INDUSTRIAL SECTOR
As in the case of
agriculture, so also in manufacturing, India could not develop a sound
industrial base under the colonial rule. Even as the country’s world famous
handicraft industries declined, no corresponding modern industrial base was
allowed to come up to take pride of place so long enjoyed by the former. The
primary motive of the colonial government behind this policy of systematically
deindustrialising India was two-fold. The intention was, first, to reduce India
to the status of a mere exporter of important raw materials for the upcoming
modern industries in Britain and, second, to turn India into a sprawling market
for the finished products of those industries so that their continued expansion
could be ensured to the maximum advantage of their home country — Britain. In
the unfolding economic scenario, the decline of the indigenous handicraft
industries created not only massive unemployment in India but also a new demand
in the Indian consumer market, which was now deprived of the supply of locally
made goods. This demand was profitably met by the increasing imports of cheap
manufactured goods from Britain. During the second half of the nineteenth
century, modern industry began to take root in India but its progress remained
very slow. Initially, this development was confined to the setting up of cotton
and jute textile mills. The cotton textile mills, mainly dominated by Indians,
were located in the western parts of the country, namely, Maharashtra and
Gujarat, while the jute mills dominated by the foreigners were mainly
concentrated in Bengal. Subsequently, the iron and steel industries began
coming up in the beginning of the twentieth century. The Tata Iron and Steel
Company (TISCO) was incorporated in 1907. A few other industries in the fields of
sugar, cement, paper etc. came up after the Second World War. However, there
was hardly any capital goods industry to help promote further industrialisation
in India. Capital goods industry means industries which can produce machine
tools which are, in turn, used for producing articles for current consumption.
The establishment of a few manufacturing units here and there was no
substitute to the near wholesale displacement of the country’s traditional
handicraft industries. Furthermore, the growth rate of the new industrial
sector and its contribution to the Gross Domestic Product (GDP) or Gross Value
Added remained very small. Another significant drawback of the new industrial
sector was the very limited area of operation of the public sector. This sector
remained confined only to the railways, power generation, communications, ports
and some other departmental undertakings.
