Industrial Development in India - Class XI

The Value Added Method involves both identifying sectors and calculating the net value added by each to determine the total GDP contribution.

Industrially developed nations typically have a higher per capita income due to higher productivity and value addition in their economies.

Over the decades, the industrial sector's contribution to GDP has generally improved as the economy shifted from agrarian to industrial and service-based.

Intermediate goods are goods used as inputs in the production of other goods, such as chemicals, plastics, and rubber.

Consumer goods are final products purchased by individuals for personal use, such as watches, beverages, and fibers.

The public sector in India grew significantly in size and became highly diversified across various industries to drive development.

The pattern of industrial development in India post-independence is often described as lopsided because it favored certain regions or heavy industries over others.

The performance of the public sector in India has been widely criticized as poor due to inefficiencies, lack of profitability, and bureaucratic hurdles.

After agriculture, the small-scale and cottage industry sector is the largest provider of employment in India.

The first cotton cloth mill in India was established in 1818 at Kolkata. And the 2nd mill established by KGN Saber in 1854 laid the base for the further development. It is since then India is involved into cotton and textile industry. Now this sector contributes 4% of the GDP, and our country is the second largest producer of fibre in the world. 

Small Industries Development Corporation Limited (SIDCO) has been set up by the Govt. of Tamilnadu, with the specific objective of playing a catalytic role in the promotion and development of Small Scale Industries.

Small Industries Development Organi-sation (SIDO) an apex body at Central level for formulating policy for the development of Small Scale Industries in the country, is playing a very constructive role for strengthening this vital sector which has been proved to be one of the pillars of the economy of the country.

Beacause the prices of capital are higher than that of labour hence the technique of production used should be labour intensive. 

The state played a major role in India's industrialization by providing massive capital investment and promoting key industries.

After independence, India adopted the mixed economy principle, but a high stress on the Public sector was given. The government could not manage the debt and inflation and hence we adopted the LPG i.e. Liberalization, Privatization, and Globalization under the new industrial policy in 1991. 

The Industrial Policy Resolution of 1956 was a cornerstone of the Second Five Year Plan, which focused on heavy industrialization.

The Industrial Policy Resolution was launched in 1956.

Small-scale industries are labor-intensive primarily because they lack the capital to invest in expensive, automated machinery.

Under the license raj, industries required licenses for establishing units, expanding production, and diversifying, which were all part of the regulatory framework.

A key rationale for promoting small-scale industries is their potential to grow into larger, more established enterprises over time.

Serious policy focus on export promotion in India began to gain significant momentum in the mid-1980s.

The government promoted regional equity by requiring licenses for new industries, which allowed them to steer investment toward backward regions.

The 1956 Industrial Policy Resolution classified industries into three categories based on the extent of state control.

Protectionist techniques included quotas, tariffs, and the reservation of specific products for small-scale production to shield them from large-scale competition.

Small-scale sector units were often given exemptions from certain location restrictions to encourage their growth and flexibility.

The New Industrial Policy, which marked a major shift towards liberalization and deregulation in the Indian economy, was announced in July 1991.

Under the reservation policy for small-scale sectors, larger units could produce reserved items only if they obtained an industrial license and committed to a significant export obligation (typically 50%).

The 1991 policy aimed to abolish industrial licensing for most sectors, but it maintained specific restrictions for industries reserved for the public sector, small-scale sectors, and those with specific local or environmental constraints.

The Industrial Policy Resolution of 1956 emphasized the state's role in industrial development, significantly expanding the scope and dominance of the public sector in the Indian economy.

The 1991 Industrial Policy significantly reduced the number of industries reserved exclusively for the public sector to eight, down from the previous much larger list.

The sugar industry in India is historically referred to as the child of protection because it grew under the shelter of protective tariffs and government support.

The 1991 policy drastically reduced the number of industries requiring compulsory licensing to 18 initially, which was later reduced further to 6.

The Industrial Policy Resolution of 1956 was a landmark policy statement presented by Prime Minister Jawaharlal Nehru to the Parliament.

The industrial sector is a major consumer of commercial energy in India, accounting for approximately 50% of the total consumption.

The New Industrial Policy, which initiated the liberalization of the Indian economy, was announced in 1991.

Handicrafts are often cited in economic literature as having higher labor productivity compared to other traditional village industries like khadi, due to the specialized skill set involved.

At the time of the policy implementation, there were 326 items reserved for exclusive manufacture in the small-scale sector.

In 2016, the Union Cabinet approved a Memorandum of Understanding between India and Singapore to foster cooperation in the field of industrial property, such as patents and trademarks.

Small-scale industries are a vital part of the Indian economy, contributing approximately 40% to the gross industrial value added.

As industrialization progresses, the demand for capital goods (machinery and equipment) increases relative to consumer goods to support further production and infrastructure development.

Historically, Indian industry has been characterized by labor-intensive methods, resulting in a relatively low amount of capital employed per worker.

Due to lower purchasing power and limited infrastructure in many rural areas, the market for industrial goods has historically been narrow.

Higher industrial output generally leads to increased productivity and economic growth, which in turn results in higher income per head.

After independence, India's employment was heavily concentrated in both small/household industries and the emerging large-scale industrial sector.

Retrogression in this context refers to a situation where the growth of luxury or elite-oriented consumption goods outpaces the growth of essential goods needed by the masses.

Capital goods industries are those that produce machinery, machine tools, and equipment used to manufacture other goods.

Unlike agriculture, which is heavily dependent on weather and nature, the industrial sector is largely independent of such vagaries.

Over the various planning periods in India, the growth rate of industrial output is generally considered to have been satisfactory, despite various challenges.

Basic goods industries are those that produce raw materials and intermediate products like steel, iron, cement, and fertilizers, which serve as the foundation for other industries.

The capital-output ratio in the Indian economy has generally trended upward over time, reflecting a rise in the amount of capital required to produce a unit of output. This indicates a decline in capital efficiency as the economy has developed.

Indian industries have historically faced issues with underutilization of capacity due to factors like power shortages, raw material bottlenecks, and demand constraints. This is a common structural issue in developing industrial economies.

Post-independence, the licensing system and protectionist policies often led to the concentration of economic power in large business houses. This trend of dominance persisted for several decades until the liberalization reforms.

The Mahalanobis model, which formed the basis of the Second Five-Year Plan, prioritized the development of heavy and capital goods industries to build a self-reliant industrial base.

India has historically been characterized as a high-cost industrial economy due to factors like inefficient infrastructure, high input costs, and protectionist trade policies that limited competitive pressure.

Bhilai, Rourkela, and Mirzapur (often associated with industrial hubs) are recognized locations for various industrial plants in India. Therefore, all listed options are valid.

The industrial strategy post-independence focused heavily on shifting the structure toward basic, capital, and intermediate goods to reduce dependence on imports and build a strong domestic industrial foundation.

The strategy during 1951-1990 was characterized by the public sector taking the lead in developing heavy, basic, and capital goods industries, as these were seen as essential for long-term growth.

Since 1951, the government has actively promoted small-scale industries through various incentives, leading to a significant increase in their number and contribution to the economy.

The industrial sector in India has evolved from a limited base to a broad-based structure that incorporates modern technology and diverse production capabilities.

The government supported small-scale and cottage industries through both financial assistance (loans) and protective measures, such as reserving specific items for exclusive production by these sectors.

The number of products reserved for the small-scale sector was significantly reduced over time as part of liberalization. By October 2008, the number of reserved items had been brought down to 21.

Foreign direct invest helped India in exports, imports and import of money from outside. FDI stands for Foreign Direct Investment. It is also known as 'cross
border investment'. It plays an important role in the global economy. It
is a type of investment made by a resident in one economy in a business organisation which belongs to another country.

Small-scale units are the most vulnerable to market fluctuations, lack of credit, and competition, which leads to a higher proportion of them becoming 'sick' or non-viable compared to larger, more resilient firms.

The Industrial Policy of 1977 placed a renewed and specific emphasis on the development of cottage and small-scale industries, particularly in rural areas, to promote employment.

The major proportion of sick industrial units are small units. Small-scale industries face higher vulnerability due to resource constraints, limited access to credit, and operational challenges.

While capital and infrastructure are issues, a limited domestic market (due to low purchasing power) has historically been a major hurdle for the steady growth of industrial production in India.

Industrial Policy development between 1948-88 saw relaxation in both MRTP (Monopolies and Restrictive Trade Practices) and FERA (Foreign Exchange Regulation Act) provisions. These relaxations were part of liberalization trends.

The talent search and scholarship program for nuclear power training was initiated in 1957 as part of India's early efforts to develop its atomic energy capabilities.

Industrialization refers to a period where high growth rate in the economy can be achieved by industrial application which involves adoption of technology that supports superior techniques of production as well as use of modern techniques of management and organisation.

On 18 May 1974, India performed its first successful nuclear bomb test "Smiling Buddha” . 

The bomb was detonated on the army base, Pokhran Test Range, situated in Rajasthan which was regulated by the Indian Army under the supervision of several key Indian generals.

The new industrial policy was introduced in 1991 which includes the latest industrial reforms where many requirements of industrial licensing were abolished, restrictions on investment and expansion were removed, and easy access to foreign technology and foreign direct investment was facilitated so that Sustainable growth in productivity could be maintained with greater employment and optimum utilization of resources.

Mahalanobis model, an economic development model developed by the Indian Statistician Prasanta Chandra Mahalanob is in  1953.Second five year plan was based on the Mahalanobis model. It
was made for the duration of 1956 to 1961. Main objective of the second
five year plan was the industrial development of the country.  The plan
was successful and achieved growth ratee of about 4.1%.

At
the end of the plan period in 1956, five Indian Institutes of
Technology (IITs) were established as major technical institutions. IIT(s) are autonomous public institutions established by the Government of India.
Main objective was to motivate technological up-gradation in the economy. 

True. 

The new industrial policy was introduced in 1991 which includes the latest industrial reforms were many requirements of industrial licensing abolished, restrictions on investment and expansion were removed, and easy access to foreign technology and foreign direct investment was facilitated. 

The failure to achieve industrial production targets is typically multifaceted, involving technical issues, infrastructure bottlenecks (power/finance), and poor planning, making 'all of the above' the correct choice.

Disinvestment means
disposal of public sector's unit's equity in the market or in other
words selling of a public investment to a private entrepreneur. It means transfer of ownership or management of an enterprise from the public sector to the private sector. It may result in better management of the enterprises. It also encourages entrepreneurship.

According
to Section 7 of Micro, Small and Medium Enterprises Development Act,
2006, in the case of industry specified in the First Schedule to the
Industries (Development and Regulation) Act, 1951 where investment in
plant & machinery does not exceed Rs 25 lakhs are classified as micro enterprise. Micro enterprise is generally defined as a type of small business firms which can employ a few number of people.

A recession is a period during which aggregate output declines. Recession can be defined as a part of the business cycle contraction. In this phase, overall economy experiences downfall. Other indicators such as GDP, investment spending, capital utilization, etc also tend to decline.

Small-scale
industry under Industry Development and Regulation act, 1951, is one with an investment up to 1 crore in
plant and machinery, excluding land and building. Small scale industries can be defined as those industries where manufacturing activities take place in a very small scale.

The new industrial policy was introduced in 1991 which includes the latest industrial reforms where many requirements of industrial licensing were abolished, restrictions on investment and expansion were removed, and easy access to foreign technology and foreign direct investment was facilitated so that Sustainable growth in productivity could be maintained to transform India in to a major player globally and to attain international competitiveness through globalization.

The 1991 New Industrial Policy was a landmark reform that abolished industrial licensing for most sectors, retaining it only for a small list of industries related to security, strategy, and environmental concerns.

Presently industrial licensing is not applicable for electronic goods. Industrial license refers to the license which needs to be issued when an industry is to be set up. Industrial licensing is applicable for goods like cigarettes, industrial explosives and alcohol.