Functioning of Industrial Licensing System- Capacity and Production in Organised Industry

Functioning of Industrial Licensing System Capacity and Production in Organised Industry This survey of capacities and production in the organised sector of Indian industry concludes that the industrial sector suffers from gross over-capitalisation. Capacities built over the past three decades are far in excess of present levels of production. This has happened in spite of the existence of the Industrial Licensing System (ILS) which was supposed to regulate and co-ordinate investments in order to achieve an optimal allocation of limited capital resources. Excessive capitalisation im/plies misallocation of foreign exchange as well as scarce national resources.