• The Industrial Policy Resolution – 1956 classified industries into three categories. The first category comprised 17 industries (included in Schedule A of the Resolution), exclusively under the domain of the government. These included inter alia, railways, air transport, arms and ammunition, iron and steel and atomic energy.

• The second category comprised 12 industries (included in Schedule B of the Resolution), which were envisaged to be progressively state owned, but private sector was expected to supplement the efforts of the state.

• The third category contained all the remaining industries and it was expected that the private sector would initiate development of these industries but they would remain open for the state as well.

• It was envisaged that the state would facilitate and encourage development of these industries in the private sector, in accordance with the programmes formulated under the Five Year Plans, by appropriate fiscal measures and ensuring adequate infrastructure. Despite the demarcation of industries into separate categories, the Resolution was flexible enough to allow required adjustments and modifications in the national interest.