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After gaining independence in 1947 India showed very low signs of economic growth and development within its economy. One of the main arguments for the bad performance of the economy was strongly related to the culture and traditions of the Indian people, which was also often termed as the Hindu rate of growth by some economists. In addition, the government decided to operate in a closed economy with almost all the main sectors of the economy being regulated by the government using the licensing policy. This led to the emergence of the term 'License Raj', which meant that all domestic firms were given five year plans in order to achieve set target levels of production, and were protected from foreign competition under the licensing umbrella. The main objectives of the licensing initiative which had been implemented by the Industrial Policy Resolution, was to gradually improve inequalities in income and wealth, prevent creation of monopolies, boost overall economic performance and growth of industry. Nevertheless, the requirements that had to be met in order for new companies to obtain an industrial license were rather over ambitious, and provided many problems for development local firms and the growth of industry as a whole. One of the main obstacles was the very lengthy time period for applications to be processed, which lead to slow progress in the start up of new firms. Moreover, the lack of corruption and bureaucratic structure of the departments dealing with new applications, resulted in the more established and big firms being given first priority over majority of small and medium sized enterprises. Nevertheless, there was still a relatively greater number of applications that had been approved, the economy lost out to the declined firms who would have contributed to overall investment and growth within industries. In addition, the lengthy time span for the average application to be process proved to be another reason for the slow growth of domestic industries, since it was discouraging to those who were keen on setting up new businesses.

The notion of industrial licensing was introduced when the government decided to approve the new Industrial Development Act 1951. This was a crucial phase in the development of the political economy of India, since the nation had recently gained independence and was seeking to revive the troubled domestic economy. Furthermore, the main aims of the new law relating to industrial development was to put into practice new industrial policies, to assure the development and regulation of main industries, and finally to expand and develop new and existing industries. The second five year plan which was implemented during 1956-1961, introduced the notion of import substitution within the economy. Yet again, the newly revised policies still led to more problems with regards to improving exports within domestic industries, since manufacturing firms were unable to import new capital in order to improve productivity and competitiveness. The third five year plans, the restrictions on a number of imports were lowered in order to help modernise the economy. In addition, the problem with exports had been given priority; hence the new export promotion initiatives were offered to local firms. Although, these policies were very much in practise throughout the 1970s a本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。