Industry in India Planning

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Until the early 1990s, Industry in India Planning was in a state of sorry affairs. By the end of 1980s, the Indian industry was a protected and strictly regulated sector. But the period from 1990s was marked with speedy reforms and their subsequent successful implementation.

The Government took measures which were more rational than previous ones. Although skeptics had their reservations, the trend was clearly towards that of globalization and liberalization that were effecting sweeping changes in the world economy.

Further, Industry in India Planning is now more focused on areas like improving the urban infrastructure, ensuring fair competition and access to markets, reduction of import duties, quality improvements in vocational and higher education, increased investment in R&D, and support of SMEs. Government leaders, experts, and researchers are striving towards making the Indian industry globally competitive and to being about a sustained growth which would contribute significantly to GDP growth, employment generation, and overall economic development. Indian industrial policy also aims to identify factors hampering industrial growth and seeks to redress these factors.

A brief summary of Industry in India Planning in all 5 year plans, are as follows -

  • The first four 5-year plans involved a total public sector disbursement of ` 314.1 billion. The first plan prioritized agriculture and power projects.

  • The second plan focused on new industrial policy, rapid industrialization and envisaged 25% increase in national income The third plan targeted rapid industrialization, with 24.6% outlay on transport and communications and 20.1% on industry and minerals.

  • The fourth plan stressed on agriculture and allied sectors and received around 27%, while industry and minerals outlay was 18.5%, transport and communications stood at 18.4%, and power development at 17.8%.

  • The fifth plan envisaged removal of poverty and the attainment of self-reliance. A total spent of ` 393.2 billion was allocated, and actual expenditures amounted to ` 394.2 billion.

  • The sixth plan targeted developmental plans and the projected outlays amounted to ` 975 billion.

  • The seventh plan projected 5% overall GDP growth (which was surpassed) based on increases of 4% in agricultural and and 8% industrial output. And spent amounted to ` 1,800 billion.

  • The eighth development plan laid the foundation for long-term economic gains. The eighth plan was a grand success and economic growth rose to 6% a year, generated more employment, poverty was curtailed, exports increased many folds, and inflation declined substantially.

  • The ninth plan witnessed overall stupendous improvement in the GDP growth rate from an average of about 5.7% to about 6.1% The Tenth Plan envisages -
    • More investor friendly flexible economic reforms
    • Creation of congenial investment environment
    • Encourage private sector involvement
    • Setting up state-of-the-art infrastructure
    • Capacity building in industry
    • Corporate transparency
    • Mobilizing and optimizing all financial resources
    • Implementation of friendly industrial policy instruments

Last updated on 4/28/2011