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Module II

The document discusses industrialization, defining it as the transformation of economies from agrarian to manufacturing-based, highlighting its causes such as technological advancements, resource availability, and labor supply. It outlines both positive consequences, like economic growth and urbanization, and negative effects, including environmental degradation and income inequality. The text also covers industrialization in India, detailing pre- and post-independence developments, key policies, and the impact of the 1956 Industrial Policy on the country's industrial landscape.
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0% found this document useful (0 votes)
26 views8 pages

Module II

The document discusses industrialization, defining it as the transformation of economies from agrarian to manufacturing-based, highlighting its causes such as technological advancements, resource availability, and labor supply. It outlines both positive consequences, like economic growth and urbanization, and negative effects, including environmental degradation and income inequality. The text also covers industrialization in India, detailing pre- and post-independence developments, key policies, and the impact of the 1956 Industrial Policy on the country's industrial landscape.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Module II

Industrialization : Causes and consequences of


industrialization, Industrialization in India, Industrial Poling
Resolutions – 1956

Notes

Definition of Industrialization

Industrialization is the process of transforming an


economy from primarily agrarian to one based on the
manufacturing of goods and services. This
transformation involves the development of industries,
increased use of technology, mechanization, and large-
scale production, leading to urbanization and economic
growth. The Industrial Revolution, which began in the
18th century, marked the beginning of modern
industrialization and changed the way societies
functioned worldwide.
Causes and Consequences of Industrialization

Causes of Industrialization:

Industrialization is a key driver of economic growth and


social transformation. The major causes of industrialization
include:

1. Technological Advancements: The development of


machinery, tools, and production techniques
revolutionized industries, leading to mass production
and efficiency. Example: The Industrial Revolution in
the 18th and 19th centuries saw the advent of steam
engines, mechanized looms, and factory systems.

2. Availability of Natural Resources: Industrialization


requires raw materials such as coal, iron, and minerals.
Example: The abundance of coal and iron ore in Britain
played a significant role in its industrial expansion.

3. Labor Supply: A growing population and migration from


rural to urban areas provided a workforce for industries.
Example: The influx of rural workers into cities during the
British Industrial Revolution enabled the rapid expansion of
textile and steel industries.
4. Capital Investment: Entrepreneurs and governments
invested in industries, leading to the establishment of factories
and infrastructure. Example: The Rockefeller and Carnegie
industrial empires in the United States flourished due to large-
scale capital investments in oil and steel.
5. Market Demand: Rising consumer needs and increasing
trade encouraged mass production of goods. Example: The
automobile industry boomed in the 20th century as a result of
increasing demand for personal vehicles.

6. Political and Economic Stability: Governments


implemented policies that promoted industrial growth through
incentives, trade agreements, and infrastructure development.
Example: Japan's Meiji Restoration policies (1868) fostered
rapid industrialization and modernization.

7. Transportation and Communication: The development of


railways, roads, and telegraph systems facilitated the
movement of goods and information, boosting industrial
activities. Example: The completion of the Transcontinental
Railroad in the USA (1869) boosted national trade and
industrial connectivity.

Consequences of Industrialization:
Industrialization has led to both positive and negative effects:

Positive Consequences:

1. Economic Growth: Industrialization contributes to GDP


growth, employment, and improved standards of living.
Example: China’s economic boom post-1980s was largely
driven by industrial expansion and manufacturing exports.

2. Urbanization: Cities developed around industries, leading


to better infrastructure and facilities. Example: Manchester,
UK, became an industrial hub during the Industrial
Revolution.
3. Technological Innovations: Industrialization promotes
research and development, leading to technological
advancements. Example: The invention of the assembly line
by Henry Ford revolutionized automobile production.

4. Increased Production and Trade: Mass production led to an


increase in goods and international trade. Example: Post-
WWII Japan rapidly expanded its industrial exports,
particularly in electronics and automobiles.

5. Improved Transportation and Communication: Industries


fostered the development of modern transport and
communication networks. Example: The growth of global
supply chains was driven by advances in shipping, aviation,
and digital connectivity.

6. Higher Wages and Employment Opportunities:


Industrialization creates job opportunities and provides better
wages than agrarian economies. Example: The IT industry in
India has provided employment to millions, boosting GDP.

Negative Consequences:

1. Environmental Degradation: Industrialization causes


pollution, deforestation, and depletion of natural
resources. Example: The Great Smog of London (1952)
was caused by industrial emissions.

2. Labor Exploitation: Poor working conditions, child


labor, and long working hours are common issues in
industrialized societies. Example: The early factories of
the Industrial Revolution had unsafe conditions and
exploitative child labor.
3. Income Inequality: Industrialization often leads to
disparities between the rich and poor. Example: The
Gilded Age in the U.S. (late 19th century) saw extreme
wealth disparity between industrial tycoons and
workers.

4. Social Displacement: Traditional occupations decline,


forcing workers to adapt to industrial jobs. Example:
The handloom industry in India declined due to the rise
of mechanized textile mills.

5. Health Hazards: Pollution and hazardous working


conditions contribute to occupational diseases and health
problems. Example: The Bhopal Gas Tragedy (1984) in India,
caused by industrial negligence, led to thousands of deaths.

Industrialization in India

Pre-Independence Period:

1. Colonial Exploitation: British policies favored raw


material extraction rather than industrial development in
India. Example: The deindustrialization of India's textile
industry due to British imports.

2. Early Industries: Traditional industries like textiles and


handicrafts declined due to British imports.

3. Industrial Growth: The Tata Group and other private


enterprises established industries despite colonial
restrictions. Example: Tata Iron and Steel Company
(TISCO) was established in 1907 in Jamshedpur.

4. Infrastructure Development: Railways, telegraph, and ports


were developed, facilitating trade and transportation.

Post-Independence Industrialization:

1. Five-Year Plans: The Indian government introduced


planned industrial growth, focusing on heavy industries
and self-sufficiency. Example: The first Five-Year Plan
(1951-56) emphasized infrastructure and industrial
expansion.

2. Public Sector Expansion: Major industries like steel,


coal, and heavy machinery were nationalized. Example:
The establishment of Bharat Heavy Electricals Limited
(BHEL) in 1964.

3. Liberalization Policies (1991): Economic reforms opened


the market for private and foreign investments, boosting
industrial growth. Example: Infosys and Wipro emerged as
global IT giants post-liberalization.
4. IT and Service Industry Boom: India emerged as a global
IT hub, contributing significantly to economic development.
Example: Bangalore became the 'Silicon Valley of India.'

5. Make in India Initiative: Launched in 2014 to encourage


manufacturing and foreign investment in India. Example:
Companies like Apple and Samsung set up manufacturing
plants in India.
Industrial Policy Resolution – 1956

Key Features:
1. Division of Industries: Industries were classified into three
categories, promoting state control over key sectors.
2. Public Sector Growth: Strengthening public sector
industries for national development.
3. Reduction of Income Inequality: Promotion of economic
equality and balanced regional development.
4. Small-Scale Industry Promotion: Encouragement of small
and cottage industries to generate employment.
5. Industrial Licensing: Industries required licenses for
establishment and operation to ensure planned growth.
6. Foreign Investment Control: Restriction on foreign capital
to protect domestic industries.

Impact of the 1956 Industrial Policy:

- Established the foundation for public sector enterprises.


- Led to growth in heavy industries and infrastructure.
- Strengthened economic self-reliance but also resulted in
inefficiencies due to excessive government control.

Conclusion:
Industrialization is a crucial process for economic growth and
modernization. While it has transformed economies and
improved living standards, challenges such as environmental
damage, labor exploitation, and social inequalities persist.
India’s industrial policies have played a vital role in shaping
its economy, with continuous reforms needed to balance
growth with sustainability. The future of industrialization lies
in sustainable and technology-driven industrial growth that
benefits all sections of society.

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