In any country, be it least developed under developed or advanced, the industrial sectors from the sheet anchor for the generation and development of country’s productive forces. There is a strong case for industrialization of countries like India which has vast manpower, large and varied resources and continental dimensions.
The first plan was not as important as far as industrial development is concerned. Of the total expenditure of Rs. 1,960 crores in the plan the industrial sector received Rs. 55 crores which was 2.8 percent during the second five year plan (1956-61).
Three new plants were set up in the public sector and the capacity of the two existing steel works in the private sector was doubled. In this plan new steel plants got a severe jolt. The share of industrial sector was Rs. 938 crore which is 20.1 per cent of the total plan and three plans the progress was significant.
Thereafter for nearly three years, the economy was subjected to considerable stress and strain. Many industries were severely affected by the shortage of raw materials and exponent arising from the pause in external aid in 1965.
Total expenditure under the third plan was Rs. 8577 crore of which the share of industrial sector was Rs. 1,726 (20.1 percent). In the fourth plan (1969-74) the performance of the industrial sector fell short of expectation, both in terms of production and investment.
On an average, the growth rate in industry was around 5 percent which was much below the targeted growth rate of 8 percent envisaged in the plan. Main objectives of fifth plan (1979-80) were self-reliance and growth with social justice. The revised fifth plan provided a total outlay of Rs. 10,135 crore in organized industry and mining.
This accounted for nearly 26 percent of the public sector outlay of the fifth plan. During this annual growth rate was only 5.3% which was much below the target. The sixth plan (1980-85) intended to work within the development strategy of structural diversification, modernization and self- reliance.
The aggregate resources allotted to industry and mineral worked to be Rs. 22,187 crore i.e. 22.8 percent of the total progress of the industrial growth during the sixth plan. The total investment in industry in seventh plan (1985-90) was Rs. 22,460 crore or 12 percent of the plan outlay.
The actual average rate of growth during the seventh plan worked out at 8.4 percent annum. Thus the target was exceeded as the expected growth rate was 8 percent.
In the eight plans (1992-97) the economy was liberalized eighth plan below that the desired growth of different sectors could be achieved primarily through modification in industrial trade and fiscal policies.
During the Eighth Plan the private sector had come of age and had developed considerable entrepreneurial management, technological, financial and marketing strength. The overall outlay envisaged in the eight plans for public sector was Rs. 40,670 crores.
The basic purpose of this allocation was to upgrade technology in this sector and bring it to international levels. The overall industrial growth rate was fixed at 8 percent per annum for the eighth plan.
Industrial Policy-At the time of independence Indian industries were facing many problems such as shortage of raw materials, bad industrial relations and marketing facilities etc. However after independence, government made various industrial policies to solve their problems.
First Industrial policy resolution of 1948
The first industrial policy gave emphasis to industry where state had a monopoly (arms and ammunition etc.) there also existed mixed sector industries (coal, iron and steel etc.) Government controlled industries (automobiles, heavy machinery etc.) and private industries. The industrial policy resolution also stressed the importance of cottage and small scale industries.