PRESENTATION ON

“ Industrial Economy”

Presented by

ROHAN KABBUR
Content
• Introduction
• Contribution of industry to National Economy.
• Role of industrial development economic grow
• Importance of Industries
• Industrialization in India
• Comparison of india, china, and world
• Index of Industrial Production (IIP)
• Ranking on Business topics
• Some achievements of Indian Industries
Introduction
• Industrial economics is the study of firms, industries, and markets.
• It looks at firms of all sizes-from local corner shops to multinational
gaints such as wall mart or tesco.
• Industrial economics helps us to understand issues like:
The levels at which capacity, output, and prices are set.
The extent that products are differentiated from each
other.
How much firms invest in research and development(R&D).
How and why firms advertise.
Contribution of industry to National Economy.

• The share of industries to the GDP has 17% which goes up to 27% when
the contribution of mining, Quarrying, electricity and gas is included.

• The growth rate predicted for the next decade is 12% and it is at present growing at
the rate of 9 to 10% per annum.
 Role of Industrial Development Economic Growth:
1) Modernization of Industry
• In India, agriculture is traditional and backward.
• The cost of production is high and productivity is low.
• We need tractors, threshers, pump sets and harvesters to modernise agriculture.
• To increase productivity, we need chemical fertilizers, pesticides and weedicides etc. These are all industrial products.
2) Development of Science and Technology:
• Industrial development encourages the development of science and technology.
• The industrial enterprises conduct research and develop new products.
3) Capital Formation:
• Acute deficiency of capital is the main problem of Indian economy.
• In agricultural sector, the surplus is small. Its mobilisation is also very difficult. In large scale industries, the surplus is very high.
4) Industrialisation and Urbanisation:
• Industrialisation in a particular region brings growth of transport and communication.
• Schools, colleges, technical institutions, banking and health facilities are established near industrial base.
• Rourkela was dense forest but now is ultra modern town in Orissa.
5) Self-reliance in Defence Production:
• To achieve self-reliance in defence production, industrialisation is necessary.
• During war and emergency dependence on foreign countries for war weapons may prove fatal.
• Self-reliance in capital goods and industrial infra-structure is also necessary.
6) Importance in International Trade:
• Industrialisation plays an important role in the promotion of trade.
• The advanced nations gain in trade than countries who are industrially backward.
• The underdeveloped countries export primary products and import industrial products.
• Agricultural products command lower prices and their demand is generally elastic.
• While industrial products command higher values & their demand is inelastic.
7) Use of Natural Resources:
• It is a common saying that India is a rich country inhabited by the poor.
• It implies that India is rich in natural resources but due to lack of capital and technology, these resources have not been tapped.
• Resources should be properly utilized to transform them into finished industrial products.
8) Alleviation of Poverty and Unemployment:
• Poverty and unemployment can be eradicated quickly through rapid industrialisation.
• It has occurred in industrially advanced countries like Japan.
• The slow growth of industrial sector is responsible for widespread poverty and mass unemployment.
9) Main Sector of Economic Development:
• Industry is viewed as leading sector to economic development.
• We can have economies of scale by applying advanced technology and division of labour and scientific management. So production and employment will increase
rapidly.
Importance of Industries

i)Rapid growth of income

• The first and the foremost argument in favor of industrialization
is that it can provide a base for rapid growth of income.
• It is because of the fact that that productivity rates are higher
in industry than in agriculture.
• Industries mainly depend on man

ii)Employment
• With the increasing population agriculture is unable to provide
for employment.
• Hence it is very important to set up industries to absorb this
surplus labor

iii)Exploitation of resources
• Industries are capable of utilizing all the resources present in
the economy.
iv)Foreign exchange
• India cannot earn adequate foreign exchange from the
exports of its primary products.
• It is because of the fact that the demand for such
products is very low in other countries.

v)Development of agriculture
• The requirements of agriculture are met by the industries
in large.
• Agriculture requires improved farm machinery, chemical
fertilizers and pesticides.

vi)Balanced development
• Ours is an unbalanced economy. Our greater dependence
on agriculture has made us poor.
• With the industrialization in the economy this disparity
can be removed.

vii)Self-sustained growth
• The rapid development of capital goods industries promote
the growth of agriculture, transport and communication.
Industrialization in India

Petroleum products and chemicals

Petroleum products and chemicals are a major contributor to India's industrial GDP, and together they
contribute over 34% of its export earnings

Pharmaceuticals
India produced about 8% of the global pharmaceutical over 60,000 generic brands of medicines

Engineering
India is the largest producer and the largest market for tractors, accounting for 29% of global tractor
production in 2013. India is the 12th-largest producer and 7th-largest consumer of machine tools

Gems and jewellery

India is one of the largest centres for polishing diamonds and gems and manufacturing jewellery; it is also one
of the two largest consumers of Gold.
Textile
Textile industry contributes about 4 per cent to the country's GDP, 14 per cent of the industrial production, and 17
per cent to export earnings

Mining
India's mining industry was the fourth-largest producer of minerals in the world by volume, and eighth-largest
producer by value

Iron and steel

India was the third-largest producer of raw
Comparison of india, china, and world

Export Oriented services activites in

developing countries are often under
the control of a
foreign economic agent and tend to
be poorly integrated with the rest of
the domestic economy. Thus, their
potential as engines for growth is
relatively weak.
Index of Industrial Production (IIP)

• IIP is computed by accounting for

the number of items produced in
the current month versus the
average monthly production in th
base year.

• It is a measure of industrial
performance released by Central
Satistic office(CSO).
Ranking on Business topics

These improvements in
rankings have various
reform measures
undertaken by the
government including
structures and deep
seated reforms such as
goods and services tax
(GST) and insolvency and
bankruptcy code(IBC)
reforms aimed at
strengthening India’s
institutes
 Some achievements of Indian Industries

• India's foreign exchange reserves were US$ 404.92 billion in the week up to December 22, 2017, according to
data from the RBI.

• Indian companies raised Rs 1.6 trillion (US$ 24.96 billion) through primary market in 2017.

• The top 100 companies in India are leading in the world in terms of disclosing their spending on corporate