justify the direct participation of state in industrial development of our country after independence

Dear student 

state plays an important role . Indian state intervention in industrial development has been extensive.The Indian system of state planning went far beyond the usual inward-looking industrialisation policies that most developing countries pursued after World War II. The government regulated the most basic business decisions for all firms above a certain size: borrowing, investment, capacity utilisation, pricing and distribution.which limits the freedom and well being of the Indian masses and played a direct role in the industrial development of our country after independence.The system of state planning constrained growth of the private sector by allowing it to expand only with government permission.which means with the permission of government only any industry can be set up. But despite the massive interventions, economic progress was made during the period of independence. The per capita GDP grew at a respectable rate of 1.4% per annum from the late 1940 into the 1970. Both famine and poverty were significantly reduced during this period. Nevertheless, most economists argued that the interventions lowered India’s economic growth rates to a level which was not adequate for a country that saved and invested over one-fifth of its GDP. With few major producers of many key industrial products, the concentration of domestic production was very high,by inviting monopolistic pricing. Moreover, as the world economy grew and as beneficial opportunities for growth through trade expanded, India paid an increasing price for its economic isolation. The Indian system of state planning has been described as combining "the worst of socialism and capitalism, by suppressing growth while failing even to deliver the social welfare that communist systems provided".


Regards

  • 0
plz answr
  • 0
What are you looking for?