Advertisements
Advertisements
Question
Why was public sector given a leading role in industrial development during the planning period?
Advertisements
Solution
At the time of independence, Indian economic conditions were very poor and weak. There were neither sufficient foreign reserve nor did India have international investment credibility. In the facet of such poor economic condition it was only the public sectors that need to take the initiative. The following are the reason that explains the driving role of the public sector in the industrial development:
1. Need of Heavy Investment: There was a need of heavy investment for industrial development. It was very difficult for the private sector to invest such a big amount. Further, the risks involved in these projects were also very high and also these projects had long gestation period. Thus, the government played the leading role to provide the basic framework of heavy industries.
2. Low Level of Demand: At the time of independence, the majority of population was poor and had low level of income. Consequently, there was low level of demand and so there was no impetus for any private sector to undertake investment in order to fulfill these demands. Thus, India was trapped into a vicious circle of low demand. The only way to encourage demand was by public sector investments.
APPEARS IN
RELATED QUESTIONS
Collect pictures of a few successful entrepreneurs.
From among the things we use in our daily life, identify those that are locally manufactured from those that are imported. Prepare a chart.
What is sectoral composition of an economy? Is it necessary that the service sector should contribute maximum to GDP of an economy? Comment.
Though public sector is very essential for industries, many public sector undertakings incur huge losses and are a drain on the economy’s resources. Discuss the usefulness of public sector undertakings in the light of this fact.
Why and how was private sector regulated under the IPR 1956?
How many industries have been reserved for the public sector under Industrial Policy Resolution, 1956?
Which of the following industry was not reserved for the government in Industrial Policy Resolution, 1956?
Industrial Policy Resolution (IPR) 1956 formed the basis of the ____________ Five Year Plan.
Read the following hypothetical text and answer the given question:
India’s Micro, Small and Medium Enterprises (MSME) sector is poised for a mega transformation in 2020, with the launch of an Alibaba-like e-marketplace, trendy yet affordable khadi products to appeal to the masses and digital data-based credit ratings to help entrepreneurs avail loans. However, the MSME sector, often considered the bulwark of the economy as it contributes around 29% to the GDP and 48% to the Indian exports. There is an urgent need of major reforms and policy interventions towards ensuring timely availability of low cost credit, improving ease of doing business and technological up gradation, to take on the formidable challenge of creating millions of jobs, ensure equitable distribution of national income and achieving large-scale import substitution. The World Bank has recently approved loan worth $750 million to address the immediate liquidity and credit needs of India’s MSME sector that has been severely impacted by the Covid-19 crisis. This will give a push to the Atmanirbhar Bharat vision of the government.
Identify which of the following is not an advantage of the MSME sector?
What are the reasons why traditional handicrafts industries were ruined under British rule?
In which year railways were introduced in India?
Why was public sector given a leading role in industrial development during the planning period?
The public sector is very essential for industries, many public sector undertakings incur huge losses and are a drain on the economy's resources. What is the usefulness of public sector undertakings in light of this fact?
All the support structures which facilitates the development of a country constitute its
Which system of the economy does India follow?
First Industrial Policy Resolution of Independent India was announced in the year ______.
