BIS can be enforced through QCO only on Scheduled Industry under the IDR Act, 1951

The Industries (Development and Regulation) Act, 1951 (IDRA) is a cornerstone in the legal and regulatory architecture of industrial policy in India. Enacted on 8th October 1951, the Act was passed under Entry 52 of the Union List of the Constitution of India, which empowers the Central Government to regulate industries declared by Parliament to be under its control in public interest.

The IDRA laid the legislative foundation for India’s planned economic growth in the post-independence era. It served as the backbone of industrial licensing, control, and regulation, commonly referred to as the “License Raj.”

Even though economic liberalization in 1991 significantly relaxed licensing controls, the Act continues to apply in critical sectors such as defence, hazardous chemicals, and atomic energy, and was last substantively amended in 2016.

Objectives of the Act

The key objectives of the IDRA, 1951 include:

Regulation and development of scheduled industries in accordance with national policy
Equitable distribution of resources and balanced regional development
Control over production, quality, pricing, and distribution of essential industrial goods
Preventing monopolistic and unfair trade practices
Government intervention in mismanaged or non-performing industrial units

Salient Provisions of the IDRA

1. Section 2 – Declaration of Controlled Industries

This section declares that industries specified in the First Schedule are under the control of the Union Government. This declaration is a constitutional precondition to apply Central laws to industries, using Entry 52 of List I (Union List) of the Seventh Schedule.

2. Sections 10–13 – Licensing and Registration

No new industrial undertaking can commence production in scheduled industries without a license.
Substantial expansion or manufacture of new articles also requires prior approval.
Registration is mandatory for existing industries.

3. Section 15 – Investigation of Industries

Allows the government to investigate any scheduled industry where:

There is a fall in production
Public interest is at stake
There is mismanagement or neglect

4. Sections 18A–18F – Takeover of Management

The Central Government can assume management control of undertakings found to be:

Persistently mismanaged
Operating against public interest
In violation of the Act or license conditions

5. Section 18G – Control of Supply and Pricing

Empowers the government to regulate:

Supply and distribution of industrial products
Pricing to prevent hoarding and black marketing

First Schedule: Industries Covered Under IDRA

The First Schedule of the IDRA lists industries declared to be under the control of the Union, thus enabling Central regulation.

Key Categories of Scheduled Industries:

Metallurgical industries: Iron, steel, copper, Aluminium, zinc
Fuel industries: Coal, petroleum, natural gas
Chemical industries: Fertilizers, drugs, paints, explosives
Mechanical engineering industries: Machine tools, construction equipment
Electrical equipment industries: Cables, motors, transformers
Telecommunications: Radios, mobile handsets, satellite communication
Transportation industries: Automobiles, shipbuilding, railways, aircraft
Textile industries: Cotton, wool, silk, synthetic fibers
Food processing industries: Sugar, dairy, edible oil
Miscellaneous industries: Cement, glass, paper, rubber, leather

As of now, the First Schedule contains over 25 broad groups, each with several sub-categories. This schedule is updated periodically by legislation or notifications.

What if an Industry is Not Listed in the First Schedule?

Industries not mentioned in the First Schedule are not governed by the IDRA.

Inapplicability of the Act:

No licensing or registration requirement under IDRA.
The government cannot exercise powers of takeover, price control, or investigation under this Act.
Such industries remain governed by general laws like the Companies Act, Environmental laws, State industrial policies, and labour laws.

Applicability in Case Product Is Not in First Schedule

If a product is not covered under the First Schedule, then:

IDRA, 1951 does not apply to that industry unless the Schedule is amended to include it.
The regulation of such industry would then fall to:
- State Governments (under Entry 24 of List II – State List), or
- General laws applicable across sectors (like Environment Acts, BIS, FSSA, MSME Acts, etc.)

Example:

Steel, cement, and automobiles are included in the First Schedule, so the Central Government can regulate them under IDRA.
Software development or IT services are not in the First Schedule, hence IDRA doesn’t apply to them. Such industries are governed by other laws like IT Act, Shops & Establishments Acts (State laws), etc.

Applicability of the QCO on the Product, Which is Covered under the First Schedule Industry List- Comparative Table: IDRA First Schedule vs. BIS Act, 2016 (Section 16) – Applicability of QCOs

S. No.	Industry/Product Category (from First Schedule – IDRA, 1951)	QCO Applicability under Section 16 of BIS Act, 2016	Remarks
1	Metallurgical industries (ferrous & non-ferrous metals like steel, aluminum, copper)	Applicable	Numerous QCOs notified for steel pipes, billets, wires, copper tubes, etc.
2	Boilers and steam-generating plants	Applicable	Boiler safety valves and components under QCO in public interest
3	Telecommunications equipment	Applicable	Routers, modems, PoE switches, mobile devices under CRS/BIS QCOs
4	Electrical equipment (transformers, motors, etc.)	Applicable	BIS QCOs for transformers, fans, motors, and ISI marking mandatory
5	Cement and cement products	Applicable	Multiple QCOs issued for Portland cement types, white cement, etc.
6	Paper and pulp products	Applicable	QCOs apply to copier paper, packaging board, kraft paper
7	Industrial machinery	Selective Applicability	QCOs apply to components like pumps, compressors, but not entire machines unless specified
8	Fertilizers	Applicable	Some fertilizers notified under BIS QCO; ISI marking mandated
9	Chemicals (inorganic & organic)	Applicable	QCOs exist for acids, solvents, plasticizers, specialty chemicals
10	Drugs and pharmaceuticals	BIS Not Primary Authority	Regulated mainly by CDSCO under Drugs Act; BIS standards optional unless notified jointly
11	Leather and leather products	Applicable	Footwear products under QCO with mandatory BIS certification
12	Food processing industries	Applicable	Food contact materials, stainless steel utensils, packaging notified under BIS QCOs
13	Textiles and garments	Applicable	QCOs for polyester yarn, sewing thread, protective clothing, synthetic fibers
14	Automobiles and transport equipment	Applicable	Tyres, safety glass, brake linings, helmets – all notified under BIS QCOs
15	Industrial gases	Applicable	QCOs for oxygen, hydrogen, acetylene cylinders and valves

Key Legal Provision: Section 16 of BIS Act, 2016

Section 16(1): “The Central Government may… notify that any goods or article or process or service shall conform to a standard and use Standard Mark…”

BIS is enforceable through QCO to First Schedule industries only.
Any article, product, process, or service may be made subject to mandatory BIS certification via a QCO.

Relevant Provision: Section 2 of IDRA, 1951:

Section 2 is the enabling clause that restricts the applicability of the Act only to industries listed in the First Schedule.
Unless an industry is declared by law to be under Union control and added to the First Schedule, IDRA provisions cannot apply to it.

Amendments to the Act – Focus on 2016 Amendment

Over the decades, the Act has been amended to reflect India’s evolving industrial policy. Key milestones include:

Key Amendments Timeline:

1953 & 1956 – Early empowerment to investigate and take over mismanaged industries
1971 & 1984 – Expansion of takeover provisions
1991 – Major reform: Industrial licensing abolished for most industries
2016 – Latest amendment aimed at aligning with “Ease of Doing Business”

Why Was the Act Amended in 2016?

The Industries (Development and Regulation) Amendment Act, 2016 was introduced to:

Exclude alcohol for potable purposes from Central control under the IDRA
Empower states to regulate industries engaged in alcoholic beverages for human consumption
Align with Supreme Court rulings affirming states’ exclusive jurisdiction over alcoholic beverages (Entry 8, List II)

This amendment was important to:

Clarify jurisdictional conflicts between Centre and States
Support Make in India and federalism principles
Promote ease of doing business in the alcoholic beverage sector

Comparative Table: IDRA 1951 vs. Industries Facilitation Act 2016

Particulars	Industries (Development and Regulation) Act, 1951	Industries (Facilitation) Act, 2016
Legislative Authority	Enacted by Parliament under Entry 52, Union List	Enacted by State Governments under Entries 24, 26 & 27, State List
Primary Objective	To regulate and control scheduled industries in public interest	To promote industrial development through single-window clearance, self-certification, and ease of doing business
Applicability	Applies to industries listed in the First Schedule only	Applies to all industrial units within the state, irrespective of schedule
Type of Law	Central legislation	State legislation (Model law with state-specific adaptations)
Regulatory Approach	Regulatory and controlling (includes licensing, investigation, takeover)	Facilitative and promotional (focuses on reducing compliance burdens)
Licensing Requirement	Licensing mandatory for new undertakings, expansion, or change of product	Licensing largely abolished; uses self-declaration or automatic approvals in most cases
Controlling Authority	Ministry of Commerce & Industry / DPIIT	State-level Single Window Boards / Nodal Agencies
Key Provisions	– Section 2: Control via First Schedule – Section 10–13: Licensing – Section 15: Investigation – Section 18A–F: Takeover	– Online single-window system – Deemed approvals – Time-bound clearance – Exemption from inspections
Scope of Regulation	Strategic sectors (e.g., defence, chemicals, atomic energy)	General manufacturing, MSMEs, and new industrial setups
First Schedule Relevance	Defines the scope of applicability under IDRA	Not applicable; facilitation applies regardless of schedule
Amendment in 2016	Removed Central control over potable alcohol industries	Act enacted or re-notified in many states post-DIPP’s EODB push
Penal/Investigative Powers	Yes – includes investigation, takeover, price control	No – focuses on service delivery and investor support
Ease of Doing Business	Limited due to legacy regulatory controls	High – focuses on simplification, digitization, and transparency
Overlap with Other Laws	May conflict with state policies if First Schedule not updated	Designed to complement central policies and FTP schemes

Judicial Interpretations and Constitutional Backing

The Supreme Court has repeatedly emphasized that Section 2 is essential to bring any industry under Union control. Without being in the First Schedule, Entry 52 of the Union List cannot be invoked.

Relevant case laws:

State of UP v. Modi Distillery (1995) – Centre cannot regulate potable alcohol
Bharat Commerce vs UOI (1998) – Validated government’s power of takeover under IDRA
SIEL Ltd. v. UOI (2012) – Highlighted that DGFT and Central authorities cannot override FTP or statutes like IDRA without express power

Conclusion

The Industries (Development and Regulation) Act, 1951 remains a foundational economic law, even in a post-liberalized India. The 2016 amendment reflects India’s federal vision by devolving powers to states while retaining strategic control for the Centre in key sectors. The scope of the Act is limited to industries listed in the First Schedule, and any non-scheduled industry escapes its purview unless specifically included through legislative action.

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Source: IDRA Act, 1952 & BIS Act, 2016 (DPIIT/BIS)

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