Examine the response of the states in India to industrialization and economic reforms.
Introduction
This chapter
deals with the economic history of India after its independence as a colony
from the United Kingdom. Jawaharlal Nehru envisaged an Indian state whose
economy was patterned after the Soviet Union's central planning and he believed
that the Soviet Union achieved industrialisation over a very short span of
time. However, it proved to be that their move was a failure. For a couple of
times they tried different kinds of reforms but still they failed.
Examine the response of the states in India to industrialization and economic reforms.
The cause of
the vicious cycle that India experienced was because it is considered as a
country with an economy heavily intervened by the government. Before a business
may operate, it needs a lot of licenses from different bureaucratic levels. The
state also controls the results of production. Hence, intervening measures made
by the government should be removed.
To discuss
the topic "The Indian approach to industrialisation", this essay is
divided into several parts. Firstly, the reasons for, and policies of
industrialisation are discussed. The theoretical framework is finished by
identifying indicators to be used in the evaluation of the success of such
policies. The second section gives a rough overview of the development of
industrialisation in India since independence.
Examine the response of the states in India to industrialization and economic reforms.
The third
section goes into more detail and provides information about some specific and
important areas for industrialisation. The fourth section uses the defined
indicators to measure the success of India’s two main approaches to
industrialisation and evaluates the results. The fifth section describes the
main problems India faces today and in the future. Last but not least, the
sixth section informs about current trends in Indian policy.
Before
analysing the Indian approach, we want to introduce the aims of
industrialisation, give a rough overview of the industrialisation strategies
for Less Developed Countries (LDCs) and identify indicators for the evaluation
of the success of industrialisation policies. Why Industrialisation? What are
the ultimate objectives of economic development? Different governments may have
different objectives in mind.
Generally,
however, they will include a faster growth of national income, alleviation of
poverty, and reduction of income inequalities. But how is industrialisation
expected to contribute to these goals? The experience of industrial economies
shows a close association between development and industrial expansion. But
industry is also thought to provide certain spillovers which would benefit
other activities: enhancement of skills, training of managers, dispersion of
technology, etc. Moreover, pessimism about the prospects of food and raw
materials made the substitution of domestic for imported manu factured goods
seem the most promising route to development for many countries.
Examine the response of the states in India to industrialization and economic reforms.
Industrialisation
and foreign trade Economists and policymakers in the developing countries have
long agreed on the role of government in providing infrastructure and
maintaining stable macroeconomic policies. But they have disagreed on policies
toward trade and industry. The form of government intervention in this area is
the distinguishing feature of alternative development strategies.
Examine the response of the states in India to industrialization and economic reforms.
A convenient
and instructive way to approach the complex issues of appropriate trade
policies for development is to set these specific policies in the context of a
broader Less Developed Countries strategy of looking outward or inward.
Outwardlooking development policies encourage not only free trade but also the
free movement of capital, workers, enterprises, the multinational enterprise,
and an open system of communications. By contrast, inward-looking development
policies stress the need for LDCs to evolve their own styles of development and
to control their own destiny. Within these two broad philosophical approaches
to development, a lively debate has been carried out between the free traders,
who advocate outward-looking export promotion strategies of industrialisation,
and the protectionists, who are proponents of inward-looking import
substitution strategies.
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