Page 257 - LECTURETTE TOPICS eBOOK

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• Moreover, agriculture and industry are complementary to each other. With
industrialization, the agricultural sector also benefits.

• The standard of living of people improves and a wider choice of goods is made
available.
• The population starts migrating from rural areas to urban areas with
industrialization.
• With industrialization, there can be import substitution that is goods which
need to be imported can be produced in the home country. The exports can
also increase thereby increasing the foreign exchange.

Industrialisation in India
• In India, the focus on industrialization came after independence. The
Industrial policy was developed in 1948. Both public and private sector played
an important role at that time. There was a classification of industries based
on various grounds. There were norms for industrial licensing.
• It is only with the coming up of 1991 Industrial policy that there was an
abolition of industrial licensing and liberalization of industries. This
accelerated the growth of industries in India.
• In India, there are a number of small-scale and micro and medium enterprises
as well. The government provides a number of benefits, tax concessions etc.
to encourage setting up of more such industries.
• The industrial sector in India contributes about 30% to GDP.
• New initiatives involve permitting Foreign Direct Investment in the industrial
sector to take advantage of additional resources and better technologies. In
some sectors, even 100% foreign equity participation has been permitted.
• Special Economic Zones have been set up with relaxed rules to encourage
setting up of more and more industries.
• Major industries in India are textile industries, food-processing, chemical,
cement, steel etc.
• There have been some negative impacts as well, of industrialization in India.
For example, with industrialization, the age-old cottage industries declined.
Pollution and other environmental problems are also a concern.

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