Seven serious Problems In Industrial Development in India

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1. Gap between targets and achievements:

Excepting 1980s, the industrial growth in the country could not achieve its previous targets. This slow growth of industrial sector has an adverse impact on the overall growth performance of the country.

Specifically the failure of industrial sector to generate adequate employment opportunity to absorb the labour force has resulted in no substantial change in the standard of living of the people.

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2. Under-utilisation capacity:

A large number of industries suffer from under-utilisation capacity. The causes for this under-utilisation are many and varying from technical to shortage of raw materials, frequent power failures, labour disputes, govt. policies and demand factor.

3. Concentration of economic power:

Though the authorities have stressed to reduce the concentration of economic power in fewer hands, the actual policy only tended to concentrate more and more resources with a fewer hands. This is clear from the fact that big industrial houses have considerably increased their assets and sales turnover during the plan-periods.

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4. Elite-oriented consumption:

The industrial sector has witnessed a rapid growth of consumer durable goods unit designed for the elite sector of the economy. Particularly during the 1980s the production of motor-cycles, scooters, TVs, radios, air- conditioners and refrigerators, computers and cosmetics has increased significantly.

5. Performance of public sector:

The performance of public sector units in India has not been satisfactorily judged from the profit point of view. Most of the PSUs are running in losses. But their performance should not be judged from profit yard-stick only as they have certain broader socio- economic objectives.

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6. Growth of regional imbalances:

Industrial development in the country has concentrated in the western regions of the country while the eastern and north eastern region has been totally neglected in the process. States like Maharashtra and Gujarat have received major part of industrial licenses during the recent years while the entire north-east has not received its due shape. Though substantial investments in public sector were made in backward States like Orissa, MP and Bihar, the expected trickling down effects of industrial development were not found during the years.

7. Industrial sickness:

A large number of industries particularly in the public sector have been sick during the plan periods due to bad and inefficient management. Further adequate attraction has not been given to improvement in technology and quality of the product in these units. At the end of 1992 there were 2.36 lakh sick industrial units involving an outstanding credit of Rs 12, 500 crores.

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