The first paper mill was set up in India more than 100 years ago. The industry operated under a protective tariff since 1925. Attracted by high profits under the protective tariff umbrella, many new paper mills were set up. During the period of planned development, the paper industry made rapid progress, India’s forests providing abundant raw materials for its smooth working. Production rose from 3.5 lakh tonnes in 1960-61 to 49.6 lakh tonnes in 2009-10. The production of newsprint rose from 0.4 lakh tonnes to 10.3 lakh tonnes between 1961 and 2008-09.
The industry should be helped to optimize capacity utilization through renovation and modernization of existing large mills. In this connection, the prices fixed by the Government for various types of paper were unrealistic and did not provide for reasonable returns on capital.