INDUSTRIES IN INDIA
The primary industrial ministries of Government of India are the Ministry of Commerce and Industry, the Ministry of Heavy Industries and the Ministry of Micro, Small and Medium Enterprises (MSME).
■ Ministry of Commerce and Industry
It oversees general industrial policy, manufacturing, promotion, and internal trade. The Ministry of Commerce and Industry manages two departments, the Department of Commerce and the Department for Promotion of Industry & Internal Trade. The Ministry is headed by a Cabinet-rank minister.
■ Ministry of Heavy Industries
It focuses on automotive and heavy engineering sectors. The Ministry of Heavy Industries is responsible for the development of the heavy engineering and machine tools industry, the heavy electrical engineering industry, the automotive industry, and for the supervision of the Central Public Sector Enterprises (CPSEs), their subsidiaries.
■ Ministry of Micro, Small and Medium Enterprises (MSME)
It promotes and develops smaller-scale industrial units and businesses across the country. To promote the growth and development of micro, small and medium enterprises, including khadi, village and coir industries, to create new enterprises and more employment opportunities. The long-term objective of the Ministry is to enhance the productive base of the country by improving the performance of MSMEs through skill and entrepreneurship development.
History of Industrialization in India
Industrialization in India is the historic shift from a rural, farm-based economy to a modern system driven by machine production, factories and industrial cities. It started in the mid-19th century under British rule and grew rapidly through state-planned heavy industries. India is a country rich in natural resources. But with the beginning of British rule in India, they started exploiting our wealth excessively. They turned India into a market for producing raw materials for their factories in England and selling the products they made there. When India became independent on August 15, 1947, it was in the midst of many problems. The most important of them was the backwardness in the industrial sector. At that time, there was less wealth in the hands of individuals. This hindered private capital investments. At that time, the stock markets were not as developed as they are today. Therefore, capital could not be raised from the public. The few industrialists who were ready to invest in industry were ready to start industries in areas where raw materials were available. This led to an imbalance in the economic sector. Another major challenge that India faced in terms of industrialization was the lack of basic facilities, including electricity.
The first government led by Jawaharlal Nehru introduced planned economic development policies to solve the problems in the economic sector. The main emphasis was on public sector enterprises owned by the central government. Initially, the public sector focused on basic and strategic industries. In the second phase, nationalization and acquisition of industries that were sinking into losses and heading for closure began. In the third phase, public sector enterprises entered the manufacturing of products needed by the common man, consultancy, transportation, and large-scale construction activities. The Industrial Policy approved in 1956 classified industries in India into three categories. The first category was the strategic industries included in Schedule 'A'. Their future development was made a monopoly of the government alone. The government also had control over the second category industries included in Schedule 'B'. However, private investment was also allowed in these sectors to a certain extent. The third category includes sectors that were left to the private sector. Policies that emphasized the public sector provided India with a strong industrial base. Industries could be started even in industrially backward areas with limited availability of raw materials.
After Nehru, Prime Ministers Lal Bahadur Shastri and Indira Gandhi focused on industrial policies that focused on the public sector. Indira Gandhi implemented bank nationalization (taking over banks into the public sector) in 1969. The 'licensing policy', which imposed strict controls on large companies, was implemented in 1970. Such policies to protect the public sector later led to India's industrial stagnation. India had shifted to a position that gave importance to the private sector since the time of Rajiv Gandhi. Through the economic liberalization announced by the Narasimha Rao government in 1991, private investment and foreign investment were gradually allowed in many sectors reserved for the public sector.
Industrial Policy means rules, regulations, principles, policies and procedures laid down by government for regulating, developing and controlling industries in India. Government of India announced its first Industrial Policy Resolution on 6th April 1948.
Industrial Policy of 1948
The first industrial policy of free india is Industrial Policy of 1948. It was launched on April 6, 1948 by then Union Industry Minister M.Shyama Prasad Mukherjee (First Union Industry Minister of Free India). This policy established a base for mixed and controlled economy in India. Industrial activities were divided into four broad categories.
(a) Items under Central Government control - Manufacture of arms and ammunition production and control of atomic energy and the ownership and management of railway transport.
(b) Items under State Government control - Coal, Iron and Steel, Aircraft manufacture, ship building, manufacture of telephone, telegraphs and wireless apparatus and mineral oils.
(c) Items of basic importance (planned and regulated by Central Government) - Machine tools, chemicals, fertilizers, non-ferrous metals, rubber manufactures, cement, paper, newsprint, automobiles, electric engineering etc.
(d) Items of Private Sector - The rest of the industrial field will be open to private enterprise.
Industrial Policy Resolution of 1956
The Industrial Policy of year 1956 was regarded as the economic constitution of the country.
Objectives - To develop public sector, co-operative sector and control on private monopoly. It was first comprehensive statement on industrial development of india.
Industrial Policy of 1973 (February 2, 1973)
It provided closer interaction between the agricultural and industrial sector. Higher priority was given to the generation and transmission of power. Special legislation to protect cottage and household industries was also introduced.
Industrial Policy of 1977 (December 23, 1977)
Exploitation of alternative sources of energy were given special assistance including finance on concessional terms.
Industrial Policy of 1980
Through the Industrial Policy of 1980, the policy of giving concession to agriculture based industries was implemented.
Industrial Policy 1991
Industrial Policy of 1991 was declared on 24th July 1991. Privatisation and Liberalisation were the main thrust areas in the New Industrial Policy. The New Industrial Policy 1991 abolished all industrial licensing except for certain industries related to security and strategic concerns. For the promotion of exports of indian products in world markets, the government encourages foreign trading companies to assist indian exporters in export activities.
Types of Industries
Based on Size of Capital, the industries are classified into four as, Cottage Industries, Small Scale Industries, Medium Scale Industries and Large Scale Industries.
Cottage Industries
The most decentralized and small industrial units as compared to other industries. The type of work is primarily household or run by family members. They employ a minimal workforce. The investment and infrastructure was very low. They primarily depend on locally available raw materials and traditional - simple tools. Examples of cottage industries are pottery, handloom weaving, handcrafted jewelry, basket making, leather work etc.
Small Scale Industries
The industries in which the maximum investment is Rs 1 crore is called Small Scale Industries. Small Scale Industries include Traditional Small Scale Industries and modern small scale industries. Traditional small scale industries include Khadi and Handloom, handicrafts, sericulture, coir etc. Modern Small Scale Industries include Television sets, electronics, various engineering products etc. Abid Hussain Committee is related to reforms in small industries. Small Industries Development Bank of India (SIDBI) was established in 1990 on the recommendations of Abid Hussain Committee.
To help the Small Scale Industries in meeting the challenges of globalisation, the government has taken several initiatives. Primarily among them is the enactment of Micro, Small and Medium Enterprise Development Act, 2006. It has became effective from October 2, 2006. Its aim is to facilitate the promotion and development of SSI's and enhance the competitiveness of MSMEs.
Medium Scale Industries
A transitional category between the small and large scale industries. They employ a larger workforce than Small Scale Industries and require more advanced technology and specialized labour. Computer hardware assembly, electronic hardware assembly, consumer durable goods, and light engineering tools are examples of Medium Scale Industries.
Large Scale Industries
They are big industrial organizations that operate on a massive scale of production with larger workforce. Large Scale industries should have minimum investment of above Rs 10 crore. They require high financial support and have more skilled labours.
The leading industrial states in India are Maharashtra, Gujarat and Tamil Nadu and the backward industrial states in india are Kerala, Rajasthan, Himachal Pradesh, Odisha and Haryana. Mumbai is the leading industrial centre in the country. Other major industrial centres of India are Bengaluru, Kolkata, Ahmedabad, Chennai, Coimbatore etc.
Public Sector Undertaking (PSU)
PSU is a government owned corporation. The majority equity must be owned by the government to be a PSU. Federally owned PSUs are termed Central Public Sector Enterprises (CPSEs) and are administered by the Ministry of Heavy Industries. There are more than 270 PSU companies in India. Various PSUs have been awarded additional financial autonomy. The level of financial autonomy is currently divided into three categories: Maharatna, Navratna and Miniratna CPSEs (itself divided into Category 1 and Category II).
Maharatna - The major criteria of awarding Maharatna status are,
• Three years with an annual net profit of over Rs 5000 crore after tax.
• Average annual Net worth of more than Rs 15,000 crore the last 3 years.
• Average annual turnover of more than Rs 25,000 crore during the last 3 years.
Navaratna - The major criteria of awarding Navaratna status are, A score of 60 or above (out of 100), based on six parameters which include net profit to net worth, total manpower cost to total cost of production or cost of services, Gross margin as capital employed, Gross profit at turnover, Earnings per share and inter sectoral comparison. A company must first be a Miniratna and have four independent directors on its board before it can be made a Navaratna.
Mini Navaratna Category I - Criteria, Have made profits continuously for the last three years or earned a net profit of Rs.30 crore or more in one of the three years.
Mini Navaratna Category II - Criteria, Have made profits for the last three years continuously and should have a positive net worth.
Export Processing Zone (EPZ)
India was one of the first in Asia to recognise Export Processing Zone models in promoting exports. Kandla in 1965 became Asia's first EPZ. Seven more zones were setup thereafter. But EPZ had many shortcomings. The shortcomings of the EPZ model were corrected and some new features were added to form the Special Economic Zones in April 2000.
Special Economic Zone (SEZ)
The SEZ policy was first announced in India on April 2000, as a part of the Export-Import (EXIM) policy of India. India passed Special Economic Zone Act in 2005. The SEZ Act, 2005, came into effect on February 10, 2006. Kandla, Surat, Santa Cruz (Maharashtra), Kochi, Chennai, Visakhapatnam, Faeta (West Bengal) and Noida (UP) have been converted into Special Economic Zones.
A SEZ is a geographical region that has economic laws that are more liberal than a country's domestic economic laws. As to these policies, the Government has setup SEZ's in the public, private, joint sector or by State Governments. In this regard some of the existing Export Processing Zones were converted in to Special Economics Zones.
Specific Economic Zone types
• Free Trade Zones (FTZ)
• Export Processing Zones (EPZ)
• Free Zones (FZ)
• Industrial Estates (IE) or Industrial Parks
• Free Ports
• Urban Enterprise Zones and others
The important thing is that everything that they produce is exported. SEZs would be allowed duty free import of capital goods and raw materials. The main objectives of SEZs are generation of additional economic activity, promotion of exports of goods and services, promotion of investment from domestic and foreign sources, creation of employment opportunities and development of infrastructure facilities.
Confederation of Indian Industry (CII)
It is an association of indian businesses. CII is non-government, not-for-profit, industry-led and industry-managed organization, playing a leading role in India's International and Business Development. It is founded in 1895. Its Headquarters is at New Delhi.
ASSOCHOM
ASSOCHOM is Associated Chambers of Commerce and Industry of India. ASSOCHOM is an apex trade associations of India. It is founded in 1920. Its headquarters is at New Delhi. The aim of ASSOCHOM is to promote both domestic and international trade and reduce trade barriers for the growth of trade and industry in India.
Board for Industrial and Financial Reconstruction (BIFR)
It is an agency of Government of India to determine sickness of industrial companies and to assist in reviving those that may be viable and shutting down the others.
Sunrise and Sun Set Industries
An Industry growing quickly and expected to be increasingly important in future is termed as sunrise industry. The sunrise industries consists of high technology manufacturing industries featuring automated and computerised processes. The industry growing slowly or declining is called sunset industry.
Major Industries in India
2. Automobile Industry in India
3. Biotechnology Industry in India
4. Chemical Industry in India
5. Fertilizer Industry in India
6. Insurance Industry in India
7. Information Technology (IT) Industry in India
8. Paper Industry in India
9. Petrochemical Industry in India
10. Pharmaceutical Industry in India
11. Synthetic Fiber Industry in India
12. Telecom Industry in India
13. Iron and Steel Industry in India
14. Cotton Textile Industry in India
15. Jute Industry in India
16. Silk Industry in India
17. Fibre Industry in India
18. Aluminium and Copper Industry in India
19. Zinc and Lead Industry in India
India is a major exporter of heavy and light engineering goods among the Third World Countries. Heavy Engineering Corporation Ltd was set up at Ranchi (Jharkhand) in 1958. The pioneer company in the manufacturing of machine tools is Kirloskar Brother Ltd.
21. Locomotives Industry in India
The Railway Engine Manufacturing Industries are Chittaranjan Locomotive (West Bengal), Diesel Locomotive Works (Varanasi, UP) and Tata Engineering and Locomotive Works (Jamshedpur). The Railway Coaches Manufacturing Units in India are Perambur (Tamil Nadu), Kapurthala (Punjab), Bangalore (Karnataka) and Kolkata (West Bengal). The Integral Coach Factory at Perambur near Chennai was set up in 1955 with Swiss collaboration. The Railway Workshops in India are Kharagpur (West Bengal), Jamalpur, Samastipur, Barauni (Bihar), Ajmer (Rajasthan) and Jhansi (Uttar Pradesh).
22. Ship Building Industry in India
The four main centres of Ship Building Industry are Vishakhapatnam, Kolkata, Kochi and Mumbai. Hindustan Shipyard Ltd, Vishakhapatnam was set up in 1941. The first ship building yard in the country to receive ISO - 9001 certification is Cochin Shipyard Ltd, Kochi. It was incorporated in 1972. It also manufactures ships for Indian Navy. Mazgaon Dock at Mumbai builds cargo ships, passenger ships, dredgers etc. for indian navy.
23. Aircraft Industry in India
The first aircraft industry in India is Hindustan Aircraft Ltd. It was set up at Bangalore in 1940. It was merged into Aeronautics India Ltd. in 1964 to form Hindustan Aeronautics Ltd., Bangalore. The centres of aircraft industry are Bangalore, Hyderabad, Kanpur, Koraput and Nashik.
24. Bicycle Industry in India
The first bicycle factory was started in Mumbai (1940). The largest bicycle manufacturing companies are Atlas cycle, Hero cycle.
25. Petroleum and Natural Gas Industry in India
26. Cement Industry in India
27. Leather Industry in India
28. Glass Industry in India
29. Rubber Industry in India
The first Synthetic Rubber factory is set up in Bareilly in 1955. Rubber Board is a statutory body under the Rubber Act 1947, for the overall development of the rubber industry in the country. The central office is located in Kottayam. Rubber Research Institute of India was established in 1955. It is located at Puthupally, Kottayam.
30. Lac Industry in India
31. Sugar Industry in India
32. Retail Market in India
It accounts for over 10 percent of the country's GDP and around eight percent of the employment in India. India is the fifth largest global destination in the world for retail. Reliance Industries Ltd is the biggest leading company in Retail Sector.
33. Online Retail in India
India has about one million online retailers which sell their products through various e-commerce portals. Amazon, Flipkart, Jabong, Myntra etc are some leading e-commerce firms.
0 Comments