PROGRAMMES FOR INDUSTRIAL DEVELOPMENT UNDER THE PLANS On the eve of the First Plan, the industrial development in India was confined largely to the consumer goods sector, the important industries being cotton textiles, sugar, salt, soap, leather goods and paper. Thus, the industrial structure exhibited the features of an underdeveloped economy. Industries manufacturing ‘intermediate products’ like coal, cement, steel, power, alcohol, non-ferrous metals, chemicals Scanned with CamScannertc. were also established but their production was oc, were also es small as productive capacity was considerably below the requirement except ceme P ou (except cement). far as the ‘capital goods sector i concerne a ded0n the neered, only a small beginning had been made On the whole, while consumer goods industries y Hl established, producer goods industries lagged considerabl behind “— An The First Plan did not envisage any large-scale prog 5 Programmes of industrialisation, Accordingly, only % 55 “ rore out of the total expenditure of % 1,960 crore in the irs: ere 2.8 i t Plan (@ mere 2.8 per cent) was spent on ‘industry and mineral a The Plan made an attempt to give a practical shape to the concept of mixed economy by providing for the development of both, the public sector and private sector, in a complementary manner.) The Second Plan accorded top priority to programmes of industrialisation as would be clear from the fact that the expenditure on industry and minerals was hiked to 938 crore under this plan which was 20.1 per cent of the total expenditure of € 4,672 crord, Based on Mahalanobis Model, the Second Plan set out the task of establishing basic and capital goods industries on a large scale so that a strong base for industrial development in the future could be built. (The strategy was spelt out in the Plan in the following words: “If industrialisation is to be rapid enough, the country must aim at developing basic industries and industries which make machines to make the machines needed for further development, This calls for substantial expansion in iron and steel, non-ferrous metals, coal, cement, heavy chemicals and other industries of basic importance...” Accordingly, such industries were given top priority in the industrial sector. Three steel plants of one million tonnes ingot capacity each were set up in the public sector at Bhilai, Rourkela and Durgapur besides the expansion and modernisation programmes undertaken in the private secton Third Five Year Plan also pressed forward with the establighthent of basic capital and producer goods Programme — so that the growth of the economy i the “SUbSEquent plans could become self-sustaining)As a" esult, programmes for expansion and diversificatién of capacity ‘of the heavy engineering and machine building industries, Scanned with CamScanner| output was the fact that 328 ial steels, iron castings and forgings, alloys tool and spec! pee and ferro-alloys, and steps to as output 7 ilisers and petroleum products were undertaken) E ipenditure on industry in the Third Plan was © 1,726 erre nbc 20.1 per cent of the torat expenditure of 577 under the Plan, __The above discussion shows that the Secon and ‘Third Plans placed great emphasis on building up the capital goods industries and base industries. Asa rest the insustiat structure built up over these plans was heavily biased in favour of these industries (Most of these instnies sete se up in the public sector witfr the result That the size of the Bublic sector also grew rapid. The growth of the consumer Goods Wdisties was mostly leit to the pir jor, This ied and SMhictune of industrial development was promol mifiured in the Fourth and FHWh Plans also. with MOTO cfianges ere and there. Oui of the toral ‘expenditure of 3. ‘crore in the Fourth Plan, industry received £2,864 crore (ie. 18.2 per centof the total). The expenditure on industry was hiked to 22.8 per cent (© 8,989 crore out of the total of © 39,426 crore) in the Fifth Plan. ‘ew of jndustrial development over the thirty la (be Sixth Plan noted that industrial had incttased by about 5 times during this than this quantitative inerease in the industrial structure had been - ridely diversified covering broadly the entite_range of | aes sand copia SS esenatar Ei the industrial sector in the ‘Sixth Plan was % 15,002 crore which was 13.7 per cent (es total expenditure of Ina re years of pi production period. More important €1,09,292 crore in the Plan.| the period of the Sixth Plan saw wide range changes in the industrial policy of the government. The industrial and trade policies were ‘substantially liberalised.)As a result, industrial production started picking up but ifalso created certain distortions in the economy as the import-intensive sector of consumer durables and the group of chemicals, petrochemicals and allied industries marched much ahead of ‘other sectors and groups of industries. The overall outlay envisas ome Seventh Pit industrial and mineral programmes Tas stated earlier, data on village and small-scale industries are excluded) in the ‘public sector was © 19,663 crore. As against this, the tual expenditure was © 25,971 crore which is 11.9 per of the total expenditure of © 2,18,730 crore in the snth Plan.(industrial production was targeted to grow Fhe rate of 87 per cent per annum, The actual average te of growth during the Seventh Plan works out at 8.5 per ent per annumas far as the Eighth Plan is concerned, the all outlay Tor industrial and mineral programmes in the Ublic sector was kept at € 40,588 crore. This was only 9.3 1 Economy stat outlay of €4.34,100 + cent of thee 4.100 This reduced (allocation siry_and_min Pighh Plan Ge Sine with the liberalsati Fannunced i the New 100 inal Policy of 1997 fie. private sel a icy of tor awhich. = destined i ‘Feasasinaly important re whet ondstrateyic jose field seers csideration sermipran Bn actual expen so ata sector in thFaghth Plan reveal hag ve on industry during the Eighth pry. netual expenditure re jast © 404621 crore ont of the Fal Pigg crore. This comes to just tp, ier the Eighth Plan, in industeval ictivitie period expenditure of C48 cent of total expenditure 1 The Ninth Plan outlay for indust 17 63,148 crorefthe Ninth Plan + kepthat mare broad sector-wise, therefore this includ tillage and smallscate industries as sell) Th of @ 8,59,200 crore. Hor cent of the total Plan ou the actual expenditure on Ninth Plan was only © 40408 crore jn cent of toral actual expenditare itt the Plan{ Ve So dan industrial growth rate of 8.2 Per cent pe the actual growth rate w industry and minerals in hich was just 5 Plan envis annum while per annum. (ie Fenth Five Year Plan proposed an oui 758, 9 crore for industry and minerals yshich w 9 per cent of the total outlay of @ 1 the actual expenditure on industry w cent of actual exper 139 crore. 4 against this, % 64,655 crore which was 4.0 per c' under the Tenth Plan.(this reduced alloc: is in line with the govamnment’s strate privatise and more space to the private expand its activitiesIn this context, the followin: of the Plan is notéworthy, “The industrial developme strategy is being re-oriented towards enabling our ¥ private sector to reach its full entrepreneurial poten contribute towards production, employment and income generation. Unless the economic environment is condi to high levels of private sector participation, there es" little progress in accelerating industrial development of 10 per tion to in to lib growth.”*(The Plan set an ambitious tare per annutt growth for the industrial sector whe achievement was 8.2 per cent per annum. The Eleventh Fie od an outlay of © 1,53,600 crore fi per cent of the total pst 1 2006-07 prices).* Tarest Year Plan propos industrial sector which was outlay of 8 36,44,718 crore growth in the industrial s&ctor was Kept at 10 per cent annum, The actual expenditure in the Eleventh Plan 82° % 1,85,653 crore (at current prices) which was 5.1 pet 67 of total expenditure Ue rate of growth of the indust ca lg Twelfth sector in this Plan was.9 per cent per ann he Scanned with CamScannerPlan proposes an outlay of & 3,77,302 crore at current tat prices) for the industrial sector which is 4.9 per cent of the fre total outlay of € 76,69,807 crore.‘ (Target for industrial ce growth has been kept at 10 per cent-per cies) Scanned with CamScanner