What is meant by 'Substantial Expansion'? When the nature of expansion would not amount to substantial expansion under Industries (Development and Regulation) Act, 1951?

CS Executive · Economic and Commercial Laws · PYQS · June 2017
What is meant by 'Substantial Expansion'? When the nature of expansion would not amount to substantial expansion under Industries (Development and Regulation) Act, 1951?

Answer & Explanation:

"Substantial Expansion" means the expansion of an existing industrial undertaking which substantially increases the productive capacity of the undertaking or which is of such nature as to amount virtually to a new industrial undertaking. In the following cases the nature of Expansion would not amount to substantial expansion under Industries (Development and Regulation) Act, 1951- Where such expansion is normal to the undertaking having regard to its nature and the circumstances relating to such expansion, it will not be substantial expansion. Increase in production by twenty five per cent over the licensed capacity being in the nature of expansion would not amount to substantial expansion if: no additional plant and machinery has been installed except minor balancing equipment indigenously procured; no additional expenditure had been incurred or foreign exchange was involved; and the extra production does not give rise to any additional demand for scarce raw materials. Wherever a question arises as to whether or not there has been a substantial expansion of an industrial undertaking, the decision of the Central Government thereon shall be final.

Topics: Industries (Development and Regulation) Act, 1951

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