DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE

ECONOMICS AND LEGAL ANALYSIS OF INDUSTRIAL SECTOR IN INDIA

SUBJECT

ECONOMICS-II

NAME OF THE FACULTY

Prof. ABHISHEK SINHA

Name of the Candidate Aleena Maria Moncy

Roll No. 2017007
Semester 3

DATE OF SUBMISSION: -10-2018

 ACKNOWLEDGEMENT

I would sincerely like to put forward my heartfelt appreciation to our respected Economics
professor, Abhishek Sinha for giving me this golden opportunity to take up this project regarding
“ECONOMICS AND LEGAL ANALYSIS OF INDUSTRIAL SECTOR IN INDIA”. I have
tried my best to collect information about the project in various possible ways to depict clear
picture about the given project topic.
 RESEARCH METHODOLOGY

This project is purely Doctrinal and based on primary and secondary sources such as websites,
books, journals and internet sources. The referencing style followed in this project is BLUE
BOOK 19th Edition's format of citation. This Research process deals with collecting and
analysing information to answer questions. The Research is purely descriptive in its boundaries
of the topic
 ECONOMIC$ ABSTRACT

TITLE OF THE PROJECT:

ECONOMICS AND LEGAL ANALYSIS OF INDUSTRIAL SECTOR

The Indian economy is incredibly diverse – made up of traditional industries such as village
farming, fishing, and handicrafts, as well as modern sectors such as telecommunications,
transportation, and tourism.

Much of the economy though is built on informal businesses. The informal economy was
recently estimated as comprising 60 percent of net domestic product, 68 percent of income, 60
percent of savings, 31 percent of agricultural exports and 41 percent of manufactured exports.
Similarly, within the retail industry, 90 percent of the market is controlled by small-scale,
family-run operations with big chains making up just 10 percent.

Manufacturing has emerged as one of the high growth sectors in India. Prime Minister of India,
Mr. Narendra Modi, had launched the ‘Make in India’ program to place India on the world map
as a manufacturing hub and give global recognition to the Indian economy. India is expected to
become the fifth largest manufacturing country in the world by the end of year 2020*.

Industrial development is necessary for modernisation of agriculture. In India, agriculture is

traditional and backward. sets The cost of production is high and productivity is low. We need
tractors, threshers, pump and harvesters to modernise agriculture. To increase productivity, we
need chemical fertilizers, pesticides and weedicides etc.Industrial development encourages the
development of science and technology.

Finally, the Industry sector makes up 18 percent of India’s GDP and employs 19 percent of the
labour force. Among the major sub-industries include textiles (the largest industry in terms of
employment), chemicals, food processing, steel, transportation equipment, cement, mining,
petroleum, machinery, software and pharmaceuticals.
 ECONOMICS SYNOPSI$

TITLE OF PROJECT:
ECONOMICS AND LEGAL ANALYSIS OF INDUSTRIAL SECTOR

INTRODUCTION:
Industrial development is necessary for modernisation of agriculture. In India, agriculture is
traditional and backward. sets The cost of production is high and productivity is low. We need
tractors, threshers, pump and harvesters to modernise agriculture. To increase productivity, we
need chemical fertilizers, pesticides and weedicides etc.Industrial development encourages the
development of science and technology. The industrial enterprises conduct research and develop
new products. In agricultural sector, the surplus is small. Its mobilisation is also very difficult. In
large scale industries, the surplus is very high. By using external and internal economies,
industry can get higher profit.

AIM:

My aim is to analyse all the consistent factors associated with the Economic offence of industrial sector
and to find out the impact of these consistent factors; whether they are having a positive impact or
negative impact.

OBJECTIVE:

I am going to cover the economic and legal aspects of the ECONOMIC OFFENCE OF INDUSTRIAL
SECTOR.

SIGNIFICANCE:

Industrialization plays a vital role in the economic development of underdeveloped countries. ...
For this reason, it is pursuing policies that support privatization and deregulation of the
economy. Industry plays a complex role in economic development.

SCOPE OF THE PROJECT:

 1. SUBJECT MATTER:

Industrial development is necessary for modernisation of agriculture. In India, agriculture is

traditional and backward. sets The cost of production is high and productivity is low. We need
tractors, threshers, pump and harvesters to modernise agriculture. To increase productivity, we
need chemical fertilizers, pesticides and weedicides etc. Industrial development encourages the
development of science and technology. The industrial enterprises conduct research and develop
new products. In agricultural sector, the surplus is small. Its mobilisation is also very difficult. In
large scale industries, the surplus is very high. By using external and internal economies,
industry can get higher profit.

2. TIME PEROD:

Industrial sectors should be done periodically

3. Area:

Industrial sector is processing all over the world..

Literature Review:

LABOUR & INDUSTRIAL LAW - by S.N.MISRA

"Industry plays a vital role in shaping up the economy of the country. The field of industrial laws
covers a large number of enactments. There is no single Labour Code in our country. We have
different statutes dealing with different branches of labour and industrial laws. The present work
is a brief commentary of Twenty- one different labour enactments dealing with Labour-
Management relations, Social Security legislations and Minimum Standard legislations. This
edition has been enriched by incorporating relevant material on Collective Bargaining. Important
amendments and recent judicial decisions have also been included in this work. This book shall
be extremely useful to students of law. It shall also cater the needs for those preparing for
Business Administration courses or doing specialization in this branch of law. "

Financing for Small Scale Industries in India- by Singh Kanwaljit

In this era of globalization the old grounds for small scale industries promotion like employment
creation and balanced regional development are losing their relevance. In the context of new
economy, the core objectives need to be reinterpreted because we were used to explore the
potential of small scale industries in terms of local resources, local processes and absorption of
local labour only.

Research problem:

1. Is there any exponential growth in industrial sector.

2. Is there any reforms needed in industial sector .

Research Question:

1. whether are there any financial measures to be taken to develop the industrial sectors

2. How much profits have the franchises and sponsors made regarding the implementation of industrial
sector.

Research Methodology: My study deals with the Analytical Method of Research

Data and Data Base:

Secondary Data:

Industry sector makes up 18 percent of India’s GDP and employs 19 percent of the labour force.
Among the major sub-industries include textiles (the largest industry in terms of employment),
chemicals, food processing, steel, transportation equipment, cement, mining, petroleum,
machinery, software and pharmaceuticals.

CONTENTS:
1. Introduction

2. History of Industrialization in India

3. Special areas of economic policy

4. Role of Industrial Development in Economic Growth

5. Impacts of Industrialization in India

6. Advantages and Disadvantages of Industrialization

7. Impact of globalization on industrial sector

8. Role of the Government towards the Development of the Country in industrial sector

9. Make in India

10. Role and Functions of the Department of Industrial Policy & Promotion

11. Industrialization and foreign trade

12. Conclusion

13. Bibiliography
INTRODUCTION:

Industrial development is necessary for modernization of agriculture. In India, agriculture is

traditional and backward. The cost of production is high and productivity is low. We need
tractors, threshers, pump and harvesters to modernize agriculture. To increase productivity, we
need chemical fertilizers, pesticides and weedicides etc. Industrial development encourages the
development of science and technology. The industrial enterprises conduct research and develop
new products. In agricultural sector, the surplus is small. Its mobilization is also very difficult. In
large scale industries, the surplus is very high. By using external and internal economies,
industry can get higher profit.

In this era of globalization the old grounds for small scale industries promotion like employment
creation and balanced regional development are losing their relevance. In the context of new
economy, the core objectives need to be reinterpreted because we were used to explore the
potential of small scale industries in terms of local resources, local processes and absorption of
local labour only.

"Industry plays a vital role in shaping up the economy of the country. The field of industrial laws
covers a large number of enactments. There is no single Labour Code in our country. We have
different statutes dealing with different branches of labour and industrial laws. The present work
is a brief commentary of Twenty- one different labour enactments dealing with Labour-
Management relations, Social Security legislations and Minimum Standard legislations. This
edition has been enriched by incorporating relevant material on Collective Bargaining. Important
amendments and recent judicial decisions have also been included in this work. This book shall
be extremely useful to students of law. It shall also cater the needs for those preparing for
Business Administration courses or doing specialization in this branch of law. "
History of Industrialization in India:

This section gives a rough overview of the history of industrialization in India. Several areas will
be discussed in more detail in the following section.

Colonial rule

Under colonial rule, India, as with most other developing countries, followed a non-industrial
model. But many Indians believed that progress was retarded by this. It was believed that true
economic progress lay in industrialization; Smith’s and Ricardo’s ideas of international
specialization and mutually advantageous free trade 3 of 13 were rejected, at least until India
became an exporter of more sophisticated goods. Industrialization since Independence India’s
first Prime Minister, Jawaharlal Nehru, Premier from 1947 to 1964, saw industrialization as the
key to alleviating poverty. Industrialization not only promised self-sufficiency for his nation that
had just regained political sovereignty, but also offered external economies accruing from
technical progress. Believing the potential of agriculture and exports to be limited, Indian
governments taxed agriculture by skewing the terms of trade against it and emphasizing import
substitution, thus giving priority to heavy industry. Nehru believed a powerful state with a
centralized planned economy to be essential if the country was to industrialize rapidly. The
Industries (Development and Regulation) Act (IDRA) in 1951 laid the foundations for this
administrative control on industrial capacity. But, over time, the licensing requirements became
increasingly stringent and were accompanied by a gamut of procedures that required clearance
by a number of disparate and uncoordinated ministries. In order to pursue IS, the Import Trade
Control Order of 1955 subjected almost all imports to quantitative restrictions in the form of
import licenses. Greater global integration was encouraged with a significant reduction in the use
of import licenses and tariffs (down to 150% from 400%), an elimination of subsidies for
exports, and the introduction of a foreign-exchange market. Since April 1992, there has been no
need to obtain any license or permit to carry out import-export trade. As of April 1, 1993, trade is
completely free, barring only a small list of imports and exports that are either regulated or
banned1.

1
www.historydiscussion.net › Indian History › British Rule › Industrial Development
Special areas of economic policy:

After giving a rough overview of the history of industrialization, this chapter provides more
detailed information about the areas of human factors for industrialization, structure of foreign
investment, and the process of privatization. Human Factors for industrialization A very
necessary ingredient for promoting industrialization and technological change is the investment
in human capital. India’s current average adult literacy rate is low at 52%. There are large
inequalities between males (literacy: 64%) and females (literacy: 39%), between urban and rural
areas, and between different social classes. Low levels of female education in India are due to the
gender division of labour. Females are expected to spend most of their life in domestic work and
child rearing. Secondly, the practice of dowry and the ideology of hypergamous marriage can
turn female education into a liability. The remarkable neglect of elementary education in India is
all the more striking given the widespread recognition, in the contemporary world, of the
importance of basic education for economic development. Primary education in India is not
compulsory. However those who receive primary education and make it through secondary
school 5 of 13 have an excellent chance of getting a high-class University education. India has a
huge supply of people with more education than they can use. Amartya Sen argued that there
were deep-seated class biases in the pressures that have determined Indian educational priorities,
and that the inequalities in education are, in fact, a reflection of the inequalities of economic and
social powers of different groups in India. India’s hierarchical, brahmin-dominated society has
been noticeably casual about primary education; resources have been poured into the higher
education that benefits the upper class. The persistence of endemic illiteracy and educational
background in India generally limits the freedom and well-being of the Indian masses and has a
direct role in the relative deprivation of women in particular. Elementary education is extremely
important for a successful integration in the world market and if the process of growth were more
‘participatory’ it could raise the income-earning power of large parts of the nation. Even if
India’s high technology industries, such as modern computer software or engineering products
had an accelerated growth, the bulk of the Indian population would benefit only marginally. 2

2 https://www.tcd.ie/Economics/assets/pdf/SER/1999/Hambrock_Hauptman.pdf
Role of Industrial Development in Economic Growth:

The following points explain the role of industrial development in economic growth:
1. Modernization of Industry:
Industrial development is necessary for modernization of agriculture. In India, agriculture is
traditional and backward. The cost of production is high and productivity is low. We need
tractors, threshers, pump sets and harvesters to modernise agriculture. To increase productivity,
we need chemical fertilizers, pesticides and weedicides etc. These are all industrial products.
Without industrial development, these goods cannot be produced. Agricultural products like jute,
cotton, sugarcane etc. are raw materials. To prepare finished products like flex, textiles and sugar
etc. we need industrialization. So industrial development is necessary for modernization of
agriculture.

2. Development of Science and Technology:

Industrial development encourages the development of science and technology. The industrial
enterprises conduct research and develop new products. Ethanol in the form of biofuel is an
example of industrial development. Industry conducts research on its wastes and develops
byproducts like biodiesel from Jatropha seeds. Due to industrialization, we have made progress
in atomic science, satellite communication and missiles etc.

3. Capital Formation:
Acute deficiency of capital is the main problem of Indian economy. In agricultural sector, the
surplus is small. Its mobilisation is also very difficult. In large scale industries, the surplus is
very high. By using external and internal economies, industry can get higher profit. These profits
can be reinvested for expansion and development. So industrialization helps in capital formation.

4. Industrialization and Urbanisation:

Urbanisation succeeds industrialization. Industrialization in a particular region brings growth of
transport and communication. Schools, colleges, technical institutions, banking and health
facilities are established near industrial base. Rourkela was dense forest but now is ultra modern
town in Orissa. Many ancillary units have been established after setting up of big industry.
5. Self-reliance in Defence Production:
To achieve self-reliance in defence production, industrialization is necessary. During war and
emergency dependence on foreign countries for war weapons may prove fatal. Self-reliance in
capital goods and industrial infra-structure is also necessary. Atomic explosion at Pokhran
(Rajasthan) and Agni Missile are examples of industrial growth.

6. Importance in International Trade:

Industrialization plays an important role in the promotion of trade. The advanced nations gain in
trade than countries who are industrially backward. The underdeveloped countries export
primary products and import industrial products. Agricultural products command lower prices
and their demand is generally elastic. While industrial products command higher values & their
demand is inelastic. This causes trade gap. To meet the deficit in balance of payments we have to
produce import substitute products or go for export promotion through industrial development.

7. Use of Natural Resources:

It is a common saying that India is a rich country inhabited by the poor. It implies that India is
rich in natural resources but due to lack of capital and technology, these resources have not been
tapped. Resources should be properly utilized to transform them into finished industrial products.
The British people took India’s cheap raw-materials for producing industrial goods in their
country. India was used as a market for their industrial products. So India fought with poverty
and England gained during industrial revolution. Hence industrialization plays important role for
proper utilisation of resources.

8. Alleviation of Poverty and Unemployment:

Poverty and unemployment can be eradicated quickly through rapid industrialization. It has
occurred in industrially advanced countries like Japan. The slow growth of industrial sector is
responsible for widespread poverty and mass unemployment. So with fast growth of industrial
sector, surplus labour from villages can be put into use in industry.
9. Main Sector of Economic Development:
Industry is viewed as leading sector to economic development. We can have economies of scale
by applying advanced technology and division of labour and scientific management. So
production and employment will increase rapidly. This will bring economic growth and capital
formation.

10. Fast Growth of National and Per Capita Income:

Industrial development helps in the rapid growth of national and per capita income. The history
of economic development of advanced countries shows that there is a close relation between the
level of industrial development and the level of national and per capita income. For instance, the
share of industrial sector to national income was 26% and the per capita income in year 2000
was 36,240 dollar in USA.

The share of agriculture in the same year was only 2%. In Japan, the share of industrial sector in
her GDP was 36% and her per capita income was 36210 dollar. In India due to industrialisation,
the contribution of industrial sector to GDP has gone upto 28.5% in 2000-01 and per capita
income has risen to Rs. 16,486 in 2000.

11. Sign of Higher Standard of Living and Social Change:

A country cannot produce goods and services of high quality in order to attain decent living
standard without the progress of industrial sector.3

3
http://www.economicsdiscussion.net/articles/role-of-industrial-development-in-economic-growth/2227
Impacts of Industrialization in India:

India is a predominantly agricultural country. The well-being of Indian economy is directly

connected with the welfare of her masses dwelling in the rural areas. With the scientific and
industrial development, we had to adopt a vigorous industrial policy. The introduction of heavy
industries have both positive and negative impact on Indian society and economy.

Private sector in now encouraged to invest into heavy industries. It sought to establish in the
country a belt of heavy industries, like the gigantic steel plants at Durgapur, Rourkela and Bhilai.

Positive Impact of Industrialization:

Low cost of production: The introduction of industries have led to the decrease in the cost of
production of many essential items. The decrease in cost is the result of economy of Large scale
production. It allows to save time and labour. Industrial goods have become more affordable for
common people.

Self-sufficient: Before independence, we used to spend hundreds of millions of rupees over

import of cloth only, as we had no heavy industries in the real sense of the term. With the
advancement of textile industry in our country, we are able to manufacture clothes at a much
lower cost. In this way, we made ourselves self-sufficient in providing our basic needs.

Employment: Large industries need thousands of skilled and semi-skilled workers. It

provides massive employment opportunity for a large chunk of people.

Improved Agriculture: In the modern age efficient agricultural system is that, which is done
with the help of machine and mechanical devices. For this purpose, we have to adopt the latest
Industrial system.

Defense and security: But we must keep pace with the march of time. We have to defend our
country against foreign aggression. We must manufacture latest weapons, for it is most unwise to
depend upon foreign aid for defense of one’s country.
Negative Impact of Industrialization:

Mechanized, heavy and large-scale industries have negative impact which adversely affects the
environment, society and economy of this country.

Decline of cottage industry: Throughout, India has been proud of her rural cottage industries.
The silk produced by the village-weavers had been a source of attraction all over the world. With
the advent of heavy mechanical industries began the chapter of the decline of our village cottage
industries.

Mass migration from rural areas: Another attack is that with the creation of heavy mechanized
industries in the urban areas, the rural population would start mass-migration into town and
cities, thereby making the unemployment problem more acute and complex.

Depletion of natural resources: Due to industrialization, there is constant depletion of natural

resources. Many industries are powered by thermal power plants that consumes coal. Since, large
industries are spread over many acres of land, agricultural lands and forests are often cleared to
make available the required land.

Pollution: Large industries emits many harmful gases into the environment. The introduction of
harmful chemicals into air leads to air-pollution. The noises that it produces leads to noise-
pollution.

Increase of war-like situation: Out of the degenerating effects of heavy industries is born
contention. In developed nations, most of these Heavy industries are engaged in the production
of war materials. With a lot of war weapons in hands, there has been an increase in war-like
situation among countries.4

4
https://www.importantindia.com/15285/impact-of-industrialization-in-india/
Advantages and Disadvantages of Industrialization:

The development of science and technology has resulted in the growth and spread of Heavy
Industries. Human progress now-a-days is measured in terms of industrial potentialities and
prosperity.

But it is unfortunate that we have not yet realized the evils of industrialization due to unplanned
growth in our time. The ecological imbalances and greenhouse effects have posed serious threat
to human kind and its survival is questioned.

Advantages

The advantages of industrialization are given below:

1. The growth of industries has resulted in large scale production of goods which are
available to the consumer at much cheaper rates.
2. There is saving of time and labor.
3. Industrialization has resulted in a considerable rise in the standard of living of the people.
4. A number of substitutes in consumer goods are available. The customer get wide variety
of choices.
5. There are means to control and check the colossal wastage of human energy that can be
used otherwise.
6. Industrialization creates new job opportunities, leading to the removal of poverty to a
great extent.
7. Industrialization has also resulted in the development of new modes of transport making
quick export and import possible. The world has become a small place.5

5
https://www.importantindia.com/.../advantages-and-disadvantages-of-industrialization/
Disadvantages

The disadvantages of Industrialization are discussed below:

1. The immediate result is in the gradual disappearance of many natural resources, the
pollution of land, water and air.
2. The increase in vehicular traffic, launching of space ships and rockets by competing
nations, the incessant working of machines in factories have brought in noise-pollution
and dust and smoke.
3. The general dirty and unhealthy conditions in and around the industrial sites have affected
human health and happiness. Diseases, unheard of before, are spreading far and wide.
4. There has been instances of child labor in factories.
5. The exploitation of the poor by the rich has increases increases the crime-rate, isolation
and sense of loneliness.
6. The gradual displacement of manpower in industries is ultimately leading to
unemployment.
7. There has been a steady decline in spiritual values and well-being of man consequent
upon the growth of an artificial, mechanical and materialistic civilization brought about
by industrialization.
8. Capitalistic ethics with a craving for more and more money seem to dominate and
influence millions of people. The grave uncertainties in the money-market sometimes
bring misfortunes for the common people.
9. Inflation sets in, the value of money goes down and the poor working class becomes
poorer. Class conflicts, strike, dharnas, gheraos and bandhs and then lockouts cause
hardship and unrest. Society faces their impact in various ways.
10. Large scale heavy industries lead to a sharp fall in the number of cottage industries and
their gradual disappearance. Regional and local artisans and workers of various trades and
professions suffer a great deal.
IMPACT OF GLOBALIZATION ON INDUSTRY:

Positive Effects

Delicensing, removal of government restrictions on industries and liberalization of foreign

investments have reduced the time and money spent in formal procedures for obtaining
approvals from the government. This has shifted the focus of enterprises to the actual business of
production thus lowering project costs. Exports have increased so also has the volume of trade.
Policies in areas of foreign investments have attracted inflow of foreign capital especially in
sectors like electrical equipments , services and telecommunication. Indian industries and
financial institutions have undertaken investments abroad. Several Indian companies have
entered into joint ventures with foreign companies. They are becoming internationally
competitive. India is increasing it’s export orientation through setting up of SEZs (Special
Economic Zones) and they are making their international presence felt through mergers and
acquisitions. Industrial labour has become more efficient and skilled due to increased
competition and inflow of foreign knowledge. There is a rise in industrial productivity which is
reflected in higher industrial wages. Instances of industrial sickness have gone down. The goods
produced by Indian industries in this competitive scenario, sold at competitive prices give higher
levels of satisfaction to the Indian consumers as they are of superior quality. The small scale
sector is growing more robust with preferential loans, microfinance and other forms of credit
being made available. Some SSEs have grown into medium scale operations.

Negative Effects:

Certain sectors that were already well established when opened to foreign investment led to
exploitation of their resources by dominating MNCs and stifle their own R and D efforts. Use of
foreign technology may not be adaptable to Indian conditions. Sometimes MNCs deliberately
use less sophisticated technology in their subsidiaries. There’s uncontrolled growth of
consumerism and the problem of plenty as a consumer has lot of choice. Businesses are solely
motivated by private profits. Globalization has in fact raised capital intensity in production and
this has affected employment adversely aslabour has been replaced by machine. Globalization
has exposed domestic firms to risks such as fluctuations in prices, instability of profits and
uncertainties of demand and supply.
Role of the Government towards the Development of the Country in industrial sector

Role of the Government Can Broadly Be Divided Into Two Parts:

1. Direct Role:
The government is a social-welfare organisation. It works for the benefits of the common people
without making any motive to maximise profit.

Hence, the main agenda of the government is welfare maximisation.

The direct involvement of the government towards the country’s development is

summarised below:
(a) Agricultural Growth:
India is an agro-based country. The main occupation of the Indians is agriculture and its allied
activities like farming, poultry, cattle rearing, fishing, animal husbandry etc. According to recent
statistics, about 67 per cent of the labour force in India is engaged in agriculture. They are
producing about 22 per cent of the country’s GDP (Gross Domestic Product).

However, due to defective planning and improper implementation the productivity of Indian
agriculture is very poor. Improper land tenure system, wrong landholding inadequate credit
system, primitive technology and old system of ploughing and irrigation etc. are the main
reasons behind low productivity of Indian agriculture. To overcome all these difficulties,
government adopts several measures, including land reforms, new tenancy system, economic
subsidy etc. for the growth of per hectare agricultural production

b) Industrial Growth:
In the Second Five Year plan the Government of India had given huge emphasis on the
development of basic and heavy industries like steel, iron, cement, power etc. Although
consumer goods industries are growing up properly, but the capital goods industries have lost
their momentum. Most of the industries have become sick and weak. To save these situations, in
1991 the Government of India adopted New Industrial Policy.
By the policy of privatisation, the government gives enough licence to the private sectors for
developing consumer goods industries along with few heavy engineering goods. However, the
core basic industries like defence, railway, power and energy etc. are still under the government
hand. Proper credit facilities and adequate subsidies are also provided to the industrialists to
increase their scale of production.

(c) Development of Socio-Economic Infrastructures:

In order to maintain a smooth functioning between agriculture and industrial sectors, a sound
socio-economic infrastructure is necessary. Thus, government is investing huge amount money
of for the development of overhead capitals like energy, power, transport, communications,
education, health, housing etc. Moreover, the government is also giving stress on the
development of other tertiary sectors like banking finance, insurance etc.

(d) Efficient Utilisation of Resources:

All the countries have different types of natural and economic resources for their own use. These
resources are used optimally to satisfy maximum wants among the economy. This will enable the
country to achieve the path of economic development. Hence, efficient utilisation of domestic
resources is the main role of the government.

(e) Maintain Law and Order:

The government or the state plays an important role in maintaining peace law and order within
the economy through effective administrative system. The state runs defence, police and court to
maintain peace and order both externally and internally.6

6
https://www.odi.org/events/2048-role-industrial-policy-development
Make in India:

Make in India is an initiative which is initiated by Government of India, Launched by Prime

Minister Shree Narendra Modi. The motto behind the campaign “Make in India” is to attract
capital and technological investment and initiate product manufacturing in India. This is
launched to gain investment in the country from foreign and India too.

Reason behind the Campaign

Make in India is launched by GOI, by PM Narendra Modi to attract the Foreign Investors to
invest in India and manufacture products and Goods in India.

The government of India is running this campaign to encourage the domestic as well as
Multinational companies in order to manufacture goods and products in India.

Since India is growing very fast and developing tremendously, India Need employment as well
as manpower, so by looking at this, the effort made by PM and he launched Make in India
campaign.

The campaign was launched on 25th of September 2014 in Vigyan Bhawan which is in New
Delhi and This was launched by Prime Minister Shri Narendra Modi.
Benefits of Make in India Campaign
The population of the country is increasing day and night and this is creating a huge issue to the
employment to the youth of the country.

As the Campaign is running effectively, the youth are getting jobs in industries and other
employment sectors.

The main aim of the campaign is to make India a powerful economy which will help India to
become the developed nation from the developing nation.

At the launching of the Make in India Campaign, Top Business Tycoons and Industrialist were
there at the venue of launching where they ensure the employment guarantee.7

7
https://www.ibef.org › Indian Economy
Helping the Countries Economy
This campaign is launched to ensure the job guarantee and the effective impact on India
Economy. This will help the country to grow the Economy effectively.

The campaign will help to provide employment to the youth of the Country and this will surely
reduce the poverty level and other social issues of the country.

Shri Narendra Modi appeals the investors and manufacturers that they must manufacture the
project in India only but they can sell anywhere in India world.

The investors come to India and started investing and manufacturing goods and products in
India.

Here are some most invested industries which are occupied by Most of the Investors such as

 Electronics
 Electric
 Automobiles
 Agro
 Satellite and Submarines

People available while the launching of Make in India Campaign

This plan was launched in the presence of top CEOs from India Inc, ambassadors, international
industry leaders, ministers, government officials, etc.

Indian as well as International companies were invited at the time of launching of the Make in
India Campaign.

Most of the Domestic companies which are leaders in the field of Innovation and new
technology.

There is a special unit in the Commerce Ministry named “Invest India” which helps in guiding
all the top foreign investors in terms of regulatory and policy issues as well as assists in
obtaining the regulatory clearances.
Role and Functions of the Department of Industrial Policy & Promotion:

The Department of Industrial Policy & Promotion was established in 1995 and has been
reconstituted in the year 2000 with the merger of the Department of Industrial Development.
Earlier separate Ministries for Small Scale Industries & Agro and Rural Industries (SSI&A&RI)
and Heavy Industries and Public Enterprises (HI&PE) were created in October, 1999.
With progressive liberalisation of the Indian economy, initiated in July 1991, there has been a
consistent shift in the role and functions of this Department. From regulation and administration
of the industrial sector, the role of the Department has been transformed into facilitating
investment and technology flows and monitoring industrial development in the liberalised
environment.

The role and functions of the Department of Industrial Policy and Promotion primarily
include:

 Formulation and implementation of industrial policy and strategies for industrial

development in conformity with the development needs and national objectives;

 Monitoring the industrial growth, in general, and performance of industries

specifically assigned to it, in particular, including advice on all industrial and
technical matters;

 Formulation of Foreign Direct Investment (FDI) Policy and promotion, approval and
facilitation of FDI;

 Encouragement to foreign technology collaborations at enterprise level and

formulating policy parameters for the same;

 Formulation of policies relating to Intellectual Property Rights in the fields of

Patents, Trademarks, Industrial Designs and Geographical Indications of Goods and
administration of regulations, rules made there under;

 Administration of Industries (Development & Regulation) Act, 1951

 Promoting industrial development of industrially backward areas and the North

Eastern Region including International Co-operation for industrial partnerships and
 Promotion of productivity, quality and technical cooperation.
Department of Industrial Policy & Promotion is responsible for formulation and implementation
of promotional and developmental measures for growth of the industrial sector, keeping in view
the national priorities and socio-economic objectives. While individual Administrative Ministries
look after the production, distribution, development and planning aspects of specific industries
allocated to them, Department of Industrial Policy & Promotion is responsible for the overall
Industrial Policy.
Department of Industrial Policy and Promotion monitors the industrial growth and production, in
general, and selected industrial sectors, such as cement, paper and pulp, leather, tyre and rubber,
light electrical industries, consumer goods, consumer durables, light machine tools, light
industrial machinery, light engineering industries etc., in particular. Appropriate interventions are
made on the basis of policy inputs generated by monitoring and periodic review of the industrial
sector.
The Department is also responsible for facilitating and increasing the FDI inflow in the country.
Foreign Investment Promotion Board (FIPB), now located in Department of Economic Affairs,
Ministry of Finance, provides a time bound, transparent and pro-active FDI regime for approval
of FDI investment proposals. The Department also plays a pro-active role in resolution of the
problems faced by foreign investors in implementation of their projects through Foreign
Investment Implementation Authority (FIIA), which interacts directly with the Ministry/State
Government concerned.
The Department undertakes technical cooperation programmes with the World Intellectual
Property Organisation (WIPO), Geneva for the modernisation and upgradation of intellectual
property administration relating to patents, designs, trademarks and geographical indications and
the organization of Human Resource Development and awareness generation activities in the
country.
The Department is the nodal point for the promotion of productivity in the industrial sector. It
undertakes programmes of technical cooperation with the Asian Productivity Organisation
(APO), Tokyo by sourcing experts to advise on productivity related projects and by deputing
officials from the private and public sector to programmes conducted by the APO in the industry,
agriculture and service related sectors. It also promotes the adoption of quality standards relating
to the ISO 9000/14000 series through the accreditation services provided by National Boards for
Certifying Bodies and Auditors and Trainers under the Quality Council of India, which has been
certified by international accreditation bodies.
Department of Industrial Policy and Promotion is the nodal Department in Government of India
for coordinating and implementing programmes with United Nations Industrial Development
Organization (UNIDO) in India. UNIDO is a specialised agency of United Nations with a
mandate to act as the central coordinating body for industrial activities within the United Nations
system. India has been an active Member of the Organization since its inception. Under the
country service framework, UNIDO's activities in India are primarily focussed in the fields of
strengthening competiveness of the industry through technology upgradation, promoting
investment and promoting cleaner and environmentally substainable technologies.
With liberalisation of the industrial licensing regime, only 6 categories of industries require
industrial licensing under the Industries (Development and Regulation) Act, 1951. These sectors
have been kept under compulsory licensing considering their significance from environment,
public safety and strategic considerations. All industries, which do not require an industrial
license, are required to only submit an Industrial Entrepreneurs’ Memorandum (IEM).
The Department monitors the industrial sector through information on Industrial Entrepreneurs’
Memorandum (IEM), Letter of Intent (LOI) , Foreign Collaboration (FC) approval and inflows
and industrial production returns. The Department also coordinates the progress of ‘infrastructure
sectors’ approved for investment/technology transfer, promotion of private investment including
foreign investment in the infrastructure sector. The Department also compiles sectoral policies,
strategies and guidelines on infrastructure sector8.

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Industrialisation and foreign trade

Economists and policymakers in the developing countries have long agreed on the role of
government in providing infrastructure and maintaining stable macroeconomic policies. But they
have disagreed on policies toward trade and industry. The form of government intervention in
this area is the distinguishing feature of alternative development strategies. A convenient and
instructive way to approach the complex issues of appropriate trade policies for development is
to set these specific policies in the context of a broader 2 of 13 Less Developed Countries
strategy of looking outward or inward.

Outward-looking development policies encourage not only free trade but also the free
movement of capital, workers, enterprises, the multinational enterprise, and an open system of
communications. By contrast, inward-looking development policies stress the need for LDCs to
evolve their own styles of development and to control their own destiny. Within these two broad
philosophical approaches to development, a lively debate has been carried out between the free
traders, who advocate outward-looking export promotion strategies of industrialization, and the
protectionists, who are proponents of inward-looking import substitution strategies.

The advocates of import substitution (IS) – the protectionists – believe that LDCs should
substitute domestic production of previously imported simple consumer goods and extend this
later to a wider range of more sophisticated manufactured items – all behind the protection of
high tariffs and quotas on imports. In the long run, IS advocates cite the benefits of greater
domestic industrial diversification and the ultimate ability to export previously protected
manufactured goods, as economies of scale, low labour costs, and the positive externalities of
learning by doing cause domestic prices to become more competitive with world prices. By
contrast, advocates of export promotion (EP) of of both primary and manufactured goods cite the
efficiency and growth benefits of free trade and competition, the importance of substituting large
world markets for narrow domestic markets, the distorting price and cost effects of protection,
and the tremendous success of the East Asian export-oriented economies of South Korea,
Singapore, and Hong Kong9.

9
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CONCLUSION:

I would like to conclude that thus, the statistical materials examined above show that in many
developing countries, particularly in Asia, there are great possibilities for the use of forms of
industrial production having a low level of mechanization. In one or another concrete economic
situation very successful use can be made of the positive side of small-scale industry — the
greater gross and net output per unit of capital investment as compared with the factory industry.
At the same time it should be remembered that large-scale factory production, first of all the
production of the means of production, must remain the basis for the industrial development of
the countries investigated. Only the development of modern forms of industry can guarantee
these countries the most rapid and steady movement along the road of progress. In our view, the
present role of small-scale industry is that it makes it possible not to hurry with the development
of certain branches and enterprises, i.e., small-scale industry can supply the basic branches with
auxiliary output during the entire period of transition to a developed economy. In addition to the
fact that such "auxiliary" use of forms with a low level of mechanization will ensure the
production of a number of deficit products, it will also considerably increase general
employment, and, accordingly, the size of national income. In these forms of production there
will be a continuous growth of technical cadres familiar with the principles of a given production
unit, able to use at least the most elementary work tools, and possessing certain work skills.
BIBILIOGRAPHY:

WEBSITES:

https://www.epw.in/journal/.../industrialisation-and-foreign-trade-critical-review.html

dipp.nic.in/about-us/role-and-functions-department-industrial-sector-promotion

dipp.nic.in/about-us/role-and-functions-department-industrial-policy-promotion

https://www.ibef.org › Indian Economy

https://www.odi.org/events/2048-role-industrial-sector-development

https://www.importantindia.com/15285/impact-of-industrialization-in-india/

https://www.importantindia.com/15285/impact-of-industrialization-in-india/

www.historydiscussion.net › Indian History › British Rule › Industrial Development

https://www.tcd.ie/Economics/assets/pdf/SER/1999/Hambrock_Hauptman.pdf

BOOKS:

LABOUR & INDUSTRIAL LAW

Financing for Small Scale Industries in India