24Oct 2018 by Reese Bannister

Classification of Industries in India According to the New Industrial Policy of 1956

Industry
A number of new developments had taken place since the formulation of the 1948 policy. These developments included the adoption of the constitution of India, successful implementation of First Five year Plan (1951-55), formulation of Second Five year plan with greater thrust on industrialisation, adoption of a socialist pattern of society (Avadi session) as the goal of economic and social policy.These, necessitated the announcement of a new Industrial Policy of 1956 replacing the Industrial Policy of 1948. The IPR of 1956 is popularly referred to as the economic constitution of the country. Image Source: cdn.historydiscussion.net ADVERTISEMENTS: Under the new policy, industries were classified into three categories.(a) Schedule A: Industries which were to be exclusive monopolies of the state- 17 industries were included in this category. They were arms and ammunition,…
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24Oct 2018 by Reese Bannister

6 Chief Features of Industrial Policy Resolution of 1977 (India)

Investment
In March, 1977, the Janata Party came to power at the centre. Criticising the 20 years of the functioning of the Industrial Policy of 1956, the Janata Party Industrial Policy statement (December, 1977) mentioned: Despite some desirable elements, the Industrial Policy of congress resulted in certain distortions: “unem­ployment has increased, rural urban disparities have widened and the rate of real investment has stagnated.Since the new policy was drafted by the hardcore Gandhians in the Janata Party, its major emphasis was on the growth and development of the small sector. The chief features of the policy were Image Source: gauravmisraa.files.wordpress.com ADVERTISEMENTS: 1. Principal thrust was on the Development of small Industries: The Janata Party accused the Congress of over emphasising on large industries, neglecting the development of cottage and small industries.…
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24Oct 2018 by Reese Bannister

12 Main Problems Faced by Small Scale Industries in India

Business
12 Main Problems Faced by Small Scale Industry in India are described below:Problems of SSI:(1) Finance and Credit(2) Underutilization of Capacity ADVERTISEMENTS: (3) Production and Marketing(4) Inadequate and Incomplete(5) Machine and Equipment Production of Raw Material(6) Inefficient Management ADVERTISEMENTS: (7) Power Production not Normal(8) Slow Responsiveness or Production Pattern(9) Burden of Excessive Tax(10) Competition from Large Scale Industries ADVERTISEMENTS: (11) Poor Transport Facilities(12) Technology in Many Cases not up to Date. Image Source: bustler.netScarcity of finance and credit is main obstacle in the development of small scale industries and situation is worse in the case of cottage and village industries.According to the Nayak Committee Report, the small scale sector was getting working capital only to the extent of 8.1 percent of its annual output as against the normative requirement of…
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24Oct 2018 by Reese Bannister

Classification of Small Scale Industries (SSI) in India

Investment
For long, the term ‘small enterprises’ means an industrial unit which employed less than 50 workers producing with electricity and than 100 workers without using electricity and had assets not exceeding Rs 5 lakhs.In 1960, and even now the definition delimits the size of industries in terms of capital investment alone. Later on in 1966, some modification was made but that reduced the items to be included in evaluating the capital investment.In 1966, the small scale enterprises were defined as undertakings with a fixed capital investment of less than Rs. 7.5 lakh and ancillaries with a fixed capital investment of Rs 10 lakh. Image Source: grips.ac.jp ADVERTISEMENTS: Investment will imply investment in fixed assets in plant and machinery, whether held in ownership term or by lease or by hire purchase.…
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24Oct 2018 by Reese Bannister

7 Important Characteristics of Small Scale Industries in India

Essays
The Most Important Characteristics of Small Scale Industries are Given below:a. Labour intensive:SSI is largely labour intensive and therefore, can provide employment to a large number of people with limited capital. ADVERTISEMENTS: b. Capital required is less and therefore economises use of capital: The capital requirement of small enterprises, in respect of economic overheads, such as factory buildings, building for workers and transport facilities; are much less than in large enterprises. By promoting these industries, we can economise capital even in respect of these overheads. Image Source: shellbeachcapital.comc. Short Gestation Period: ADVERTISEMENTS: SSI has a short gestation period when compared to large seals industries. They can provide finished goods in a shorter period and thus can be a better counteracting force for the inflationary trends, so common in a growing…
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24Oct 2018 by Reese Bannister

Achievements and Criticism of Third Five Year Plan (1961-66) in India

Industry
The 3rd Plan with the goal of ‘self reliant and self generating economy’ saw the beginning of long term perspective planning as an instrument to achieve the objective of a integrated growth of industry balanced with agriculture.With the base created in the first two plans, the Third Plan called for the Maximum rate of investment to:(a) Strengthen industry, power and transport and ADVERTISEMENTS: (b) Hasten the process of industrial and technological change.i. 20% total outlay was allocated to industries and mineralsii. The overall financial outlay in organised industries and mining during the Third Plan period was Rs. 3,000 crores.iii. The aim of the plan was to make the economy self-sustaining in producers’ goods industries such as steel, machine-buildings, etc., so that the quantum of external assistance needed could be curtailed…
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24Oct 2018 by Reese Bannister

5 Main Arguments for the Expansion of the Public Sector in India

Construction
To this basic argument for the expansion of the public sector, the government added various reasons over time.(a) To increase the growth of the core sectors of the economy, thereby creating a solid foundation in industrial growth. ADVERTISEMENTS: (b) To serve the equipment and financial needs, of strategically important sectors like Railways, Telecommunications, Nuclear Power, Defence etc. Many technical engineering, consultancy and construction industries were created.(c) To exercise countervailing power on the operation of private monopolies and multinationals in selected area this would be detrimental to the interest of common people and contrary to the principles of establishing a socialistic pattern of society. Image Source: upload.wikimedia.org(d) To ensure easier availability of articles of mass-consumption socially desirable consumable commodities, to check production of unimportant luxury articles and the rationale behind setting…
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24Oct 2018 by Reese Bannister

8 Contributions of Public Enterprises towards the Growth of Indian Economy

Economic Development
Through the establishment of public sector undertakings the basis of further rapid industrialisation has been attempted. They have also made a significant contribution to the balanced economic development in the country.The following are some tangible contributions of the public enterprises to the growth process of our economy. (1) Contribution to Capital Formation: ADVERTISEMENTS: Capital formation is a necessary condition for economic growth. This creates a nucleus for further growth. (2) Development of Infrastructure: Infrastructural facilities are as much essential for the economy to take-off, as the run-way for an aeroplane to take off. Infrastructure refers to power, transport, communication, irrigation, steel, cement and fertilizers. The public sector has played a pivotal role in creating infrastructural facilities in the development process of our economy. Image Source: mhi-global.com (3) Role in Export…
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24Oct 2018 by Reese Bannister

9 Important Merits and Demerits of Disinvestment (Privatisation) Policy of India

Investment
“Privatization” or “Disinvestment” are used to mean same thing i.e., divestment of PSEs required in public interest.The main objective of disinvestment is to put national resources and assets to optimal use and in particular to unleash the productive potential inherent in our public sector enterprises. The policy of disinvestment aims at modernization of PSEs, creation of new assets, generation of employment and retiring of public debt. Merits/Objectives of Disinvestment: ADVERTISEMENTS: 1. To obtain release of the large amount of public resources locked up in non-strategic Public sector units for re-employment in areas that are much higher on the social priority e.g. health, family, welfare etc. and to reduce the public debt that is assuming threatening proportions.2. Privatization would help stemming further outflows of the scarce public resources of sustaining the…
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24Oct 2018 by Reese Bannister

Complete Information on the “Disinvestment” (Privatisation) Policy of India

Strategy
This article covers the benefits and pitfalls of disinvestment (privatisation) policy of India.Since the process of disinvestment began in 1991, no privatization took place till 2000. However, since 2000, almost 30 PSES were privatized of which many profit are making. The budget for 2000-01 provided for Rs. 10,000 crores by way of disinvestments and the target was raised to Rs. 12,000 crores in the next two budgets. In the two years 2000-02, Rs. 7443 crores were estimated as receipts but in 2002-03, Government hoped to exceed the target and even double it by putting through an accelerated programme. ADVERTISEMENTS: Government has been encouraged by the strategic sales affected in 2001 and 2002. The Supreme Court’s view is that the disinvestments procedure followed in the sale of BALCO (Bharat Aluminium Company…
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