The industrial policy as a driver of the Indian economy’s development

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Abstract


The aim of this research is the Indian industrial policy in 1950-2010s, its main direction and perspectives of its future evolution. The methodological basis of the study is such methods as induction and deduction, analysis and synthesis. The systematic approach to the overall study of the Indian economy and the Indian industrial policy in particular has become the base of this research. The author thoroughly analyses its main specific features during the pre-reform period, as well as identifies the causes and the nature of its transformation at the beginning of the 1990s. At the same time the author underlines that taking into account the national-specific features of a mixed society, the industrial policy of the prereform stage facilitated the successful holding of industrialization during which the industrial sector has become the fastest growing sector of the Indian economy. The author underlines the main directions of the New Industrial Policy, 1991 , among which the most important ones are the following: abolition industrial licensing, the reduction of the public sector in the national economy, amendment of Monopolies and Restrictive Trade Practices Act, 1969 , attraction of foreign direct investment and advanced technologies, liberalization of industrial policy at the local level and the replacement the Foreign Exchange Regulation Act, 1973 , by the Foreign Exchange Management, 1999 . Apart from that the author examines the most representative theories of the Indian economists (R. Agraval and C. Rangarajan) which made a significant contribution to working out the industrial policy in 1990s. The author also draws attention to the main elements of a future ready industrial policy discussed in India at the present time. The author stresses that for all its diversity at different stages of socio-economic development the Indian industrial policy always based on both the economic and social components (the New Industrial Policy, 1991 , also added the ecological component). It means that accelerating the annual economic growth rate, the Indian industrial policy has contributing to solving a wide range of social tasks - from the creation of new jobs to poverty and undernourishment alleviation. The article also presents statistical data on the dynamics of gross domestic savings and gross domestic capital formation in the Indian economy, annual average economic growth rates in India from 1990-1991 to 2016-2017 financial year as well as the Indian GDP by industry of origin in 2000-2017.


About the authors

Natalia V Galischeva

MGIMO University of the Ministry of Foreign Affairs of the Russian Federation

Author for correspondence.
Email: galistcheva@yandex.ru
76 Vernadskogo prospect, Moscow, 119454, Russian Federation

Doctor of Economics, Head of Department of the World Economy

References

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