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Unit 7: Indian Industries

The Seventh Plan offered for an investment of ` 19,710 crore in large and medium industries and Notes
` 2,750 crore for the development of village as well as small industries. Total investment in the
industrial sector would hence be of the order of ` 22,460 crore or 12.5% of the total Plan outlay.
The annual target growth rate was 8 per cent.
It is essential to note the chief elements of the Seventh Plan industrial strategy were:

1. Rapid elimination of infrastructural constraints, by placing greater stress on additional
availability of power via more efficient use of prevailing capacity as well as the set-up of
new power stations involving super thermal and nuclear plants.
2. Motivation of modernisation and technological upgradation in industries such as textiles
and sugar where a large number of units were established in the early portion of the 20th
century.
3. Particular targets of productivity for major industries such as steel, petro-chemicals,
fertilizers, non-ferrous metals, paper and cement were to be set for the Plan.
4. Export production was to be made an important portion of production in the domestic
economy. An exclusive effort was to be made in chosen industries in which the country
has comparative advantage and has attained a degree of industrial maturity.
5. Motivation of ‘sunrise’ industries such as telecommunications, computers, micro-
electronics, ceramic composites and bio-technology. Industries were to be motivated to
adopt technologies such as fibre optics, lasers, robotics etc. for improving productivity
and quality.
6. Location of industries adjacent to the small district towns which were not industrialized
so far would be promoted with a view to eliminating regional disparities and motivating
dispersal of industries.
7. Nearly 30 per cent of industries-large and medium-had already installed pollution control
system. The Seventh Plan intended to expand the coverage of this programme as also to
reinforce it.
It is important to note that a review of the progress of the Seventh Plan discloses that the annual
growth rate of the industrial sector involving mining, manufacturing and electricity generation
during the Seventh Plan era was 8.5% which although marginally lower than targeted 8.7% was
much greater than the 5.5% attained during the Sixth Plan.

7.3.6 Industries in the Eighth Plan (1992-97)

You are required to remember that the Eighth Plan was framed under a new environment when
numerous reforms in industrial, fiscal, trade and foreign investment policies were launched in
the economy - commonly termed as economic liberalisation. In the setting of the new Industrial
Policy of July 1991, the function of the public and private sector was reviewed. In the first phase
of planned development the public sector played an innovative role but its principal weakness
was its exceedingly poor performance and its inability to produce adequate resources for
sustaining the growth process. During this era, the private sector has come of age and has
developed substantial entrepreneurial, technological, managerial, financial and marketing
strengths. Hence, the private sector should henceforth play a greater function in the process of
development. This new method is reliable with the general philosophy of positioning greater
reliance on competitiveness of industries and effectiveness of operations. Future growth would,
hence, be more in those sectors where the nation has comparative cost advantage.

Eighth Plan assigned a total investment of ` 38,083 crore for industry and mineral production
(at 1991-92 prices). A review of the progress of actual outlay disclosed that at current prices,

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