Strategy Of Industrial Growth 1947-1990

Strategy Of Industrial Growth 1947-1990

 

Strategy Of Industrial Growth 1947-1990

Importance of Industry

1. Source of implements

2. Promote modernization

3. Increase in national income

4. Infrastructural growth

5. GDP growth

 

Need for public sector in industrial development

1. Lack of capital

2. Low induced investment

3. Growth with Social Justice

4. Development of infrastructure

 

Industrial policy resolution/revolution (IPR-1956)

 

According to the industrial policy 1956 government increase the role of public sector in the industrial development of economy the main objective is to prevents the concentration of wealth from few hands.

( dominant role by public sector)

 

Principal elements of IPR-1956/features

 

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1. Three fold classification of industries

[A]. Schedule (a) 17 industries (exclusively  as public sector) ex- defence equipments, Railways, heavy machinery, atomic energy,electricity ,etc

(complete ownership of public sector)

[B]. Schedule (b) 12 industries (Private and public) .Dominant role of goverment.

eg- chemical fertilizers,plastic materials,Roads transports

   (policy formation by government)

[C]. Schedule (c) remaining industries under private sector

 

2.  Industrial licensing

It refers to a written permission from the government for opening or expanding and industrial unit.

 

3. Industrial concession

The private entrepreneur were offered many types of industrial concession for establishing industry in the backward regions of the country

     • tax holiday (rebate)

     • subsidies power supply

 

Small scale industry

It can be defined as the one whose investment does not exceed 5 Lakh rupees in 1951 Now 5 crore.

 

features characteristics of small scale industry(SSI)

1. Labour intensive and Employment friendly

2. SSI is locational friendly/flexibility and therefore equality

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3. SSI needs small investment and is therefore equity

 

Features of industrial growth during 1950 to 1990

1. Public sector the primary role of            industrialisation

2.  private sector play the secondary role of Under permit/licensing

3. Focus on import substitution

it is a policy of the state in which Import of goods are generally substituted by domestic production

4. Protect from foreign competition

5. Large scale industry was to be developed for building and infrastructural base in the country

6. Small scale industry was to be developed for employment and equity

 

Good effect or bad effect of industrial policy

   •Good effect

1. Big push for economic growth 6% annual increase

2. Diversification in industrial sector

3. Growth of large scale industry

4. Growth of small scale industry with employment and equity

   •Bad effect

1. Public sector monopoly

2. Low quality of product compared to foreign standards

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3. Focus on import substitution

 

ROLE OF INDUSTRIAL SECTOR IN INDIA

Industrialisation is important for overall growth of a country. Following points highlight the importance of Industry is an economy:

1. Provides employment.

2. Raises national income.

3. Promotes regional balance.

4. Leads to modernisation.

5. Helps to modernise agriculture.

6. Leads to self-sustainable development.

7. High potential for growth.

8. Key to high volume of exports.

9. Growth of civilisation.

10. Change in basic structure of economy

11. source of Employment

12. Imparts Dynamism to Growth Process.

 

A growth industry is that sector of an economy which experiences a higher-than-average growth rate as compared to other sectors.

Their growth is a result of demand for new products or services offered by companies in the field.

 

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