Today India is one among the top ten industrial nations of the world. Industrial development has changed India’s economic status from underdeveloped to developing country. Industrial development today is considered as prerequisite for modern economic development. That is why all countries of the world, whether big or small, rich or poor and developed or developing are channelising their resources to promote rapid industrialisation. Before the rise of the modern industrial system, India had a flourishing state of cottage and household industries and Indian manufacturers had a worldwide market. Indian muslin, cotton and silk fabrics, calicoes, artistic wares etc were in great demand all over the world.
The real beginning of modern industries in India is recognised with the establishment of cotton textile industry at Mumbai in 1854. But post independence, India witnessed a change in character and purpose of industrialisation. Identifying the need of a well-developed industrial sector, in 1951 India’s Prime Minister Jawaharlal Nehru announced that India had to become industrialised as fast as possible. The policy-makers did everything they could to improve the state of the manufacturing sector in India.
The industrial growth before 1991 can be categorised into three main time periods i.e. (i) Phase-I (1950-65) Major industries were sugar, cotton textiles, jute, iron and steel smelting, chemicals, petroleum, non-metallic mineral products, basic metals etc. (ii) Phase-II (1965-80) Major industries were basic goods, capital goods, high technology industries, ferrous metal, construction material and mechanical engineering industries. (iii) Phase-II (1980-91) Major industries were consumer durables, export-oriented industries, modern technology based industries, petroleum products, non-electric machinery, food beverages etc.
In this 21st century when science and technology have gained unquestionable supremacy, the level of the industrial development of a country has become the yardstick to be applied to judge its actual development.
To realise the dream of development of industries, Indian Government adopted certain industrial resolutions and Five Year Plans. The First Industrial Policy Resolution, 1948 contemplated a mixed economy, reserving sphere for the private sector and another for public sector.
Then it was Industrial Policy Resolution, 1956 which laid down new classification of industries (Schedule A, Schedule B and Schedule C), fair and non-discriminatory treatment of private sector, encouragement of village and small industries and removing regional disparities. This policy was based upon Mahalanobis model of growth which suggested that there should be an emphasis on the heavy industries and led the Indian economy to a higher growth rate.
The 1956 Resolution was followed by Industrial Policy 1977, 1980 and the most important Industrial Policy of 1991. The 1991 policy envisages to culminate the gradual liberalisation since 1956 and unshackle the Indian economy from cobwebs of bureaucracy, introduce liberalisation, remove restriction on direct foreign investment and free the domestic entrepreneur from restrictions of Monopolistic and Restrictive Trade Practice (MRTP) Act. Hitherto a closed economy, Indian economy was opened to the forces of market and elements of globalisation.
The abolition of industrial licensing, dismantling of price controls, dilution of reservation of small-scale industries and virtual abolition of monopoly law enabled Indian industry to blossom. Apart from industrial policy, the Five Year Plan devised by the Planning Commission also shaped industrial development in India. Though the First Five Year Plan was predominantly agricultural plan, industry was not totally neglected. Hindustan Machine Tool, Integral Coach Factory, UP Government Cement Factory etc were set up during the First Five Year Plan.
The tempo of industrial development gathered momentum during Second Five Year Plan which adopted Mahalanobis Model with major industries like Rourkela Steel Plant, Bhilai Steel Plant etc. The subsequent Plans also focused on industries but were without considerable success. It was the Eighth Five Year Plan which followed Industrial Policy Resolution 1991 and the popular reform liberalisation, privatisation and globalisation ignited the fire for the industrialisation in India which continued in all the subsequent Plans.
Small-scale industry is recognised by the Government of India as a priority sector as it paves way for rapid industrialisation, prerequisite for balanced growth, employment intensive and export earning. Measures towards its development have been taken since First Five Year Plan and received special emphasis in Eleventh and Twelfth Five Year Plans. The Twelfth Five Year Plan envisaged capacity building, credit guarantee, launch of venture capital etc for Micro, Small and Medium Enterprises (MSMEs).
National Manufacturing Policy also envisaged developed National Investment and Manufacturing Zone (NIMZ) as integrated industrial townships with state-of-the-art infrastructure and land use.
Manufacturing sector is critical to Indian economy as it promises to provide gainful productive employment, shift of surplus agricultural labour to industries, reduce import bill hence, rationalise fiscal and current account deficit along with earning in export sector through promotion of Special Economic Zone.
In 2015, the NDA Government announced Make in India scheme, a major national initiative designed to foster innovation, enhance skill development, protect intellectual property and build best in-class manufacturing infrastructure.
But Make in India cannot be sustained without encouragement to entrepreneurship; hence, Startup India took birth. To encourage entrepreneurship amongst Scheduled Caste, Scheduled Tribe and women, Startup India was launched which also promised additional boost to MSME sector and add to the MUDRA scheme for refinancing micro finance sector.
Though industrialisation in India has come a long way from planning age to NITI Aayog (ensuring Cooperative Federalism), Revolutionary Industrial Policy, Manufacturing Policy, but still there is way ahead to go. The Economic Survey has categorised India as refuge of stability and outpost of opportunity.
This stability and opportunity should be realised at the earliest to ensure Indian manufacturing sector shine brightly in the international domain. The culture of dependency (Import) should shift to culture of innovation and scientific spirit as envisaged in our fundamental duties.
Education has to be linked with industries (vocational education) so that Indian youths are skilled, without which indigenisation of industry would remain a distant dream. The new mantra of industrialisation in 21st century should be to inculcate skills along with a hospitable and encouraging environment to improve ease of doing business in India.