Explain the direction for industrial development as pursued under the different phases of planned
development in India.
Answers
Answer:
Indian Industry had a global presence before the advent of Britishers in India. Before the advent of British in India, India accounted for a quarter of World’s Industrial output.
The exports from India consisted of manufacturers goods like cotton, silk, artistic ware, silk and woollen cloth.
The impact of British Policies and the Industrial Revolution led to the decay of Indian handicraft industry. Post-Industrial revolution in Britain, machine-made goods starting flooding into the Indian markets.
The decline of traditional handicraft was not followed by the rise of modern Industrialisation in India due to the British policy of encouraging the imports of British made goods and exports of raw materials from India.
The First Phase (1950-1965): Industrial Sector at the Time of Independence
The main features of the Indian Industrial sector on the eve of the Independence were:
There were majority of consumer goods industries vis-à-vis producer goods/capital goods industries resulting in lopsided industrial development. The ratio of consumer goods industries to producer good/capital goods industry was 62:38 during the early 1950s.
The Industrial sector was extremely underdeveloped with very weak infrastructure.
The lack of government support to the industrial sector was considered as an important cause of underdevelopment.
The structure and concentration of ownership of the industries were in few hands.
Technical and Managerial skills were in short supply.
As a result of these shortcomings, the national leadership reached on a consensus that economic sovereignty and economic independence lay in the rapid industrialisation including the development of Industrial Infrastructure.
The First Five-year Plan did not envisage any large-scale programs for industrialisation. The plan rather made an attempt to give a practical shape to the Indian economy by providing for the development of both private and public sector. A number of industries were set up in the public sector. Important among those were Hindustan Shipyard, Hindustan Tools, Integral Coach Factory etc.
The Second Five-Year plan accorded highest priority to Industrialisation. The plan was based on famous Mahalanobis Model. Mahalanobis model set out the task of establishing basic and capital goods industries on a large scale to create a strong base for the industrial development. The plan includes substantial investment in the Iron and Steel, Coal, Heavy engineering, Machine building, Heavy Chemicals and Cement Industries of basic importance.
The Third Plan followed the strategy of the Second plan by establishing basic capital and producer good industries with the special emphasis on machine building industries. As a result, the second and the third plan placed great emphasis on building up the capital goods industries. Most of the capital good industries are built under the Public Sector.
The First Three-Five Year Plans are important because their aim was to build a strong Industrial base in India. This first phase of Industrial development in India laid the foundation for strong Industrial Phase.
As a result, the first Three Plans witnessed a strong acceleration in the growth rate of the Industrial production. The period witnessed an increase in growth rate from 5.7% to 7.2% and ultimately 9.0% in the first, second and third plans respectively.
The most important observation of the period was that the rate of growth of capital good industry considered as the backbone of modern industrialisation grew at 9.8%, 13.1% and 19% during the first, second and third plan respectively.
Source: Government of India, Handbook of Industrial Statistics
The Second Phase (1965-1980): The Period of Industrial Deceleration
The first three five-year plans mostly focused on the development of the Capital Good sector. As a result, the consumer goods sector was left neglected. The consumer goods sector also known as wage good sector is considered to be the backbone of the rural economy and its complete neglect had resulted in fall in the growth rate of industrial
production as well as of the overall economy.
Explanation:
Indian Industry had a global presence before the advent of Britishers in India. Before the advent of British in India, India accounted for a quarter of World’s Industrial output.
The exports from India consisted of manufacturers goods like cotton, silk, artistic ware, silk and woollen cloth.
The impact of British Policies and the Industrial Revolution led to the decay of Indian handicraft industry. Post-Industrial revolution in Britain, machine-made goods starting flooding into the Indian markets.
The decline of traditional handicraft was not followed by the rise of modern Industrialisation in India due to the British policy of encouraging the imports of British made goods and exports of raw materials from India.
The First Phase (1950-1965): Industrial Sector at the Time of Independence
The main features of the Indian Industrial sector on the eve of the Independence were:
There were majority of consumer goods industries vis-à-vis producer goods/capital goods industries resulting in lopsided industrial development. The ratio of consumer goods industries to producer good/capital goods industry was 62:38 during the early 1950s.
The Industrial sector was extremely underdeveloped with very weak infrastructure.
The lack of government support to the industrial sector was considered as an important cause of underdevelopment.
The structure and concentration of ownership of the industries were in few hands.
Technical and Managerial skills were in short supply.
As a result of these shortcomings, the national leadership reached on a consensus that economic sovereignty and economic independence lay in the rapid industrialisation including the development of Industrial Infrastructure.