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Industrial Policy and Its effects on Industrial growth. Lesson-1 Presented By: Roman Saini
In This Lesson Industrial Policy Introduction Industrialization In India Under British Rule
Industrialization The process by which an economy is transformed from primarily agricultural to one based on the manufacturing of goods is called as Industrialization. Industrialization has a vital role to play in the economic development of underdeveloped and developing countries. . The prosperity which developed countries witnessing today is the result of Industrialization . . The Industrial Revolution traces its roots to the late 19th century in Britain. Prior to the revolution, fabrication and processing were generally carried out by hand in people's homes.
Industrialization .With the spread of Industrial revolution, we have witnessed major technological changes, growth of factories, and the making of a new industrial labour force. The advent of steam engine led to different types of machinery. Growth of the metals and textiles industries allowed for the mass production of basic personal . and commercial goods As manufacturing activities grew, transportation, finance and communications industries expanded to support the new productive capacities. Industrial revolution led to unprecedented expansion in wealth, increased labor specialization, increased urbanization, migration of people from rural to urban areas etc
Industrialization Industrialization In India Under British Rule India had world-wide market before the advent of modern industrial system Since ancient times, Indian cotton textiles, gems and jewels, and spices like pepper and cardamom, ivory and sandalwood continued to make trade a lucrative business. Armenian and Persian merchants took the goods from Punjab to Afghanistan, eastern Persia and Central Asia Silk and cotton goods from India dominated the international market in textiles. Muslin and calicoes were in great demand across the world. A variety of Indian merchants and bankers were involved in the network of export trade financing production, carrying goods and supplying exporters.
Industrialization All these have changed with the arrival of European companies to the Indian subcontinent. India could not develop a sound industrial base under the colonial rule. .Industrial revolution led to the decay of Indian handicrafts and industrial revolution was successful in de-industrializing India. The intent behind colonial policy was to reduce India to the status of a mere exporter of important raw materials for the upcoming modern industries in Britain and, second, to turn India into a market for the finished products. . The decline in handicraft industries produced massive unemployment in India and it also made Indian market deprived of local goods.
Industrialization In 1813, the British Government began imposing high taxes on the import of Indian textiles. On the other hand, British goods had virtually free entry into India . The results were evident: Between 1814 and 1835 British cotton goods exported to India rose from one million yards to thirty-one million yards; while the value of Indian cotton goods exported in the same seventeen years fell to one-thirteenth its original size . In 1860s, with the increased export of raw cotton Indian weavers were starved of supplies and forced to buy raw cotton at exorbitant prices. . Factories in India began production, flooding the market with machine- goods and it was hard for Indian weavers to compete with them.
Industrialization This policy of British, exporting raw material and importing finished goods adversely affected Indian Economy. . This along with devastating famines, over taxation and diversion of revenues back to England were the primary factors for the deteriorating condition of the Indian crafts community. . During the second half of the nineteenth century, modern industry began to take root in India but its progress remained very slow. . The cotton textile mills, mainly dominated by Indians, were located in the western parts of the country, namely, Maharashtra and Gujarat, while the jute mills dominated by the foreigners were mainly concentrated in Bengal. .
Industrialization .Subsequently, the iron and steel industries began coming up in the beginning of the twentieth century The Tata Iron and Steel Company (TISCO) was incorporated in 1907. A few other industries in the fields of sugar, cement, paper etc. came up after the Second World War. 'But, capital goods industries were lacking in India. There was hardly any capital goods industry to help promote further industrialisation in India to help promote further industrialisation in India .Few manufacturing industries were not at all enough to fill the gap of country's traditional handicraft industries which were displaced
Industrialization Moreover, the growth rate of the new industrial sector and its contribution to the Gross Domestic Product (GDP) remained very small. Another significant drawback of the new industrial sector was the very limited area of operation of the public sector. This sector remained confined only to the railways, power generation, communications, ports and some other departmental undertakings Overall, by the end of British rule, Industrialization was marked by low capital intensity, limited development of medium sized factory enterprises and imbalance between consumer and capital goods industries.