What is Industrialization
Industrialization may be defined as a process in which change of series of strategical and systematic production take lace. It means creation and growth of manufacturing units. For a developing country like India industrialization plays a key role for he economic development. Thus, from the Second Five Year Plan the Planning Commission has given huge emphasis on industrialization in India.
The reasons behind the need of industrialization are listed below:
(1) Increase in Per Capita Income:
The development of various industries leads to direct increase in production and productivity within the country. Industries create an environment where more manpower’s are utilized. Hence, the surplus labour from agriculture can easily absorb within the industries bring more income opportunities in the country.
All the industrially developed countries have high per capita income compared to the countries where industrial Nourishment is low. There is no doubt that industrial development gives rise to the per capita income of the economy
(ii) Rise in Capital Formation:
Industrial development is positively correlated with increase in capital formation. High level of investment is required for the establishment of industries. According to ‘Big Push’ theory, high level investment-injection within a country causes a suitable atmosphere for industrial growth which eventually rise to the economic growth of the coun*: y. In fact size of capital formation in both public and private sectors provides a stimulus for industrial growth or vice versa. In short, more industries lead to more capital formation or investment within the economy.
Many small scale units have turned sick due to lack of managerial Competence on the part of entrepreneurs. An entrepreneur who is required to undergo training and counseling for developing his managerial skills will add to the problems of entrepreneurs.
The small scale entrepreneurs have to encounter numerous problems relating to overdependence on institutional agencies for funds and consultancy services, lack of credit-worthiness, education, training, lower profitability and host of marketing and other problems. The Government of India has initiated various schemes aimed at improving the overall functioning of these units.
Measures to remove difficulties faced by Small-Scale Industries in India!
It will be noted that small scale industrial units experience serious handicaps by an inequitable allocation system for scarce raw materials, inadequate institutional finance, poor technical skill and managerial ability, and lack of marketing channels.
It is, therefore, essential to develop an overall approach to remove these difficulties and put the small-scale industrial sector on a sound path of development.
In this connection, the following measures may be suggested:
1. Equitable allocation of raw materials, imported components and equipment.
2. Improvement in the methods and techniques of production.
3. Provision for adequate finance.
4. Marketing assistance.
5. Provision for industrial education and training.
6. Demarcating spheres for large-scale and small-scale units.
(1) Equitable Allocation of Raw Materials, Imported Components and Equipment:
The small scale industrial units should be given adequate degree of priority in the allocation pattern of essential, but scarce, raw materials, imported components and equipment.
(2)Improvement in the Methods and Techniques of Production:
The small scale industrial units should be encouraged to replace land. All these products are the outcome of industries. Hence there is urgent need to develop industrial sector in India.
(vi) Stable Economic Growth:
In India growth is unbalanced and biased in nature. After 1966, agricultural sector has improved decently compared to industries. However, the stability of an economy depends on the industrial growth. Hence, to achieve a stable balanced growth, the country requires a healthy industrial development in both consumer and capital goods areas.
