Study of Industrial Growth in India: Perspective in Political Economy

Abstract

Adopting a historical and descriptive approach, this paper tries to explain that performance of the economic sector in general and that of the industrial sector in particular, depends on the pragmatic policies of the government. This paper starts with the state of affairs during the pre-independence period when state-created inhibitions blocked the local initiative. Post-independence India was a classic case of state-led economic development. Not only was the state highly interventionist but overtime the economy has also included a sizeable public sector. Economic policies adopted in India after independence were result of Indian's scepticism about big business, particularly multinationals. Thus, through the Industrial Policy Resolution 1948, the government assumed the role of a principle actor in industrial areas. Objectives defined in the Directive Principles of State Policy for socioeconomic policy further substantiated the role of the government in this context. In tune with this philosophy, the Government of India adopted the Industrial Policy Resolution on April 20, 1956, to speed up industrialisation as one of its objectives but again under the aegis of the public sector. Although the process to ease out government control was started as early as 1985, it is unfinished even after the liberalisation of the Indian economy in 1991.