Page 203 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 16: Industrial Sector in Pre-Reform Period

(v) When and where was Britain described as ‘the workshop of the world’? Notes
(a) In 1750 when the Americans predicted the ‘revolution’ to come
(b) In 1800 at the Paris Industrial Conference
(c) In 1851 at the Great Exhibition
(d) None of these
16.3 Summary

• The direction of industrial development in India made an early start with the introduction of
the Statement of Industrial Policy, 1945, the Industrial Policy Resolution of 1948, the enactment
of the Industries (Development and Regulation) Act, 1951, the First and Second Five Year Plan
documents, and the Industrial Policy Resolution of 1956.
• In the pre-reform period, the industrial sector in India fared quite impressively in the 1980s in
terms of growth of output/value added, compared to the earlier decades.
• If we look at average annual growth rates in Gross Value Added (GVA) for the entire economy,
the agricultural sector and the different subsectors of the industrial sector for the 1970s, 1980s
and the two halves of the 1980s, we find that there was appreciable increase in the growth rate
in the 1980s in all sectors/sub-sectors for which comparable figures are available.
• There are several opinions about the resurgence of growth in the 1980s but there are certain
most common factors causing the improvement in the growth rate.
• Industrialisation has a major role to play in the economic development of the underdeveloped
countries. The gap in per capita incomes between the developed and underdeveloped countries
is largely reflected in the disparity in the structure of their economies; the former are largely
industrial economies, while in the latter production is confined predominantly to agriculture.
• The industrial sector which possesses a relatively high marginal propensity to save and invest
contributes significantly to the eventual achievement of a self-sustaining economy with continued
high levels of investment and rapid rate of increase in income and industrial employment.
• In many cases, the diversion of underemployed rural labour to non-agricultural occupations is
an urgent requirement for development.
• While there is now almost universal agreement on the importance of industrialisation, there is
still much debate regarding the proper pattern of industrial development.
• Soviet pattern of industrialisation involves a straight jump from the first to the third stage
while British pattern is that of a gradual evolution.
• The alternative to the increase of exports of primary products from under-developed countries
would be to develop export promoting manufacturing industries.
• Before the rise of the modern industrial system Indian manufacturers had a world-wide market.
Indian muslin and calicoes were in great demand the world over. Indian industries not only
supplied all local wants but also enabled India to export its finished products.
• The British Government in India provided discriminating protection to some selected industries
since 1923. This protection was accompanied by the most favoured nation clause for British
goods.
• The Government of India launched the process of industrialisation as conscious and deliberate
policy of economic growth in early fifties. The Government recognised the significant
contribution industrialisation could make to the development process, “as a base for the growth
of the primary sector, as a catalytic agent for the development of infrastructure, as a stimulant
to generation of technologies through R & D effort... and as a growth multiplier.”

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