Industrial policy refers to those principles and activities being pursued and performed to industrialize a country. It studies taxation system, protection policy, labour and capital, cottage and small industries, foreign capital and all other related matters concerned with industries of a country.
Prior to independence, government was guided has by the principle of laissez-faire and industrial development was left exclusively to the private control.
It is only after independence that government has taken keen interest to develop industries of the country. At present, industrial development is fully controlled in and regulated by the government.
Role of Industrialization
There is no second opinion to say that industrialization is an effort of finding solution to the problem of poverty, insecurity, over population and ending backwardness. However, its role is explained as under:
1. Leading Sector to Economic Growth:
industrialization is considered crucial to development strategy as it lifts our stagnation. It brings forth both backward and forward linkage effort.
The success of western countries followed by Asian countries, Japan is the standing instance of what industrialization can do to a nation.
2. Gainful Employment Opportunities:
No wonder, industrial development can greatly increase gainful employment opportunities especially in less developed countries. Generally, these countries are characterized by the existence of surplus labour. Thus, it opens avenues for employing the surplus labour.
3. Raising Productivity:
The modern industry can directly or indirectly help to raise productivity of the economy. This is due to better organization and technology. Moreover, it is accompanied by the expansion of tertiary sector.
4. Development of Agricultural Sector:
In fact, agricultural and industry are the two arms of an economy. Both are interdependent and the development of one sector promotes the other.
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