Industrial Development In India

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As industrial development proceeds in an economy, several structural changes took place in the industrial sector. Historically Industrial development has proceeded in three stages. In first stage, industry was concerned with the processing of primary products, milling grains, extracting oil, tanning leather, spinning vegetable fibres, preparing timber and smelting ores. The second stage comprises of materials making bread and confectionary, foot wear, metal goods, cloth, furniture and paper. The third stage consists of manufacturing of machines and other capital equipments useful to facilitate the production process. W.G. Hoffman (The Growth of Industrial Economies, Oxford, 1952) had given operational criteria to the degree of industrial development. …show more content…

In India the overall efficiency in most of the industrial sectors has increased and the output elasticity of labour is less than that of capital. The Manufacturing sector growth in the post-globalization period has been "input driven" rather than "efficiency driven," with significant levels of technical inefficiency. More competitive market structure or an improvement in scale efficiency is not widespread across Indian manufacturing. The fixed capital in manufacturing is increased by 19.4 percent over the period 1991‐92 to 2006‐07. The increase in the fixed capital was faster in the initial years of reform and it tapered off in the subsequent period particularly in the period 2001‐02 to 2006‐07. This was largely due to the down turn both the Indian economy and the global economy. The process of economic reform got slow-down in the later period. An increase in fixed capital differed vastly from industry to industry. For example, apparel (64.4%) and coke and petroleum products (54.7%) have high rate of growth in fixed capital and in publishing and printing (32.0%) and motor vehicles (31.8%) but to lesser extent. The rise in the fixed capital was low in important industries such as basic metals (12.4%) and machinery and equipment (12.9%). The gross value added (GVA) in the manufacturing sector increased by 17 per cent during 1991‐92 to 2006‐07. In the second phase (1996‐97 to 2000‐01 the GVA growth declined to 1.9 per cent and in the subsequent period (2001‐02 to 2006‐07) the growth rate was restored to 16.8 per cent per

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