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The development of various benefits of economic growth in a specific field or sector of the broader industry refers to industrial growth. The industrial sector is a vital part of the economy of a developing country such as India. After the country’s independence, the government of India highlighted the importance of industrialisation for its long-term economic development and preservation for the benefit of the Indian citizens. This article discusses in detail the industrial sector, the confederation of Indian industry, and the high fiscal deficit.
Industrial Growth
In 1956, the Industrial Policy Resolution (IPR) laid out the blueprint for industrial development. The construction of heavy industries highlights the 1956 program, with the public sector taking the lead in this field. During the second and third plan periods, after the adoption of the Industrial Policy Resolution 1956, there was a significant increase in industrialisation. The industrial sector contributed the most to this expansion. According to the second advance estimate for FY21, the industrial sector gross value added at current prices expects to be US$ 348.53 billion.
The following are the eight primary causes behind India’s poor industrial growth:
Political Factors
During the pre-independence period, the industrial policies introduced by the British were not in the country’s interests. As a result, India primarily remained a producing country, which slowed the country’s early industrial development.
Poor Performance of the Agricultural Sector
India’s industrial development is highly dependent on the agricultural and industrial sectors’ success. As a result, a poor agricultural performance due to biological variables is another critical element contributing to the country’s industrial slowdown.
Gaps Between Targets and Achievements
Except for the 1980s, the industrial sector could not meet its overall targets during the planning period. The industrial sector could only meet its targets during the Sixth and Seventh Plans. In the early 1990s, the industrial sector failed miserably to meet its goals.
Lack of Skilled and Efficient Personnel
The country has a shortage of experienced technical and efficient personnel needed for industrial development. Inefficiency and insincerity among individuals working in the industrial sector have resulted in massive waste in the industrial sector.
Elite Oriented Consumption
Large industrial houses have developed a strong tendency to make wealthy men’s items in recent years. As a result, the manufacture of “white goods” such as refrigerators, washing machines, air conditioners, and other luxury goods have increased dramatically.
The Public Sector’s Poor Performance
Despite achieving a significant expansion throughout the planning period, public sector enterprises’ performance remained dismal. As a result, public sector investment failed to generate the essential surpluses for continued investment in India’s industrial sector.
Regional Imbalances
The concentration of industrial development in a few states has created a new challenge of imbalances in the country’s industrial sector. The western area, which includes Maharashtra and Gujarat, has achieved the highest level of industrial growth while many of the eastern states are lagging behind.
State Controls Regime
Inefficiencies in the manufacturing sector have resulted in the continuation of regional state regulations and regulatory mechanisms, slowing India’s industrialisation. However, the government has taken significant steps to implement required economic reforms in India’s industrial sector’s public and private sectors in recent years.
A Brief View of the Confederation of Indian Industry
The confederation of Indian Industry (CII) collaborates with industry, government, and civil society to establish and maintain an environment favourable to India’s development through advising and consultative processes. The confederation of Indian industry is a non-profit, industry-led, and managed organisation with over 9000 members from the commercial and public sectors, including SMEs and multinational corporations, and an indirect membership of over 300,000 businesses from 294 national and regional industries organisations. The confederation of Indian industries influences India’s growth path and is working to alter the Indian industry’s participation in national development.
The confederation of Indian industry helps businesses identify and implement corporate citizenship initiatives. Corporate activities for integrated and inclusive growth are carried forward through partnerships with civil society organisations in various domains, including affirmative action, livelihoods, diversity management, skill development, women’s empowerment, and sustainable development.
What is High Fiscal Deficit?
Fiscal deficit is defined as the excess of total disbursements from the Consolidated Fund of India, excluding debt repayment, over total receipts into the fund during a financial year. A high fiscal deficit is a difference between a government’s revenue and its spending.
Conclusion
Sound industrial policy is the process of speeding up learning within a country’s industrial ecosystem, allowing its businesses to enhance their competitiveness more quickly than businesses in other countries. Industrial growth is preferred over primary and secondary growth since it is not virtual like services and provides greater returns than agriculture. The eight factors as mentioned above are the primary reasons for India’s poor growth in the industrial sector, and this will continue to be so if not taken the proper steps. As India is a developing country, the industrial sector plays a very crucial role in its growth.
