What Is Industrial, Meaning, Definition, Beginning Of Industrialisation

Today India is one among the top ten industrial nations of the world. Industrial development has changed India’s economic status from underdeveloped to developing country. Industrial development today is considered as prerequisite for modern economic development. That is why all countries of the world, whether big or small, rich or poor and developed or developing are channelising their resources to promote rapid industrialisation. Before the rise of the modern industrial system, India had a flourishing state of cottage and household industries and Indian manufacturers had a worldwide market. Indian muslin, cotton and silk fabrics, calicoes, artistic wares etc were in great demand all over the world.

Beginning of Industrialisation

The real beginning of modern industries in India started with the establishment of cotton textile industry at Mumbai in 1854. But post independence witnessed a change in character and purpose of industrialisation. Identifying the need of a well-developed industrial sector, in 1951 India’s Prime Minister Jawaharlal Nehru announced that India had to become industrialised as fast as possible. The policy-makers did everything they could to improve the state of the manufacturing sector in India.

Manufacturing sector is critical to Indian economy as it promises to provide gainful productive employment, shift of surplus agricultural labour to industries, reduce import bill and hence rationalise fiscal and current account deficit along with earning in export sector through promotion of Special Economic Zones.

Phases of Industrialisation

The industrial growth before 1991 can be categorised into three main time periods. These are

(i) Phase-I (1950-65) Major industries were sugar, cotton textiles, jute, iron and steel smelting, chemicals, petroleum, non-metallic mineral products, basic items etc.

(ii) Phase-II (1965-80) Major industries were basic goods, capital goods, high technology industries, ferrous metal, construction material and mechanical engineering industries.

(iii) Phase-III (1980-91) Major industries were consumer durables, export-oriented industries, modern technology based industries, petroleum products, non-electric machinery, food beverages etc.

Industrial Resolutions

To realise the dream of development of industries, Indian Government adopted certain industrial resolutions and Five Year Plans. The First Industrial Policy Resolution, 1948 contemplated a mixed economy, reserving a sphere for the private sector and another for public sector.

classification Then it was Industrial Policy Resolution, 1956 which laid down new of industries (Schedule A, Schedule B and Schedule C), fair and non-discriminatory treatment of private sector, encouragement of village and small industries removing regional disparities. This policy was based upon Mahalanobis model of growth which suggested that there should be an emphasis on the heavy industries and led the Indian economy to a higher growth rate.

The 1956 Resolution was followed by Industrial Policy 1977, 1980 and the most important Industrial Policy of 1991. The 1991 policy envisages to culminate the gradual liberalisation since 1956 and unshackle the Indian economy from cobwebs of bureaucracy, introduce liberalisation, remove restriction on direct foreign investment and free the domestic entrepreneur from restrictions of Monopolistic and Restrictive Trade Practice (MRTP) Act. Indian economy hitherto a closed economy was opened to the forces and elements of globalisation. The abolition of industrial licensing, dismantling of price controls, dilution of reservation of small-scale industries and virtual abolition of monopoly law enabled Indian industry to blossom.

Five Year Plans

Apart from industrial policy, the Five Year Plan devised by the Planning Commission also shaped industrial development in India. Though the First Five Year Plan was predominantly agricultural plan, industry was not totally neglected. Hindustan Machine Tool, Integral Coach Factory, UP Government Cement Factory etc were set up during the First Five Year Plan.

The tempo of industrial development gathered momentum during Second Five Year Plan which adopted Mahalanobis Model with major industries like Rourkela Steel Plant, Bhilai Steel Plant etc. The subsequent plans also focused on industries but were without considerable success. It was the Eighth Five Year Plan which followed Industrial Policy Resolution 1991 and the popular reform liberalisation, privatisation and globalisation ignited the fire for the industrialisation in India which continued in all the subsequent plans.

Small-scale industry is recognised by the Government of India as a priority sector way for rapid industrialisation. It is a prerequisite for balanced growth, is employment intensive and export earning. Measures towards its development have been taken since First Five Year Plan and received special emphasis in Eleventh and Twelfth Five Year Plan. The Twelfth Five Year Plan envisaged capacity building, credit guarantee, launch of venture capital etc for Micro, Small and Medium Enterprises (MSMEs).

Government Schemes

In 2015, the NDA Government announced Make in India scheme, a major national initiative designed to foster innovation, enhance skill development, protect intellectual property and build best in-class manufacturing infrastructure.

eurobi But Make in India cannot be sustained without encouragement to entrepreneurship, hence, Startup India took birth. To encourage entrepreneurship amongst Scheduled Caste, Scheduled Tribe and women, Startup India was launched which also promised additional boost to MSME sector and add to the MUDRA scheme for refinancing micro finance sector.

The National Manufacturing Policy also envisaged developed National Investment and Manufacturing Zone (NIMZ) as integrated industrial townships with state of the art infrastructure and land use.

Government has also provided a push to the khadi, village and coir industries by providing them with improved equipment, common facility centres, business development services, training, capacity building, design and marketing etc. under the Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

A Scheme for Promotion on Innovation, Rural Industry and Entrepreneurship (ASPIRE) aims to create new jobs, reduce unemployment, omote entrepreneurship culture in India, boost grassroots economic development at district level and facilitate innovative business solutions for unmet social needs.

The credit linked subsidy scheme facilitates technology upgradation of small scale industries, by providing 15% upfront capital subsidy. It will help in upgrading plant and machinery of small enterprises with state of the art technology. The Credit Guarantee Scheme for micro and small enterprises also facilitates MSMEs by providing free credit facilities.


Though industrialisation in India has come a long way from planning age to NITI Aayog (ensuring Cooperative Federalism), Revolutionary Industrial Policy, Manufacturing Policy, but still there is way ahead to go. The Economic Survey has categorised India as refuge of stability and outpost of opportunity. This stability and opportunity should be realised earliest to ensure Indian manufacturing sector shine brightly in the international domain.

Education has to be linked with industries (vocational education, so that Indian youths are skilled, without which indigenisation of industry would remain a distant dream. The new mantra of industrialisation in 21st century should be to inculcate skills along with a hospitable and encouraging environment to improve ease of doing business in India. In the 21st century when science and technology have gained unquestionable supremacy, the level of the industrial development of a country has become an important factor to judge its actual development.

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