Facts about Industries in India

Facts about Industries in India.jpg

  • Industrial Policy can be called as rules, set of laws, values, policies and actions laid down by Indian government for managing, developing and scheming industries in India.
  • Government of India announced its first Industrial Policy Resolution on 6th April 1048.
  • First Industrial policy of Free India: The industrial Policy of 1948 launched on April 6, 1948 by then Union Industry Minister M. Shyama Prasad Mukherjee. (First Union Industry Minister of Free India)
  • This policy set up a base for mixed and restricted economy in India.

Industrial activities were divided into tour broad categories:

  1. Items under Central Government control: Manufacture of arms and ammunition, production and control of atomic energy and the ownership and management of railway transport.
  2. Items under State Government control: Coal, iron and steel, aircraft manufacture, ship building, manufacture of telephone, telegraphs and wireless apparatus and mineral oils.
  3. Items of basic importance (planned and regulated by Central Government): Machine tools, chemicals, fertilizers, non-ferrous metals, rubber manufactures, cement, paper, newsprint, automobiles, electric engineering etc.
  4. Items of private sector: The rest of the industrial field will be open to private enterprise.

Industrial Policy Resolution of 1956

  • The Industrial Policy of year 1956 was regarded as the Economic Constitution of the country.
  • Objectives: to develop public sector, co-operative sector and control on private monopoly.
  • It was first complete declaration on industrial development of India.

Industrial Policy of 1973 (Feb 2, 1973)

  • It provided closer interaction between the agricultural and industrial sector. Higher priority was given to the generation and transmission of power. Special legislation to protect cottage and household industries was also introduced.

Industrial Policy of 1977 (Dec. 23, 1977)

  • It is the exploitation of alternative sources of energy was given special assistance including finance on concessional terms.

Industrial Policy of 1980

  • Through the Industrial Policy of 1980 the policy of giving concession to agriculture based industries was implemented.

Industrial Policy 1991 was declared on 24th July, 1991

  • Privatization and liberalization were the main thrust areas in the New Industrial Policy. The new Industrial Policy 1991 abolished all industrial licensing except for certain industries related to security and strategic concerns.
  • For the promotion of exports of indian products in world markets, the government encourages foreign trading companies to assist Indian exporters in export activities.

Small Scale Industries

  • The industry in which the maximum investment is Rs. 1 crore is called Small Scale Industries.
  • Small Scale industries include Traditional Small Scale Industries and modern small scale industries.
  • Traditional small scale industries include Khadi and Handloom, handicrafts, sericulture, coir etc.
  • Modern SSI includes Television sets, electronics, various engineering products etc.
  • Abid Husain Committee is related to reforms in small industries. Small Industries Development Bank of India (SIDBI) was established in 1990 on the recommendations of Abid Hussain Committee.
  • To help the Small Scale Industries in meeting the challenges of globalization, the government has taken several initiatives.
  • Primarily among them is the enactment of Micro, Small and Medium Enterprise Development Act 2006. It has become effective from October 2, 2006.
  • Its aim is to facilitate the promotion and development of SIS’s and enhances the competitiveness of MSMEs.
  • The Integrated Infrastructure Development Scheme (IID) was launched in 1994 for setting up industrial estates and to develop infrastructural facilities for MSMEs.
  • BIER - Board for industrial and Financial Reconstruction is a bureau of Central Government to decide condition of industrial companies and to support in stimulating those that may be workable and closing the others.
  • Leading Industrial States - Maharashtra, Gujarat , Tamil Nadu
  • Backward Industrial States - Kerala, Rajasthan, Himachal Pradesh, Odisha, Haryana
  • Leading industrial centre of the country is Mumbai.
  • Major industrial centres of India are Bengaluru, Kolkata, Ahmedabad, Chennai, Coimbatore etc.

What is Sunrise and Sun Set Industries?

  • An industry rising fast and likely to be significant in future is called as sunrise industry. The sunrise industries consists of high technology manufacturing industries featuring automated and computerized processes. The industry growing slowly or declining is called sunset industry.

Public Sector Undertaking (PSU)

  • PSU is a government-owned corporation. The majority equity must be owned by the government to be a PSU. Federally owned Public Sector Undertakings are called as Central Public Sector Enterprises (CPSEs) and are controlled by the Department of Heavy Industries and Public Enterprises of Central Government.
  • There are 251 PSI companies in India.
  • Various PSUs have been awarded additional financial autonomy.
  • The level of financial autonomy is currently divided into three categories: Maharatna, Navratna, Miniratna CPSEs (itself divided into Category I & Category II).
  • There are seven Maharatna companies, 17 Navratna companies and 72 Miniratna CPSE's.

Maharatna

It is the Biggest Public Sector Undertakings of India. Maharatna companies are as follows,

  1. Coal India Limited (CIL)
  2. Indian Oil Corporation (IOC)
  3. NTPC Limited
  4. Steel Authority of India limited (SAIL)
  5. Bharat Heavy Electricals Limited (BHEL)
  6. GAIL (India) Limited
  7. Oil and Natural Gas Corporation (ONGC)

Major criteria of awarding status

  • Three years of service having an annual net profit of more than Rs. 5000 crore after tax.
  • Average annual Net worth of over Rs.15,000 crore in the previous 3 years.
  • Average annual Turnover of over Rs.25,000 crore in the previous 3 years.

Navaratna

Major Criteria for awarding status

  • A score of 60 or above (out of 100), based on six parameters which include net profit to net worth, total manpower cost to total cost of production or cost of services, Gross margin as capital employed, Gross profit at turnover, Earnings per share and inter sectoral comparison.
  • A company must first be a Miniratna and have 4 independent directors on its board before it can be made a Navaratna.

Navaratna companies are as follows,

  1. Engineers India Ltd
  2. Bharat Electronics Ltd
  3. Bharat Petroleum Corporation Ltd
  4. Hindustan Aeronautics Ltd
  5. Hindustan Petroleum Corporation. Ltd
  6. Mahanagar Telephone Nigam Ltd
  7. National Aluminium Company Ltd
  8. National Mineral Development Corp. Ltd
  9. Neyveli Lignite Corporation Ltd
  10. Oil India Ltd
  11. Power Finance Corporation Ltd
  12. Container Corporation of India Ltd
  13. National Buildings Construction Corporation Ltd
  14. Power Grid Corporation of India Ltd
  15. Rashtriya Ispat Nigam Ltd
  16. Rural Electrification Corporation Ltd
  17. Shipping Corporation of India Ltd

Mini Navaratna Category-I

  • Criteria: Have made profits continuously for the last three years or earned a net profit of Rs. 30 crore or more in one of the three years.

Mini Navaratna Category-II

  • Criteria: Have made profits for the last three years continuously and should have a positive net worth.

Export Processing Zone (EPZ)

  • India was one of the first in Asia to recognise Export Processing Zone (EPZ) models in promoting exports.
  • Asia's first EPZ : Kandla in 1965. Seven more zones were setup thereafter.
  • But EPZ had many shortcomings. The shortcomings of the EPZ model were corrected and some new features were added to form the Special Economic Zones (SEZ) in April 2000.

Special Economic Zone

  • The SEZ policy was first announced in India on April 2000 as a part of the Export-Import ("EXIM") policy of India.
  • India passed Special Economic Zone Act it 2005.
  • The SEZ Act, 2005, came into effect on February 10, 2006. Kandla, Surat, Santa Cruz (Maharashtra) Kochi. Chennai, Visakhapatnam, Fact, (West Bengal) and Noida (UP) have been converted into Special Economic Zones.
  • A SEZ is a geological zone that has financial laws that are moderate than a nation's home economic laws.
  • As per the policies, the Government has established a SEZ's in the public, private and joint sector or by State Governments. In this regard some of the existing Expo Processing Zones were converted in to Special Economic Zones.
  • SEZ in Kerala: Kochi
  • The important thing is that everything that they produce is exported.
  • SEZs would be allowed duty free import of capital goods and raw materials.
  • Main objectives: generation of additional economic activity, promotion of exports of goods and services, promotion of investment from domestic and foreign sources, creation of employment opportunities and development of infrastructure facilities.

Specific Economic Zone types

  • Free Trade Zones (FTZ)
  • Export Processing Zones (EPZ)
  • Free Zones (FZ)
  • Industrial Estates (IF) or Industrial Parks
  • Free Ports
  • Urban Enterprise Zones and others

Confederation of Indian Industry (CII)

  • It is an association of Indian businesses. CII is non-government, not-for-profit, industry-led and industry managed organization, playing a leading role in India's International and Business Development. It is founded in 1895. The Headquarters is at New Delhi

ASSOCHAM

  • Associated Chambers of Commerce and Industry of India: ASSOCHAM is an apex trade association of India. It was founded in 1920. The Headquarters is at New Delhi.
  • The aim of ASSOCHAM is to promote both domestic and international trade and reduce trade barriers for the growth of trade and industry in India.