Role and problems of
industrial development in India
Industry –
industry means where goods were produced with the help of factor of
productions.
{Factors of
production: land, labour capital and entrepreneur}
Key points
· Industries have more productivity than
agriculture
· Industrial development means = Rise
in production capacity
Role/advantage/benefits of Industrial
development:
Balanced development:
· unbalanced development due to maximum
population stills depends on agriculture in India
· for balance growth ,industrial
development must needed to diminish population pressure on agriculture
· which result in agriculture
growth=industrial growth
Increase in production capacity:
· industrial development leads to rapid
growth of per capita income
· nature play dominant role in
agriculture, where humans control industrial sector, and can control
accordingly to inc. its productivity
Development of agriculture:
· with development of industrial sector, result in diminish of population
pressure on agriculture
· green revolution and modernisation of
agriculture depends industrial development i.e. in the form of tools, tractor
etc
· industrial development result in rise
in demand of agriculture products
Increase in employment:
· more employment opportunities will
generate
· rise in purchasing power
Improvement in standard of living:
· due to rise in purchasing power of
people by employment, generated by industrial sector
· result in rise of people standard of
living
Export promotions:
· country like India, where labour is
cheap, a great scope of export of goods produced by labour-intensive
Import substitution:
· with the help of industrial
development, goods can be produced, close to imported goods
· only those goods can be import, which
can rise the production capacity
Optimum use of natural resources:
· Extraction of natural resources
requires machineries and tools, which can be produced in domestic industries. industrial
development helps in optimum use of resources like coal, minerals, gas, water
etc, can be used properly
· Industries will also provide
machinery for generating hydro-electricity and thermal plants
Development of Infrastructure:
· Infrastructure includes communication
and transports
· With the help of industrial
development means of transport and communication increases like roads,
buildings, communications etc
· to establish these things cement, steels,
machinery etc is required which is produced by industrial sector
Meet increasing demand:
· Increasing population means inc. In demand
also
· To meet demand, availability of
product in the market is required (tv,phones,consumer goods etc)
Measures/Steps/initiative taken by government for development
of industrial development
After independence, most important policy-
Industrial development and
Regulation act 1991,
taken due to this act India became 10th largest industrial country
in the world.
Establishment of basic and heavy
industry:
· Govt. Established many basic and
heavy industries in public sector
· large–scale plants were setup with
collaboration with foreign in public sector
· Huge amount of investment is done
until it gives return
Establishment of new industries:
· Several new industries were
established in public sector and joint sector like telephones(BSNL),railway
engines, pharmaceuticals, cars(Maruti Suzuki)etc
· private sector industries also
encouraged
Establishment of financial
institutions:
· To provide financial, help much
financial institution were setup by the govt. In the form of public banks, cooperative
banks etc
· Loans at low interest rate and attractive
offers
Facility of liberal foreign capital:
· Foreigners were allowed to invest in
the country
· Foreign
investment promotion Board is established for give clearance to foreign investment
Facility of
foreign technological agreements
· According to these agreement, Indians
industries were allowed to import foreign technology in foreign currency in the
form of royalty and onetime payment
Facility of electricity:
· Many river-valley projects were
launched to increase Power generation
capacity for industrial machineries and industrial development
Facility of infrastructure:
· Development of means of transport for
movement of products and efficiency of communication were increased in both in
rural and urban areas
Facilities of inventions and technical
development:
· Many policies were introduced for
development of indigenous technology
· Special incentives were given to inventions
related to import substitution
Facility for industrialisation of
backward areas:
· Public sectors/industries mostly has been
set up in backward areas
· Subsidies/loan at low interest rate/
were given to industries set up in backward area
· Easy process of licensing made for
backward area
· Easy instalment for small industries
in backward regions
Special facilities to export oriented
industries:
· Subsidies/loan at low interest rate/ Easy
instalment for were given for export oriented industries
· Export processing zones have been
created in different part of the country
Facility for standardisation of
industrial goods:
· Bureau
of Indian standards were
set up for to improve quality of industrial products
· Those products who clear the standards,
set by the bureau allowed to use ‘ISI’ marks in their products
Problem faced by the industrial development in India:
Problem of raw material:
· Difficult to find good quality raw
material at fair price
· Some industries import raw material,
increases dependency in foreign countries
· Also foreign exchange is required for import
Shortage of power resources:
· Difficulty of power resources at fair
price
· common power resources: electricity,
coal and oil
· more preference is given to
agriculture then industries
· coal and oil leads to rise in cost of
production, then electricity
Insufficient capital:
· capital play very important role in industrial
development
· volume of capital depends on saving
and investment
· banks not provide required capital at
fair interest rate
Insufficient economic infrastructure:
· means of transport and communication is
not far developed
Problem of old plant and machinery:
· industrial development required
modern technology
· modern technology means low cost of production
and high quality
· old machinery and technology cant
helps in compete with foreign competition
Industrial sickness:
· Industrial sickness means ,situation
to repay loans, funds, liability and interest
· Sometimes they even fails to give
wage and salary of labours and employees
Regional inequality:
- Some states
are industrially developed or some are not, situation of imbalance
Defective industrial productions
structure:
· Production of luxury goods, more than
its demand
· Production of Wages/consumption goods
is less
Industrial disputes:
· Common disputes between trade union
and employee/labour and employee
· Results- falls in profit, production and
unemployment
Inefficiency of public sectors industries:
· Inefficient public sector, running in
loss and weak management due to many reasons like interference of politics, irresponsible
staff etc
Problem of human capital:
· Human capital means efficiency,education,health,
discipline etc of labour and entrepreneur
· Less risk taking entrepreneur and low
efficiency of labour-low industrial development
Less development of small industries:
· Country like India-micro, Small and
medium industries are more important than large industries
· Small industries-labour intensive,
large industries –capital intensive
Loss of domestic industries from foreign
competitions:
· Cannot compete with MNCs, in term of
quality, technology, efficiency etc
Poor quality product:
· Due to method of production cannot
compete with product quality and cost per unit
Suggestions to solve/remove the problem of industrial backwardness/industrial
development in India
Development of private sector:
· More facilities should be given in
assistance ,subsidy, licensing ,finance facility ,research and modernisation to the private
sector
Increase in efficiency of public
sector:
· Capital goods industries like steel
and iron should be increase
· Must have accountable and responsible
staff with less interference
Encouragement to foreign capital and foreign
technology:
· Encourage foreign capital investment
· Establishment of partnership
industries with foreign, results in modern technology in the economy
Encouragement to capital formation:
· Industries need capital formation to
run their business in initial stage
· To encourage capital formation-tax
holidays for some beginning years, capital subsidy in risky projects
Development of infrastructure:
· Mean of transport and communication should
be improved for satisfactory results
Import of modern machinery:
· For Import of modern tools, equipment
and raw material , required foreign exchange be sanctioned and finance
facilities should be given
Proper development of natural resources:
· Proper harnessing of natural resources
can give more benefits to industrialisation with the help of good equipment and
machinery
Development of agro-industries:
· Development of agriculture, which
industries depends on agriculture for their raw material
Development of export industries:
· More facilities should be given to
export industries
· Results in- more foreign exchange,
favourable BOP etc
Industrial peace:
· Good relation between employee and worker.
Workers get full reward from employee for the work
· Its save economy from strike and
lockout
Expansion of
managerial and technical education:
· Education must have managerial,
technical practical skills
· Proper Training should be given to worker
