In this twentieth century when science and technology have gained unquestionable supremacy, the level of the' industrial development of a country has become the yardstick to be applied to judge its actual development. All other progress has become meaningless; if a country is technologically backward, it is backward irrespective of any other excellence it might have acquired.
It is a well-known fact that British Government never intended to develop the industries in our country during pre-independence period. After independence the people of this country entertained high hopes from the government for the betterment of their life it is the industrial development which provides basic infrastructure necessary for the development of the economy as a whole. Industrial Policy, 1948 and the Industries (Development and Regulation) Act, 1957 gave an idea of the attitude of the Government with regard to the development of industries. But, it was only the adoption of planning in 1951 which created a favorable atmosphere for the development of industries.
The history of organized industry in India may be traced to 1854 when the real beginning of the cotton mill industry was made in Bombay. The foundations of jute industry were laid near Calcutta in 1855, Coal-mining also progressed about this time. There were the only major industries which had developed substantially before the First World War. During and after World war I and II, a somewhat more liberal policy was adopted by the authorities, such as, a discriminating protection policy, which gave impetus to industrial development. Several industries developed and a number of new industries came up but their production was neither adequate nor diversified in character.
The development of the economy can be measured with the help of different criteria, such as the growth rate in industrial output, industry's contribution to national income, and industry's contribution to employment. A close application of these criteria divides the planned period into two distinct phases, the first lasting till 1965-66 and the second following there from. The economy took rapid strides daring the first three Five-year Plans but slowed down later. The Seventh Plan envisages a growth rate of 8 percent with some segments of industry registering a higher growth rate, but only time can unfold the future achievement. Since industry's contribution to national income and its capacity to generate employment have displayed similar trends, we cannot describe our industrial development as spectacular though there has been a spurt of new industrial complexes all over the country.
The pattern of our industrial growth was determined by the state of economy in which the British left us. The British had used India as a source of cheap raw material and a lucrative market for finished products and they had not made any effort to develop the infrastructure. After getting independence, India immediately felt the need of capital goods and it was decided to promote the rapid growth of capital goods industries. Almost till the end of the Third Five-Year-Plan, India had to import a variety of capital goods including iron and steel, transport equipment and various kinds of machinery. But the situation has radically changed now. India is now in a position to export these capital goods even to the technologically advanced countries of Western Europe, America, Soviet Union etc.
A significant feature of our industrial development has been the phenomenal growth of the public sector. This sector comprises public utility services like the railways, road transport, post and telegraph, power and irrigation projects, departmental undertakings of the Central and State Governments including the defence production establishments, and a number of other industrial undertakings which are wholly supported by the Central Government. The public sector now contributes about one-fifth of the share of industrial sector in the national income and the surpluses earned by it form an important source of non-tax revenue of the Government. It also offers job opportunities to a large number of people.
If we aim at an accurate assessment of our achievement, we should either compare our industrial growth with the growth in other countries during the corresponding period or, we should measure our achievement in terms of our targets. Another yardstick can be to compare our achievement with our needs. This kind of assessment can be quite revealing. In 1947, Japan was in no better a position than India. If India had been ruthlessly exploited by the British and fiercely rocked by communal hatred; violence and bloodshed in the wake of partition, Japan was laid waste by atom bombs during the Second World War. But today, Japan is technologically one of the most advanced countries of the world. Our achievement has also fallen short of the targets laid down in the Five-year Plans. If we compare our performance with our needs and targets it is obvious that what we have achieved is too inadequate to meet them.
Industrialization in India suffers from a few obvious drawbacks. Though the aim of industrialization has been to bring amelioration to the miserably poor millions, somehow economic power and wealth have been concentrating in a few hands and the masses have, by and large, been left un-benefited. The industrial licensing policy which is only an adjunct to the industrial policy has given rise to many evils, economic, social and political. This breeds unrest among the poor, and the labourers employed in big industrial houses often resort to strikes and lock-outs, giving a serious blow to the productivity of the system. Finally, regional disparities and imbalances that should have been eliminated by now still persist. There exist m India a few pockets that have registered rapid economic development while a few areas find themselves utterly neglected.
Almost every plan has revealed that industrial production fell short of the target by a wide margin but, then, there are some inherent shortcomings in our planning system. It need not be emphasized that planning has widened the horizon of industrial sector and opened new vistas of industrial growth.