In 1970, the government introduced a new policy that grouped industries into categories:

1. Core Sector Industries: These industries had capital exceeding ₹35 crores and included nine specific industries operating under government monopoly.
2. More Capital Sector: Industries in this sector had capital ranging from ₹5 crores to ₹35 crores, with participation allowed from private and foreign entities.
3. Middle Capital Sector: This sector included industries with capital from ₹1 crore to ₹5 crores, highlighting their importance.
4. Reserved Small-Scale Capital Sector: Industries in this sector started with capital from ₹7.5 lakhs, with subsidiaries and attached industries allowed up to ₹10 lakhs. The capital limits in this sector were later modified multiple times.

Changes were made in 1973 to include 19 industries in the core sector and to encourage the growth of small-scale and cottage industries for producing commodities for large-scale use. The government also promoted the establishment of industries in the mixed sector.