Role & Problem of industrial development in india

ROLE & PROBLEMS OF INDUSTRIAL
DEVELOPMENT IN INDIA
From:
Sakshi Mittal
Assistant Professor
PGGCG-11, Chandigarh

INTRODUCTION
 For a predominantly agricultural country development of
industries is must.
 Industries play important role in the rapid economic growth of
Indian economy.
 It helps increase employment opportunities.
 Provides improved means of production like machines, chemical
fertilizers to agriculture.

ROLE OF INDUSTRIAL DEVELOPMENT
• There is a strong case for the industrialization of countries
like India suffering with problems like poverty, insecurity,
unemployment, dependence on agriculture, unfavorable
BOP.
• The main argument put forward in this regard are as follows-

RAISING INCOME
• Opportunities of new inventions are very large in industries,
• National income goes up as industries enhance productivity and
add value.
GROWTH WITH STABILITY
Economic development is possible with stability as possibility of
fluctuations are remote because industrial production is the outcome
of efforts of man and Govt. policies.

MEETING HIGH INCOME DEMANDS
• With advancement on the industrial front, the proportion of natural
raw materials in finished products has declined.
• Besides, the synthetics have greatly reduced the need for natural
raw material
OPTIMUM USE OF NATURAL RESOURCES
• Industry provide machinery for generating hydroelectricity &
thermal power plants
• Provide machinery & other equipment for extracting oil from soil
or offshore.

ABSORBING SURPLUS LABOR
• Provide work or job to rapid growing population.
• It generates employment opportunities on an accelerated rate.
STRENGTHING THE ECONOMY
• Production of a variety of goods in large quantity and at low
costs.
• Production of goods like railways, dams of economic
infrastructure.
• It fulfills the agricultural requirement.

BALANCED DEVELOPMENT
• Indian economy- Unbalanced-46.2% population depends upon
agriculture.
• Development of industries and service sector will make our
economy a balanced economy.
INCREASE IN PRODUCTIVITY
• Division of Labor, use of machines, less role of nature contribute to
the development of industries and hence productivity per worker
increases.
IMPROVEMENT IN STANDARD OF LIVING
• Fulfilling requirements like fine cloths, domestic gadgets, TV sets,
telephone, car, scooter, refrigerator, etc.
• Increase in level of employment and income.

ROLE IN NATIONAL DEFENCE
• Produces military hardware like weapons, tanks aeroplanes,
war-ships, helicopters, guns etc.
• Fulfill the national objective of self reliance in defense material
EXPORT PROMOTION
• Increased production, promoted export of engineering goods,
automobiles etc.
• Greater scope of export for labour intensive industries
IMPORT SUBSTITUTION
• Production of close substitute of imported good in the domestic
country.
• Less dependence on foreign countries.

PROBLEMS OF INDUSTRIAL DEVELOPMENT
INTRODUCTION
During the period of 70 years since independence(1947-2017),
rate of industrial growth has been about 5% per annum as against
13% in China. Main problems of industrial development in India
are as follows::
SHORTAGE OF POWER RESOURCES
• Three sources-Electricity, coal, oil.
• Supply of hydro electricity and thermal electricity is far less then
demand.
• Cost of production increases and profit falls.
• Poor quality coal- mainly coal mines are located in eastern part.

INSUFFICIUENT CAPITAL
• Low income results in almost zero saving capacity so also their
investment.
• Saving in the form of real estate, jewellery etc.
• Large and medium sized industries meet their capital needs from
stock market, financial institutions, banks etc.
INSUFFICIENT ECONOMIC INFRASTRUCTURE
• Means of transportation like roads, motor transport, railways,
waterways, airways etc. are not fully developed.
OLD PLANT AND MACHINERY
• Industries are deprived of modern machinery.
• Due to this production cost is high and quality of products is low.
• Fail to compete with foreign countries.

PROBLEMS OF RESEARCH AND INNOVATION
• No improvement in the quality of products due to lack of research
and innovation.
• India spends 0.88% of their GNP while most of developed
countries spend more than 2% of their GNP on research and
development.
INDUSTRIAL SICKNESS
• Fail to repay loans and interest and provident fund to laborers.
• Large stock due to lack of sale of output
REGIONAL INEQUALITY
• More tHan 50% of the industries are located in Maharashtra,
Gujarat, Karnataka.
• These states contribute 60% of total industrial output.

DEFECTIVE INDUSTRIAL PRODUCTION STRUCTURE
• Large amount of investment have been made in industries
producing white goods like AC, TV sets etc.
• Very little investment has been made in wage goods like coarse
cloth, sugar, vegetable oil has not increased much.
UNDER UTILISATION OF PRODUCTION CAPACITY
• Less production and rise in production cost.
• E.g. Industrial disputes, shortage of power etc.
INDUSTRIAL DISPUTES
• Strikes and lockouts- because of disputes between trade union
and employers.
• It results in fall in production and profit.

HUMAN CAPITAL
• Illiterate and unhealthy laborers and lack in technical skills.
• Low efficiency of migratory laborers.
LESS DEVELOPMENT OF SMALL INDUSTRIES
• Contribution of micro, small and medium enterprises in total
industrial production was 45% and of large industries was 55%.
INDUSTRIAL POLLUTION
• By not installing the pollution control equipment causing air as
well as water pollution.
• It is giving birth to many diseases and is very harmful for all
living creatures.

Role & Problem of industrial development in india

Role & Problem of industrial development in india

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