Industry during the 5 year Plans

Date : 30.4.2020
Sub  : Economics
Class : 12
Day   : 3
Period : 5
Time    : 10:45am -11:25am

Learning Outcomes

• Importance of Industry
• Stratergy of Industrial Development
• Expansion of Public Sector
• Strict regulation of Private sector
• Policy of protection
• Development of Small Scale Industries

 A very good morning students

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Today we will be learning about the State of Industry during the Planning Period

During the Planning period there only two well managed industries :

Iron and Steel Industries in Jamshedpur and Kolkata

Let us look at the Importance of Industry:

• An Industry provides a more stable source of Employment---- This is more stable than agricuture. when workforce is shifted from less productive occupation(agriculture) to more productive occupation( industry), this will add to the national output.Increase in National Output will create more employment oppurtunities.

• Promotes Modernisation : Agriculture is the backbone of the Indian economy.Most of the requirements in Agriculture are met by Industries.Agriculture requires improved farm machinery and tools eg tractors, harvesters, pumping sets, tube-wells,etc.

• Rapid and long term growth was possible through the development of industriesas productivity of labour is higher in the manufacturing sector

• Industrialisation induces development in other sectors

Stratergy of Industrial Development

1. Expansion of Public Sector: Public sector can help in reducing inequality in the distribution of income and wealth because profits of Public sector can be distributed among a large number of individuals.

---Economic development requires the growth of basic key industries  ie industries vital for the development of other industries.Large investment was needed in in basic and key industries and in infrastructure.Since, these areas were beyond the capacity of the Private sector, Public sector was assigned to undertake this role.

--Private sector would not be interested in the development of the backward areas.The Public enterprises can be established in these areas to have a balanced development of the country.

2. Strict Regulation of Private Sector : Under INDUSTRIAL DEVELOPMENT AND REGULATION ACT 1951 , new industry could not be established without obtaining necessary license and getting itself registered,

3 Policy Protection : The government protected the domestic industry fro foreign competetion.

--rotection took place in the form of Tarrifs and Quotas. Tariffs are a tax on imported goods which make them costlier. Quatas specify the macimum quantity of imported goods. Tariffs and quotas together discourage and restrict imports and therefore, protect domestic industry from foreign competition.

4. Development of Small scale industries: In 1955, the Karve committee ( also called Village and small scale industries committee ) realised the importance of small scale industries for promoting rural development. A small scale industry is defined on the basis of msximum investment limit. This investment limit has changed over a period of time. In 1950, small scale industrial unit was one which investments a maximum of rupees five lakh . Presently the maximum investment allowed is Rs 5 crore.

Pleae go through the video link below to understand the topic better

https://www.youtube.com/watch?v=_Sf2x3gaJbo

your assignment is to make notes in your copies