A

Report on
Industrialization for inclusive growth

For the module – Growth, equity & Inclusive Growth

___________________________________________________

UNDER THE SUBJECT “SEMINAR ON CONTEMPORARY ISSUES

IN MANAGEMENT -1 (SCIM-1) (MB706)

Prepared by
(KAPIL PRAJAPATI)
ID:- 10MBA083
MBA 2010-12, Semester – I

Submitted to
(GAURANG BADHEKA)

INDUKAKA IPCOWALA INSTITUTE OF MANAGEMENT

(I2IM)
CHAROTAR UNIVERSITY OF SCIENCE AND TECHNOLOGY
(CHARUSAT)

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CHAROTAR UNIVERSITY OF SCIENCE AND TECHNOLOGY
(CHARUSAT)
INDUKAKA IPCOWALA INSTITUTE OF MANAGEMENT
(I2IM)
MBA PROGRAMME
BATCH 2010-12, SEMESTER – I

Certificate

It is here by certified that this is the bona fide report of work done by
Mr./Ms. Kapilbhai Dilipbhai Prajapati on the topic of
Industrialization for Inclusive Growth as a part of the course
“Seminar on Contemporary Issues in Management – I (MB706)”. This
report is based on the independent work carried out by the student.

Faculty: - GAURANG BADHEKA SIR

Date:- 22nd oct 2010.

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 Table of content

No Particular Page No
1 Introduction of inclusive growth 4
2 Role of industrialization 5
3 Problems face by the industries 6
1) Lack of finance
2) Lack of technology
3) Lack of infrastructure
4) Multinational competition
5) Defective government policy
6) Economic factors…
7) Monopoly of any sector
8) Political factors
9) Licensing policy
4 How government helpful to develop 12
industries in India:-
1) Policy of self-reliance
2) Abolish the monopoly
3) Developing the infrastructure
4) Welcome the foreign investment
5) Entrepreneurship development
6) Welcome the latest technology
7) Motivating the export industries
8) Established SEZ
9) Government incentives:-
A. Land
B. Power
C. Water
D. Sales tax
E. Finance

5 Conclusion 18
6 Sources 19

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 Industrial Development

• Introduction of Inclusive growth:-

Inclusive Growth means not excluding any section. It is a ‘Broad Based
Growth’ of the any country. Inclusive growth by it very definition implies an equitable allocation
of resources with benefits accruing to every section of society. If any one section gets benefit
then they develop but remaining can’t get so they are not develop very well. That affect is
reflecting directly on states. In some states are more industrial developments while in author are
low development. Inclusive growth is directly affecting to the development of the any nation. In
them many section are like
1. Agriculture,
2. education,
3. women empowerment,
4. industrial development,
5. government policies,
6. social justices,
7. child welfare,
8. micro finance
9. Health care

Sumit Mazumdar said...

- A major concern of inclusive growth is to ensure the benefits and fruits of growth
reaches to the bottom of the socio-economic distribution.

- Benefits of the growth should reach to all the stakeholders.

A Development Policy Report (DPR) in 2006 by World Bank reveals that inclusive
growth is the indisputable way to reform the regional imbalances and strengthen economic gains.
The DPR report also reveals that the inclusive growth process should go towards the
enhancement of the quality of basic services including education, power, healthcare and water
supply for every individuals across the country. The DPR report suggests that the stress should
be given not only to the distribution of economic gains but also on empowering people in
enjoying their social life and at creating employment opportunities.

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• Role of industrialization:-
Industrialization play very crucial role in achieve inclusive growth. It is also
helpful to national development. Industrialization development is necessary for any countries
development. India’s post 1990’s economic growth has made it one of the world’s fastest
growing economies in the world. Its GDP growth rates of up to about 9% in the last few years
are historically unparalleled except by the neighboring China. With the rapid growth rates,
however, come new challenges and new questions. One such challenging question concerns the
spread of the benefits of growth across different segments of society. So it’s also helpful to
improve GDP. If industries are developing then employment will be increase and social
standard of living increase, also. Ultimate whole nation will developing.

If industries are increase then employment level will be increase and then social
living of standard will be increase. Industries develop in rural area then rural people get
employment and there families also develop and ultimate whole societies develop and than
whole nation will be develop. People who live in rural area they will not move in urban area so
that equally whole nation will develop due to industrialization. We know that in India many
state and area there were not any industrial development so they very poor and that’s why they
move towards the develop cities and there where over population problem is increase.
When they are not get any employment then they was diverted in wrong direction, so that
develop area are more develop and backward are more backward. Ex: - Bihar, Jarkhand etc
they are very backward in industrial development.

Industries are the base of economic development of the any countries. Industries are
developed then people get income and then they provide education for them children and literacy
ratio is growing up. This is good for nation. India is main emerging country in the world as the
GDP of country growing since last 20 years and also reduction in poverty of the country. One of
the main reasons for reducing poverty is the development of industrialization. First of all,
industrial development is a powerful tool for poverty reduction. Proper industrial services will
help the poor increase income, accumulate assets and reduce external risk. With industrial
development services, low-income rural households can make plans for their future
development, improve their housing and health conditions, and receive better education.

Industrialization is most helpful to decrease the migration from rural to urban area, so
that national development areas equally increase. Not only are the urban areas developing. That’s
why education is increase day by day. According to the 2001 census, the total literacy rate in
India is 65.38%. The female literacy rate is only 54.16%. The gap between rural and urban
literacy rate is also very significant in India. This is evident from the fact that only 59.4% of rural
populations are literate as against 80.3% urban population according to the 2001 census. This
problem solved to increase industrialization.

Since it is impossible to approach improvements in skill, or workforce development

without considering the role of business in the process, we propose to engage the most
innovative thinkers and corporate leaders to help chart a bold new path leading to job and
workforce development in ways that meet their bottom line interests while growing sustainable
economies in Mission countries. How can this project help grow initiatives that demonstrate

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 how imagination, and creativity can move low income people from the unorganized to an
organized cluster. We will explore a number of innovative approaches, including the use of the
internet to form new, cross-national labor markets, providing jobs and skills for workers in poor
countries.

• Problems face by industries:-

India is developing country. Industries are faces lots of problems. Many industries are not
developing very well.

1. Lack of finance:-

Finance is the primary source for establishing any industry and also to running the
industries. Human body work because of blood, without blood we can’t live. As same Finance is
the Blood of the Industries, without finance its can not moving. In India many people interested
to start his own business but due to lack of finance they can’t start. Small and medium scale
enterprises feces this problem. Because of they have not enough capital to run the business or
resources to compete with the big or all ready running industries. The financial problems include
investment risks, procurement of loan from banks and their repayment, meeting day to day
expenses and the like. MNC’S come and establish her business and they have enough finance to
run her business so that our small and medium enterprise can’t fight with them, and they sold his
business or stop. Because lack of finance.

Before 1990 in India many financial institute are available but there was more
restriction to take a loan for established industries. There was long procedure followed and
problem faced, So that the small and medium scale enterprises face this financial problem. Due
to lack of finance industries can not purchase latest technology and that’s why other countries
more develop compare to us. Comparing the other counties Indian industries face this problem
more.

The non-availability of institutional finance on affordable and easy terms is hindering

access to new technologies. In India the situation is further complicated by the fact that the
preferred mode of finance is either self or other sources. Some of the measures undertaken to
improve the position are : Innovation in developing countries is promoted by venture capital, to
help in indigenous development of technologies. In India financial institutions, such as Industrial
Development Bank of India (IDBI), Industrial Credit and Investment Corporation of India
(ICICI), Industrial Finance Corporation of India (IFCI), and other banks are providing financial
assistance, for commercialization of indigenously developed technologies and adoption of
imported technologies for wider domestic applications through venture capital.

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2. Lack of technology:-

Indian is big country and ‘golden bird of the earth’, and natural resources are more
available. But due to lack of technology we can not utilized properly. If we see the big and
multinational companies they have more technology and they utilize properly all available
resources. MNC’S are come in India and utilize our natural resources. Crud Oil, coal, petroleum,
nuclear etc are available but we can not use. MNC’S utilized latest technology and develop very
fast while the Indian industries use old technology or traditional method, so that industries feces
more problem to survive in the market.

Before 1990 the Cotton and Textile industries produced cotton in traditional way. So
that they take more time to produce cotton. When big industries and MNC’S came in the market
then they faced lot of problem and many small and handloom enterprise closed down there
business. Because of the big firm produced cotton very fast with good quality and low price
compare to our industrial product.
There product very cheap in the market so during that period Indian cotton and Textile industries
faced lot of problems. In Gujarat many cotton and handloom industries at that time fight very
strongly, and stay in the market. India and China both start gurney together but now India is 30
year back. Now China is technologically more forward compare to India, so that the per capita
production was lower and in GDP also low.

We are backward to developed countries due to this problem. U.S.A, Germany, Japan,
China etc is developing because they have use latest technology and optimum utilized resources.
Although Indian industries realize the importance of technological innovation, most of the Indian
industries still believe in importing technology, rather than developing them in-house or
through/in association with, national Research and Development (R&D) centers. Indian
industries over the years, have largely ignored their R&D and have mostly not embarked on new
product development and technological up-gradation. This is despite the fact, that India has the
third largest pool of technologically trained manpower.

Technology is the key to enhancing a company's competitive advantage in today's

dynamic information age. SMEs need to develop and implement a technology strategy in
addition to financial, marketing and operational strategies, and adopt the one that helps integrate
their operations with their environment, customers and suppliers. Ministry of SSI, Government
of India, offers a number of technical services through its National Small Industries Corporation
Ltd and Small Industry Development Organization. National Small Industries Corporation Ltd
was established 1955, by the Government of India to promote, aid and foster the growth of small
scale industries in India. It offers a number of technical services to SMEs through its Technical
Services Centers, Extension Centers, Software Technology Parks and Technology Transfer
Centers. These include technology audits and benchmarking, technology needs assessment,
technology sourcing and application of new techniques, technology acquisition, development of
software, material testing facilities through accredited laboratories, product design common
facility support in machining and tooling, energy and environment audit services Classroom and
practical training for skill up-gradation etc

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3. Lack of Infrastructure:-

Indian infrastructure is not to much develop. Road, power supply, bridge many state or
area there is not reaching any facilities, because there are no road and power supply. Those areas
are more backward and there are no any industrial developments due to lack of infrastructure
development. If industries are establish then infrastructure development are require. Industries
require transportation facilities for there raw material and sending goods to the market.
In India many area there were road, water, electricity etc not available so that industries were not
develop because of poor infrastructure. Transportation facilities were there so that industries
easily send their goods and services to the final customer. We know that without develop
infrastructure industries are not develop.
In Bihar many areas there were not proper infrastructure develop so that industries faced more
problem that’s why there were industrial development was less compare to other states. They are
faced more problems like-

- Not proper road and transportation facilities so that they can not run there business
properly. They can not get raw material easy and paid more transportation cost.
Those industries are producing perishable products they must require good
transportation facilities, and due to this company not get time to time raw materials
so that they can produce goods delay and not survive in the market. This problem
mainly arise in rural area because less of government support and lass industrial
development.

- They must require proper water supply and electricity in enough way so that they
can start there machinery on time and continuously produced goods and services. If
there is power supply not available 24 hour then how industries are run.

4. Multinational Competition:-
This is the basic problem of every developing country. MNC’S was come in India and
then established their business. There policy to breakdown the Indian Small and big industries,
and achieve more profit. They have more powerful in financially and technologically, so that
they took very less time to produced goods and services and quality are also good compared to
us. They used new technology and maximum utilized the available natural resources. While
Indian industries cannot compete with them because of our industries use old and traditional
method for producing goods and services.

An industry was manufacturing goods and services very old way. We talk about cotton industries
they were producing cotton clothes by using hand so they were take more time so they were not
stand with MNC’S company so that cotton industries face more problem before 1990. So many
small and medium industries faced lots of problem. Due to this problem many Indian industries
were not developed and stopped there business. However SMEs in India, which constitute more
than 80% of total number of industrial enterprises and form the backbone of industrial
development, suffer from the problems of sub-optimal scale of operation and technological

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obsolescence. Indian SMEs are facing a tough competition from their global counterparts due to
liberalization, change in manufacturing strategies and turbulent and uncertain market scenario.
Having to liberalize their industrial, services and agriculture sectors may cause dislocation to the
local sectors, firms and farms as these are generally small or medium-sized and unable to
compete with bigger foreign companies or cheaper imports.

5. Defective government policy:-

Government should make good policy for considering the industrial development. If
policy makes and it is so good but there proper implementations are require. But in India
government made policies 100 % and his implementation was only 40%. Before 1991 many
industries faced these problems. On government side they were not provide full support so that in
Indian industrial development are lower than other countries. Many backward areas there are
require industrial development. They are really very poor and not any developments are there.
Many industrialists are Willingness to establish there industries in that area. But government side
they get less support so that in India industrial development are very less.

Trade is a means to and not a goal of development. To realize the potential of trade as
a development instrument requires conditions tailored to the specific requirements of each
country. These conditions for trade may differ from country to country, and thus a one-size-fits-
all approach will not work and, if enforced, might cause more harm than good. Each country has
to make decisions on appropriate processes, degrees and sequencing of trade and trade
liberalization. The multilateral trading system should, therefore, be sensitive to the different
needs of different countries, and allow them to have sufficient “policy space” to choose from
different options.

Attaining long-term balance between imports and exports (the two main components
of trade) is important. Developing countries face two types of problems that hinder their
participation in trade: pressures to liberalize their imports, affecting local production units in
various sectors, including industry and agriculture; and the lack of adequate export earnings,
export capacity or opportunities. Although many developing countries have taken measures to
rapidly liberalize their imports, their export earnings have not grown as much due to a decline in
commodity prices, barriers to industrial exports and supply constraints. For many developing
countries, trade imbalances have widened, adding to their trade deficits and external debt
problem.

6. Economic factors:-
In economic condition many changes are arise. Mainly there are two basic factors
affecting the whole economic development. One is inflation and second is deflation. In
inflationary situation country faces lots of problems. And in 2008-2009 many countries faced

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inflationary condition. In U.S.A and U.K they were more affected and many industries and
services sector were closed down and
Big ‘Lehman Brother’ was also gone bankrupt. Many other countries were also getting affected
due to inflation. India affected but not more, and these economic factors directly influence our
industrial development. During this period our industries growth also decrease and per capital
production, exporting industries they all were faced inflation condition. Economy getting affect
and prices of all products and materials are increase, so that those small and medium scale
industries not suffer this kind of situation.

In financial crisis many big industries were affected. In India Reliance, TATA,
Hindustan Lever ltd etc companies’ profit margin also goes down and there were production also
decline during 2008-2009. Many small scale industries goes down and financial institute also no
supported during this period. Because of financial institutes and Banks also affected, so that they
had not enough capital to help small and large industries.

7. Monopoly of any sector:-

Monopolistic market condition also the barrier of industries growth. These situation
whole markets are controlled by the one company. In many company control one area so in that
area other industries are not develop, so industries growth stop in that area. Indian Railway is the
best example of monopolistic sector. No one enter in this business and no any competitor in the
market. In India Railway is monopolistic sector and there are no one enter in to competition.

8. Political factors:-

In Industrial development political factors are play very crucial role. The big
industrialist maintain good relation with political parties and on that basis they got big
government tender so that already developed industries get more benefits and developing
industries not get tender. So that one is growing and other are working on that place.
Ex:- The Reliance and Essar both started there journey together but now a day Reliance
reach top in India and Essar goes behind the Reliance. Why such kind
Of things were happen? Because of Indian politics very difficult to understood. Reliance
maintains good relation with all political leaders, so that they reach in top position.
In India political leaders are change in every five year, so that they can directly
affecting the industries. Political party changes so the new industrial policies come in the market.
New tax policy, change in industrial rules and regulation they are follows etc. Both large and
small scale enterprises should be targeted for improved environmental practices. Many countries
have implemented policies to encourage the growth of large scale enterprise. Others, such as
India, have chosen a very different track by actively promoting small scale enterprise (SSE) that
is more labors intensive and hence plays a more important role in combating poverty. Large and
small scale enterprises share similar environmental problems while also having their own distinct
advantages and challenges in establishing better environmental practices.

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9. Licensing policy:-

In India before 1990 many legal restriction were there, so that industrialist or
entrepreneurs faced lots of problems to established industries in India. Hindustan lever ltd and
many other companies were running and other small and medium scale industries they first
follow long procedure for established industries and the government was highly restricted on
this. Government had some licensing policy so that some product reserve for public company
and therefore private company were not survive in the market or established industries.

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 How government helps to develop industries in
India :-
1. Policy of self-reliance:-

In this policy governments helping those industries who are manufacture Export products
or technological products. After 1991 government main focus on this industries so that now a day
we slowly growing on self- reliance. Government provides enhance support to the small scale
sector and encouraging of entrepreneurs developing the technical unit. In India many industries
expand there business in outside countries also and many foreign companies took over by Indian
industrialists. Government more focus to became independent, not depend to other country. We
manufacture technology or other products in our country.

2. Abolish the monopoly:-

Government play very crucial role in developing industries. But many big industries and
multinational industries were already existed so that they capture the whole market and one type of
monopoly established, so that new and small industries can not fight and industrial development
not arises. There government play very important role to stop this kind of monopoly in the market
and abolish them. Government takes some action like fixing the price of products not more or not
less so that both parties get equal benefits. Government will Endeavour to abolish the monopoly of
any sector of any individual enterprise in any field of manufacture.

3. Developing the infrastructure:-

India is developing country and there are many states those are not developing and not get
any facilities like water supply, transportation, road, electricity etc. For developing infrastructure
government take help of private sector. If government develops road or any infrastructural
development then they give the contract of private sector so that they are also developing. In
India many infrastructure development agencies are working.
Ex:- For development of infrastructure Gujarat state already set up ‘GIDB’ (Gujarat
infrastructure development board). This is the main part or basic requirement of any industrial
development. Industries must require water supply, road transportation and electricity for there
running business.
Now a day private industries are more interested to take part in developing infrastructure
like L&T.

4. Welcome the foreign investment:-

Indian industries are not vastly growing due to lack of finance. Now a day many
industries are developed and growing more compare to past. After industrial revolution
government more focus on industrial development and more helping them. Government
welcomes the new foreign investment, so that many foreign company and financial institute

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 come in India and invest here. India is very vastly growing country so that many foreign
investors interesting to invest in Indian industries. In Gujarat Mr. Narendra Modi was attracting
foreign investors to invest in Gujarat for establishing more industries. That’s why they organized
“Vibrant Gujarat” and this was successfully done to invite foreign investment. In that case many
companies were involved and sign for legal documents.

Governments were focused on sustainable development and industrialization in

Gujarat. The most industrialized state in India With new investments totaling over US $35
billion, Gujarat is amongst the richest states in India. During the 1990s, the manufacturing sector
has grown 10 per cent annually in the state. With increased investment flow from large domestic
groups as well as from multinational companies, this growth rate is expected to accelerate. In
order to compete globally and qualify for IMF and World Bank loans, Gujarat has aggressively
promoted these statistics to attract the attention of large multinational corporations seeking a
location to establish their global operations in South Asia with minimum capital investment.
Many NRIs (non resident Indians) living and working abroad have also played a significant role
in helping Gujarat achieve its economic status within India, mostly due to their ability to attract
foreign investment dollars. The strategy to attract foreign industrial investment has lead to a
diverse industrial base within the state including: production mills for cotton textiles, man made
textile fabrics, organic and inorganic chemicals, agro-chemicals like pesticides and fertilizers,
detergents and cosmetics, drugs and pharmaceuticals, petroleum and petro-chemical products,
plastics, food processing especially diary products, sugar, cement, steel products, heavy
machinery, and paper products. Together, these industrial sectors put together constitute over
78% of the total industrial production of the state.
Gujarat has become prosperous through rapid industrialization instead of reliance on
the agricultural sector. During the 1990s, the manufacturing sector has grown 10 per cent
annually in the state. With increased investment flow from large domestic groups as well as from
multinational companies, this growth rate is expected to accelerate. Gujarat has aggressively
promoted these statistics to attract the attention of large multinational corporations.

5. Entrepreneurship development:-

Government motivate the entrepreneurs to establishing there business, so that they

helping them by providing financial supports or any other facilities. Governments are arranging
many entrepreneurship developments programs. In those programs they are motivating them and
providing all the guidance to require starting the industries. In Gujarat government established
“Gujarat industrial development corporation” (GIDC). Here government provides land, power
supply, water and other services for establishing industries. Here entrepreneurs easily start there
business. Now a days small scale industries are developing more than the past year. The number of
small scale units increased from 67.9 lakh in 1990-91 to 123.42 lakh in 2005-06, registering a
growth rate of about 5.84% annually. This survey conducted in economics survey of India in the
year of 2005-06.

The Government of India has established a net work of entrepreneurship development

institutes including 3 national level institutes, for imparting entrepreneurial education and
training. These Institutes are responsible for development of training modules and undertaking

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 of research and training for meeting the needs of the entrepreneur manager. They work in close
coordination with the local industrial associations. The model shows that Gujarati entrepreneurs
have values such as self-employment, openness to learn, radical economic sense, family
orientation, community orientation, congeniality, venturesome and quest for the unknown,
coupled with environmental stimuli, such as family background, and easy availability of cheap
resources which result in typical entrepreneurial orientations giving rise to Pioneering-Innovative
behaviours.

6. Welcome the latest technology:-

Technologies are the major factor for development of any industries. Indian industries
are faces this problems many years and now they install the latest technology for that production.
Now government also makes liberal policies for importing new technology. Polices for less
restriction and this is very helpful for any industries.
 After welcoming latest technology the per capita production of such vital guides to
industrial progress as Iron, Steel and Coal in India is .005, .003, .007 ton respectively as
against .3, .4 and 3 tones in the United state, and .2, .3 and 5.2 tones in the U.K.
 Cotton textile industries In 1941, 390 mills were in operation, employing on average
nearly 4.5 lakh workers working and consuming nearly 42.5 lakh bales of cotton, 36
lakh of which were provided by cotton grown in India. Now total annual production
reached the high- water mark of 4269 million yards per year. Which is supplemented to
the extended of nearly 2000 million yards by the output of the handloom industries,
which affords employment to thousand of villages in their spare house.
 More focuses to develop new technology in our country. To effectively tackle the
situation India needs to invest in research and development to develop new products,
reduce transaction costs, reduce per unit costs, and finally, improve its raw material
quality.
 The Ministry of Small Scale Industries, Government of India has been promoting the
use of IT in SMEs, as a part of the overall effort towards enhancing SME
competitiveness, in the context of globalization. The Small Enterprises Network
(SENET) project was launched for ensuring electronic delivery of services, to SMEs
through dynamic web based applications and e-enabling SMEs. It primarily does this
through a knowledge portal for SMEs, which is also the front end for delivery of
services. The Ministry of SSI has also recognized various IT enabled services such as
medical transcription, call centres, back-office processing, as well as software
development by SMEs in the services sector. This recognition enables such SMEs
easier access to land, infrastructure and credit.

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7. Motivating the export industries:-

On the other hand, developing countries are advised to liberalize their imports, on the
expectation that this will result in welfare gain as consumers enjoy access to cheaper goods, and
local producers are pressurized to become more efficient or to shift to more suitable activities in
which they have a comparative advantage. In reality, many countries that rapidly liberalized their
imports have experienced the collapse or reduced output of local industries, and the displacement
of the market of local farmers. Moreover, as imports raised by more than exports, many countries
suffered wider trade deficits, making it more difficult for them to improve their external debt
situation. India needs to move from the lower-end markets to middle level value-for-money
markets and export high value-added products of international standard. Thus the industry should
diversify in design to ensure quality output and technological advancement.

TATA STEEL exploring the possibility of setting up a 13,371 crore steel project in
collaboration with the worlds fourth largest steel producer Nippon steel corporation of Japan.

8. Established SEZ:-

Indian government established “special economic zone” for trading freely with other
countries. Here all foreign producers and our industrialist come together and sale their products
or buy products also. Governments are not imposing more duties so that small and medium scale
industries directly doing trades, so that international trade become easier. In a consideration of
the development implications and effects of the multilateral trading system, a good starting point
is to review the relationship between a country’s degree and nature of “trade openness” and
development. In recent years, there has been major controversy over the nature of this
relationship. According to the current orthodox view, trade openness is essential for growth.
Countries that liberalize their imports and orientate production towards exports are assumed to
have faster growth than those that do not, and the faster the rate of opening, the greater will be
the prospect for development.

9. Government incentives:-

Those industries are developing in rural area then government provides incentives.
These incentives are very beneficial for any new industrial development.
Indian businessmen they have not enough capital for sustaining there business efficiently. First of
all they require land for establishing industries, power and water supply for running machinery and
main requirement is finance. While government provides incentives because, In India, small and
medium industries play a vital role in the growth of the economy. Small industries have a 40%
share in industrial output, producing over 8000 value-added products. They contribute nearly 35%

15
in direct export and 45% in the overall export from the country. They are one of the biggest
employment-providing sectors after agriculture, providing employment to 28.28 million people.

A) Land:-
 Every state is offer developed plates for setting up of industries.
 There were many terms and condition like some state don’t charge rent in the initial
years, while some state aloe payment in installment.
 GIDC is the best example for this. There were every small industries businessmen
established there business.
B) Power:-
 Electricity is supplied at concessional rate of 50%.
 While some state exempt such units from payment in the initial years.
c) Water:-
 Water is supplied on a no-profit, no-loss basis.
 Some times 50% concession.
 In some state exemption from water charges for period of 5 year.
D) Sales Tax:-
 In all state applied this for all unit territories, industries and exempted
from sales tax.
 While some states extend exemption for 5 year period.
E) Finance:-
 Government provides subsidies of 10 -15 % is given for building capital
assets.
 Government also established financial institutes private as well as public.
 Different banks established like
• 1948- IFCI (Industrial finance corporation of India )
• 1955- ICICI (Industrial credit & investment corporation of India)
• 1964- IDBI (Industrial development bank of India)
• 1963- UTI (Unit trust of India) etc.
This all banks give encouragement for small and large industries development by
providing financial support.

 Small Industry Development organization (SIDO) offers a number of

financial services to SMEs. Some of its the popular schemes are Credit Linked
Capital Subsidy Scheme for Technology Up-gradation, Credit Guarantee Scheme,
ISO 9000 / IS 14001 Certification Reimbursement Scheme, Integrated Infrastructure
Development Scheme, Cluster Development program , Mini Tool Room Scheme etc.
 Small Industries Development Bank of India (SIDBI) was set up in
April, 1990 under an Act of Parliament. SIDBI is the principal financial institution for
promoting, financing and development of industries in the small-scale sector. To
further improve credit availability, a SME fund of $ 2 billion has been operational
from the year 2004.

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 That’s why the small and medium enterprise sector has played an important role in the Indian
economy. They were contributing nearly 40% of the total manufacturing exports. The total number
of MSEs at 12.34 million units during 2005-06, constitutes nearly 95% of industrial units in the
country, providing employment to 29.5 million persons, and output at 19983-94 prices at 2,777 bn.
With growth rate of production at constant prices in MSEs during 2005-06 at 10.4%, the sector has
consistently demonstrated better performance compared to the industrial sector as a whole, and
manufacturing sector in particular for a long time. The merchandise exports of the sector during
2005-06 being Rs.1,502.4 bn constituted nearly 32% of output of the sector. These incentives very
helpful to all state equally develop SSI. The states which have shown high growth in setting up SSI
units are Maharashtra (23.18%), Gujarat (14.01%), Himachal Pradesh (13.85%), Karnataka
(14.85%), Kerala (17.47%), and UP (13.79%). This all survey conducts in Economic Survey of
India, 2005-06. The relation between trade policy and industrial policy is a crucial one.

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 Conclusion

Today organizations are knowledge based and their success and survival depend on
creativity, innovation, discovery and inventiveness. An effective reaction to these demands lead
to innovative change in the organization, to ensure their existence. The rate of changes is
accelerating rapidly, as new knowledge idea generation and global diffusion are increasing.
Creativity and innovation have a bigger role in this change process for survival.

Here we can see that the industrial development are very important for an inclusive
growth, and also contribute in GDP for national development. Industrial development maintains
balance of trade for import and export. Indian Balance of trade was negative all time; we have
paid many debts to IMF.

Industries are develop so that people get job and ultimate employment level will be
increase, people standard of living will be improve, Education , etc will improve due to Industrial
developments. Indian economy ultimate increase and balance of trade come to positive.
Industries developed product and now day our industries more focus on independence or self
reliance so that technology or any other products manufacture in our country. Directly import of
technological products will be decrease and we more exporting to technical products.

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 Sources
 www.niscindia.com
 www.google.com
 www.smallindustryindia.com
 www.techshowindia.com
 www.wikipedia.com

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