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December 21, 2016

Development of Industries in India from Independence till Today

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  • History of Indian industry. 
  • The pattern of industrial development before independence.
  • Government's initiation after independence. 
  • Industrial policy of 1977, 1980 and 1991. 
  • Five Year Plan's role for industrial development.
  • The National Manufacturing Policy-Role of National Investment and Manufacturing Zone (NIMZ) and Special Economic Zone (SEZ).
History of Indian industry dates back to the history of mankind. Indian handicrafts which manufactured in village huts and houses all over the country were praised in foreign countries. The real beginning of modern industries in India is recognised with the establishment of cotton textile industry at Mumbai in 1854. But post independence witnessed a change in character and purpose of industrialisation, that is, a shift from colonial exploitation and raw material based to industries for fast socioeconomic development of India. This was channelised by a mixed economy with socialistic means and goals.

The pattern of industrial development which had emerged in the 19th century was confined to a limited sector and concentrated in a few unevenly distributed areas and remain virtually unchanged till 1940s.

In addition, preindependence industrialisation suffered from shortage of capital management experience and technical expertise as well as the absence of a growing indigeneous market and above all, general poverty caused slow expansion of Indian industries. Hence, revival of Indian industries was imperative after independence for fast socioeconomic development of India.

To realise the dream of development of industries. Indian Government adopted certain industrial resolutions and Five Year Plans. The first Industrial Policy Resolution, 1948 contemplated a mixed economy, reserving sphere for the private sector and another for public sector.

Then it was Industrial Policy Resolution, 1956 which laid down new classification of industries (Schedule A, Schedule B and Schedule C), fair and non-discriminatory treatment of private sector, encouragement of village and small industries removing regional disparities. This policy was based upon Mahalanobis modal of growth which suggested that there should be an emphasis on the heavy industries and led the Indian economy to a higher growth rate.

The 1956 Resolution was followed by Industrial Policy 1977, 1980 and the most important Industrial Policy of 1991. The 1991 policy envisage to culminate the gradual liberalisation since 1956 and unshackle the Indian economy from cobwebs of bureaucracy, introduce liberalisation, remove restriction on direct foreign investment and free the domestic entrepreneur from restrictions of Monopolistic and Restrictive Trade Practice (MRTP) Act. Indian economy hitherto a closed economy was opened to the forces and elements of globalisation.

The abolition of industrial licensing, dismantling of price controls, dilution of reservation of small-scale industries and virtual abolition of monopoly law enabled Indian industry to blossom.

Apart from industrial policy, the Five Year Plan devised by the Planning Commission also shaped industrial development in India. Though the First Five Year Plan was predominantly agricultural plan, industry was not totally neglected. Hindustan Machine Tool, Integral Coach Factory, UP Government Cement Factory etc were set up, during First Five Year Plan.

The tempo of industrial development gathered momentum during Second Five Year Plan with major industries like Rourkela Steel Plant, Bhilai Steel Plant etc the subsequent Plans also focussed on industries but were without considerable success.

It was the Eight Five Year Plan which followed Industrial Policy Resolution 1991 and the popular reform liberalisation, privatisation and globalisation ignited the fire for the industrialisation in India which continued in all the subsequent Plans.

Small-scale industry is recognised by the Government of India as a priority sector as it paves way for rapid industrialisation, prerequisite for balanced growth, employment intensive and export earning. Measures towards its development has been taken since First Five Years Plan and received special emphasis in Eleventh and Twelfth Five Year Plan.

The Twelfth Five Year Plan envisaged capacity building, credit gurantee, launch of venture capital etc for Micro, Small and Medium Enterprises (MSME).

The National Manufacturing Policy also envisaged developed National Investment and Manufacturing Zone (NIMZ) as integrated industrial townships with state-of-the-art infrastructure and land use.

Manufacturing sector is critical to Indian economy as it promises to provide gainful productive employment, shift of surplus agricultural labour to industries, reduce import bill hence, rationalise fiscal and current account deficit along with earning in export sector through promotion of Special Economic Zone.

In 2015, the NDA government announced Make In India scheme, a major national initiative designed to foster innovation, enhance skill development, protect intellectual property and built best in-class manufacturing infrastructure.

But Make In India cannot be sustained without encouragement to entrepreneurship, hence, Startup India took birth. To encourage entrepreneurship amongst Scheduled Caste, Scheduled Tribe and women, Startup India was launched which also promised additional boost to MSME sector and add to the MUDRA scheme for refinancing micro finance sector.

Though industrialisation in India has come a long way from planning age to NITI Aayog (ensuring Cooperative Federalism), Revolutionary Industrial Policy, Manufacturing Policy, but still there is way ahead to go. The Economic Survey has categorised India as refuge of stability and outpost of opportunity.

This stability and opportunity should be realised earliest to ensure Indian manufacturing sector shine brightly in the international domain. The culture of dependancy (Import) should shift to culture of innovation and scientific spirit as envisaged in our fundamental duties.

Education has to be linked with industries (vocational education) so that Indian youths are skilled, without which indigenisation of industry would remain a distant dream. The new mantra of industrialisation in 21st century should be educate-skill innovate along with a hospitable and encouraging environment to improve ease of doing business in India.

Difficult Words with Meanings
  • Indigenous native
  • Revival an improvement in the condition
  • Imperative of vital importance
  • Disparities a great difference
  • Envisage to have something as a plan or an intention
  • Culminate reach or be a climax or point of highest development
  • Prerequisite required as a prior condition
  • Fiscal relating to government revenue, especially taxes
  • Refuge a place or state of safety from danger or trouble
  • Indigenisation bring under the control of native people. 
shared by Nisheeta Mirchandani
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