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The process of industrial transition in the British period is broadly divided into
industrial growth during the 19th century and industrial progress during the 20th
century.
It was mainly the private sector –whether indigenous or foreign that carried
industrialization forward. Only after the First World War some protection was
granted to Indian industries otherwise Indian industry had to weathers all storms
and face world competition on its own strength. This explains the slow growth of
industrialization.
(a) Private enterprise and industrial growth in the 19th century: - The
outstanding industrial events of the 19th century were the decline of
indigenous industries and the rise of large-scale modern industries.This
change was brought about by private enterprises. The rise of large scale
industries was slow in the beginning but by the close of the 19th century,
the movement was more rapid.
The period 1850-55 saw the establishment of First Cotton mill, First Jute
mill and First Coal mine. In the same period , the First Railway line was laid
in India. In a period of 25 years ,that is, by the last quarter of the 19th
century, there were 51 cotton mills and 18 jute mills. During the same
period, India produced one million tonnes of coal per annum and the Indian
railways had a mileage of 8,000. By the end of the 19th century there were
194 cotton mills and 36 jute mills, and coal production had risen to over 6
million tonnes per annum.In spite of the very rapid increase in
industrialization and the fact that the foundations for the development of
modern industries for the utilization of coal and iron resources were laid by
the end of the 19th century.
(b)Private enterprise and industrial growth in the first half of the 20th
century:- In 1905 , the swadheshi movement was started . It stimulated
Indian industries and there was a slow but steady growth in the field of
exisiting industries as well as the establishment of new industries between
1890 and outbreak of the war of 1914. Over 70 cotton mills and nearly 30
jute mills were set up in the century. Coal production was more than
doubled. Extension of railways continued at the rate of about 800 miles per
annum.The foundation of iron and steel industry was finally laid during this
period.
The war of 1914-18 created enormous demand for factory goods in India.
Imports from England and other foreign countries fell substantially.
*Tariff protection to Indian industries: - In 1923 the government of India
accepted the recommendations of the first Fiscal commission and gave
protection to selected Indian industries against foreign competition.
Between 1924 and 1939 several major industries were given protection by
the government, prominent among them being iron and steel industry,
cotton textiles, jute, sugar, paper and pulp industry, matches etc. India
industrialists took advantage of the policy of protection extended by the
government and developed the protected industries rapidly. They were
able to capture the entire Indian market and eliminate foreign competition
altogether in important fields.
First Five Year Plan(1951-56):- On the eve of the first plan , the
industrial development textiles in India was confined largely to the
consumer goods sector .and other important industries being cotton
textiles, sugar, salt, soap ,leather goods and paper.
The plan made an attempt to give a practical shape to the concept of mixed
economy by providing for the development of both, the public sector and
private sector in a complementarily manner. A number of industries were
either set up in the
*BASIC GOODS:- In economics a good wanted not for its own sake but for
the goods derived it.
Until 1980s the process of industrialization was guided by an inward looking and
state led command planning strategy. There was a system of government
regulation and controls on the private sector and a protected environment for the
public sector.
A process of reflection and debate on the need for a change in policies had been
set in motion in India I the second half of the 1979s.india used the decade of
1980s for experimentation of domestic deregulation. The reform on the industrial
policy front coincided with sharp deterioration I the fiscal deficit of the
government increased from 6.2% of GDP IN 1980-81 TO 8.3% BY 1990-91.
The country went through a severe economic crisis in 1991.ut was converted in to
an opportunity to introduce some fundamental changes in the content and
approach .the response to the policies was to put in place a set of policies aimed
at stabilization and structural reform. Whilestabilization policies were aimed at
correcting the weaknesses that had developed on the fiscal and the balance of
payment frunts,the structural reforms sought to remove the rigidities that had
entered into the various segments of the Indian economy.
The trust of the new economic policy has been towards the creating a more
competitive environment in the economy as a measure to improve the
productivity and efficiency of the system. This was to be achieved by removing
the barriers to entry and the restriction on the growth of the firm.
As far as the 8th five year plan the overall outlay for industry and mineral
programmers in the public sector was kept at 40,588 crore .This was only 9.3% of
total plan outlay. This reduced allocation to industry and mineral is in line with
the liberalization measures announced in the new industrial policy of 1991.
In line with the liberalization of industrial policy, the 8th plan placed less emphasis
on quantitative target. It sought to achieve the desired growth in different sectors
primarily through modification in industry, trade, fiscal policies and changes in
duties and taxes rather than through quantitative restriction on import, export or
licensing mechanism. The annual growth rate during 8th plan was 7.4% per
annum.The cause cited for lower growth during 8th five year plan as compared to
seventh plan include sudden exposure to foreign competition on account of
liberalization of import and a drastic reduction in import duties. There was also
slowdown of public investment to control the fiscal deficit.
The ninth plan emphasized on the quality of the quality of infrastructure, exports
,review of small scale industries , reservation for critical export industries such as
toys, garments and leather gods, labor legislation, disinvestment of PSEs ,balance
in industrial development investment in domestic Rand D, and linking of Rand D
with industry. The government also decided to dismantle the administered price
mechanism in respect of petroleum products in a phased manner.
The ninth plan outlay for industry and minerals was kept at 65,148 crore .this was
7.6% of the total plan outlay of 8, 59,200crore.the industrial growth during ninth
five year plan was 4.5% while that for manufacturing mining and electricity
generation were 5.3%,2.5 and 5.5% respectively. Internal factor cited for the
slowdown were slowdown in domestic and global demand ,continuing high real
interest rates, infrastructure bottlenecks in power and transports, lack of reforms
in and and labor markets, decline in private investment and delays in establishing
appropriate institutional and regulatory frameworks in some key sectors.
The tenth five year plan proposed on outlay of 58,938crore for industry and
minerals which was just 3.9% of the total outlay of 15,25,638crore.this reduced
the allocation to industry is in line with the government’s strategy to liberalize
and privatize and give more space to the private sector to expand its activities .
The plan achieved growth rate of 8% per annum.
The dynamism in manufacturing during the tenth plan increased its growth rate to
8.7% compared to 3.8% in the ninth five year plan. A conductive investment
climate for the industry was attempted through elimination of entry barriers n
etc. Against the background of a growing manufacturing scenario, the growth
target for 11th plan for industry and manufacturing were set at an average annual
rate of 9.8%.the emphasis was on creation of world class infrastructure, especially
on quality of electricity, power, roads, railway, airport, etc.
The manufacturing growth rate peaked at 18.4% in 2007-08 and then started
decelerating .the decline manufacturing growth was primarily responsible for
slow down of GDP 2011-12,while global economic meltdown, frangile economic
recovery in US and EU ,etc.The rate of growth of manufacturing in GDP has
declined from 10.3% in 2007-08 to 4.3% I 2008-09, revived in 009-10 and 2010-11
to 9.7% and 7.6% respectively.
YEAR SHARE OF
INDUSTRY TO
GDP
1950-92 21.6
1992-97 25.9
1997-2002 25.7
2002-07 26.1
2007-08 28.7
2008-09 28.1
2009-10 28.1
2010-11 27.8
2011-12 27.0
The Quick Estimates of Index of Industrial Production (IIP) with base 2004-05 for
the month of July 2013 have been released by the Central Statistics Office of the
Ministry of Statistics and Programme Implementation. IIP is compiled using data
received from 16 source agencies viz. Department of Industrial Policy &
Promotion (DIPP); Indian Bureau of Mines; Central Electricity Authority; Joint
Plant Committee; Ministry of Petroleum & Natural Gas; Office of Textile
Commissioner; Department of Chemicals & Petrochemicals; Directorate of Sugar;
Department of Fertilizers; Directorate of Vanaspati, Vegetable Oils & Fats; Tea
Board; Office of Jute Commissioner; Office of Coal Controller; Railway Board;
Office of Salt Commissioner and Coffee Board.
2. The General Index for the month of July 2013 stands at 171.5, which is 2.6%
higher as compared to the level in the month of July 2012. The cumulative growth
for the period April-July 2013-14 over the corresponding period of the previous
year stands at (-) 0.2%.
4. In terms of industries, eleven (11) out of the twenty two (22) industry groups
(as per 2-digit NIC-2004) in the manufacturing sector have shown positive growth
during the month of July 2013 as compared to the corresponding month of the
previous year (Statement II). The industry group ‘Electrical machinery & apparatus
n.e.c.’ has shown the highest positive growth of 83.6%, followed by 44.0% in
‘Wearing apparel; dressing and dyeing of fur’ and 16.5% in ‘Luggage, handbags,
saddlery, harness & footwear; tanning and dressing of leather products’. On the
other hand, the industry group ‘Radio, TV and communication equipment &
apparatus’ has shown a negative growth of 20.8% followed by 11.3% in ‘Furniture;
manufacturing n.e.c.’ and 10.6% in ‘Machinery and equipment n.e.c.’.
5. As per Use-based classification, the growth rates in July 2013 over July 2012 are
1.7% in Basic goods, 15.6% in Capital goods and 2.4% in Intermediate goods
(Statement III). The Consumer durables and Consumer non-durables have
recorded growth of (-) 9.3% and 6.8% respectively, with the overall growth in
Consumer goods being (-) 0.9%.
6. Some of the important items showing high positive growth during the current
month over the same month in previous year include ‘Fruit Pulp’ (50.5%), ‘Cashew
Kernels’ (23.2%), ‘Apparels’ (39.8%), ‘Leather Garments’ (62.6%), ‘Purified
Terephthalic Acid’ (29.6%), ‘Vitamins’ (61.8%), ‘Ayurvedic Medicaments’ (44.6%),
‘Cable, Rubber Insulated’ (336.0%) and ‘Ship Building & Repairs’ (58.7%).
7. Some of the other important items showing high negative growth are: ‘Grinding
Wheels’ [(-) 29.4%], ‘Boilers’ [(-) 36.6%], ‘Air Conditioner (Room)’ [(-) 30.8%],
‘Earth Moving Machinery’ [(-) 42.6%], ‘Sugar Machinery’ [(-) 27.9%], ‘Plastic
Machinery Incl. Moulding Machinery’ [(-) 40.7%], ‘Transformers (Small)’ [(-)
22.7%], ‘Generator/ Alternator’ [(-) 42.0%], ‘Telephone Instruments (incl. Mobile
Phones & Accessories)’ [(-) 21.5%] and ‘Gems and Jewellery’ [(-) 20.5%].
Indian industrial sector is growing faster after the planning period mainly because
of liberalization and also privatization principles of government .it led new way of
development in India towards consumer oriented industrial development.