Presented To Prof. C. S.

Balasubramanyam

GROUP MEMBERS
NAME
Mandar Deshmukh Saish Mantri Deepak Patil Mayur Patil Shruti Surve

ROLL NO.
12 33 42 43 57

INTRODUCTION
Industrial Development: It is development of the manufacturing sector, in other words the process of expanding the country's capacity to produce secondary goods and services. Industries are broadly divided into three categorize: Large Scale Industries Medium Scale Industries Small Scale Industries

IMPORTANCE OF INDUSTRIAL DEVELOPMENT Provide Employment

Increase in Income and Savings Increase in Economies of scale Better utilization of raw materials Development of social overhead

INDUSTRIAL POLICY
An industrial policy is any government regulation or law that encourages the ongoing operation of, or investment in, particular industry. It is combination of all government regulation aimed at regulation and control of industrial activities in a country. Goals of Industrial Policy: Rapid agricultural and industrial development of the country. Rapid expansion opportunities for employment. Removal of poverty and self-reliance.

NEW INDUSTRIAL POLICY 1991

NIP announced by committee in July, 1991 Focused toward LPG and other objectives Promoting of Industrialization Initiatives taken under NIP,1991 covers following areas: Industrial Licensing Foreign Investment Foreign Technology Agreements Public Sector Policy MRTP Act (Monopoly and Restrictive Trade Practices Act)

NEW INDUSTRIAL POLICY 1991

Objectives of NIP,1991:
To abolish the monopoly of any sector or any individual enterprise. To ensure that the public sector plays its rightful role. To end poverty and unemployment and to build a modern, democratic, socialist, prosperous and forward-looking India. Such a society can be built if India grows as part of the world economy and not in isolation. Up gradation to world standards in terms of manufacturing and technology. To provide enhanced support to the small-scale sector. To enhance foreign investment and technology collaboration, to obtain higher technology, to increase exports and to expand the production base.

NEW INDUSTRIAL POLICY 1991

Positive Impact of NIP,1991:
Increase in production Removal of bureaucratic hurdles Increase in competition Increase in efficiency of public sector Increase in Foreign Investment Increase in Exports

Criticism of NIP,1991:
Concentration of Economic power Increase in Unemployment

OTHER INITIATIVE TAKEN BY GOVT. OF INDIA

Industrial Licensing
Govt. issued notification no. 477(E) on July 25, 1991

Foreign Investment Policy

As per annexure 1: GOI decided to provide approval for direct foreign investment up to 51% foreign equity in industries. This is subsequently increased to 74% in some industries and with replacement of FERA (1973) with FEMA (1999), 100% FDI is permitted in many areas.

FDI Policy Initiatives:

The FDI policy is being progressively liberalized on an ongoing basis in order to allow FDI in more industries under the automatic route. Recent changes in FDI Policy

FOREIGN INFLOWS
(US$ Billion) Financial Year As per international Practices Percentage Growth FDI Equity Inflow Percentage Growth

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 (P) 2010-11 (P) 2011-12 (P) 2012-13 (P) (Apr Nov)
Source: DIPP;

4.32 6.05 8.96 22.83 34.84 41.87 37.75 34.85 46.55 24.65

(-) 14 (+) 40 (+) 48 (+) 146 (+) 53 (+) 20 (-) 10 (-) 08 (+) 34

2.19 3.22 5.54 12.49 24.58 31.40 25.83 21.38 35.12 15.85
P: Provisional

(-) 19 (+) 47 (+) 72 (+) 125 (+) 97 (+) 28 (-) 18 (-) 17 (+)64

SECTOR-WISE FDI INFLOWS INTO INDUSTRY AND INFRASTRUCTURE

(US $ Billion)

1991-2000
Food Products Fermentation Industries Textiles Wood Products Paper Leather Chemicals Rubber, Plastics & Petroleum Products (including Oil Exploration) Non-Metallic Minerals Metals & Metal Products Machinery and equipment Transport Equipment Other Manufacturing Mining (Including Mining Service) Power Telecommunication Total
Source: Office of Economic Advisor, DIPP

2000-2010
1237.3 770.1 828.6 18.8 716.9 42.6 4446.1 2953.6

2010-2011
246.9 57.7 129.8 1.6 44.0 9.3 734.0 573.6

2011-2012
170.7 18.0 74.8 1.1 30.8 0.4 589.6 555.0

April Oct 2011-2012

190.8 53.2 94.0 11.6 5.6 341.75 4001.7 323.6

707.4 24 241.8 .0 250.5 33.5 1480.9 90.3

261.1 186.2 2043.1 0.0 1761.6 0.0 1038.9 1089.4 16699.6

2263.6 3143.2 15670.4 4603.2 5705.6 730.9 5220.9 8915.9 110289.3

657.3 1098.1 1846.7 1286.1 1495.3 79.5 1464.4 1664.5 19426.9

623.3 964.4 1447.6 1048.0 1249.7 75.9 1072.0 1326.7 16039.2

207.7 1495.3 3279.0 609.6 706.2 136.6 1729.4 1988.7 24187.8

PRIVATISATION, GLOBALIZATION AND LIBERALISATION

Privatization:
It is the incidence or process of transferring ownership of business from the public sector (government) to the private sector (business). The private sector is more efficient than the public sector.

Globalization:
It is a integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology.

Liberalization:
It is a relaxation of previous government restrictions, usually in areas of social or economic policy.

LIBERALISATION IN INDUSTRY
Benefits of Liberalization:
Promotes competition, which leads to lower costs and prices for consumers Competition promotes efficiency, so resources are wasted much less Liberalization removes government regulations on the economy, which promotes jobs, lower prices, higher incomes and lowers inflation Promotes technological advancement, again creating jobs and growing incomes

Impact of Liberalization:
Increase in Foreign Investment Attracts Multi-national Companies toward Indian Market Increase in export in 1995-96 by 28.64% over previous year Increase in Balance of Trade

INDUSTRIAL PERFORMANCE
Recovery of Growth by 9.2% in 2009-10 and 2010-11 Manufacturing, mining, electricity and construction sectors, slowed to 3.5 per cent in 2011-12 and by 3.1 in current year. Electricity Sector has shown moderate growth in 2012-13 The growth of the mining sector in 2012-13 is estimated at 0.4%

INVESTMENT IN INDUSTRIAL SECTORS

GROSS CAPITAL FORMATION IN INDUSTRY
2004-05 2005-06
Rate of growth of GCF in industry (Percent) Share of Sectors of Industry in overall GCF (Percent) Mining Manufacturing Registered Manufacturing Unregistered Manufacturing Electricity Construction Share of Industry in GCF Share of GCF in Industry as percent of GDP of this sector

2006-07

2007-08 2008-09 2009-10

2010-11

2011-12

46.7

18.3

22.0

24.7

-24.5

24.2

22.3

-10.8

3.7 34.1 24.3 9.7 5.3 5.4 48.4 59.0

4.4 34.2 29.0 5.3 5.5 4.9 49.0 63.6

4.4 34.8 27.9 6.9 5.6 7.0 51.8 69.2

4.3 38.1 32.5 5.6 5.4 7.2 54.9 78.7

3.6 26.8 24.1 2.7 6.3 5.7 42.5 56.9

3.6 32.8 27.8 5.1 6.2 4.8 47.5 64.7

3.8 34.7 29.7 5.1 6.6 5.3 50.4 72.5

3.8 27.9 24.9 3.0 6.8 6.0 44.4 62.4

Source: DIPP

CONTRIBUTION OF INDUSTRIAL SECTOR IN GDP

India ranks 14th in the factory output in the world 27.6% share in India GDP Employs 17% of total workforce of India Industry Growth Rate in India GDP came to 7.6% in 2005- 2006 The manufacturing sector contributed 9.0%

The water supply, gas, and electricity sector contributed 4.3%

The long-term average annual growth of industries comprising mining, manufacturing, and electricity between 1991-92 and 2011-12, averaged 6.7 per cent as against GDP growth of 6.9 per cent.

CHALLENGES FACED BY INDUSTRIES IN INDIA

Unbalanced Industrial Structure Low Demand Regional Concentration Loss In Public Sector Industries

Industrial Sickness
Lack Of Infrastructure Improper Location Base Lack Of Capital

Shortage Of Industrial Raw Material

Higher Cost Of Production And Low Quality Of Goods