Industry & Infrastructure – 04
Cutback in agricultural subsidies:
Farmers were encouraged to shift from
growing a mixture of traditional crops to export oriented ‘cash crops’ like chill,
cotton and tobacco. Liberalisation policies reduced the subsides on pesticide, fertilizer and elasticity. As a result prices have increased by 300%. However, the prices of agricultural goods have not increased to that extent.
Reduction of import duties:
With a view to open India’s markets, the liberalization reforms also withdrew tariffs and duties on imports. By 2001,
India completely removed restrictions on imports of almost 1,500 items
including food. As a result, cheap imports flooded the market, pushing prices of crops like cotton and pepper down.
Paucity of credit facilities: After 1991 the lending pattern of commercial
banks, including nationalised bank drastically changed. As a result, loan was not easily adequate. This has forced the farmers to rely on moneylenders who charge exorbitant rate of interest.
Trade Policy Reforms: The main features of the new trade policy as it
has evolved over the years since 1991 are as follows:
Free imports and exports: Prior to 1991, in India imports were regulated. From 1992, imports were regulated by a limited negative list. For instance, the
trade policy of 1 April 1992 freed imports of almost all intermediate and capital goods. Only 71 items remained restricted. This would affect the domestic industries.
Export and Import Policy: The Government of India, Ministry of Commerce and Industry announced New Foreign Trade Policy on 01st April 2015 for the period of 2015-2020.
Salient Features of “EXIM POLICY (2015-2020)”:
- The new EXIM policy has been formulated focusing on increasing in exports scenario, boosting production and supporting the concepts like Make in India and Digital India.
- Reduce export obligations by 25% and give boost to domestic manufacturing supporting the “Make in India” concept.
- As a step to Digital India concept, online procedure to upload digitally signed document by CA/CS/Cost Accountant are developed and further mobile app for filing tax, stamp duty has been developed. Repeated submission of physical copies of documents available on Exporter Importer Profile is not required.
- Export obligation period for export items related to defence, military
store, aerospace and nuclear energy to be 24 months.
- EXIM Policy 2015-2020 is expected to double the share of India in World Trade from present level of 3% by the year 2020. This appears to be too ambitions.
There is no doubt that the Indian economy recorded ample achievements in some sectors after new economic policy. If the size of an economy provides the first impression of a country’s political and economic strength, then India has indeed grown since 1991. In dollar terms, India’s GDP crossed the $2-trillion mark in 2015-16. Currently, the country is ranked ninth in the world in terms of nominal GDP. The GDP growth rate of India is very much appreciated. This growth is also due to changes in accounting system. That is why the increased GDP growth rate has failed to alleviate the miseries of the common people and to reduce the socio, economic and environmental imbalances. The basic problems of unemployment, poverty, ill-health and inequalities remain unsolved.
INDIAN INDUSTRIES A GLANCE
Large Scale Industries
The term “Large scale industries” refers to those industries which require huge
infrastructure, man-power and a have inﬂux of capital assets. The term ‘large scale industries’ is a generic one including various types of industries in its purview. All the heavy industries of India like the iron and steel industry, textile industry, automobile manufacturing industry fall under the large scale industrial arena.
However in recent years due to the IT boom and the huge amount of revenue generated by it the IT industry can also be included within the jurisdiction of the large scale industrial sector. Indian economy is heavily dependent on these large industries for its economic growth, generation of foreign currency and for providing job opportunities to millions of Indians.
The following are the major large scale industries in India.
8 core Industries
It comprises of major industries which has higher production. There is an index of industrial production which focuses on the major 8 core industries and it acts as a parameter to show industrial growth and economic development. This index is released by the Office of Economic Adviser within the Department for Promotion of Industry and Internal Trade released the Index of Eight Core Industries (ICI). The government has major stake in this core industries and regulates its activities through ministry and policies.