Government agencies have been under severe criticism by media in recent days. Actual problems do exist about some government officials and their organizations that do not fit the present situations. However, the policies and efforts of MITI in the reconstruction and fosterage of the national industry once destroyed in WWII should appropriately be held in high esteem. The present paper describes how MITI helped economic growth in the postwar Japan with their policies centered on the Foreign Capital Law, designed for the introduction of advanced technologies to reconstruct and enhance the Japanese industry then far behind the level the American and European industries had reached, and how those policies matched social and institutional reforms during and after the war. The paper also gives a historical overview of MITI's policies on the auto movive industry including planning; technology licensing; import of parts, raw materials and equipment; taxation; and financing. The gas turbine is discussed as an example of the effects of early technological basis on the current competitiveness of manufacturers, which illustrates the importance of governmental policy in the fosterage of industry