Professional Documents
Culture Documents
Development in India
Dr. K. Narayanan
Professor
Department of Humanities & Social Sciences, IIT Bombay
knn@iitb.ac.in
Presentation
• Meaning and Aspects of Policy
• Policy in action [inaction?]
• De-regulation and Liberalisation Measures
• SAP & Globalisation
• Economic reponse to policy changes
– Trade
– Technology
– FDI
Industrialisation Strategy
• Initiated in 1956 [Second Five Year Plan]
• Heavy industry biased
• Import Substitution and Export Pessimism
• Pattern of Investment largely guided by “Capital
constraint”
• Large role for Public Sector
• Metal and Metal based
• Public Investment in Infrastructure
Policy during the early Years
• Major Policy Initiatives
• Industrial Licensing : 1950s
• MRTP Act in 1969 to regulate
Monopolies
• FERA 1973 to regulate Foreign
Companies
• From Import Substitution to Export
Promotion
Policy Framework
• Regulatory Framework
• Product Specific and Capacity Licensing
• Imports in Consumer goods in banned list
• Price Control on many items enforced
through regulation on rate of return to
capital
• Restrictions on import of Technology
Broad Overview of
Industrialisation
• Increase in share of Industrial output in GDP
• Increase in Employment in the Industrial sector in
total employment
• Role of Manufacturing sector in Industries
• Capability to produce diversified commodities
• Importance to Small Scale sector
• Growth of unorganized sector within the
manufacturing.
Industrialization Experience
• However,
• Initial high growth could not be sustained
• Supply side bottlenecks including
infrastructure constraints and restrictive
trade and industrial policy
• Inadequate growth in demand
• Slow-down in public investment
• Less than minimum efficient scale
Policy Response during the 1980s