UNIT 1

1. Indian
Economic
Development

2. Sectoral Development In India
Unit – I

3. Agenda Style
Sectoral Development of the Indian Economy and their interrelationship
Growth and Composition
Trends in Production and Productivity
Primary Sector
Growth and Structure of Industry. Industrial Policies.
Secondary Sector
Nature, structure and development.
Tertiary Sector

4. Introduction
Indian Economic Development: At a Glance

5. India’s GDP at nominal
price. It is $8.72 trillion
(PPP)
US$ 2.25 trillion
Average Household
income
US$ 8671
Foreign Trade
Contribution to India’s
GDP
49%
Per capita GDP
China-$6894
US$ 1718
Demograpic Divident of
India. It is 37 yrs in
China
27.3 yrs.
The total labour force
in India
502 mn
Development Indicator
Selective Indicators of Indian Economic Development (2011)

6. Agriculture and agriculture
related activities
Agriculture and
Allied Activities
All industrial production where
physical goods are produced
come under the
secondary sector
Industrial Sector
Financial services,
management consultancy,
telephony and IT are
examples of service sector.
Service Sector
Primary Secondary Tertiary
Economic Structure
Structure and Growth of Indian Economy

7. Primary Sector
When the economic activity depends mainly
on exploitation of natural resources
Secondary Sector
When the main activity involves
manufacturing then it is the secondary sector.
Tertiary Sector
When the activity involves providing
intangible goods like services
Economic
Structure

8. Growth and CompositionSectoral Development of the Indian Economy and their
interrelationship

9. S. No. Period GDP Percapita GDP
1 1900–01 to 1946–47 0.9 0.1
2 1950–51 to 1960–61 3.7 1.8
3 1960–61 to 1970–71 3.4 1.2
4 1970–71 to 1980–81 3.4 1.2
5 1980–81 to 1990–91 5.2 3.0
6 1990–91 to 2000–01 5.9 4.0
7 2000–01 to 2010–11 7.6 6.0
1951 – 2016 6.08
GDP Growth in India
Growth of Gross Domestic Product in India at constant prices

10. Gross Domestic Product
Growth Performance of GDP in India (in %)
1991–92 to 2010–2011
Post-Reforms Period
1950–51 to 1990–91
Pre-Reforms Period
1900–01 to 1946–47
Colonial Period
2011–12 to 2015– 6
Globalised India
0.9
3.5
6.2
7.7

11. Period Primary Sector
Secondary
Sector
Tertiary Sector GDP
1950–51 to 1960–61 2.8 6.1 4.1 3.7
1960–61 to 1970–71 2.1 5.4 4.4 3.4
1970–71 to 1980–81 2.0 4.2 4.5 3.4
1980–81 to 1990–91 3.5 5.5 6.6 5.2
1990–91 to 2000–01 3.3 6.2 7.5 5.9
2000–01 to 2010–11 3.2 8.5 8.9 7.6
Decadal Agriculture (%) Industry (%) Service (%) (%)
Composition
Structural Composition of Indian Economy at constant price

12. 2014
Rs. 9801370
2016
Rs. 11381002
2015
Rs. 10536984
2017
Rs. 12189854
India’s GDP
Growth of India’s GDP in the Recent Past (Rs. in Crores )

13. Interrelationship among the sector
Industry
Agriculture
Economic
Development
Service

14. Tertiary
IndustryAgriculture

15. GDP (%)
Year Agriculture Industry Service
2013– 4 18.6 30.8 50.6
2014– 5 18.0 30.2 51.8
2015– 6 17.5 29.6 52.9
2016–17 17.4 28.8 53.8
Sectoral contribution to GDP
Share of sectoral contribution to the GDP
Agricultural
Sector
17%
Industrial
Sector
29%
Service
Sector
54%

16. Primary Sector

17. Production and
Productivity
Trends in Production and
Productivity of Agricutlural
sector in India.

18. Agricultural
Production
It refers to crop/vegetable and
animal production that is made available for
human consumption and animal feed.
Agricultural Production
Crop production data
include: main crops (dried
pulses and protein crops,
root crops, industrial
crops, plants harvested
green) vegetables, melons
and strawberries.

19. Foodgrains Production
Foodgrains Production in India (in Million Tonnes)
Year Rice Wheat
Coarse
Cereals
Total
Cereals Pulses
total
foodgrains
1957-58 25.53 7.99 21.23 54.75 9.56 64.31
1960-61 34.58 11 23.74 69.32 12.7 82.02
1965-66 30.59 10.4 21.42 62.41 9.94 72.35
1973-74 44.05 21.78 28.83 94.66 10.01 104.67
1979-80 42.33 31.83 26.97 101.13 8.57 109.70
1984-85 58.34 44.07 31.17 133.58 11.96 145.54
1989-90 73.57 49.85 34.76 158.18 12.86 171.04
1996-97 81.73 69.35 34.11 185.19 14.15 199.34
2001-02 93.34 72.77 33.38 199.48 13.37 212.85
2006-07 93.36 75.81 33.92 203.08 14.2 217.28
2007-08 96.69 78.57 40.75 216.02 14.76 230.78
2008-09 99.18 80.68 40.04 219.9 14.57 234.47
2009-10 89.09 80.8 33.55 203.45 14.66 218.11
2010-11 95.98 86.87 43.4 226.25 18.24 244.49

20. Non-Foodgrains
Non-Foodgrains production in India (in million tonnes)
year
Ground
nut
Rapese
ed &
Mustard
Soya
been
Total
Sugar
cane
Tea Coffee
Cotton
(litt)
Raw
Jute &
Mesta
Tobaco
1957-58 4.71 0.93 - 6.35 - 4.96 5.33 71.16 - 0.24
1960-61 4.81 1.35 - 6.98 - 5.60 5.26 110.00 - 0.31
1965-66 4.26 1.30 - 6.40 - 4.85 5.78 123.99 - 0.29
1973-74 5.93 1.70 0.04 9.39 86.39 6.31 7.68 140.81 472.00 0.46
1979-80 5.77 1.43 0.28 8.74 149.84 7.65 7.96 128.83 544.00 0.44
1984-85 6.44 3.07 0.95 12.95 195.11 8.51 7.79 170.32 639.90 0.49
1989-90 8.10 4.13 1.81 16.92 118.05 11.42 8.29 225.57 684.10 0.55
1996-97 8.64 6.66 5.38 24.38 205.00 14.23 11.13 277.56 780.14 0.62
2001-02 7.03 5.08 5.96 20.66 300.60 10.00 11.68 297.21 851.41 0.55
2006-07 4.86 7.44 8.85 24.29 288.00 22.63 11.27 355.52 973.07 0.47
2007-08 9.18 5.83 10.97 29.76 262.00 25.88 11.21 348.19 987.02 0.44
2008-09 7.17 7.20 9.91 27.72 262.00 22.28 10.37 285.03 972.77 0.57
2009-10 5.43 6.61 9.96 24.88 290.00 24.02 11.82 292.3 991.18 0.69
2010-11 8.27 8.18 12.74 32.48 302.00 33.00 10.62 342.38 966.73 0.88

21. Agricultural
Productivity
Agricultural productivity is
measured as the ratio of
agricultural outputs to agricultural
inputs.
Inputs
Seeds, Fertilizers,
Pesticides, Agro
Chemicals etc.,
Farm equipments: agri-
implements, machinery,
tractor- combine-
harvesters, tillers, etc.,

22. Foodgrains Productivity
Productivity of Foodgrains in India (Kg/Hect.)
Year Rice Wheat
Coarse
Cereals
Total
Cereals Pulses
total
foodgrains
1957-58 790 682 495 630 424 587
1960-61 1013 851 528 753 539 710
1965-66 862 827 483 676 438 629
1973-74 1151 1172 623 918 427 827
1979-80 1074 1436 652 982 385 876
1984-85 1417 1870 795 1285 526 1149
1989-90 1745 2121 922 1530 549 1349
1996-97 1882 2679 1072 1831 630 1614
2001-02 2079 2762 1131 1980 607 1734
2006-07 2131 2708 1182 2021 612 1756
2007-08 2202 2802 1431 2151 625 1860
2008-09 2178 2907 1459 2183 659 1909
2009-10 2125 2839 1212 2075 630 1798
2010-11 2239 2988 1531 2256 691 1930

23. Non-Foodgrains: Productivity
Productivity of Non-Foodgrains production in India (Kg/Hect.)
year
Ground
nut
Rapese
ed &
Mustard
Soya
been
Total
Sugar
cane
Tea Coffee
Cotton
(litt)
Raw
Jute &
Mesta
Tobaco
1957-58 734 387 - 502 34325 - - 105 944 669
1960-61 745 467 - 507 45549 - - 125 1049 766
1965-66 554 446 - 419 43717 - - 104 936 778
1973-74 845 493 829 555 51163 1311 555 142 1188 1001
1979-80 805 411 568 516 49358 1455 889 160 1177 1031
1984-85 898 771 768 684 57673 1606 936 196 1242 1113
1989-90 930 831 801 742 65612 1652 534 252 1646 1335
1996-97 1138 1017 989 927 66496 1809 816 265 1819 1444
2001-02 1127 1002 940 913 67370 1670 937 186 2007 1565
2006-07 866 1095 1063 916 69022 1716 840 421 2170 1274
2007-08 1459 1001 1235 1115 68877 1706 761 467 2101 1255
2008-09 1163 1143 1041 1006 64553 1679 748 403 2071 1456
2009-10 991 1183 1024 958 70020 1711 815 403 2349 1559
2010-11 1411 1185 1327 1193 70091 1669 838 499 2192 1794

24. Production &
Productivity
Production and Yield of Major Crops
Area, Production and Productivity of majro crops in India
during 2013–14 to 215–16

25. Area, Production and Productivity
Area, Production and Productivity of major crops in India
Crops Area (Lakh hectare) Production (MT) Yield (Kg/Hect)
2013–14 2014–15 2015–16 2013–14 2014–15 2015–16 2013–14 2014–15 2015–16
Rice 441.36 441.10 433.88 106.65 105.48 104.32 2416 2391 2404
Wheat 304.73 314.65 302.27 95.85 86.52 93.50 3145 2750 3093
Coarse
Cereals
252.19 251.70 237.75 43.29 42.86 37.93 1717 1703 1596
Pulses 252.12 235.54 252.59 19.25 17.15 16.47 764 728 652
Food
grains
1250.41 1243.00 1226.50 265.04 252.02 252.22 2120 2028 2056
Oilseeds 280.50 255.96 261.34 32.74 27.51 25.30 1168 1075 968
Sugarcane 49.93 50.66 49.53 352.14 362.33 352.16 70522 71512 71095
Cotton 119.60 128.19 118.72 35.90 34.80 30.15 510 462 432
Jute &
Mesta
8.38 8.09 7.85 11.69 11.12 10.47 2512 2473 2399

26. 265.04
Million Tonnes
in 2013–14
252.22
Million Tonnes
in 2015–16
Foodgrains
productionProduction of Rice was 104.32
million tonnes in 2015–16, is lower
by 2.33 million tonnes than their
production 106.65 million tonnes in
2013 – 14
1. Rice
Production of coarse Cereals was
37.93 million tonnes in 2015–16, is
lower by 5.36 million tonnes than
their production 43.29 million
tonnes in 2013 – 14
3. Coarse Cereals
Production of Wheat was 93.50
million tonnes in 2015–16, is lower
by 2.35 million tonnes than their
production 95.85 million tonnes in
2013 – 14
.
2. Wheat
Production of Pulses was 16.47
million tonnes in 2015–16, is lower
by 2.78 million tonnes than their
production 19.25 million tonnes in
2013 – 14
4. Pulses
Production
Trend in Production of foodgrains in India

27. 2120
Kg/Hect.
in
2013–14
2056
Kg/Hect
in
2015–16
Productivity of Rice was 2404
Kg/hect in 2015–16, is lower by 12
Kg/hect than their yield 2416
Kg/hect. in 2013–14
1. Rice
Productivity of coarse Cereals was
1596 Kg/hect in 2015–16, is lower
by 121 Kg/hect than their yield
1717 Kg/hect. in 2013–14
3. Coarse Cereals
Productivity of Rice was 3093
Kg/hect in 2015–16, is lower by 52
Kg/hect than their yield 3145
Kg/hect. in 2013–14
2. Wheat
Productivity of Pulses was 652
Kg/hect in 2015–16, is lower by 112
Kg/hect than their yield 764 Kg/hect.
in 2013 – 14
4. Pulses
Productivity
Trend in productivity of foodgrains in India
Foodgrains
Productivity

28. Non-
foodgrains
production
Production of Oilseed was 25.30
million tonnes in 2015–16, is lower
by 7.44 million tonnes than their
production 32.74 million tonnes in
2013–14
1. Oilseed
Production of Cotton was 30.15
million tonnes in 2015–16, is lower
by 5.75 million tonnes than their
production 35.90 million tonnes in
2013 – 14
3. Cotton
Production of Sugarcane was
352.16 million tonnes in 2015–16, is
marginally higher by 0.02 million
tonnes than their production 352.14
million tonnes in 2013 – 14
.
2. Sugarcane
Production of Jute & Mesta was
10.47 million tonnes in 2015–16, is
lower by 1.22 million tonnes than
their production 11.69 million tonnes
in 2013 – 14
4. Jute & Mesta
Production
Trend in Production of Non-foodgrains in India

29. Non-
foodgrains
production
Productivity of Oilseed was 968
Kg/Hect in 2015–16, is lower by 200
Kg/Hect. than their yield 1168
Kg/Hect. in 2013–14
1. Oilseed
Productivity of Cotton was 432
bales/Hect in 2015–16, is lower by
78 bales/Hect. than their yield 510
bales/Hect. in 2013–14
3. Cotton
Productivity of Sugarcane was
71095 Kg/Hect in 2015–16, is higher
by 573 Kg/Hect. than their yield
70522 Kg/Hect. in 2013–14
.
2. Sugarcane
Productivity of Jute & Mesta was
2399 bales/Hect in 2015–16, is lower
by 113 bales/Hect. than their yield
2512 bales/Hect. in 2013–14
4. Jute & Mesta
Productivity
Trend in Productivity of Non-foodgrains in India

30. Secondary Sector
Growth and Structure of Industry & Industrial Licensing Policies

31. Industrial
Sector
The secondary sector include
industries that produce a finished, usable
product or are involved in construction.
Secondary Sector
This sector generally takes the
output of the primary sector
and manufactures finished
goods or where they are
suitable for used by other
businesses, for export or sale
to domestic consumers

32. ● Mining and quarrying (2.2%)
● Manufacturing (16.5%)
● Electricity, Gas and Water Supply (2.5%)
Industrial Sector
in India
● Construction (7.6%)
Structure of Industry in India
(28.8%)
Secondary Sector
Growth and Structure of Industry in India

33. Industries in
India
Mining, Manufacturing, Electricity,
Gas, and wter supply; construction
and other industries

34. Growth of Industries
Sectoral Growth of GDP at Factor cost in India
Sector 1950–51
to
1980–81
1980–81
to
1989–90
1994–95 1999–
2000
2003–04 2006–07
Mining & Quarrying 4.5 6.4 9.3 3.7 3.1 5.7
Manufacturing 5.1 6.8 12.0 4.0 6.6 12.0
Electricity, Gas and
Water Supply
9.5 8.8 9.4 5.2 4.8 6.0

35. 2012 – 13 2013 – 14 2014 – 15 2015 – 16
8.8%
7.5%
3.8%
3.3%
Growth of Industrial Sector
Growth of Industrial Sector in India (2012–13 to 2015–16)

36. Electricity, Gas &
Water Supply
8.68%
Mining and
Quarrying
7.63%
Mining &
Quarrying
57.29%Construction
26.38%
28.8%
The share of Industrial sector to the GDP of
India in the year 2016 – 17 .
Growth Rate (%)
Year
Mining &
quarrying
Manufac
turing
Electrify,
Gas and
Water
Supply
Constru
ction
2012 – 13 0.6 5.5 2.7 0.3
2013 – 14 0.2 5.0 4.2 2.7
2014 – 15 11.7 8.3 7.1 4.7
2015 – 16 10.5 10.8 5.0 5.0
2016 – 17 1.8 7.9 7.2 1.7
Growth and Structure
Sectoral Share of Industries to the GDP of India

37. Secondary Sector
Industrial Licensing Policy

38. 1948,1956,1970,1980 & 1991
Industrial Policy Resolution

39. official strategic effort to encourage
the development and growth of part
or all of the manufacturing sector as
well as other sectors of the economy
Industrial Policy
01 rules, regulations, principles, policies
and procedures laid down by
government for regulating,
developing and controlling industrial
undertakings in the country
Industrial Policy
02
Industrial Policy is a formal
declaration by the Government
whereby it outlines its general
policies for industries.
Formal Decleration
03 Government Policy towards teh
establishment of Industries, their
working and management
Government Policy
04
Industrial Policy
Meaning

40. Objectives & Importance
helps in identifying, collecting and
using resources properly
Deployment of Natural
Resources
use of modem and latest production
techniques m industrial sector
Modernisation
provides an impetus to rapid
development of industries and
industrial growth
To Augment Industrial
Production
facilitates balanced development
of various sectors
Balanced Industrial Development
concessions for rapid development
of industrially backward
areas/regions
Balanced Regional Development

41. Industrial Policies in India
19911980197019561948
After
independence,
the first Industrial
Policy was
announced in
India.
The Industrial
Policy was revised
in 1956.
Review and
Reappraisal of
Industrial licensing
during 4th Five–
Year–Plan
Industial Policy
was restated
during the 6th
Five–Year–Plan
The New Industrial
Policy was
introduced in the
regime of New
Economic Policy

42. Industrial Policy
Resolution,
1948
The Industrial Policy 1948
was presented in the
parliament on 6th April, 1948
by then Industry Minister Dr.
Shyama Prasad Mukherjee.
The main historical
importance of this policy is
that it ushered India in the
system of Mixed Economy.
INDEPENDENCE INDIA’S
FIRST THE FIRST
INDUSTRIAL POLICY
The first Industrial Policy Was
declared in Parliament
30th April, 1948
Government should have a
definite plan for the demarcation
of the roles of the private and
public sector
Industry Congress, 1947
based on the conference
deliberations, the 1st Industrial
Policy Resolution was presented in
the parliament.
6th April, 1948

43. Objectives (IPR, 1948)
Major objectives
The establishment of social order wherein justice and equality of
opportunity shall be secured to all the people.
The promotion of standard of livingn of people by exploiting
resources.
The increase in production of both agricultureal and industrial
The offering of opportunities to all for employment
Need for careful planning and integration of efforts and the
establishment of a National Planning Commission
The determination of state responsibility and private enterprise
in industrialization and
The regulation of private enterprises.

44. Classification
State Monopoly
Exclussive Monopoly
Defence
Arms and ammunition
Atomic energy
Stragetic industries &
Railways
Basic & Key
Industry
State Initiative
Iron & Steel
Aircraft manufacture,
Ship building
Telephone,
Telegraph & wireless
apparatus
Minerals Oil
Private Industry
controlled by Govt.
Governmemnt Control
Contton Textile
Sugar
Cement
Paper
heavy chemicals
Private sector
Private Sector
Cottage and Small
scale industries

45. Features (IPR, 1948)
Laissez-faire and Collectivism
Indian industries saw the dawn of mixed economy andthe participationo
the public and the private enterprises in specified fileds of production
Tariff Policy
A sound tariff policy desinged to prevent unfar foreing competition
Labour-management
Underlined better labour-managemtn relations adn also fair deal to
the labour
Competitiveness
The major interest and ownership and control was to be in Indian
hands.
01
02
03
04

46. Industrial Policy
Resolution,
1956
1. Introduction of the
Constitution
2. Adoption of Planned
Economy
3. Resolution declaring
“Socialistic Pattern
of Society “.
INDUSTRIAL POLICY WAS
REVISED IN 1956
the Government revised its first
Industrial Policy
30th April, 1956
The partiament adopted socialistic
Pattern Society.
December 1954
Described the cherished goals of the
society and accepted the socialist
pattern of society .
Avadi Congress 1955

47. Improvement in living standards
and working conditions for the
mass of the people
Improvement in Standad of
Living
Reduction of disparities in
income and wealth disparities
Reduce Regional Disparites
Prevention of private monopolies
and concentration of economic
power.
Prevention of Monopoly
To accelerate the rate of
industrialisatino adn economic
growth
Economic Growth
Undertake State trading on an
increasing scale
State Trading
Direct responsibility for the
State in setting up new
industrial undertakings and for
developing transport facilities
State Undertakings
Objectives
Major objectives of Industrial Policy Resolution, 1956

48. Classification
Schedule A
17
Exclussive
Monopoly
Centre : 04
State : 13
Schedule B
12
State Controlled
Both Private and
Public Sector
Schedule C
Private Sector
open to the
private sector

49. Both the policies emphasised
nationalisation of the Industries, but
1956 policy gave more attention on it
Government Initiatives
The classification of industries
between private and poublic sectos
was made flexible.
More flexible – 1956
The programme of overall
nationalisation of industries had
been abandoned in PPR, 1956.
Nationalisation
IPR: 1948 & 1956
Comparison between 1948 and 1956 Industrial Policies

50. Industrial Policy
Resolution,
1970
Recommendation
1. Administrative
Reforms Committee
(ARC)
2. Industrial Licensing
Policy Enquiry
Committee &
3. Planning
Commission.
INDUSTRIAL LICENSING
POLICY WAS ANNOUNCED
IN 1970
providing greater opportunities to
fresh entrants in the industrial field
and the small entrepreneurs
Fair Competition
eliminating excessive
concentration of economic power
is sought to be achieved both by
modification in the licensing
policy
MRTP Act, 1969
envisages that there will be a joint
sector of enterprises, comprising both
public and private entrepreneurs,
covering major projects in the core
and heavy investment sectors
Joint Sector

51. Almost all the important
industries had been put into the
core sector
Core sector
Prepared and essential inputs
made available on a priority
basis
Priority Basis
Curbing monopolies and tried to
encourage the middle sector
Prevention of Monopoly
To accelerate the rate of
economic growth by generating
employment in rural areas.
Economic Growth
Facilitated to avail financial
assistance from the Intuition.
Financial Institution
Liberalizing licensing system
and promoted the rural
industries
Licensing System
Objectives
Main features of Industrial Policy Resolution, 1970

52. Industrial Classification
Core Sector
Exclusively
Developed under
Public Sector
basic, critical and
strategic industries such
as atomic energy,
cement, Iron, Steel etc
Middle Sector
Small Scale Sector
These industries
required the investment
of Rs. 1 Crore to Rs. 5
crore.
Non-Core
Heavy Investment
Sector
Heavy Investment
Sector or Joint sector,
which comprised of
those core industries
which required assets of
Rs. 5 crore
.
Delicensed Sector
Rest of the
Industries Sector
investment was less
than Rs. 1 Crore and
was exempted from
licensing requirements.

53. The government decided to raise
the efficiency of public
sector undertakings
Revitalisation of the Public
sector
based on the premise that
interests of the small and large
industry
Economic Federalism
Investment increased to (Rs. in laksh)
Tiny units : 1 to 2
Small Scale : 10 to 20
Ancillaries : 15 to 25
Redefining the small Units
favoured a more capital-intensive
pattern of development
Excessive Capacity
the state encouraged industrial
units in backward areas
Removal of regional
imbalances
handlooms, handicrafts and
Khadi would receive greater
attention
Promotion of rural industries
Features
Most Important Features of Industrial Policy, 1980

54. Industrial Policy
Resolution,
1991
The new industrial policy
was announced on 24th
July 1991 by then Prime
Minister Mr. P.V.
Narasimha Rao.
THE NEW INDUSTRIAL
POLICY 1991
IPR, 1948
IPR, 1956
IPR, 1970
IPR, 1980

55. Changes in IPR, 1991
FDI up to 51% in high priority
industry.
Foreign Investment
Automatic clearance if,
(i) foreign equity & (ii) CIF 25%
to max. of Value of 2 cr.
Population less than 1 million
(25KM)
Industrial Licensing Policy
controlling and regulating
monopolistic, restrictive,
and unfair trade practice.
MRTP Act
Automatic permission in high
priority industry up to lump
sum payment of Rs.1 million
Foreign Technology
Agreement
Board of PSU will be
given greater power
Public Sector

56. Improvement in living standards
and working conditions for the
mass of the people
Improvement in Standad of
Living
Reduction of disparities in
income and wealth disparities
Reduce Regional Disparites
Prevention of private monopolies
and concentration of economic
power.
Prevention of Monopoly
To accelerate the rate of
industrialisatino adn economic
growth
Economic Growth
Undertake State trading on an
increasing scale
State Trading
Direct responsibility for the
State in setting up new
industrial undertakings and for
developing transport facilities
State Undertakings
Objectives
Major objectives of Industrial Policy Resolution, 1991

57. (1991)
The New Industrial Policy

58. Increasing competitiveness of industries
for the benefit of the common man
Market Economy
Liberalising the industry from the
regulatory devices such as licenses and
controls.
Delicensing
Enhancing support to the small scale
sector
Promoting Small Scale Industries
Ensuring rapid industrial development in a
competitive environment
Healthy Competition
Providing more incentives for
industrialisation of the backward areas
Regional Balance
Ensuring running of public enterprises on
business lines and thus cutting their
losses.
Profit Management
Objectives
Imain objectives of New Industrial Policy 1991

59. No prior approval or clearance from the
MRTP Commission is now required for
setting up industrial units by the large
business houses.
Changes in the MRTP Act
industries under this policy no licenses are
required for setting up new industrial units
or substantial expansion of existing units,
except for a short listed of industries.
Abolition of Industrial Licensing
policy made several concessions to
encourage flow of foreign capital and
technology into India.
Liberalised Policy Towards Foreign
Capital and Technology
The new industrial policy seeks to limit the
role of public sector and encourage private
sector’s participation over a wider field of
industry.
De-reservation of Industries for Public Sector
New Industrial Policy
Featurs of New Industrial Policy, 1991

60. It also announced the setting up of a fund to
provide social security (rehabilitation to
technological unemployment)
National Renewal Fund
It also allows for equity participation by the
large industries in the small scale sector not
exceeding 24 per cent of their total
shareholding.
Greater Support to Small-Scale
Industries
Foreign Investments Promotion Board
(FIPB).
FIPB
the government would set up a special
board to negotiate with a number of
international companies for direct
investment in industries in India
Other Provisions
New Industrial Policy
Features of New Industrial Policy, 1991

61. De-reservation of Industries for Public Sector
Reduced reservation for
public sector
It seeks to limit the role of public
sector and encourage private
sector’s participation over a
wider field of industry.
Efforts to revive loss making
enterprise
Those public enterprises which are
chronically sick and making
persistent losses would be returned
to the Board of Industrial and
Financial Reconstruction (BIFR)
Greater autonomy to public
enterprises
give greater autonomy to the
public enterprises in their day-
to-day working.
Disinvestment in selected
public sector industrial units
private participation in public
sector units, the government would
sell a part of its share to Mutual
Funds, financial institutions,
general public and workers

62. 02
01
03
Max. limit was raised to 51%
from 40% (34 specified industry)
the ratio was raised to 74%
FDI liberalised &100%
permitted
Foreing Investment (equity)
Payment of upto Rs. 1 crore
and royalty upto 5 percent
on domestic sales and 8 per
cent on exports.
Foreign Technology Agreement
the level of ownership is
greater than or equal to
10% of ordinary shares.
Investors
The inflow of foreign capital and import of
technology was tightly regulated under the earlier
Industrial policy. Each proposal of foreign
investment was to be cleared by the Government
in advance. Wherever foreign investment was
allowed, the share of foreign equity was kept
very low so that majority of ownership control
remains with Indians
Foreing Capital and Technology
Foreign Capital and Technology
Liberalised Policy Towards Foreign Capital and Technology

63. 1951–60, 1960–70, 1970–77, 1980–90 & 1991 and after
Industrial Licensing System

64. A written permission issued by the
Central Government to an industrial
undertaking stating such details as
the location, manufacturing, etc.,
Industrial Licensing
01 Licenses is normally issued after
approved application and if further
clearances like foreign collaboration,
capital goods, imports and further
conditions are fulfilled.
Industrial Licensing in India
02
A license is initially valid for two
years and production as per the
licensed capacity must start within
the specified period.
Validity
03
In India, Industrial Licensing is
governed by the Industries
Development & Regulation Act, 1951.
Industries Development &
Regulation Act, 195104
Industrial Licensing
Meaning

65. Planned industrial development
through appropriate Regulations
and controls
Regulation and Control
Directing industrial investment in
accordance with plan Priorities
Investment Plan
Preventing concentration of indu
strial and economic Power and
monopoly
Monopoly Restriction
Regulating the industrial capacity
as per targets set for Planned
economy
Economic Growth
Utilizing full capacity of large
scale industries
Resource Utilisation
Protecting of small scale
industries against undue
competition of large-scale
industries
Small Scale Industry
Objectives
objectives of Industrial Licensing

66. Tertiary Sector
Nature, Structure and Development of Service Sector

67. Tertiary Sector

68. Exernal sectors
Trade, hotels, transport, communication &
services related to broadcasting
Financial Sector
Financial Services, real estate & professional
services
.
Tertiary Sector
Public administration, defence and other
services
Service
Sector

69. Growth of Services Sector
Annual Growth Rate of Services Sector (in %)
S. No. Description of category 1979–80 to
1995–96
1995–96 to
2004–05
2004–05 to
2009–10
1 Trade 21.5 29.8 24.3
2 Banks 3.4 6.0 10.6
3 Public administration and defence 12.2 10.2 9.8
4 Business services 1.7 5.2 9.2
5 Road transport 8.4 9.4 6.8
6 Education (research and Scientific) 6.9 7.7 6.2
7 Private sector communication 0.0 0.6 4.1
8 Dwellings 16.2 5.4 3.6
9 Public sector Telephones 0.7 1.9 3.3
10 Hotel and restaurant 1.8 3.0 2.3
11 Railway 2.0 1.5 1.6
12 Medical & Health 2.8 3.6 1.4
13 All Other services 22.5 15.6 16.8

70. 7.7
2013 - 14.
9.7
1014 - 15
9.7
2015 – 16
7.7%
206 – 17 .
Service Sector Growth
Growth of Service Sector during the recent past (in %)

71. 2012 – 13 9.8
2013 – 14 6.5
2014 – 15 9.0
2015 – 16 10.5
2016 – 17 7.8
Trade, hotels, transport, communication
& services related to broadcasting
Service Sector Growth
Structure and Growth of Service Sector in India (%)
2012 – 13 9.7
2013 – 14 11.2
2014 – 15 11.1
2015 – 16 10.8
2016 – 17 5.7
Financial Services, real estate
& professional services
2012 – 13 4.3
2013 – 14 3.8
2014 – 15 8.1
2015 – 16 6.9
2016 – 17 11.3
Public administration,
defence and other services

72. Thank you
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76. R : 87
G : 167
B : 189
R : 105
G : 182
B : 204
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77. Growth of Major Industries
Annual Growth Rate of major sectors of Industry (in %)
Period Mining Manufacturing Electricity General
1981 – 82 17.7 7.9 10.2 9.3
1982 – 83 12.4 1.4 5.7 3.2
1983 – 84 11.7 5.7 7.6 6.7
1984 – 85 8.9 8.0 12.0 8.6
1985 – 86 4.1 9.7 8.5 8.7
1986 – 87 6.2 9.3 10.3 9.1
1987 – 88 3.8 7.9 7.7 7.3
1988 – 89 7.9 8.7 9.5 8.7
1989 – 90 6.3 8.6 10.8 8.6
1990 – 91 4.5 9.0 7.8 8.2