New Century Publications Industrial Policy Economic Development I: 1947 - 2012

From 1950 to 1980, India's development pattern was characterized by strong centralized planning, government ownership of basic and key industries, excessive regulation and control of private enterprise, trade protectionism (through tariff and non-tariff barriers), and a cautious and selective approach towards foreign capital. It was a quota, permit, and license regime guided and controlled by a bureaucracy trained in colonial style. This so-called inward-looking, import substitution strategy of economic development began to be widely questioned at the beginning of 1980s. Policy makers started realizing the drawbacks of this strategy, which inhibited competitiveness and efficiency and produced a much lower rate of growth than expected. A tilt towards economic liberalization started in 1985 when India's government announced a series of measures aimed at the deregulation and liberalization of industry. As a result of economic reforms of the last 20 years, India is presently one of world's fastest growing economies. In the last few years, it has emerged as a global economic power, the leading outsourcing destination, and a favorite of international investors. Indian industry has upgraded technology and product quality to a significant degree and met the challenge of openness after being protected for so long. This book traces the developments in different aspects of industrialization during India's post-Independence period. It explains the key reform measures undertaken for making Indian industry internationally competitive and examines the current issues pertaining to this vital sector of the Indian economy.