Reviewed by Aug 27, 2020| Updated on
Industrialisation is the period of social and economic change that transforms a human group to an industrial society from an agrarian society, involving the extensive manufacturing reorganisation of an economy.
Industrialisation requires many key elements to grow on a significant scale. They are land, labour, capital technologies, and connections. People cannot grow into an industrial society without a generous supply of these essential elements and the capacity to coordinate with them.
Industrialisation in India
The industrial revolution entered India in 1854 when Bombay opened its first steam-powered cotton mill in Asia. Initially, the growth was slow, and the expansion of these modernised cotton mills was not done until the 1870s and 1880s. India now has the world's sixth-largest economy.
Industrialisation provides greater opportunities for employment in small and large scale industries. In an industrial economy, industry absorbs underemployed and unemployed farmworkers, thus increasing community income.
It also helps in overcoming deterioration in terms of trade, bringing technological progress and providing the necessary elements for strengthening the economy.
Outcomes of Industrial Policy, 1991
The program liberalised the economy by reducing excessive regulation and other industrial growth obstacles. This ended license policy, permit policy, and Raj quota policy.
It has reduced the role of public sector industries in the economy, which reduced the government burden. The government has used the disinvestment strategy in companies in the public sector that face financial losses.
The liberalisation measures increased competition in the industrial sector, improving their efficiency, and lowering the prices of many goods and services that ultimately benefited the customers. The exit of MRTP companies has brought greater foreign investment to the private sector.
Specific policies, such as Special Economic Zones (SEZ), Export Processing Zones (EPZ), Export-Oriented Units (EOU), etc., increased India's exports under the new economic policy of 1991. It has also helped boost Foreign Exchange Reserves in India.