The Industrial Policy Resolution (IPR) is a foundational instrument of India's post-independence economic governance through which the Union Government, acting under its executive authority and the Directive Principles of State Policy (notably Articles 38 and 39 of the Constitution), articulated the broad framework, objectives and institutional division of labour for industrial development. The IPRs were policy declarations rather than statutes; they acquired legal teeth through enabling legislation, chiefly the Industries (Development and Regulation) Act, 1951 (IDRA), which created the licensing regime, and through Five Year Plans formulated by the Planning Commission (constituted 1950). The first such resolution, the Industrial Policy Resolution of 1948, presented by Shyama Prasad Mukherjee, classified industries into four categories and accepted a mixed economy in which the State would progressively assume a larger role.
The defining document is the Industrial Policy Resolution of 1948 (April 6, 1948), succeeded by the watershed Industrial Policy Resolution of 1956 (April 30, 1956), often called the "economic constitution of India." The 1956 IPR, framed in the wake of the Avadi Resolution (1955) of the Congress and the adoption of the "socialistic pattern of society," classified industries into three schedules: Schedule A (17 industries reserved exclusively for the State, including arms, atomic energy, railways, heavy machinery), Schedule B (12 industries in which the State would progressively participate alongside private enterprise), and Schedule C (all remaining industries left to the private sector but subject to licensing under the IDRA). It embodied the Mahalanobis model of heavy-industry-led growth underpinning the Second Five Year Plan. Subsequent statements—the Industrial Policy Statements of 1973, 1977 (the Janata government's emphasis on small-scale and cottage industries) and 1980—refined this framework.
The New Industrial Policy of July 24, 1991, announced by Finance Minister Manmohan Singh and Prime Minister P. V. Narasimha Rao amid a balance-of-payments crisis, dismantled the IPR-1956 architecture: it abolished industrial licensing for all but a short negative list (now reduced to a handful), reduced industries reserved for the public sector from 17 to a few strategic ones (today only atomic energy and railway operations remain substantially reserved), and ushered in Liberalisation, Privatisation and Globalisation (LPG). As of 2026, India does not operate under a single overarching IPR; sectoral and thematic initiatives such as Make in India (2014), the Production-Linked Incentive (PLI) schemes, and the National Manufacturing Policy (2011) have superseded the resolution format, though the IPRs of 1948 and 1956 remain the historical bedrock of Indian industrial planning.
For the UPSC examination, the IPR is a high-frequency topic spanning General Studies Paper III (Indian Economy—planning, growth, industrial policy) and General Studies Paper I (Post-Independence Consolidation). Prelims questions typically probe the exact schedules of IPR-1956, the year and author of each resolution, and the link to the IDRA-1951. Mains answers demand a comparative trajectory from 1948 through 1991, evaluating the shift from a State-dominated mixed economy to liberalisation, and assessing how the IPRs operationalised the socialistic pattern of society.
Example
In 1956, the Nehru government adopted the Industrial Policy Resolution reserving 17 industries—including atomic energy, arms and railways—for the State under Schedule A, anchoring the Mahalanobis-driven Second Five Year Plan.
Frequently asked questions
It created three schedules: Schedule A listed 17 industries reserved exclusively for the State; Schedule B listed 12 in which the State would progressively participate with the private sector; and Schedule C left the rest to private enterprise under licensing.