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Unit 7: Indian Industries

Sugar-refinery 26.8 2.6 Notes
Wood-pulp, paper and paper products 10.2 0.6
Source: Indian Economy, Datt and Sundharam, S. Chand
3. Composition of manufacturing output mirrors the preponderance of consumer goods
industries vis-a-vis producer goods industries. In 1953, the ratio of consumer goods to
producer goods was computed to be 62: 38. As per the criteria advised by Hoffmann, India
seems to have entered the second stage of industrial development. However even then,
there is no doubt that the capital-goods sector is under-developed and there is a requirement
for the expansion of this sector so as to make sure a quick rate of growth to make the
economy self-reliant and finally foster the pace of industrialisation in the country. Only
then can per capita income be pushed up at a quick rate.
There was a structural imbalance in the industrial pattern. In instance of consumer goods,
domestic supply was over the demand. The index of domestic supplies of consumer goods
was 112 in comparison to domestic demand equal to 100. But in instance of producer
goods, the domestic supplies fell short of domestic demand. The index number of domestic
supplies with respect to demand was 80. This enhanced our dependence on other countries
in the capital goods sector. The conclusion is evident. There was a huge need for increasing
the output of ultimate and intermediate producer goods so as to rectify the imbalance
between their demand and supply. Industrial development “is not solely a process of
expanding output to meet the rising demand created by growing per capita incomes, it is
also a process in which existing demand for manufactures is met increasingly from domestic
production instead of from foreign sources.”
In brief, the industrial pattern in India on the eve of planning was indicated by low capital
intensity, restricted development of medium sized factory enterprises as well as imbalance
between consumer goods and capital goods industries. It would be of interest to inspect the
extent to which the Five-Year Plans have made an effort to improve the industrial pattern,
rectify its lopsidedness and develop the capital goods sector.

Self Assessment

Fill in the blanks:
6. The …………………… in India provided discriminating protection to some selected
industries since 1923.

7. Composition of manufacturing output reflects the …………………… of consumer goods
industries vis-a-vis producer goods industries.
8. Before the rise of the …………………… Indian manufacturers had a world-wide market.

9. …………………… and calicoes were in great demand the world over.

7.3 Industrial Pattern and the Five-Year Plans

In this section, you will study about the industrial pattern and their relationship with the five-
year plans. The Government of India introduced the process of industrialisation as conscious
and intentional policy of economic growth in initial fifties. The Government identified the
important 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 infra-structure, as
a stimulant to generation of technologies through R & D effort ... and as a growth multiplier.”

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