What Do You Understand By The Term De-industrialisation. what Was Its Impact On The Indian Economy.

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What Do You Understand By The Term De-industrialisation? what Was Its Impact On The Indian Economy?

What Do You Understand By The Term De-industrialisation?

De-industrialization refers to the process of decline or decline in the industrial sector of an economy. In India, de-industrialization refers to the decline in the contribution of the industrial sector to the country’s GDP, as well as the decline in the share of employment provided by the industrial sector.

There are various factors that have contributed to de-industrialization in India, including:

Economic liberalization: India underwent economic liberalization in the 1990s, which involved the opening up of the economy to foreign competition and the reduction of government controls and regulations. This process had a negative impact on many small and medium-sized industries, which were unable to compete with foreign companies.

Technological change: The advancement of technology has led to the automation of many industrial processes, which has reduced the demand for labour in the industrial sector. This has contributed to de-industrialization in India, as many industries have become more capital-intensive and less labour-intensive.

Globalization: The process of globalization has led to the integration of the global economy, and has resulted in increased competition for industries in India. This has led to the closure of many industries that were unable to compete with foreign companies.

Infrastructure: The lack of adequate infrastructures in India, such as poor roads, ports, and power supply, has made it difficult for industries to operate efficiently and has contributed to de-industrialization.

Land acquisition: The acquisition of land for industrial purposes has often been met with resistance from local communities, which has hindered the growth of industries in India.

Labour laws: India has strict labour laws, which have made it difficult for industries to hire and fire workers. This has made it difficult for industries to adapt to changing market conditions and has contributed to de-industrialization.

Poor governance: The lack of good governance, including corruption and inefficient bureaucracy, has made it difficult for industries to obtain the necessary approvals and permissions to operate and has contributed to de-industrialization.

De-industrialization has had a number of negative impacts on India, including a decline in employment, a decline in the standard of living of workers, and an increase in inequality. It has also led to a shift from a manufacturing-based economy to a service-based economy, which has had its own set of challenges. The government of India has taken a number of measures to address de-industrialization, such as providing incentives to industries, investing in infrastructure, and improving the ease of doing business. However, de-industrialization remains a persistent problem in India.

What Was the Impact of Deindustrialisation On The Indian Economy?

Deindustrialization has had a number of negative impacts on the economy, including:

Decline in employment: Deindustrialization has led to a decline in employment in the industrial sector, as many industries have closed down or scaled back their operations. This has led to an increase in unemployment and underemployment and has had a negative impact on the standard of living of workers.

The decline in GDP: The industrial sector is a major contributor to the GDP of an economy. The decline in the industrial sector has led to a decline in the contribution of the sector to the GDP, which has had a negative impact on the overall growth of the economy.

Shift from manufacturing to service sector: Deindustrialization has led to a shift from a manufacturing-based economy to a service-based economy, which has its own set of challenges. The service sector is typically less productive and less able to generate employment than the manufacturing sector, which has led to a decline in overall productivity and employment in the economy.

Inequality: Deindustrialization has often led to the concentration of economic activity in certain regions, leading to regional imbalances and inequality. It has also led to a widening of the income gap between those who are able to find employment in the service sector and those who are not.

Balance of payments: The decline of the industrial sector has also had an impact on India’s balance of payments. The industrial sector is a major contributor to exports, and the decline in the sector has led to a decline in exports, which has had a negative impact on the balance of payments.

Infrastructure: The decline of the industrial sector has led to a decline in investment in infrastructure, such as roads, ports, and power supply, which has had a negative impact on the overall competitiveness of the economy.

The impact of deindustrialization on the Indian economy has been negative, as it has led to a decline in employment, GDP, and exports, and has contributed to inequality and regional imbalances. It has also led to a shift from a manufacturing-based economy to a service-based economy, which has its own set of challenges. The government of India has taken a number of measures to address deindustrialization, such as providing incentives to industries, investing in infrastructure, and improving the ease of doing business. However, deindustrialization remains a persistent problem in India.

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