Page 132 - DECO303_INDIAN_ECONOMY_ENGLISH

Unit 7: Indian Industries

Argentina imports electrical motors and systems, differentials, transmission systems, Notes
body components and interiors. Argentina is competitive in stampings, seats, glass, plastics,
panels and tyres where logistics cost is high and natural protection is thus ensured.
Argentina is a highly protected market and is expected to remain so. Importing components
by OEMs in MERCOSUR is mainly a strategic issue.
Question
Discuss how MERCOSUR - India Preferential Trade Agreement will influence the future
course of action of the Polyplastics.
Source: Business Environment, Dr Vivek Mittal, Excel Books
7.6 Summary

Industrial development depends upon the rate of capital formation.
Supply of capital goods can be augmented either through imports or through domestic
production.
Increase in the imports of capital goods depends upon the rate of growth of exports.
Since the scope for the expansion of the exports of primary commodities is limited, export
promoting manufacturing industries may be developed or alternatively, certain import
substituting domestic industries may be developed, the effect of which will be to release
foreign exchange for the imports of capital goods.
In addition, within the current volume of imports, capital goods may be substituted in
place of consumer goods. Thus, export-promoting industries, import-substituting industries
and domestic capital goods industries are not mutually exclusive alternatives.
Simultaneous development of all the three classes of industries will prove to be the most
effective strategy of industrialisation.
The relative role of each is likely to vary with the particular economic circumstances of
individual countries as well as with their current phase of industrialisation.

7.7 Keywords

Developed Country: A developed country or “more developed country” (MDC), is a sovereign
state that has a highly developed economy and advanced technological infrastructure relative to
other less developed nations.
Industrial Society: It refers to a society driven by the use of technology to enable mass production,
supporting a large population with a high capacity for division of labour.

Industry: It is the production of an economic good or service within an economy.
Large Scale Industries: Industries with a fixed asset of more than one hundred million rupees are
called large scale industries.

Production: It is the act of creating output, a goods or service which has value and contributes to
the utility of individuals.

7.8 Review Questions

1. Briefly explain the pattern and plans of Indian industries.

2. Write a short note on large-scale industries.

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