Importance of Industries

Importance of Industries

Introduction:

Industrialisation is necessary to have speedy growth of the economy, to develop agriculture sector, to generate more employment opportunities, to do optimum utilization of internal resources of economy, for quick increase in income and for improving living standard of people.

India is developing country. In developing country, industries are very important because the development of industries is advantageous to economic development in many ways. Following are the advantages of industries in Indian economy:

Importance of industrialization of India:

(1) Useful in reducing poverty:

India is developing country. Its per capita income is still low from other countries. Therefore, people still live below poverty line. In Indian agriculture, there are small and marginal farmers. The Indian agriculture depends on nature. In this case, it is difficult to reduce poverty from the income of agriculture sector. In agriculture sector, there are low income and opportunities. In industries, there are better income and more job opportunities. As a result, national income and per capita income rises. Income rises and poverty level decreases.

(2) To reduce burden on agriculture sector:

When more labour has been employed than required and if there is no change in production by removing extra employees, this is called hidden unemployed. This is also known as disguised unemployment. In this case, when industrialisation is introduced, and this disguised unemployment shifted to industries from agriculture sector, there will be no harm in agriculture sector. As a result, national income will increase. Moreover, these additional labourers will reduce the pressure on agriculture by migrate to industries.

(3) To reduce unemployment:

India is a developing country. As a developing country, it is not possible to provide permanent employment in India. If industrialisation takes place, more income and opportunities are created for labourers and problem of unemployment will be reduced. Moreover, the problem of seasonal unemployment is reduced by introducing small industries as Japan in India. In the year 1951, 10.6% labourers were employed in industries which rose to 24.3% in 2011-12. Small scale industries in industrial sector, generally used labour intensive production technique therefore increase in small scale industries could substantially increase employment.

(4) Useful for Agriculture Development:

Industrialisation is helpful for agriculture development in the following manner:

• The development of industries provides necessary equipment and tools, which are required for development of agriculture production. Industries provide chemical fertilizers, machines, pesticides, etc. for development of agriculture sector. Therefore, production and productivity increase in agriculture sector.
• Some industries use raw material like cotton, oilseeds, sugarcane, jute etc. as a raw material, which is produced by agriculture. The industries demanded these products as raw material. Thus, industrialisation provides market to agriculture goods.

(5) Non-economic benefits:

There are some non-economic benefits also due to the development of industries. Due to industrialisation, the income of the people will increase. Therefore, the human investment also increases. The services and qualities also increase regarding education, health, transport, communication and other infrastructural facilities. Due to industries development, urbanisation also increases. At present, India and China are introduced as great economic powers in the world due to industrialisation.

(6) Contribution in National Income :

At the time of independence, agriculture sector was having dominance over economy which reduced gradually with the development of industries. Due to planning efforts, share of industries has increased in national income, but still it is not enough. In the year 1951, industrial sector contributed 16.6% in national income which rose to 27% in the year 2013-14. Based on this, it can be said that contribution of industrial sector has increased in national income. It is also noticeable that, in the growth of service sector, industrial sector has played extra ordinary role.

(8) Export Income :

Similar to agriculture sector, industrial sector can also increase its production volume and generate surplus in economy. These surplus items can be exported to earn foreign exchange. This foreign exchange is very useful to import scarce items in the economy. In the year 2013-14 industries earned about 2/3 share of export income. Thus, industrial sector of economy does not only satisfy requirement of citizens, but it also earns foreign exchange from exports of surplus production. Thus it indirectly helps in satisfying the requirements of other items in economy.

(9) Balanced Economic Development :

Industrial sector is very useful in attaining rapid and balanced economic development. Along with development of economy, there is a rise in demand of primary commodities. In addition to this, excess income remains as savings. This increases demand of luxurious and entertainment products. This also can be satisfied by industries.

(11) Strengthens Economic Structure :

Industrial sector is essential to create strong solid structure of economy. Industrial sector produces products like steel, cement which are useful to build irrigation projects, roads, bridges, etc. In addition to that, it provides vehicles of transportation such as buses, trucks, railways, plane, car, two wheelers, etc. strengthen the economy. Even instruments of safety – protection (Rifles, bullets, tanks ) are also produced by industrial sector which reduce dependence on other nations and make India much stronger economically.

(12) Change in Social Structure :

Due to industrialisation, new industrial culture emerged. Due to which new values like discipline, hard work, competition, team work, self dependency, co-operation, under standing, innovation skills, institutional capability gets developed and stands against superstitions, fatalism, narrow psychology, orthodox behaviour gets reduced. These types of social changes inspire economic development.