The government tried to meet, through its licensing policy, one impor…

The first modern industries in India were cotton, jute, coal mines and railways. At independence, the government took over the ‘commanding heights of the economy.’ This involved defence, transport and communication, power, mining and other projects which only government had the power to do, and which was necessary for private industry also to flourish. In India’s mixed economy policy, some sectors were reserved for government, while others were open to the private sector. But within that, the government tried to ensure, through its licensing policy, that industries were spread over different regions. Before independence, industries were located mainly in the port cities like Madras, Bombay, Calcutta. But since then, we see that places like Baroda, Coimbatore, Bangalore, Pune, Faridabad and Rajkot have become important industrial centres. The government also tried to encourage the small-scale sector through special incentives and assistance. Many items like paper and wood products, stationery, glass and ceramics were reserved for the small-scale sector.