What is the Contribution of Industry to National Economy?
Manufacturing is the process of mass-creating objects after they have been transformed from raw ingredients to more attractive products. People who work in secondary activities transform raw resources into completed products. Workers at steel mills, car factories, breweries, textile mills, bakeries, and other sectors come into this category. Some people work in the service industry. Manufacturing industry development is used to assess a country’s economic strength.
Importance of Manufacturing
The manufacturing sector is seen as the bedrock of progress in general and economic development in particular, owing to the following reasons
- Manufacturing industries not only help to modernize agriculture, the backbone of our economy, but they also help to reduce people’s reliance on agricultural income by producing jobs in secondary and tertiary sectors.
- Industrial development is required for the abolition of unemployment and poverty in our country. On this basis, public sector industries and joint ventures were established in India. It also aimed to address regional disparities by establishing industries in tribal and disadvantaged areas.
- Exporting manufactured goods stimulates trade and commerce while also supplying much-needed foreign currency.
- Affluent countries turn their raw materials into a varied range of higher-value finished goods. India’s development is dependent on its industrial industries rapidly increasing and diversifying.
Contribution of Industry to National Economy
Over the last two decades, the manufacturing sector’s proportion of GDP has remained unchanged at 17% of GDP. Out of a total of 27 percent of the industry, mining, quarrying, power, and gas account for 10%. This is far lower than the rates in certain East Asian economies, which range from 25 to 35 per cent. Manufacturing has expanded at a 7 per cent annual rate on average over the last decade. A growth rate of 12% is expected during the next ten years. Since 2003, manufacturing has grown at a rate of 9 to 10% per year. Economists predict that manufacturing will accomplish its target over the next decade if the government implements appropriate policy interventions and the industry redoubles its efforts to improve productivity. The National Manufacturing Competitiveness Council (NMCC) was established with this purpose in mind.
India’s major industry is the service sector. In 2018-19, the Services sector’s Gross Value Added (GVA) is anticipated to be 92.26 lakh crore INR at current prices. The services sector generates 54.40 per cent of India’s total GVA of 169.61 lakh billion rupees. The industry provides 29.73 percent of GDP, with a GVA of Rs. 50.43 lakh crore. Agriculture and associated sectors account for 15.87 per cent of the total. It’s worth noting that the agriculture sector employs the most people, accounting for over 53% of the workforce, while the services and secondary industries employ just around 29% and 18% of the workforce, respectively.
Sunrise industries are another sort of industry that is predicted to be a mainstay of the Indian economy in the future. The term “sunrise industry” refers to a sector that is still in its infancy but has the potential for significant growth. The industry is typically characterized by high growth rates, a high level of innovation, and a high level of public awareness, with investors attracted to the sector’s long-term growth possibilities.
On the other hand, the quick expansion of the Sunrise industry may pose a danger to a competing industry sector that is currently in decline. Such an industry is known as a sunset industry because of its bleak long-term prospects. Information Technology, Telecom Sector, and Healthcare are examples of existing Indian sectors that can be classified as Sunrise sectors and are likely to hold us in good stead in the future in terms of job creation and company growth.
- It includes industries that produce finished commodities from natural materials derived from the primary sector. This industry covers activities such as industrial production, cotton fabric manufacturing, sugar cane production, and so on.
- As a result, rather than generating raw materials, the manufacturing sector of a country’s economy produces goods.
- Because it is involved in a variety of industries, this sector is commonly referred to as the industrial sector.
- Blue collar workers are individuals who perform auxiliary tasks.
- Small workshops making pots, artisan production, food production such as brewing plants, food processing, and oil refinery are examples of the manufacturing sector.
- Core Industries
The eight Core Industries include electricity, steel, refinery products, crude oil, coal, cement, natural gas, and fertilizers.
The Index of Eight Core Industries is a monthly production index that is also used to predict monthly industrial performance. The monthly production data obtained from the Source Agencies is used to build the Index of Eight Core Industries.
Industrial growth and its role in inclusive growth
- Agriculture must be modernized, which necessitates industrial development.
- Science and technology development are aided by industrial development.
- Urbanization follows industrialization. Industrialization increases transportation and communication in a specific region.
- Industrialisation is required to achieve self-sufficiency in defense manufacturing.
- Trade promotion is aided significantly by industrialization.
- Rapid industrialization can soon eliminate poverty and unemployment.
- Industry is regarded as the most important industry for economic development. The rapid expansion of national and per capita income is aided by industrial development.
Most of the industrialized nations shift from primary sector to secondary sector to tertiary sector, but India jumped from primary to tertiary sector skipping the secondary sector. The reasons are
- The typical economic path of a country is from agrarian to industrial to service economy, however India has raced ahead of the curve from agrarian to service economy.
- Diversification toward services has been a significant component of India’s recent prosperity, with the services sector accounting for the bulk of GDP.
- Because of its success in software and IT-enabled services (ITeS), India has become a notable services exporter, with its proportion of global services exports increasing from 0.6 percent in 1990 to 3.3 percent in 2013.
- Despite its low per capita income, India’s service sector’s share of GDP is approaching the global average. However, in comparison to the global average, the contribution of services to employment was significantly lower.
- Because the manufacturing sector is labor-intensive, greater emphasis on manufacturing through initiatives such as ‘Make in India’ will aid in correcting this anomaly and increasing employment in line with GDP growth.
Question 1: What are the benefits of cities in industrialization?
Cities serve the sector by providing markets and services such as banking, insurance, transportation, labour, consultants, and financial guidance.
Question 2: Why the Chotanagpur’s region has the maximum concentration of iron and steel industries?
The Chotanagpur’s region has the biggest concentration of iron and steel manufacturers due to the low cost of iron ore, proximity to high-quality raw materials, cheap labour, and tremendous expansion potential in the local market.
Question 3: How do industries give boost to the agriculture sector?
In the following ways industries give boost to agriculture sector:
- Agriculture provides raw resources for agro-based industries such as cotton, woollen, jute, and edible oil.
- In exchange, these businesses provide farmers irrigation pumps, fertilizers, pesticides, PVC pipes, and a variety of other products.
- As a result, agro-industries have boosted agriculture’s productivity while also making production processes more efficient.
Question 4: What is the main cause for rapid strides in the cement industry in 1980s and 1990s?
The cement sector has made great development in terms of capacity, process, technology, and production since 1989, when price and distribution were deregulated, as well as other regulatory reforms.
Question 5: State any one feature of aluminium smelting industry.
Aluminium is light, corrosion-resistant, a good heat conductor, malleable, and strong when combined with other metals.