STRATEGY OF INDUSTRIAL
GROWTH (1947 – 1990)
INDUSTRY
An industry is a sector that produces
goods or related services within an
economy.
IMPORTANCE OF INDUSTRY
Epicentre of Economic Growth
Source of Employment
Source of Mechanised Means of
Farming
Imparts Dynamism to Growth Process
Growth of civilisation
Infrastructural Growth
Industrialisation – a Sine – qua – non
of Growth
FACTORS NECESSITATING DIRECT PARTICIPATION OF THE STATE (PUBLIC SECTOR) IN INDUSTRIAL
DEVELOPMENT.
Lack of Capital
Low Inducement to Invest
Growth with Social Justice
INDUSTRIAL POLICY RESOLUTION - 1956
(IPR – 1956)
Three – fold Classification of Industries
Industrial Licensing
Industrial Concessions
SMALL SCALE INDUSTRY (SSI)
Small scale industries (SSI) are those industries in
which manufacturing, providing services,
productions are done on a small scale or
micro scale. Its investment should not exceed
Rs.5 crores. For example, these are the ideas
of Small scale industries: Napkins, tissues,
chocolates, toothpick, water bottles, small toys,
papers, pens etc.
TYPICAL CHARACTERISTICS OF SSI
Labour intensive and therefore
Employment Friendly.
Locational Flexibility and is
therefore Equality – Oriented.
Small Investment and is
therefore Equity – Oriented.
SALIENT FEATRUES OF THE STRATEGY OF INDUSTRIAL
GROWTH DURING THE PERIOD 1950 - 1990
Public enterprises were to play a central role in the
process of industrialisation.
Private enterprises were to play only a secondary role
in the process of industrialisation and that too under
Permit – Licence Raj.
Process of industrialisation focused on ‘import
substitution’.
Domestic industry was to be protected from foreign
competition
Large – scale industry was to be developed with a
view to building an infrastructural base in the country
Small – scale industry was to be developed with a
view to achieving the objectives of employment and
equity
GOOD IMPACT BAD IMPACT
>Rise in Industrial >Public Sector
Output. monopolies started
>Industrial Sector causing ‘dead social
was diversified. weight.’
>Large – Scale >Domestic Industries
industries were were inefficient to
successfully launched cope up with
>SSI recorded international
substantial spread competition.
across different >Foreign exchange
regions of the (forex) reserves
country. starting shrinking