The note reviews the rationale and evolution of the industrial licensing policy in India. The various objectives of licensing are stated, and performance is then evaluated in terms of these objectives. The limitations of the licensing tool for meeting some of these objectives such as prevention of concentration, regional dispersal, and growth of small industries are highlighted. The various criticisms levelled against licensing policy and procedures are examined with the help of relevant data. Recent attempts at rationalizing and streamlining the licensing policy and procedures are also analyzed in the light of past performance.