UPSC Mains 2017 · GS III · Q12 · 15 marks · 250 words

“Industrial growth rate has lagged-behind in the overall growth of Gross-Domestic-Product (GDP) in the post-reform period.” Give reasons. How far the recent changes in Industrial-Policy are capable of increasing the industrial growth rate ?

हिन्दी में

“सुधारोत्तर अवधि में सकल-घरेलू-उत्पाद (जी.डी.पी.) की समग्र संवृद्धि में औद्योगिक संवृद्धि दर पिछड़ती गई है ।” कारण बताइए । औद्योगिक-नीति में हाल में किए गए परिवर्तन औद्योगिक संवृद्धि दर को बढ़ाने में कहां तक सक्षम हैं ?

Industrial Policy and Liberalisation

How a topper answered the closest question

Toppers wrote this one in a test series: “It has been argued that the Industrial Policy of 1991 did not achieve the desired results due to multiple reasons. Discuss in context of India's manufacturing sector. Also, highlight the need for a new industrial policy in this regard.”

Waseem Ahmad BhatAIR 7 · CSE 2022 · 166 wordsTheir whole copy

Opening

Industrial Policy, 1991 was brought in the background of Liberalisation reforms to provide more avenues to private sector.

Body · points

→ What it entailed?

⊙ Dereservation of products for MSMEs ⊙ Only few sectors were reserved for public sector which is now only 2 (Atomic energy, railways) ⊙ Licence-Quota-raj was dismantled. ⊙ More FDI allowed on automatic route.

→ Did not achieve desired results

Close · a way forward

⊙ MSMEs are still extremely small & only employ 2 people on average

This has led to dwarfism

⊙ India share in merchandise exports is only 1.67%

⊙ Private investment has been sluggish (only around 50% in infrastructure)

⇒ Reasons & need for new industrial policy

⊙ Regulatory hurdles to ease of doing business like construction permits, environmental clearances, etc

⊙ No focus on increasing size of MSMEs ⊙ Focus in exports should be on comparative advantage & champion sectors

⊙ Need of focus on Fourth Industrial Revolution

India thus needs a holistic industrial policy to fulfill its aim of $ 5 trillion economy

How toppers approach this question, and more on its topic: open the question.

Toppers’ answers to other close questions

Source: UPSC, Civil Services (Main) Examination 2017, General Studies Paper III, Q12. The paper on upsc.gov.in. Themes and links to toppers’ answers are by UPSC Grade, not by UPSC.