India's Industrial Policy and Economic Reforms

Industrialization involves both the adoption of superior production techniques and the implementation of modern organizational and technological methods to increase efficiency.

Sickness in industrial units is typically caused by internal factors like poor management, obsolete technology, or external factors like labor disputes and raw material shortages. Capital account convertibility is a macroeconomic policy, not a direct cause of individual unit sickness.

The industrial sector is the largest consumer of commercial energy globally due to the high energy requirements of manufacturing, processing, and heavy machinery.

Following the liberalization policies in India, most industries were delicensed. However, hazardous chemicals, tobacco products, and aerospace/defense industries often remain under licensing requirements for safety or regulatory reasons. Clothes (textiles) do not require an industrial license.

Industry is broadly defined as an economic activity that includes the production of goods, the extraction of minerals, and the provision of services, all of which contribute to economic value.

Industrialisation is the process of manufacturing consumer goods and capital goods and of building infrastructure in order to provide goods and services to both individuals and businesses. As such Industrialisation plays a major role in the economic development of underdeveloped countries with vast manpower and varied resources.

Industries require a lot of cheap labour.

The industries requiring large quantities of heavy raw materials are located near the places having abundant availability of that raw materials. This is the basic step taken by any industries to reduce transportation cost of raw material.

While energy consumption varies by region, the industrial sector is widely recognized as accounting for a significant portion of global commercial energy usage, with 70% being the commonly cited figure in many textbooks.

Industries tend to locate in areas that have high population. The main reason is to get cheap labour in huge quantity.

Surat is globally famous for its diamond cutting and polishing industry, which relies heavily on a large pool of skilled labor specialized in this craft.

Transport is essential to procure raw materials from the sources to the industry and transfer the finished products to the market. Even we can say transport is the back bone of any industry without transport we cannot produce our product in market for sale.

Capital/Money is essential to set up any industry. If we have good plan or idea for business but we do not have capital/money, we are not able to setup industry or implement our idea.

As trade increased, with the help of it, newer business buildings grew up. With the shortage of area and also because of easier communication, they started growing complexes. A cooperative society that lends money collected from its members at low rates of interest also grew up to help for the time being. Banks also grew as did international trade to keep the growth and development of the country in check.

Trade is buying and selling of goods and services between two individual or more than that. It is basic economic concept involving the buying and selling of goods and services, with compensation paid by a buyer to a seller, or the exchange of goods or services between parties.

The various types of migration are mainly international which means outside the nation, and national which means within a nation. There are others types of migration too such as, forced, long term, short term, voluntary, permanent etc.

Urbanisation means an increase in the proportion of people living in urban areas compared to rural areas. People started moving in the urban areas as there grew more factories during Industrialisation and hence employment in those factories grew. With industrialisation, trade improved among countries too.

To call a place as "Urban", some conditions are required which we do  not see in rural place or in township.

• Roads, railways, airways are all modes of transportation. Vehicles like motorbikes, cars, buses etc ply on roads. The vehicles may be publicly owned or private. Railways are owned by the Central Government and form a vast network. Airways has privrate players and a public sector player Air India.
  

Migration is essentially the movement of human capital in search for better opportunities, living conditions,etc. Urbanization is the movement of people from rural to urban areas. 

Social harmony means that the people who live around and near each other get along and cooperate to make everything better for everyone exchanging each other's social and cultural customs and traditions.

There are some disadvantages that started growing due to urbanisation. The more the number of people in the area, the newer the ideas and technologies gets adopted. These eventually made urban population use cars more which ultimately leads to traffic jams. Also, with increase in industries and factories, the pollution too increased. With an increase in the base salary, the number of poor people also increased increasing the slum area in urban places.

Urbanisation means migrating from rural to urban areas. This also means, the new population will adopt newer ideas, updated technologies, newer facilities etc. Adopting these new things are an added advantage over and above the occupation of the newly migrated ones.

Social harmony means that the people who live around and near each other get along and cooperate to make everything better for everyone exchanging each other's social and cultural customs and traditions. So, the harmony gets disturbed or disrupted when any one of the parties follow themselves into a crime.

There will be lesser social harmony as there would be a mixture of many different kind of people. Modernization would be slowed down as there will be many more people to cater to to provide basic needs. 

The Industrial Policy Statement was issued in 1991, but it is typically referred to as the New Industrial Policy. Option D is marked as the incorrect combination, likely because the 1991 policy is a major reform package rather than just a 'statement'.

Statement I is correct as the policy aimed to boost industrial development. Statement II is incorrect because India's balance of trade has frequently been negative due to high imports, especially of oil and capital goods.

The 1991 policy aimed to increase competition by opening the Indian market to foreign investment and reducing trade barriers, not by limiting exposure to foreign competition.

In Indian industrial classification, units with very low investment in plant and machinery (historically up to 5 lakhs) are categorized as 'tiny units'.

Industrial production targets in India have often been missed due to a combination of technical issues, power shortages, financial constraints, labor unrest, and inadequate planning.

Multilateral trade agreements are treaties between three or more countries to reduce trade barriers and facilitate commerce between the participating nations.

A sick industrial unit is defined by its inability to maintain sustained production and profitability, leading to financial distress and operational failure.

HMT stands for Hindustan Machine Tools, a major Indian state-owned manufacturing company.

Rural industrialization in India faces systemic hurdles including lack of capital, poor infrastructure, and reliance on outdated production techniques.

The 1991 policy shifted the focus of the public sector toward strategic, high-tech, and essential infrastructure industries, while reducing state involvement in non-essential commercial sectors.

At the time of independence, a vast majority of India's population (around 72%) was dependent on agriculture. By 2004-05, this figure had decreased to approximately 54% as the economy diversified.

The 1991 Industrial Policy aimed to liberalize the economy. It abolished the Phased Manufacturing Programme (PMP) as it was considered a restrictive practice for new projects.

The Mandatory Convertibility Clause, which allowed financial institutions to convert loans into equity, was abolished under the 1991 reforms to encourage private investment.

Post-1991, India moved toward trade liberalization, which included significant reductions in custom duties to integrate with the global economy.

The 1991 policy significantly increased the limit for foreign equity participation in high-priority industries to 51 percent to attract foreign capital.

The
industrial sector depends on the agricultural sector because
agriculture sector provides food and other products for the consumption purposes of industrial sector as well as provides raw materials for the
development of agro-based industries of the economy and provides market
for industrial products.

The 1991 policy shifted from public sector dominance to private sector participation. It involved de-reservation, not further reservation, of industries for the public sector.

The correct statement is that a large number of industries face under utilization of production capacity. Others are incorrect because the
incremental capital-output ratio has been increasing over the planning
period and region-wise industrial development is quite imbalanced.

Abolition of industrial licensing and promoting private sector participation are core components of the industrial policy reforms initiated in 1991.

The 1991 policy abolished various registration requirements (like DGTD) to simplify procedures, but it actively encouraged, rather than abolished, Foreign Direct Investment.

The 1991 policy redefined the role of the public sector, focusing it on strategic, high-tech, and essential infrastructure areas while reducing its presence in other sectors.

Industries are commonly classified by their scale (size) and by the nature of their output (end-use, such as consumer or capital goods).

A
strategy for development of heavy industry is sometimes preferred for a developing
economy because it can provide a strong base for rapid
industrialization.

Based on size, industries are categorized by the scale of their investment and operations into large, medium, and small-scale industries.

The Board for Industrial and Financial Reconstruction (BIFR) was established to identify and rehabilitate sick industrial companies.

Industrial sickness is typically caused by internal factors like mismanagement or external factors like market changes. Strikes and lockouts are labor issues, not inherent causes of long-term industrial sickness.

Industrialization is the process of economic and social change that transforms a society from an agrarian one into an industrial one.

Industrial policies generally aim for multiple goals, including sustainable growth, employment generation, and efficient resource allocation.

Historical data on Indian industrial growth during the planning period (pre-1991) indicates an average annual growth rate of approximately 6.2 percent.

Board for Industrial and Financial Reconstruction (BIFR) became operational on 15th  May, 1987 is an agency set up by the Government of India, in order to tackle the problem of industrial sickness through financial inclusion. 

Industrialisation is the period of social and economic change that transformed human being from an agrarian society into an industrial society, involving the extensive re-organisation of an economy for the purpose of manufacturing. It means development of industries in a country or a region in a large scale.

The value added by the industrial sector in the GDP was about 26% in 2013−14.

This statement is correct that during the planning period, the structure of Indian industry has shifted in favour of basic and capital goods and intermediate sector. Others are wrong because the industrial pattern on the eve of Independence was imbalanced and very few big industrial units in India are sick.

The eleventh five-year plan had targeted 10% p.a. growth in industrial production, however, 7.4% p.a. of growth in industrial production was achieved during the eleventh plan period.

The 1991 Industrial Policy aimed to liberalize the economy by simplifying or abolishing restrictive regulations like the MRTP Act and FERA to encourage competition and foreign investment.

Industrial licensing was abolished for most industries in 1991, except for a few specific sectors related to security, safety, or public health, such as alcohol, cigarettes, and explosives. Electronic goods are not on the list of industries requiring a license.

While the percentage of the population dependent on agriculture has declined, the absolute number of people engaged in agriculture and allied activities has continued to increase due to population growth.