Industry, MSMEs, Public Sector, Services, FDI

Industry: Trends in composition and growth, Role of public and private sector, Small
scale and cottage industries

New Economic Policy and Industry: Strategy of industrialization, Privatization,

Disinvestments, Role of foreign direct investment and multinationals

Situation at Independence

1. From 1815 to 1832, by what % did India’s cotton exports decline? By 1850,
what % of Britain’s cotton exports was India buying?

2. ‘The ruin of traditional trades and crafts was the result of the British
commercial policy’. Elborate.

3. Which major industries developed in India during the 19th century? After
1907? During 1930s?

4. In 1946, cotton and jute accounted for nearly what % of all workers
employed in factories? What % of total value added in manufacturing
originated in cotton and jute textiles? What does this show?

5. At what rate did modern industry grow between 1918 and 1947? Why? What
was its share in national income in 1947?

6. In 1951, what % of the labour force was employed in modern industries?

Answer: 2.3%

7. What was the state of India’s capital or producer goods industry at the time
of independence?

8. What was the impact of railways?

9. What were the 3 main characteristics of foreign investments (FDI) in India

during colonial times?

10. Despite all this, there were some major developments during the 1930s and
1940s that procided Indian industry with a base for post-Independence
economic development. Outline these.

11. At the eve of planning (1950), the industrial scene in India was lopsided.
Comment.
Industrial Policy since Independence

12. To what extent was the public sector control of the industrial sector
envisaged in the First Five Year Plan? When did this view change?

13. Describe India’s industrial control regime from 1956 to the end of 1970s.

14. Outline India’s industrial policy reforms in the 1980s. List three major
exceptions to the general policy of domestic deregulation in the 1980s.

15. What were the major reasons for the macroeconomic crisis of 1991?

16. List the 6 major strands of structural reforms introduced in the early 1990s.

17. List the key features of the National Manufacturing Policy of 2011.

Industrial Growth and Structure Since 1951

1. Name the four broad phases of industrial growth in India since

independence. Where applicable, mention growth rates as well (for
manufacturing sector as a whole, including both registered and unregistered
manufacturing).

2. What were some of the reasons for the deceleration in growth after 1965?

3. What were some of the reasons for growth revival in the 1980s?

4. In the pre-reform regime, what role was the private sector expected to play?

5. In which infrastructure sector have the reforms been most successful? Why?

6. Describe the industrial growth experience in the 1990s.

7. What was the average growth rate of India’s industrial sector (measured by
the IIP) during during: 1981-91, and 1992-1999?

8. What was the performance of the capital goods sector in the 1990s? Why was
this the case?

9. What was the average growth rate of manufacturing between: 1993- 1996,
and 1996-2002? Why?

10. Describe the experience of growth in Indian manufacturing between 2002

and 2007.
 11. Describe the experience of growth in Indian manufacturing between 2008
and 2013.

12. What, roughly, has been the GFCF in Indian industry in recent years?
Answer: about 30%

13. What are some of the major current challenges faced by industry in India?

14. What has been the India experience of employment in manufacturing since
reforms?

15. Contrast the rate of growth of manufacturing GDP and employment growth
in manufacturing (figures) between: 1993-1999, and 1999-2009.

16. Why did the speeding up of the reforms after 1991 not yield faster output,
employment, and labour-intensive growth?

17. Dismantiling of the much reviled ‘permit raj’ led to acceleration of industrial
growth in India. Comment.

18. What reforms are required now?

Micro, Small, and Medium Enterprises (MSMEs)

1. Elaborate the significance of MSMEs in Indian economy.

2. What % of the manufacturing output is accounted for by the MSME sector? %

of exports? Employment (number, not %)?

3. Besides GDP earners, what are the two distinguishing features of MSME
sector that make it very important?

4. What is the investment in plant and machinery limit for enterprises to

classify as MSME (in manufacturing)?

5. What is the average annual growth rate of employment in MSMEs?

6. Contrast the investment required to generate one job in MSMEs v/s in the
large organized sector.

7. Analyse MSME performance in the 1980s v/s the 1990s with respect to:
 Growth in employment (avg)
 Growth in output
 Growth in exports
  Share in exports
 Share in employment

8. Elaborate the challenges to MSMEs in India, and mention some of the steps
taken/ being taken by the government to correct these.

Public Sector

1. What was the Mahalanobis strategy? Why was it adopted (6 reasons)?

2. What % of India’s GDP is generated by the public sector?

3. Has the significance of the public sector in national output declined after the
reforms? What does this indicate?

4. In the public sector, what is the correct measure of profitability? How have
the central PSUs fared in this regard?

5. Why have the central PSUs performed rather well in the post reform period?

6. Despite the above, why is the overall financial health of the public sector
poor?

7. What has been the rise/ fall in public sector price deflator compared to the
GDP deflator since 1961 (last 40 years)?

8. Summarize Kelkar’s views on disinvestment, and in general, performance

and role of Indian PSUs.

Services

1. What % of India’s GDP was accounted for by services in 1950?

2. What part of India’s GDP is accounted for by services? (with and without
including the construction sector)

3. What has been a curious observation about the share of services in India’s
GDP?

4. What % of employment is accounted for by the services sector?

5. According to CSO classification, what are the 4 broad classifications of the

services sector?

6. Which services subsectors have the highest employment elasticity?

 7. In 2013-14, what was the share of services in GCF? Which 3 subsectors
account for most of this?

8. Contrast the growth rates of services, agriculture, and industry between

1950-1980.

9. Contrast the growth rates of services, agriculture, and industry in 1990s.

10. What has been the CAGR of services between 2000 and 2013? Of overall
GDP?

11. What % of the Indian services sector caters to producer services? What does
this show?

12. What % of India’s FDI does the services sector account for?

13. List 4 reasons for this strong performance of the services sector.

14. What was the growth rate of services exports in 1980s, 1990s, and 2000s?

15. What was India’s share in world services exports in 1990, and in 2013?

16. What % of services exports do software (computer services) account for?

17. During 2006-2011, nearly what % of merchandise trade deficit was financed
by services?

18. What are some of the domestic and external barriers to India’s services
exports?

19. What are some issues of concern regarding the services sector?

FDI- Read from answer sheet