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Industry and Infrastructure Development in India Since 1947

  • ID: 1269611
  • Book
  • July 2009
  • Region: India
  • 598 pages
  • New Century Publications
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After 60 years of development efforts, 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 favourite of international investors. In India, the tilt towards economic liberalisation started in 1985 when Government announced a series of measures aimed at deregulation and liberalisation of industry. These measures, described as New Economic Policy, were followed by drastic changes introduced by the 1991 Industrial Policy Statement of the Government. By and large, Indian industry has upgraded technology and product quality to a significant degree and met the challenge of openness after being protected for so long.

The Competition Act, 2002 passed by the Parliament seeks to establish a pro-competitive legal framework, contain anti-competitive practices and abuses of dominance and yield better regulation of markets. Micro, Small and Medium Enterprises Development Act, enacted on June 16, 2006, provides the first-ever legal framework recognising the concept of enterprise (comprising both manufacturing and service entities) and gives an investment-based definition to the three terms. Similarly, various initiatives have been taken for the development of infrastructure. India Infrastructure Finance Company Limited (IIFCL) was incorporated on January 5, 2006 to lend funds of longer term maturity, directly to the eligible projects to supplement other loans from banks and financial institutions. Electricity Act, 2003 recognizes trading of power as a distinct activity and permits State Electricity Regulatory Commissions (SERCs) to allow open access in distribution of electricity in phases that would ultimately encourage efficiency and competition. Rajiv Gandhi Grameen Vidyutikaran Yojana ((RGGVY) was launched by the Prime Minister on April 4, 2005. This scheme is for rural electricity infrastructure and household electrification. On August 15, 2002, the Prime Minister approved an important initiative called National Rail Vikas Yojana to put Indian Railways on the path of fast track growth. The National Highways Development Project (NHDP)¾the largest highway project ever undertaken by the country¾is being implemented by the National Highways Authority of India (NHAI). New Telecom Policy (NTP), 1999 provides the basic framework for the future development and growth of the telecom sector in the country. Special Economic Zones Act, 2005 seeks to promote value addition component in exports, generate employment and mobilize foreign exchange.

Part I of the book contains 10 chapters which trace developments in different aspects of industrialization during the post-Independence period and explain key reform measures undertaken for making Indian industry internationally competitive. Part II consists of 7 chapters which deal with various facets of infrastructure development in India. Part III provides year-wise review of problems, policies and progress of industry and infrastructure in India, covering the period 1947-48 to 2008-09. Part IV consists of appendices which provide relevant material on different aspects of Indian industry and infrastructure. Part V contains glossary of terms related to industry/infrastructure.

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Authors’ Note on the Book

Part I: Development of Industry in India

1. Indian Industry: An Introduction
1.1 Pre-Independence Industrial Scene
1.1.1 Self-sufficient Village Economy
1.1.2 Well-knit Urban Economy
1.1.3 Consequences of British Rule
1.1.4 Unbalanced Occupational Structure
1.1.5 Modern Factory System
1.1.6 Introduction of Railways
1.1.7 Other Developments
1.1.8 Critical Appraisal
1.2 Legal Framework for Industrialisation
1.2.1 Constitutional Provisions
1.2.2 Industrial (Development and Regulation) Act, 1951
1.2.3 Monopolies and Restrictive Trade Practices (MRTP) Act, 1969
1.2.4 Consumer Protection Act, 1986
1.2.5 Foreign Exchange Management Act (FEMA), 1999
1.2.6 Competition Act, 2003 and Competition Policy
1.3 Consumer Protection in India
1.3.1 Need for Consumer Protection
1.3.2 United Nations and Consumer Protection
1.3.3 Role of Standards
1.3.4 Central Consumer Protection Council
1.3.5 Quality Council of India

2. Post-Independence Industrial Policy: A General Review
2.1 Industrial Policy Resolution, 1948
2.2 Industrial Policy Resolution, 1956
2.2.1 Categorisation of Industries
2.2.2 Other Features
2.3 Devaluation of the Rupee and Industrial Liberalization, 1966
2.4 Industrial Licensing Policy Inquiry Committee (ILPIC), 1969
2.5 Secretariat for Industrial Approvals (SIA), 1973
2.6 Industrial Policy Statements 1973, 1977 and 1980
2.7 Industrial Policy, 1950-80: A Critique
2.7.1 Expansion of Public Sector
2.7.2 Regulation and Controls of Private Sector
2.7.3 Absence of Internal Competition
2.7.4 Absence of Foreign Competition
2.8 Disillusionment and Rethinking
2.9 Pressure for Industrial Liberalisation
2.9.1 Internal Factors
2.9.2 External Factors
2.10 New Economic Policy and Industrial Liberalisation, 1985
2.11 Industrial Policy Statement, 1991: The Turning Point
2.12 Industrial Policy Outlook
2.13 Conclusion

3. Plan-wise Review of Industrial Policy and Development: I to XI Plan
3.1 First Five Year Plan: 1951-52 to 1955-56
3.2 Second Five Year Plan: 1956-57 to 1960-61
3.3 Third Five Year Plan: 1961-62 to 1965-66
3.4 Annual Plans
3.4.1 Annual Plan: 1966-67
3.4.2 Annual Plan: 1967-68
3.4.3 Annual Plan: 1968-69
3.5 Fourth Five Year Plan: 1969-70 to 1973-74
3.6 Fifth Five Year Plan: 1974-75 to 1978-79
3.7 Sixth Five Year Plan: 1980-81 to 1984-85
3.8 Seventh Five Year Plan: 1985-86 to 1989-90
3.9 Eighth Five Year Plan: 1992-93 to 1996-97
3.10 Ninth Five Year Plan: 1997-98 to 2001-02
3.11 Tenth Five Year Plan: 2002-03 to 2006-07
3.12 Eleventh Five Year Plan: 2007-08 to 2011-12

4. Public Sector Enterprises
4.1 Objectives of Public Sector Enterprises
4.1.1 Development of Infrastructure
4.1.2 Balanced Regional Development
4.1.3 Employment Generation
4.1.4 Promotion of Competitive Conditions
4.1.5 Check on Concentration of Economic Power
4.2 Organisation of Public Sector
4.2.1 Departmental Undertakings
4.2.2 Government Companies
4.2.3 Public Corporations
4.2.4 Holding Companies
4.3 Poor Performance and Rethinking
4.4 Industrial Policy Statement, 1991 on Public Sector
4.5 Public Sector Disinvestment Commission
4.5.1 Classification of Industry Groups
4.5.2 Objectives and Strategy
4.5.3 Loss-making PSUs
4.5.4 Profit-making PSUs
4.5.5 Criteria for Disinvestment
4.5.6 Use of Disinvestment Proceeds
4.5.7 National Investment Fund
4.6 Disinvestment/Privatisation in Action
4.7 Supreme Court Judgement, September 16, 2003
4.8 Public Sector at the State Level
4.9 Future of Public Sector

5. Micro, Small, and Medium Enterprises (MSMEs)
5.1 Micro, Small and Medium Enterprises Development
(MSMED) Act, 2006
5.1.1 Background
5.1.2 Classification and Definitions of MSMEs
5.1.3 Main Provisions of the MSMED Act, 2006
5.2 Advantages of Micro, Small and Medium Enterprises (MSMEs)
5.2.1 High Employment Potential
5.2.2 Widely Dispersed Entrepreneurial Base
5.2.3 Relatively Low Capital Investment
5.2.4 Regional Balanced Development
5.2.5 Export Potential
5.3 Social Face of MSMEs in India
5.4 Problems of MSMEs
5.4.1 Inadequate Availability of Finance and Credit
5.4.2 Inadequate and Irregular Supply of Raw Material
5.4.3 Technological Obsolescence
5.4.4 Lack of Infrastructural Facilities
5.4.5 Deficient Managerial and Technical Skills
5.4.6 Imperfect Knowledge of Market Conditions
5.5 Policy Measures to Help Small Industries
5.5.1 Reservation of Items for Exclusive Production by Small-scale Industries (SSI)
5.5.2 Excise Duty Concessions
5.5.3 Priority in the Disbursement of Loans by the Financial Institutions
5.5.4 Other Concessions
5.6 Recent Policy Initiatives for Promoting Small Industries
5.7 Small-Scale Industries in the 2006-2007 Union Budget
5.8 MSMEs and Globalisation
5.9 Sectoral Profiling of MSMEs
5.9.1 Handlooms
5.9.2 Handicrafts
5.9.3 Powerlooms
5.9.4 Silk and Sericulture
5.9.5 Unorganised Wool Sector
5.9.6 Khadi and Village Industries (KVI)
5.9.7 Coir Industry
5.9.8 Food Processing Industries
5.10 Conclusion

6. Sources of Industrial Finance
6.1 Need for Industrial Finance
6.2 Sources of Industrial Finance
6.2.1 Internal Sources
6.2.2 External Sources
6.3 Development Financial Institutions (DFIs)
6.4 All-India Financial Institutions (AIFIs)
6.4.1 All-India Development Banks
6.4.2 Specialised Financial Institutions
6.4.3 Investment Institutions
6.4.4 Refinance Institutions
6.5 State Level Institutions
6.6 Development Finance Institutions (DFIs): The Changed Scenario
6.7 Conclusion

7. Extent of Industrial Sickness
7.1 Causes of Industrial Sickness
7.1.1 External Causes
7.1.2 Internal Causes
7.2 Measures to Help Sick Industrial Units
7.3 Government Policy Regarding Nationalisation of Sick Industrial Units

8. Tax Incentives for Industrialisation and Infrastructure Development
8.1 Meaning of Tax Incentives
8.2 Forms of Tax Incentives
8.2.1 Deductions
8.2.2 Tax Credit
8.3 Rationale for Tax Incentives
8.3.1 Individuals
8.3.2 Business Organisations
8.3.3 General Purpose Incentives
8.4 Problems Created by Tax Incentives
8.5 Alternatives to Tax Incentives
8.6 Tax Holiday Schemes in India
8.6.1 Tax Holiday for Newly Established Industrial Undertakings in Free Trade Zones, Electronic Hardware Technology Parks, or Software Technology Parks
8.6.2 Tax Holiday for Newly Established Hundred Per Cent Export-Oriented Undertakings
8.6.3 Tax Holiday for Exporters of Wood-based Handicraft Items
8.7 Justification for Tax Incentives for Infrastructure Development
8.8 Tax Incentives for Infrastructure Development in India
8.8.1 Incentives under Section 35-AC
8.8.2 Extension of Tax Concessions for Infrastructure in the 2006-07 Union Budget

9. Industrial Relations and Labour Laws
9.1 Industrial Relations: Post-Independence Trends
9.1.1 From Laissez Faire to State Intervention
9.1.2 First National Commission on Labour (NCL), 1969
9.1.3 Declaration of Emergency, 1975
9.1.4 Post-Emergency to 1990
9.1.5 Post-liberalisation Period (1991 onwards)
9.2 Industrial Disputes Act, 1947
9.3 Contract Labour
9.3.1 Meaning and Forms of Contract Labour
9.3.2 Contract Labour (Regulation and Abolition) Act, 1970
9.3.3 Employers Viewpoint
9.3.4 Workers Viewpoint
9.3.5 Issues in Regulating Contract Labour
9.4 Second National Commission on Labour, 2002
9.5 Labour Reforms: A Touchy Issue
9.6 Conclusion

10. Indian Industry and WTO
10.1 WTO: An Introduction
10.2 Non-Agricultural Market Access (NAMA)
10.3 Non-tariff Barriers
10.4 Services
10.5 Singapore Issues
10.6 Anti-dumping and Subsidies Agreements
10.7 TRIPS and Public Health
10.8 Agreement on Textiles and Clothing (ATC)
10.9 Textile Sector in the Post-Quota Era
10.10 Implications for India
10.11 Measures Taken by the Government

Part II: Infrastructure Development in India

11. Infrastructure Development: Issues and Policies
11.1 Meaning and Types of Infrastructure
11.1.1 Economic Infrastructure
11.1.2 Social Infrastructure
11.2 Infrastructure and Economic Development
11.2.1 Infrastructural Bottlenecks
11.3 Traditional Approach to Infrastructure
11.4 Commercialisation of Infrastructure Services: The New Approach
11.5 Allocation of Risks: The Key Problem
11.5.1 Build-Operate-Transfer (BOT)
11.5.2 Public-Private Partnership
11.5.3 Value Guarantees
11.6 Infrastructure Finance: Nature and Options
11.6.1 Role of Financial Institutions
11.6.2 Debt Market
11.6.3 External Sources
11.7 India Infrastructure Finance Company Limited (IIFCL)
11.8 Recent Policy Announcements on Infrastructure
11.8.1 Infrastructure in Recent Union Budgets
11.8.2 Eleventh Five Year Plan (2007-12) on Infrastructure
11.9 FDI in Infrastructure
11.10 Conclusion

12. Energy Needs and Sources
12.1 Energy Needs of India
12.2 Electric Power
12.2.1 Basic Facts
12.2.2 Legal and Regulatory Framework
12.2.3 Institutional Reforms
12.2.4 Private Sector Participation in Power Sector
12.2.5 FDI in the Power Sector
12.2.6 Poor Performance of State Electricity Boards (SEBs)
12.2.7 Scope for Commercialisation of Power Sector
12.2.8 Accelerated Power Development Programme (APDP)
12.2.9 Hydro Power Development
12.2.10 Nuclear Power
12.2.11 Captive Power Generation
12.2.12 Tax Incentives to Power Sector
12.2.13 Trading in Electricity
12.2.14 Rural Electrification
12.2.15 New Tariff Policy of Central Electricity Regulatory Commission (CERC) for 2004-09
12.2.16 National Electricity Policy: Main Features
12.2.17 Partnership in Excellence
12.2.18 Eleventh Five Year Plan (2007-12) on Electric Power
12.2.19 Recent Initiatives in the Power Sector
12.2.20 Conclusion
12.3 Coal
12.3.1 Eleventh Five Year Plan (2007-12) on Coal
12.3.2 Conclusion
12.4 Oil and Gas
12.4.1 Recent Initiatives in Oil and Gas
12.4.2 Eleventh Five Year Plan (2007-12) on Oil and Gas
12.4.3 Conclusion

13. Transport Infrastructure and Services
13.1 Need for Integrated Transport System
13.2 Indian Railways
13.2.1 Introduction of Railways
13.2.2 Importance of Railways
13.2.3 National Rail Vikas Yojana
13.2.4 Railway Safety Review Committee
13.2.5 Participation of State Governments
13.2.6 Public Private Partnership
13.2.7 Technological Upgradation
13.2.8 Dedicated Freight Corridors (DFCs)
13.2.9 Other Initiatives
13.2.10 Eleventh Five Year Plan (2007-12) on Railways
13.2.11 Conclusion
13.3 Roads and Road Transport
13.3.1 Introduction
13.3.2 Deficiencies of Road Network
13.3.3 National Highways Development Project
13.3.4 Pradhan Mantri Gram Sadak Yojana (PMGSY)
13.3.5 Public-Private Partnership (PPP)
13.3.6 Special Accelerated Road Development Programme in the North Eastern Region (SARDP-NE)
13.3.7 Current Issues in Road Network Development
13.3.8 Eleventh Five Year Plan (2007-12) on Roads Network
13.3.9 Conclusion
13.4 Shipping and Ports
13.4.1 Importance of Maritime Activities
13.4.2 Maritime Agencies/Legislations
13.4.3 Coastal Shipping
13.4.4 Inland Water Transport (IWT)
13.4.5 Ports
13.5 Civil Aviation
13.5.1 Civil Aviation Agencies
13.5.2 From Monopoly to Competition
13.5.3 Recommendations of Naresh Chandra Committee
13.5.4 Modernisation of Delhi and Mumbai Airports
13.5.5 Greenfield Airports
13.5.6 Non-metro Airports
13.5.7 Other Recent Initiatives
13.5.8 Eleventh Five Year Plan (2007-12) on Civil Aviation
13.5.9 Conclusion

14. Communications and Information Technology
14.1 Telecommunications
14.1.1 Importance of Telecommunications
14.1.2 Telecommunications in India
14.1.3 New Telecom Policy (NTP), 1999
14.1.4 Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL)
14.1.5 Telecommunications Regulatory Authority of India (TRAI)
14.1.6 FDI in Telecommunications
14.1.7 Telecommunication Services in Rural Areas
14.1.8 Recent Policy Initiatives in Telecom Sector
14.1.9 Agenda for Reforms
14.1.10 Eleventh Five Year Plan (2007-12) on Telecom and Connectivity
14.1.11 Vision for the Future
14.1.12 Conclusion
14.2 IT and IT-enabled Services
14.2.1 Introduction
14.2.2 Strategies of Indian IT-BPO Companies
14.2.3 Information Technology in Indian Banking
14.2.4 Information Technology in Agriculture
14.2.5 Challenges Ahead
14.3 Postal Services
14.3.1 Project Arrow
14.4 Information and Broadcasting
14.4.1 Broadcasting Sector

15. Special Economic Zones (SEZs)
15.1 Economics of SEZs
15.1.1 Meaning of SEZs
15.1.2 Types of SEZs
15.1.3 Configuration of a SEZ
15.1.4 Advantages of SEZs
15.1.5 Pre-conditions for the Success of SEZs
15.1.6 Possible Reasons for the Failure of a SEZ
15.1.7 Role of the Government
15.1.8 Role of the Private Sector
15.1.9 SEZs and Small Enterprises
15.1.10 Global Experience
15.2 SEZs in India
15.2.1 Experience with Export Processing Zones (EPZs)
15.3 Main Features of the SEZ Policy in India
15.4 Criteria for Approval
15.5 Conversion of EPZs into SEZs
15.5.1 How are SEZs Different from EPZs?
15.5.2 Will EPZ Conversion Help?
15.6 Performance of SEZs in India
15.7 Apprehensions and Concerns
15.8 SEZs and National Security
15.9 Lessons from China
15.9.1 Size of SEZ
15.9.2 Customs Regulations
15.9.3 Incentives Package
15.9.4 Labour Laws
15.9.5 Involvement of State and Local Authorities
15.9.6 DTA Sales
15.9.7 Foreign Investment and Technology
15.10 Conclusion

16. Urban Infrastructure and Services
16.1 Degree of Urbanisation in India
16.2 Constitution (Seventy-fourth Amendment) Act, 1992
16.3 Features of Urban Infrastructure Services
16.4 Urban Housing
16.5 Urban Transport
16.6 National Urban Health Mission (NUHM)
16.7 Safe Drinking Water
16.7.1 Major Issues in Urban Water Supply
16.7.2 Eleventh Plan Programmes for Urban Water Supply
16.8 Sanitation Including Solid Waste Management
16.9 Jawaharlal Nehru National Urban Renewal Mission (JNNURM)
16.10 Eleventh Five Year Plan (2007-12) on Urban Infrastructure
16.11 Financing of Urban Infrastructure
16.12 Cost Effectiveness
16.13 Institutional Structure
16.14 Conclusion

17. Rural Infrastructure and Services
17.1 Constitutional Provisions
17.2 Rural Housing
17.2.1 Indira Awaas Yojana (IAY)
17.3 Rural Electrification
17.3.1 Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY), April 2005
17.4 Rural Water Supply
17.4.1 Swajaldhara
17.4.2 Eleventh Plan Targets for Rural Water Supply
17.4.3 Major Issues in Rural Water Supply
17.5 Rural Sanitation
17.5.1 Central Rural Sanitation Programme (CRSP)
17.5.2 Total Sanitation Campaign (TSC)
17.5.3 Nirmal Gram Pursakar (NGP)
17.5.4 Eleventh Plan on Rural Sanitation
17.6 National Rural Health Mission (NRHM)
17.6.1 Strategies of NRHM
17.6.2 Five Planks of the National Rural Health Mission
17.7 Rural Transport
17.7.1 Pradhan Mantri Gram Sadak Yojana (PMGSY)
17.7.2 National Rural Roads Development Agency (NRRDA)
17.8 Rural Telephony
17.8.1 New Telecom Policy (NTP), 1999
17.8.2 Digital Divide
17.9 Rural Infrastructure Development Fund (RIDF)
17.10 Bharat Nirman Programme for Rural Infrastructure

Part III: Year-wise Review of Developments in Industry/Infrastructure in India: 1947-48 to 2008-09

Part IV: Appendices

Appendix 1: Industrial Policy Resolution, 1956
Appendix 2: Statement on Industrial Policy, July 24, 1991
Appendix 3: New Industrial Policy and other Concessions in the North Eastern Region
Appendix 4: Industrial Infrastructure Upgradation Scheme
Appendix 5: Industrial Park Scheme, 2002
Appendix 6: Scheme for Integrated Development of Leather Sector Appendix 7: Draft National Design Policy
Appendix 8: Scheme for Central Assistance to States for Developing Export Infrastructure and other Allied Activities
Appendix 9: Report on Indian Electronics Hardware Exports
Appendix 10: Anti-Dumping Laws and Procedures in India
Appendix 11: Industrial Policy Reforms in Selected States of India
Appendix 12: New Industrial Policy and other Concessions for the State of Sikkim
Appendix 13: New Industrial Policy and Other Concessions for the State of Jammu & Kashmir
Appendix 14: New Industrial Policy and other Concessions for the State of Uttaranchal and the State of Himachal Pradesh Appendix 15: National Entrepreneurship Development Board (NEDB) Scheme: Guidelines
Appendix 16: Scheme of Micro Finance Programme
Appendix 17: Scheme of Fund for Regeneration of Traditional Industries (SFURTI) Appendix 18: Main Recommendations of the Task Forces on Direct and Indirect Taxes
Appendix 19: Ten Point Agenda Declared by Minister of Communications and Information Technology on May 24, 2006
Appendix 20: Cellular Mobile Telephone Service
Appendix 21: Very Small Aperture Terminal (VSAT)
Appendix 22: Universal Service Obligation Fund (USOF)

Part V: Glossary of Industrial/Infrastructural Terms


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