Page 121 - DECO303_INDIAN_ECONOMY_ENGLISH

Indian Economy

Notes ` 40,759 crore were spent, but when assessed at 1991-92 prices, this worked out to be ` 31,382
crore. In other words, real investment worked out to be about 82% of planned investment. There
was, hence, a serious shortfall of the order of 18%.
Performance of the industrial sector in the Eighth Plan is depicted in Table 7.3.

Table 7.3: Annual Growth Rates of Industrial Production
(Base 1993-94 =100) Per cent
Mining Manufacturing Electricity General
CAGR (1992-97) 3.8 8.0 6.6 7.3
Ninth Plan
1997-98 6.9 6.7 6.6 6.7
1998-99 -0.8 4.4 6.5 4.1
1999-00 1.0 7.1 7.3 6.7
2000-01 3,7 5.3 4.0 5.0
2001-02 1.8 2.9 3.1 2.8
CAGR (1997-02) 2.5 5.3 5.5 5.0
Tenth Plan
2002-03 5.8 6.0 3.2 5,7
2003-04 5.2 7.4 4.9 7,0
2004-05 4.4 9.1 5.1 8.4
2005-06 1.0 9.1 5.2 8.2
2006-07 5.3 12.5 7.3 11.5
CAGR (2002-07) 5.5 9.0 5.2 8.2
2007-08 5.1 9.0 6.3 8.5
2008-09 2.6 2.7 2.8 2.7
2009-10 9.9 10.9 6.0 10.5
2010-11 5.2 8.9 5.5 8.2
2011-12 -1.9 3.0 8.2 2.8
2012-13 -2.4 1.2 4.0 1.1

CAGR: Compound Annual Growth Rate.
Note: Growth rates from 1994-95 onwards are based on Index of Industrial production (IIP): Base
2013-94 = 100
Source: Indian Economy, Datt and Sundharam, S. Chand

Notes It may be noted that the overall rate of industrial production witnessed an average
growth rate of 7.3 per cent against the target of 7.4 per cent in the Eighth Plan.

It will be surprising for you to know that analysing the factors for the slow growth of the
industrial sector, it may be mentioned that the sudden opening up of the economy to the private
sector and enabling the entry of foreign investors as anticipated in the Industrial Policy of 1991
uncovered the industry to foreign competition for which it was rarely prepared since it has been
operating under a wholly protected environment for the last four decades. As a result, the
slowdown was reflected in very low growth rates realised in the initial two years of the Eighth

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