceding twelve months or.
  • Without the aid of power, provided that 200 or more workers are working or were working on any day of the preceding twelve months.
  • Trading houses and financial institutions are outside the purview of this act. It applies only to manufacturing undertakings.

As is clear from the name of the act, this act seeks to ensure planned industrial development of the country by regulations, control and development of the industries which are included in the first schedule of this act.

Objectives of The Industrial Development and Regulation Act

(1) Implementation of the Industrial Policy of the Government – The industrial policy resolution lays down the national objectives to be achieved by industrialisation. It indicates the priorities, pattern and direction of development. This Act provides the central government with the means to achieve these objectives of the industrial policy.

(2) Development and Regulation of Industries – This act makes provision for the development and regulation of a number of important industries which are listed in the first schedule of the Act. These industries are brought under the control of the Central Government because these industries are so important that these activities will affect the country as a whole. This Act, therefore, provides that the development of these industries must be governed by economic factors of all India importance.

(3) Planning for Future Development – The act considers it necessary that planning for future development should be on sound and balanced lines. For that, it is necessary that all the new industrial undertakings should be licensed by the Central Government. Thus, a system of licensing was introduced under the act. The Act also empowers the Central Government to make rules for regulating the production and development of “Scheduled industries” as well as for the registration of these industries.

(4) Constitution of Central Advisory Council – The Act provides for the constitution of central advisory council and development councils. The Central Government must consult with these councils before taking any important measures. This prior consultation is made obligatory under the Act.

(5) Other Objects – In addition to the above objects there are some other objects of this act also, which are –

  • to regulate industrial investment and production as per priorities and targets of plan
  • to protect small industries from large industries
  • to attain balanced regional development.

Important Provisions of the Act

(1) Restrictive Provisions – The purpose of the restrictive provisions is to check the unfair practices adopted by the industries. These provisions are also known as the preventive provisions. The main restrictive provisions are –

  • Registration & Licensing
  • Investigation of Industries
  • Cancellation of License

(2) Reformative Provisions – Reformative provisions are meant to make necessary reforms in the industrial undertakings. The important reformative provisions are –

  • Direct Management or Control by the Government
  • Control on Price Supply and Distribution

(3) Creative Provisions – The purpose of the creative provisions is to raise mutual confidence and to elect co-operation between the workers, consumers, industry and Central Government. Following are some of the specific creative measures –

  • Development Councils
  • Levy and Collection of Cess
  • Central Advisory Council

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