<–2/”>a >Under Industrial Policy, keeping in view the priorities of the country and its Economic Development, the roles of the public and private sectors are clearly decided.
Under the New Industrial Policy, the industries have been freed to a large extent from the licenses and other controls. In order to encourage modernisation, Stress has been laid upon the use of latest technology.
A great reduction has been effected in the role of the public sector. Efforts have been made to encourage foreign Investment. Investment decision by companies has been facilitated by ending restrictions imposed by the MRTP Act. Similarly, Foreign Exchange Regulation Act (FERA) has been replaced with Foreign Exchange Management Act (FEMA).
Some important points of the New Industrial Policy are as follows:
Abolition of Licensing
Before the advent of the New Industrial Policy, the Indian industries were operating under strict licensing system. Now, most industries have been freed from licensing and other restrictions.
Freedom to Import Technology
The use of latest technology has been given prominence in the New Industrial Policy. Therefore, foreign technological collaboration has been allowed.
Contraction of Public Sector
A policy of not expanding unprofitable industrial units in the public sector has been adopted. Apart from this, the government is following the course of Disinvestment in such public sector undertaking.
MRTP Restrictions Removed
Monopolies and Restrictive Trade Practices Act has been done away with. Now the companies do not need to seek government permission to issue Shares, extend their area of operation and establish a new unit.
FERA Restrictions Removed
Foreign Exchange Regulation Act (FERA) has been replaced by Foreign Exchange Management Act (FEMA). It regulates the foreign transactions. These transactions have now become simpler.
Public sector has played an important role in achieving industrial self reliance. Iron and steel, railway equipment, petroleum, coal and fertilizer industries, have been developed in this sector. These industries were established in industrially backward regions. During the seventh five year plan an emphasis was laid on high technology, high value addition and knowledge based industries like electronics, advanced machine tools and telecommunications.
After independence, systematic industrial planning under different Five Year Plans helped in establishing a large number of heavy and medium industries. The main thrust of the industrial policy was to remove regional imbalances and to introduce diversification of industries. Indigenous capabilities were developed to achieve self sufficiency. It is due to these efforts that India has been able to develop in the field of Industry.
The Industrial Policy Resolution 1956 classified industries into three categories with respect to the role played by the State –
- The first category (Schedule A) included industries whose future development would be the exclusive responsibility of the State
- The second (Schedule B) category included Enterprises whose initiatives of development would principally be driven by the State but private participation would also be allowed to supplement the efforts of the State
- And, the third category included the remaining industries, which were left to the private sector
After Reforms of 1991, the main focus was:
i) reduction in the number of industries reserved for public sector from 17 to 8 (reduced still further to 3) and the introduction of selective competition in the reserved area;
ii) the disinvestment of shares of a select set of public enterprises in order to raise Resources and to encourage wider
iii) participation of general public and workers in the ownership of public sector enterprises;
iv) the policy towards sick public enterprises to be the same as that for the private sector; and
v) an improvement of performance through MoU (memorandum of understanding) system by which managements are to be granted greater autonomy but held accountable for specified results.
Privatization transfer the ownership of public enterprises to private capital, opening of more industrial areas to private capital and enterprise. The main aim of privatisation is to make use of privately owned resources for collective welfare of the people.
Privatization in generic terms refers to the process of transfer of ownership, can be of both permanent or long term lease in nature, of a once upon a time state-owned or public owned property to individuals or groups that intend to utilize it for private benefits and run the entity with the aim of profit maximization.
ADVANTAGES OF PRIVATIZATION
Privatization indeed is beneficial for the Growth and sustainability of the state-owned enterprises.
• State owned enterprises usually are outdone by the private enterprises competitively. When compared the latter show better results in terms of revenues and efficiency and productivity. Hence, privatization can provide the necessary impetus to the underperforming PSUs .
• Privatization brings about radical structural changes providing momentum in the competitive sectors .
• Privatization leads to adoption of the global best practices along with management and motivation of the best human talent to foster sustainable competitive advantage and improvised management of resources.
• Privatization has a positive impact on the financial Health of the sector which was previously state dominated by way of reducing the deficits and debts .
• The net transfer to the State owned Enterprises is lowered through privatization .
• Helps in escalating the performance benchmarks of the industry in general .
• Can initially have an undesirable impact on the employees but gradually in the long term, shall prove beneficial for the growth and prosperity of the employees .
• Privatized enterprises provide better and prompt Services to the customers and help in improving the overall Infrastructure-2/”>INFRASTRUCTURE of the country.
DISADVANTAGES OF PRIVATIZATION
Privatization in spite of the numerous benefits it provides to the state owned enterprises, there is the other side to it as well. Here are the prominent disadvantages of privatization:
• Private sector focuses more on profit maximization and less on social objectives unlike public sector that initiates socially viable adjustments in case of emergencies and criticalities .
• There is lack of transparency in private sector and stakeholders do not get the complete information about the functionality of the enterprise .
• Privatization has provided the unnecessary support to the Corruption and illegitimate ways of accomplishments of licenses and business deals
ADVANTAGES AND DISADVANTAGES OF PRIVATISATION IN INDIA
• Privatization loses the mission with which the enterprise was established and profit maximization agenda encourages malpractices like production of lower quality products, elevating the hidden indirect costs, price escalation etc..
• Privatization results in high employee turnover and a lot of investment is required to train the lesser-qualified staff and even making the existing manpower of PSU abreast with the latest business practices .
• There can be a conflict of interest amongst stakeholders and the management of the buyer private company and initial resistance to change can hamper the performance of the enterprise .
• Privatization escalates price Inflation in general as privatized enterprises do not enjoy government subsidies after the deal and the burden of this inflation effects common man.
Disinvestment of a Percentage of shares owned by the Government in public undertakings emerged as a policy option in the wake of economic liberalisation and structural reforms launched in 1991. Initially, it was not conceived as privatisation of existing undertakings but as limited sales of Equity with the objective of raising some resources to reduce budgetary gaps and providing market discipline to the performance of public enterprises in general.
The Indian Government had undertaken industrial policy reforms since 1980, but the most radical reforms have occurred since 1991, after the severe economic crisis in fiscal year 1990-91. These reforms mainly aimed at enhancing the efficiency and international competitiveness in Indian Industry. Growth in the Industrial Sector is one of the vital figures that affect the Gross Domestic Product (GDP) in India.
India’s industrial policy of 1991 towards liberalisation, deregulation, market orientation has been hailed as ushering in a new era of freedom from government controls, licence raj and red carpetism and one which promises greater prosperity for the Indian people.
Objectives of the Industrial Policy of the Government are –
- to maintain a sustained growth in productivity;
- to enhance gainful EMPLOYMENT;
- to achieve optimal utilisation of human resources;
- to attain international competitiveness and
- to transform India into a major partner and player in the global arena.
Department of Industrial Policy & Promotion is responsible for formulation and implementation of promotional and developmental measures for growth of the industrial sector, keeping in view the national priorities and socio-economic objectives. While individual Administrative Ministries look after the production, distribution, development and planning aspects of specific industries allocated to them, Department of Industrial Policy & Promotion is responsible for the overall Industrial Policy.
Merits of the Industrial policy :
1.To raise the level of industrial efficiency, time consuming hurdles of regulations, licenses and restrictions would either be done away with or made industry friendly. Inflow of FDI and foreign technology transfers would be encouraged.
2.Additions to the supply of investible resources and technology would result in increased industrial production and productivity.
3.With the abolition of licensing system in most industries except 5, the wave of Liberalization-2/”>Liberalization would boost the entrepreneurial skills in the economy.
4.Pruning/de reservatioin of Industries for the public sector would boost professionalism in this secotr. Increased autonomy would usher in dynamism for the betterment.
5.NIP-1991 made a special mention about the role and importance of small scale industries. The state would initiate measures to promote and strengthen small, tiny and village industries, which have large potential to deal with the problems like Unemployment, regional disparities, income inequalities and inflation.
6.As the government of the country is obliged to protect the interest of workers, this policy would lay special emphasis to enhance the welfare and upgrade the economic and social status of the worker. To ensure long-lasting and cordial relations between the workers and the management, they (workers) would participate in the management decisions of the enterprises.
MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of NATIONAL INCOME and wealth. MSMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country.
MSMEs faces a number of problems such as:-
a) Absence of adequate and timely Banking finance.
b) Limited capital and knowledge, non-availability of suitable technology.
c) Low production capacity.
d) High cost of credit.
e) Ineffective Marketing strategy.
f) Lack of skilled man power for manufacturing, services, marketing etc.
g) Lack of access to global markets.
h) Constraints on modernization of expansion.
i) Non availability of skilled labour at affordable cost
j) Follow up with various government agencies to resolve problems due to lack of man power and knowledge etc.
The schemes/ programmes undertaken by the Government and its organizations seek to facilitate/provide:
i) adequate flow of credit from financial institutions/banks;
ii) support for technology upgradation and modernization;
iii) integrated infrastructural facilities;
iv) modern testing facilities and quality certification;
v) access to modern management practices;
vi) Entrepreneurship development and skill upgradation through appropriate training facilities;
vii) support for product development, design intervention and packaging;
viii) welfare of artisans and workers;
ix) assistance for better access to domestic and export markets and
x) cluster-wise measures to promote capacity-building and Empowerment of the units and their collectives.,
The Industrial revolution was a period of great change in the way people lived and worked. It began in Great Britain in the late 18th century and spread to other parts of Europe and North America in the 19th century. The Industrial Revolution was characterized by the development of new technologies, such as the steam engine, the spinning jenny, and the power loom, which led to the rise of factories and mass production. The Industrial Revolution also led to a number of social and economic changes, such as the growth of cities, the rise of a new middle class, and the development of new forms of labor organization.
Industrial Organization is the study of the structure, conduct, and performance of firms in an industry. The structure of an industry refers to the number and size of firms in the industry, the degree of concentration, and the barriers to entry. The conduct of an industry refers to the behavior of firms in the industry, such as pricing, advertising, and research and development. The performance of an industry refers to the efficiency of firms in the industry, the level of innovation, and the prices charged to consumers.
Industrial Policy is a government policy that seeks to promote the development of certain industries or sectors of the economy. Industrial Policies can take a variety of forms, such as subsidies, tax breaks, and regulations. The goal of industrial policy is to increase the competitiveness of domestic firms in the global marketplace.
Industrial Relations is the study of the relationship between employers and employees. Industrial relations issues include collective bargaining, labor unions, and strikes. The goal of industrial relations is to create a system of labor relations that is fair to both employers and employees.
Industrial Strategy is a government plan for the development of the industrial sector. Industrial strategies typically focus on promoting innovation, increasing productivity, and creating jobs. The goal of an industrial strategy is to make the country’s industries more competitive in the global marketplace.
Industrial Structure is the way in which an industry is organized. The structure of an industry can be described by the number and size of firms in the industry, the degree of concentration, and the barriers to entry. The structure of an industry can have a significant impact on the behavior of firms in the industry and the performance of the industry.
Industrial Technology is the application of scientific knowledge to the production of goods and services. Industrial technology has been a major driver of economic growth and development. Industrial technology has also led to a number of social and environmental changes.
Industrial Value Chain is the Network of activities that firms undertake to bring a product or service to market. The value chain can be divided into primary activities, such as inbound Logistics, operations, outbound logistics, marketing and sales, and service, and support activities, such as firm infrastructure, human resource management, technology development, and procurement. The value chain can be used to analyze the competitive advantage of firms and to identify opportunities for improvement.
The Industrial Economy is a complex system that is constantly evolving. The subtopics of Industrial Economy provide a framework for understanding the different aspects of this system. By understanding these subtopics, we can better understand the Industrial Economy and its impact on our lives.
What is the Industrial Revolution?
The Industrial Revolution was a period of great change in the way people lived and worked. It began in Great Britain in the late 18th century and spread to other parts of Europe and North America in the 19th century. The Industrial Revolution was characterized by the development of new technologies, such as the steam engine and the Cotton gin, which led to the growth of factories and the rise of a new middle class.
What are the causes of the Industrial Revolution?
There are many factors that contributed to the Industrial Revolution, including the following:
- The rise of a new middle class: The middle class grew in size and wealth during the 18th century. This provided a market for new goods and services, which in turn led to the development of new technologies.
- The availability of Natural Resources: Great Britain had abundant natural resources, such as coal and iron Ore, which were essential for the development of new industries.
- The development of new technologies: New technologies, such as the steam engine and the cotton gin, led to the growth of factories and the rise of a new middle class.
- The availability of labor: The Industrial Revolution led to a demand for labor, which was met by the growth of the Population and the Migration of people from rural areas to cities.
What are the effects of the Industrial Revolution?
The Industrial Revolution had a profound impact on Society, both positive and negative. Some of the positive effects included the following:
- Increased economic growth: The Industrial Revolution led to a dramatic increase in economic growth. This was due to the development of new technologies, the growth of factories, and the rise of a new middle class.
- Improved living standards: The Industrial Revolution led to an improvement in living standards for many people. This was due to the availability of new goods and services, the growth of the economy, and the rise of a new middle class.
- Increased social mobility: The Industrial Revolution led to an increase in social mobility. This was due to the development of new technologies, the growth of factories, and the rise of a new middle class.
Some of the negative effects of the Industrial Revolution included the following:
- Pollution: The Industrial Revolution led to an increase in pollution. This was due to the use of coal and other fossil fuels, the growth of factories, and the rise of a new middle class.
- Child labor: The Industrial Revolution led to an increase in child labor. This was due to the demand for labor, the low wages paid to workers, and the lack of Education and job opportunities for children.
- Poor working conditions: The Industrial Revolution led to poor working conditions for many workers. This was due to the long hours, the low wages, and the dangerous conditions in factories.
What is the legacy of the Industrial Revolution?
The Industrial Revolution had a profound impact on society, both positive and negative. The legacy of the Industrial Revolution is still felt today, in the way we live, work, and interact with the world around us.
Which of the following is not a characteristic of the Industrial Revolution?
(A) The rise of factories
(B) The use of machines
(C) The growth of cities
(D) The decline of agricultureThe Industrial Revolution began in which country?
(A) Great Britain
(B) France
(C) Germany
(D) The United StatesWhich of the following was not a major invention of the Industrial Revolution?
(A) The steam engine
(B) The cotton gin
(C) The railroad
(D) The telegraphWhich of the following was a major social impact of the Industrial Revolution?
(A) The rise of a middle class
(B) The growth of cities
(C) The decline of agriculture
(D) All of the aboveWhich of the following was a major environmental impact of the Industrial Revolution?
(A) Air Pollution
(B) Water Pollution
(C) Soil-pollution/”>Soil Pollution
(D) All of the aboveWhich of the following is not a characteristic of the post-industrial economy?
(A) A decline in manufacturing
(B) A rise in service industries
(C) A rise in information technology
(D) A decline in agricultureThe post-industrial economy began in which country?
(A) Great Britain
(B) France
(C) Germany
(D) The United StatesWhich of the following is not a major challenge of the post-industrial economy?
(A) The rise of inequality
(B) The decline of unions
(C) The rise of Globalization/”>Globalization-3/”>Globalization
(D) The decline of the middle classWhich of the following is not a major opportunity of the post-industrial economy?
(A) The rise of new technologies
(B) The rise of new industries
(C) The rise of new jobs
(D) The decline of the middle classWhich of the following is not a major goal of the post-industrial economy?
(A) To create a more equitable society
(B) To create a more sustainable society
(C) To create a more prosperous society
(D) To create a more democratic society