Page 211 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 17: Industrial Sector in Post-Reform Period

17.4 Summary Notes

• The widespread regulation and controls over private economic activity by the Government had
inhibited economic efficiency and growth clearly by the late 1970s and early 1980s.
• From 1991, the process of organisational restructuring and the concomitant supportive changes
in industrial policy aimed at creating a more competitive and challenging industrial environment
are being undertaken.
• The impact of liberalisation on profitability and productivity of the manufacturing sector has
not been clearly laid out.
• Largely due to price control and protection from insufficient domestic production capacity, the
margins of joint sector companies held up much better.
• For defining Small-Scale Industries (SSIs), there is no single functional economic criterion. Specific
circumstances have defined the SSIs in different countries.
• Small-Scale Industry (SSI) has been one of the major planks of India’s economic development
strategy. The key elements of India’s policy for the support of small-scale industries have been
small-scale industry reservations, fiscal concessions by way of lower excise duties, preferential
allocation of and subsidisation of bank credit, extension of business services by the Government
and preferential procurement by the Government.
• The progress of industrialisation during the last 50 years since 1951 has been a striking feature
of Indian economic development.
• A major achievement in the industrial sector has been the diversification of India’s capability.
• The development strategy adopted by the Indian planners consisted of accelerated
industrialisation with base of heavy industry.
• There was yet another aspect to industrial strategy adopted by our planners. From the very
beginning, the banners anticipated shortage of foreign exchange as a for the constraint to the
development effort.
• One striking feature of the period of planning was that the structure of Indian industries had
changed in favour of basic and capital goods sector. The study of structural transformation of
the Indian industries reveals that there has a clear shift in favour of basic and capital goods
sector.
• The rapid pace of industrial growth and the development of productive capacity has been
marked by remarkable, though still inadequate, expansion of infrastructural facilities in the
country with expansion.
• Significant progress has been recorded in the science and technology. India now ranks third in
the respect of technological talent and manpower. In scientists and technologists are working
in many the frontiers of today’s knowledge, as in agriculture industry, in the development of
nuclear power and of space technology for communications and development.
• Without under-estimating the achievement process of industrial expansion initiated during the
plan era, it may be emphasised that much of the it growth is only apparent and not real.
• The Annual Survey of Industries has reclassified data about the ownership pattern of industries
into three categories.
• In terms of number of units, the non-corporate sector accounts of 63% of units, mostly in small
industries sector referred to as the unorganized sector, but they employed 7.3% of productive
capital, accounted for only 8.2% of value added, but provided employment to nearly 31% of
industrial labour.
• Others were a minor category where contribution productive capital, value added and
employment was in insignificant.

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