Agricultural Production Trends in India: An Overview

(i) Prior to Independence:

It may be pointed out that during the period 1901 to 1947, agricultural production declined.

The population rose by 38 per cent while the increase in cultivated area was to the extent of 18 percent.
The annual output of food grains and pulses remained almost constant.

Pandse has made a special study of the yield of principal crops in India for the period between 1910-11
and 1945-46 and concluded that the yield per acre of cereals did not show any consistent decline or
increase but there was a positive increase in the yield per acre of commercial crops and food-grains. He
did not agree with the belief that there had been deterioration in fertility or in the standards of agriculture.

(ii) Post Independence Period:

The process of decline in productivity has continued in the post-independence period, as compared to the
pre-1939 period. The average yield of cereals per acre during 1946-47 to 1949-50 had declined from 619
to 565 lbs. Rangnekar found that the volume of output in India declined from 0.9 metric tones in 1938-39
to 0.86 metric tones per hectare in 1951. Similar conclusion were reached by studies undertaken by ICAR
and the Grow More Food Enquiries.

With the introduction of economic planning in 1951 and with the special emphasis on agriculture
development, particularly after 1962, stagnant of agriculture was reversed as:

1. There was a steady rise in average yield per hectare.

2. There was a Steady rise in area under cultivation.
3. Due to increase in area and increase in yield per hectare, total production of the crops recorded a
rising trend.

(iii) Trends in Food-grains Production:

The increase in agricultural production has an important impact on the economic development of a
country. In India, the increase in the production of foodgrains has been given in table 2.
It reveals from table 2, that in the last fifty two years food-grains production has increased by about more
than three times. The increase in the production of rice was four times while it was over nine times in
respect of wheat. Here, it is worth noting that there exists wide variations in the production of food-grains.

During the course of first two five years plans, the production of food-grains was on the increase but in
the third five year plan it has shown a declining trend. Further, in the course of three annual plans,
production of food-grains has increased to a great extent. But in the subsequent five year plan periods, the
rate of growth of agricultural production was favourable.

According to the first column of the table, the production of cereals was 468 lakh tones in 1949-50 which
turned to double i.e. 947 lakh tones in fourth five year plan. During the sixth plan period, its production
was recorded 1340 lakh tones and further 1719 lakh tones ending the last year of eighth five year plan.

The production of pulses was registered at 132 lakh tones in 1995-96 which was 110 lakh tones during
first plan period. This crop witnessed very deep fluctuations during second and third plan period. Thus,
total production of food-grains was recorded 648 lakh tones in first plan period which rose to 1047 lakh
tones in fourth plan, 1232 lakh tones in fifth plan, 1462 lakh tones in sixth plan, 1706 lakh tones in
seventh plan and 1851 lakh tones in 1995-96.

Regarding trend of rice and wheat, it was 276 lakh tones and 86 lakh tones in first plan which increased to
441 lakh tones and 218 lakh tones in fourth plan and further to 798 lakh tones and 628 lakh tones
respectively in 1995- 96. During 2002-03, production of total food-grains 1742 lakh tones, pulses 111
lakh tones, rice 727 million tones and wheat 651 million tones.
This data indicates that production of food-grains has increased considerably over the years but in terms
of percentage, increase in production varies from one plan period to another plan period.

(iv) Non-Food Grains:

The trends in non-food grains production in India after the introduction of economic planning is shown in
table 3.

Table 3 is the evidence that during the course of five year plans, the production of non-food-grains has
increased to a great extent. The production of cotton increased by two and a half times, three times of
sugarcane, 3.3 times of oilseeds and 1½ times of jute. These crops have a great importance, in the field of
international trade.

The production of cotton was 30 lakh bales in 1950-51 which increased to 80 lakh bales in 1980-81, 97
lakh bales in 1991-92 and 131 lakh bales in 1995-96. Regarding jute, its production was 33 lakh bales at
the start of first five year plan in 1950-51 which rose to 68 lakh bales in 1980-81, 103 lakh bales in 1990-
91 but its production reduced to 89 lakh bales in 1995-96.

The production of sugarcane has shown upward trend as it was 570 lakh tones in 1950-51, 1520 lakh
tones in 1980-81, and 2540 lakh tones in 1991-92. At the close of eighth five year plan, its production
was registered at 2829 lakh tones. In case of oil seeds, production was 186 lakh tones in 1990-91 against
50 lakh tones in 1950-51, and 101 lakh tones in 1980-81.

During 1995- 96, the production of oilseeds was recovered 224 lakh tones. Similarly, production of
cotton, jute, sugarcane was 87,103 and 2816 lakh tones and production of oilseeds was 151 million tones
in 2002-03.
Agricultural Productivity:

The agricultural production depends not only on the area but also on the productivity of land. It shows the
relationship between inputs and output.

The agricultural productivity can be classified into two categories viz;

(A) Agricultural Productivity per worker.

(B) Agricultural Productivity per hectare.

A. Agricultural Productivity per Worker:

In India, the productivity per worker is not only low but also differs from one state to other as is shown in
table 5.

The above table 5 shows that the labour productivity is only Rs. 1213 per worker on the average for India
as a whole. It is Rs. 3195 in Punjab, Rs. 1236 in U.P., Rs. 2922 in Haryana, Rs. 2072 in Kerala, Rs. 1707
in Assam and Rs. 1819 per worker in Kerala.

Per Worker-Agricultural Productivity: International Comparisons:

The per worker labour productivity in India is low as compared to some developed countries. According
to Dr. Baljeet Singh, “In India per worker productivity forms 1/23 of that of U.S.A. and Japan and
1/21 of that in U.K.” The low level of per-worker productivity is an indicator of backward agriculture.
However, a brief presentation of per worker productivity of different countries of the world has been
made in table 6.
The above table 6 shows that India’s agricultural productivity per worker is a little more than one thirty
fourth of West-Germany and less than one twentieth of England. The stagnation in agricultural
productivity has resulted due to the increasing prices of agricultural produce, disapproving many theories
of price production complexes and imperfect food distribution. However, productivity per worker for
India was Rs. 1,213 while it was Rs. 18,120 for Japan, Rs. 19,264 for USA, Rs. 27,690 for West
Germany.

B. Agricultural Productivity per Hectare:

The per hectare productivity has been analysed in two aspects as:

1. Per-hectare Productivity of Different Crops:

The trend of per hectare productivity of different crops has been analysed in the table 7.

The table 7 indicates that the per hectare productivity of rice in 1950-51 was 668 kgs. per hectare which
in 1980-81 increased to 1336 kgs. and further 1804 kg. per hectare in 2002-03. The per-hectare
productivity of wheat which was 663 kgs. in 1951 increased significantly to 1630 kg. per hectare in 1980-
81 and 2613 kg. per hectare in 2002-03.

For maize, it was 1638 kgs per hectare in 2002-03 against 547 kgs per hectare in 1950-51. The per hectare
productivity of sugarcane was recorded to be 65,000 kgs. in 2002-03 against 3342 kgs. in 1951. In case of
cotton it rose to 193 kg. per hectare in 2002-03 against 88 kg. per hectare in 1950- 51. Regarding, Jute, it
was 1043 kg. per hectare in 1950-51 which increased to 1130 kg. in 1980-81 and further 2154 kg. per
hectare in 2002-03.
C. Some International Comparison of Productivity:

No doubt per hectare productivity in India has increased after the introduction of economic planning. But,
if we compare it with developed countries it seems to be very low as has been shown in table 8.

The table 8 shows that the per hectare productivity of rice during 2000-01 in India is 1913 kgs. which in
Japan is 6410 kgs. and in China it is 6320 kgs. Similarly, the productivity of wheat is 7240 kgs. in France
and 7250 kgs. in U.K while in India it is much low i.e. 2553 kgs. per hectare. Similarly, productivity of
cotton is very low as compared other advanced countries.

What Is the Green Revolution?

Throughout history there have been many revolutions that have occurred and changed human lives, such
as the American Revolution and the Industrial Revolution. In the mid- and late-20th century a revolution
occurred that dramatically changed the field of agriculture, and this revolution was known as the Green
Revolution.
The Green Revolution was a period when the productivity of global agriculture increased drastically as a
result of new advances. During this time period, new chemical fertilizers and synthetic herbicides and
pesticides were created. The chemical fertilizers made it possible to supply crops with extra nutrients and,
therefore, increase yield. The newly developed synthetic herbicides and pesticides controlled weeds,
deterred or kill insects, and prevented diseases, which also resulted in higher productivity.

In addition to the chemical advances utilized during this time period, high-yield crops were also
developed and introduced. High-yield crops are crops that are specifically designed to produce more
overall yield. A method known as multiple cropping was also implemented during the Green Revolution
and lead to higher productivity. Multiple cropping is when a field is used to grow two or more crops
throughout the year, so that the field constantly has something growing on it. These new farming
techniques and advances in agricultural technology were utilized by farmers all over the world, and when
combined, intensified the results of the Green Revolution.

Green Revolution: Effects and Limitations of the Green Revolution

GREEN REVOLUTION during the mid-sixties was the outcome of NEW AGRICULTURAL
TECHNOLOGY.

The new agricultural technique was introduced as a package programme to include HYV seeds, fertilizers
and pesticides.

This new technology laid emphasis on the adoption of the whole package simultaneously.

To increase agricultural production and productivity, the Government of India invited a team of experts
sponsored by the Ford Foundation. The team submitted its report entitled India’s Food Crisis and Steps to
Meet It. in April 1959. This report suggested the means of improving production and productivity of the
country with stress on modern inputs, especially fertilizers, credit, marketing facilities etc.

On the basis of the recommendation of this team Government introduced Intensive Area Development
Programme (lADP) in 1960 in seven selected districts. The seven selected districts were West Godavari
(AP), Shahabad (Bihar), Raipur (Chhattisgarh), Thanjavaur (T.N.), Ludhiana (Punjab), Aligarh in U.P.
and Pali (Rajasthan). As a result of high-yielding varieties of wheat the production of wheat rose to high
level of 5000 to 6000 kg. These seeds required proper irrigation facilities and extensive use of fertilizers,
pesticides and insecticides.

This new ‘agriculture strategy’ was put into practice for the first time in India in the Kharif season of
1966 and was termed HIGH-YIELDING VARIETIEIS PROGRAMME (HYVP). This programme was
introduced in the form of a package programme since it depended crucially on regular and adequate
irrigation, fertilizers, high yielding varieties of seeds, pesticides and insecticides.

Impact or the Effects of Green Revolution:

(i) Increase in Production and Productivity:

As a result of new agricultural strategy, food grains output substantially increased from 81.0 million
tonnes in the Third Plan (annual average) to 203 million tonnes in the Ninth Plan (annual average) and
further to 212. 0 million tonnes in 2003-04. HYVP was restricted to only five crops – wheat, rice jowar,
bajra and maize. Therefore, non- food grains were excluded from the ambit of the new strategy.
Wheat has made rapid strides with its production increasing from 11.1 million tonnes (Third Five Year
Plan) to 71.3 million tonnes in the Ninth Plan. The production of wheat touched a high level of 72.1
million tonnes in 2003-04, the overall contribution of wheat to total food grains has increased from 13 per
cent in 1950 – 51 to 34 per cent in 2003-04. The average annual production of rice rose from 35. 1 million
tonnes in the Third Plan to 87.3 million tonnes in the Ninth Plan. It stood at 87.0 million tonnes in 2003-
04.

(ii) Scientific Cultivation:

A very important effect of Green Revolution is that traditional agricultural inputs and practices have
given way to new and scientific practices. Instead of farm seeds, farmers are now using HYV seeds.
Traditional fertilizers are replaced by chemical fertilizers. Consequently under HYV seeds increased
sharply from 1.66 million hectares in 1966-67 (when green revolution came to India) to about 78.4
million hectares in 1998-99.

(iii) Change in Cropping Pattern:

Two changes are significant. First, the proportion of cereals in the food grains output has increased and
the proportion of pulses has declined. Second, the proportion of wheat cereals has increased while that of
coarse grains has declined.

(iv) Development of Industries:

Green revolution has benefited the industrial development. Many industries producing agriculture,
machinery, chemical fertilizers, pesticides, insecticides etc., have come up to meet the growing demand
for these commodities.

(vi) Change in Attitudes:

A healthy contribution of green revolution is the change in the attitudes of farmers. Our farmers have now
begun to think that they can change their misfortunes by adopting new technology. Unlike past, they are
now giving up traditional agricultural practices for scientific practices.

Package Programme:

The new technology adopted in the Indian agriculture during mid-1960s consists of several ingredients
like HYV seeds, chemical, fertilizers, pesticides, irrigation and improved machines and tools like tractors,
pump sets etc. All these things are together termed as, package programme.

If any one of these elements are missing there will be no significant remarkable impact on productivity
per hectare of land. In this case, we cannot then call it Green Revolution or the New Agricultural
technology. Thus, in other words this new technology is known as Package Programme, i.e., it insists the
adoption of total package.

The new technology was tried out in 1960 – 61 as a pilot project in seven selected districts of India and
this programme was named Intensive Area Development Programme extended to other districts on an
experimental basis and was called Intensive Agriculture Areas Programme (lAAP). Thus, as a result both
production and productivity per hectare have increased considerably. This qualitative and quantitative
improvement in Indian Agriculture is scientifically termed as “GREEN REVOLUTION”.
The Government took several steps to improve irrigation facilities in rural areas. The number of tractors
used for cultivation increased from 0.3 lakh in 1960-61 to about 20 lakhs in 1999-2000. The gross
irrigated area was 22.56 million in 1950-51 and went up to 94.7 million hectares in 1999-2000. All these
efforts of the Government led to a rapid improvement in productivity of different crops as shown

The following in table:

This Table shows that except pulses, average yield (mostly rice and wheat) per hectare has improved
significantly due to new technology.

The important achievements of the package programme are:

(i) Increase in the total production of crops.

(ii) Increase in food crops per hectare.

(iii) Increase in use of chemical fertilizers

(iv) Increase in use of HYV seeds,

(v) Increase in use of power tillers and tractors,

(vi) Expansion of irrigational facility.

Limitations of the Green Revolution:

In spite of several achievements, the green revolution has several defects:

(i) More inequality among farmers (Inter-personal inequalities):

The new technology requires a huge amount of investment which can be only, afforded by the big
farmers. Hence, these farmers are getting the absolute benefits of the green revolution and became
comparatively more rich than farmers. This increases inequality in rural India

(ii) Regional inequality:

Benefits of the new technology remained concentrated in wheat growing area since green revolution
remained limited to wheat for a number of years. These were thy regions of Punjab, Haryana and Western
Uttar Pradesh. On account of the above reasons new agricultural strategy has led to an increase in regional
inequalities.

(ii) The Question of Labour Absorption:

There is a general consensus that the adoption of new technology had reduced labour absorption in
agriculture. The uneven regional growth was mainly responsible for the low absorption of labour within
agriculture. The growth of output was also slow to generate adequate employment opportunities. The
sudden rise in the demand for labour in these areas induced mechanisation and labour-saving practices in
general.

(iv) Undesirable Social Consequences:

Some micro level socio-economic studies of green revolution areas have revealed certain undesirable
social consequences of the green revolution. Many large farmers have evicted tenants as they now find it
more profitable to cultivate land themselves.

Thus, a large number of tenants and share-croppers have lost their lands and have been forced to join the
ranks of agricultural labourers. Wetlands have also attracted outsiders (non-agriculturists from nearby
towns to invest capital in buying farms.

(v) Health Hazards:

The health hazards of the new technology can also not be lost sight of. Increased mechanization that has
accompanied the modernisation of farm technology in green revolution areas carries with it the risk of
incapitation due to accidents. The attitude of the Government towards the problems of treatment and
rehabilitation of victims of accidents on farm machines is that of total ambivalence. Meagre compensation
is provided to victims.

(vi) Change in Attitudes:

A healthy contribution of green revolution is the change in the attitudes of fanners in areas where the new
agricultural strategy was practised. Increase in productivity in these areas has enhanced the status of
agriculture from a low level subsistence activity to a money- making activity. The desire for better
farming methods and better standard of living is growing up.
Globalization and Structural Changes in the Indian Industrial Sector took place in the early 1990s
when the government decided to open the markets to foreign investments by forming new economic
polices.

Structural Changes in the Indian Industrial Sector and Globalization were initiated because the
government wanted to encourage growth by doing away with supply bottlenecks that stopped efficiency
and competitiveness.

Globalization implies the dismantling of trade barriers between nations and the integration of the
economies of the nations through financial flow, trade in services and goods, and corporate investments
between nations. Globalization has increased in the recent years due to the rapid progress that has been
made in the area of technology especially in communications and transport. The Indian policies with
regard to the industrial sector before globalization had imposed many restrictions on the sector with
regard to the use and procurement of capital and raw material, type and nature of industry where the entry
of private sector was allowed, the operation scale, and the various markets where they could supply. The
Indian industrial policies favored firms of small size that were labor intensive.

The Structural Changes in the Indian Industrial Sector was brought about by the New Economic Policy of
1991 which did away with many of the regulations and restrictions. The various advantages of
Globalization and Structural Changes in the Indian Industrial Sector are that it brought in huge amounts of
foreign investments and this gave a major boost to this sector. Many foreign companies entered the Indian
market and they brought in highly technologically advanced machines into the country as a result of
which the Indian Industrial Sector became technologically advanced. With new companies being set up in
the Indian Industrial Sector it provided employment opportunities for many people in the country which
in its turn helped to reduce the level of poverty in the country. The number of factories in India in 1990-
1991 stood at 110,179 and in 2003-2004, the figure increased to 129,074.

The various disadvantages of Globalization and Structural Changes in the Indian Industrial Sector are that
with many foreign companies entering the sector increased the competition for the domestic companies.
With foreign goods being better then the Indian products, the consumer in the country preferred to buy the
foreign goods. This reduced the profit levels of the Indian companies and they had to resort to lowering
the prices of their products which in turn further lowered their levels of profit. With highly advanced
technology entering the Indian Industrial Sector, the number of labor required in the sector reduced. The
number of labor in the Indian Industrial Sector in 1990-1991 was 81,62,504 and in 2003-2004, the figure
has decreased to 78,70,081. Thus, Globalization and Structural Changes in the Indian Industrial Sector
poses advantages and disadvantages for the country.

So the government of India must take steps in order to ensure that the changes in the structure of the
Indian Industrial Sector are such that it facilitates globalization in a manner that is gainful and
constructive for a country like India.

1) Globalization of Indian Textile Industry

The initiation and development of globalization and Indian textile industry took place simultaneously in
the 1990s. The Indian textile industry, until the economic liberalization of Indian economy was
predominantly an unorganized industry. The economic liberalization of Indian economy in the early
1990s led to stupendous growth of this Indian industry. The Indian textile industry is one of the largest
textile industries in the world and India earns around 27% of the foreign exchange from exports of
textiles and its related products. Further, globalization of India textile Industry has seen a paradigm
increase in the 'total industrial production' factor of this Industry, which presently stands at 14%.
Furthermore, the contribution of the Indian textile Industry towards the gross domestic product (GDP)
of India is around 3% and the numbers are steadily increasing. The process of globalization and Indian
textile industry development was the effect of rapid acceptance of 'open market' policy by the
developing countries, much in the lines of the developed countries of the world.

The initiation and its subsequent development of globalization and Indian textile industry respectively,
was effected by the Ministry of Textiles under the Government of India. The aggressive policy that was
undertaken for the rapid development of globalization and Indian textile industry were really
praiseworthy. The most significant step amongst them was introduction of "The National Textile Policy
2000". This policy envisaged to address the following issues -

 Increased global competition in the post 2005 trade regime under WTO
 Huge import volume of cheap textiles from other Asian neighbors
 High production cost with respect to other Asian competitors
 Use of outdated manufacturing technology
 Poor supply chain management and huge transit cost
 Huge unorganized and decentralized sector

Further, this policy also aims at increasing the foreign exchange earnings to the tune of US $ 50 billion by
the end of the year 2010. It includes rational projections for the overall development and promotion of
all the sectors involved directly or indirectly with the Indian textile industry. Furthermore, this policy
also envisages the inclusion of the huge unorganized and decentralized Indian textile sector under the
organized textile industry. This is because the unorganized textile manufacturing sector in India accounts
for 76% of the total textile production.

The globalization of the Indian textile sector was the cumulative effect of the following factors -
  Huge textile production capacity
 Efficient multi-fiber raw material manufacturing capacity
 Large pool of skilled and cheap work force
 Entrepreneurial skills
 Huge export potential
 Large domestic market
 Very low import content
 Flexible textile manufacturing systems

The Indian textile industry consist of the following sectors -

 Man-made Fiber
 Filament Yarn Industry
 Cotton Textile Industry
 Jute Industry
 Silk and Silk Textile Industry
 Wool & Woolen Industry
 Power loom Sector

An approximate number of textile manufacturing companies operating in India are given below -

 Badges, emblems ribbons and allied products - 175

 Bed covers, curtains, cushions and other draperies - 2471
 Carpets and rugs - 270
 Embroidery and embroidered garments, made ups and furnishing - 848
 Fabrics and textiles - 3013
 Yarns and threads - 1201
 Jute products - 337
 Kids apparel and garments -1052
 Ladies apparel and garments - 2932
 Men's' apparel and garments - 2936
 Miscellaneous garments, textile and leather accessories - 1658
 Yarns and threads - 1201
 Wool, woolen garments, blankets and accessories - 468
 Textile chemicals, dyeing and finishing chemicals - 239

The overall growth of the Indian textile industry can be attributed to the globalization. Today, the Indian
textile industry employs around 35 million personnel directly and it accounts for 21% of the total
employment generated in the economy. Globalization of the Indian textile industry has also facilitated
introduction of modern and efficient manufacturing machineries and techniques in the Indian textile
sector. Thus, much of India's economic growth is largely dependent on textile manufacturing and
exports.
 2) Globalization and the Indian Petroleum Industry go hand in hand since Globalization of
the Indian Petroleum Industry started soon after the independence of the country.

The Indian Petroleum Industry was dependent from the very beginning on foreign capital, expert
personnel, and technology, which led to the industry's globalization. Globalization entails the integration
of the nations' economies through corporate investments, financial flow, and trade in goods and services
between nations. Globalization also means the dismantling of trade barriers between nations and it has
increased in the last few years due to the massive progress that has been made in the area of technology,
especially in transport and communications. The Indian Petroleum Industry's Globalization took place
since foreign involvement in the various important stages such as production, refining, exploration, and
transportation increased over the years. In order to further encourage the Globalization of the Indian
Petroleum Industry, the government of India took certain measures in the early 1990s when the country
opened its markets to foreign investments.

The various measures taken by the government to encourage Globalization and the Indian Petroleum
Industry are converting the legal status of the Oil and Natural Gas Commission to a corporation. In order
to encourage the involvement of the private sector in production and exploration, the government set up
the Directorate General of Hydrocarbon. The government in an effort to encourage Indian Petroleum
Industry's Globalization has offered the contract of discovered fields to foreign and private companies.
The various companies that have helped in the Globalization of the Indian Petroleum Industry are Enron
Oil and Gas Company, Videocon Petroleum Ltd, Reliance Industries Ltd., Ravva Oil Ltd., and Command
Petroleum.

The Indian government in an attempt to further boost the Globalization of the Indian Petroleum Industry
formed the Exploration Licensing Policy by which it tried to attract the foreign and Indian companies to
production and exploration. The incentives that were declared by the government to encourage
Globalization and the Indian Petroleum Industry are that on imports that were required for petroleum
operations custom duty would not have to be paid, state participation is not compulsory, no tax on the
production of crude oil, provisions for liberal depreciation, tax holidays for 7 years from the day that
production starts, and the freedom to sell natural gas and crude oil in the domestic market at prices that
are related to the market.

Globalization and the Indian Petroleum Industry has been going together as has been seen for the past
many years. The government of India has taken several measures in order to ensure that the Globalization
of the Indian Petroleum Industry is successful for the industry. In the future, the government is likely to
ensure that Indian Petroleum Industry's Globalization is beneficial for the industry and not harmful.

3) The initiation and development of globalization of the Indian manufacturing sector took
place simultaneously in the 1990s. The widespread acceptance and development of
globalization of the Indian manufacturing sector effected astronomical growth of this
industry.
The introduction and the subsequent development of globalization of the Indian manufacturing sector
respectively helped India to shed its age old tag of being 'an agriculture based country'. The main growth
driver of the Indian manufacturing sector are Information Technology and hardware, telecommunication
hardware, automobile, pharmaceutical, biotechnology, infrastructure, electronic, electrical, textiles, etc.
The effect of globalization of Indian manufacturing industry is reflected in the GDP's share of Indian
manufacturing sector which has grown considerably over the years.

The share of Indian manufacturing industry towards India GDP has grown from 25.38% in 1991 to 27%
in 2004. Further, the contribution of the Indian manufacturing sector to the Indian export sector has
increased from 52% in 1970 to 59% in 1980 and 71% in 1990 and 77% in 2000-01. Furthermore, the
Indian manufacturing exports accounted for a little over 5% (in 1990) of the value of output of the Indian
manufacturing sector but today it is close to 10%.

India exports manufactured products worth about US$ 50 billion and a recent study on Indian
manufacturing industry has forecast an annual growth of 17% by the end of the year 2015. In other words
at this rate of increase the quantum of India's manufacturing exports will cross the US$ 300 billion mark
by the end of the financial year 2015. Most of this business would be in the domain of auto components,
pharmaceutical, apparel, specialty chemicals, and electrical and electronic equipment sectors. The Indian
sectors which grew tremendously as a result of globalization of the Indian manufacturing sector are as
follows -

 Capital goods
 Engineering goods
 Chemicals
 Petroleum
 Chemicals & fertilizers
 Packaging
 Consumer non-durables
 Electronics
 IT Hardware & peripherals
 Gems & jewelry
 Leather & leather products
 Mining
 Steel & non-ferrous metals
 Textiles & apparels
 Water equipment

The positive effect of the globalization of the Indian manufacturing sector can be corroborated from the
following facts -

 The Indian industrial growth exceeded 10%

 Manufacturing growth rate exceeded 12 %
 Manufacturing of consumer durables and non-durables have also recorded upswings
 Telecommunication sector with inflows of US$ 405 million has registered the maximum growth
of 950%
 Merchandise exports recorded strong growth
 The automotive industry achieved a growth rate of over 20% in 2006-07
 The biotechnology industry witnessed another good year in 2006-07 and registering more than
40% of growth
  The US$ 47 billion Indian textile industry is expected to grow to US$ 115 billion by the year
2012
 The US$6.4 billion Indian retail industry is expected to grow over 20% annually to US$ 23
billion by 2010
 The robust pharmaceutical market in India ranks 4th worldwide and is expected to cross business
worth Rs 1,00,000 crore in
 formulations and bulk drug production by 2010

Although, the process of globalization of the Indian manufacturing sector have contributed immensely for
the overall development of the Indian economy but it still suffers from some bottlenecks, like the
following -

 Use of primitive technology or under utilization of technology

 Poor infrastructure
 Over staffed operations
 Expensive financing and bureaucracy

India is slowly shedding its image from being an agriculture based country to a manufacturing based
country and thus the above-mentioned bottlenecks should be immediately arrested and eradicated to
ensure further growth of this industry. To ensure elimination of the above-mentioned aberrations form the
Indian manufacturing sector the government of India must focus on areas like improving the urban
infrastructure, ensuring fair competition and access to markets, reduction of import duties, quality
improvements in vocational and higher education, increased investment in R&D and support of SMEs.

The manufacturing industry is the backbone of any economy since it helps in the overall growth of
productivity, employment, and it also strengthens agriculture and service sectors. The astronomical
growth in worldwide distribution systems and Information Technology, coupled with opening of trade
barriers, has led to stupendous growth of global manufacturing networks, designed to take advantage of
low-waged yet efficient Indian work force. The globalization of the Indian manufacturing sector has
brought down the percentage of Indians living below poverty line from 40% to 25%. The Indian
manufacturing sector is successfully competing in the global marketplace and registering high growth on
year-on-year basis since the 1990s.

4) effects of Globalization on Indian steel industry have been felt more profoundly in the
past few years. The India steel industry is one of the major industries in India.

The effects of Globalization on Indian steel industry are not same throughout the country. The effects
depend on the different regions, the type of raw materials used, the condition of the markets,
technological advancements, the policies of the governmental authorities pertaining to the trade and
business activities of the Indian steel industry, etc. In this age of the globalization, as the other industries
of the developing countries, the Indian steel manufacturing sector needs to restructure itself, in order to
have a sustainable growth. This will be very helpful for providing the correct strategies for the steel
industry in India. The restructuring should depend on the different requirements of the steel industry.

The government played a very important role in the development of the steel industry in India. The India
steel industry is experiencing a slow but steady growth. The steel industry in India has huge scopes in the
future with massive scale of infrastructural development happening all across the country. The steel
industry in India caters to many other industrial sectors such as construction industry, mining industry,
transportation industry, automobile industry, engineering industry, chemical industry, etc. The steel
segment includes the manufacturing of three different kinds of steel such as carbon steel, ferro-chrome
steel, and stainless steel.

The steel industry in India has further plans of development. Plans are being chalked out on setting up of
three pig iron manufacturing units of the combined capacity of 6 lakh tons per year and a steel
manufacturing unit of the capacity of producing 1 million tons yearly in West Bengal, with the technical
and financial support of China. With all these developments steel industry in India is all set to become
one of the most reputed industries not only in India but also in the international market as suggested by
experts.

In order to survive the immense competition under the globalization, the Indian steel industry plans a
reversal of the production of steel industry. The main objectives of the strategy is the derivation of the
benefit from the optimum utilization of the plant capacity, the nullification of any form of drawbacks, to
track the opportunities in order to get the maximum from it and to tackle the possible threats.

The strategy suggested for the reversal of the steel industry in India is double layered in nature, effecting
the reversal and at the same time sustaining the reversal. The strategy has to be growth and survival
oriented. The survival part would assure the survival of the industry in the fierce competitive atmosphere
and the growth part would boost the sustainable growth of the industry. The two different parts of the
strategy has to be integrated into one to have the expected results.

The reduction of the cost is another major factor in the survival of the Indian steel industry in the age of
globalization. The cost reduction would be the main aspect of the improvement pertaining to the
competitiveness of the industry. The manufacturers under the steel industry in India have to focus their
attention in the areas such as:

 The reduction in the cost of operations

 The reduction in the costs pertaining to the working capital
 The reduction in the costs pertaining to the production inventory or stock that is not sold
 The improvement in the economics operating in the technological aspects of production
 The transposition of basic materials of production
 The sources of the procurement should be different

5) Globalization of Indian Cement Industry has helped the industry to restructure itself to
coop up with the alterations in the global economic and trading system. The Indian cement
industry is one of the oldest industries. It has been catering to India's cement requirements
since its emergence during the British Raj in India. Though the majority of the players in the
Indian cement industry were private sector organizations, the industry was highly regulated.

With the rapid growth rate of the Indian economy after the 1990s, the infrastructural developments within
the country has been tremendous. The increase in the construction activities has led to the increase in the
demand for updated quality building materials and other allied products. Cement being one of the major
elements in the construction work, there is a growth in the cement industry in India. The consumption of
cement has increased in India by nearly 7.5%. With the globalization of Indian cement industry many
foreign cement manufacturers are engaging themselves in agreements and deals with their India counter
parts to have a share of the growth.
Globalization of Indian Cement Industry includes several foreign companies engaging in mergers and
acquisitions of Indian cement companies. For example,

 Heidelberg Cement - Indorama Cement Ltd.

Heidelberg Cement Company entered into an agreement for a 50% joint venture with the
Indorama Cement Ltd., situated in Mumbai, originally possessed by the Indorama S P Lohia
Group. Heidelberg Cement company is the leading German cement manufacturing company. The
Heidelberg Cement was set up in 1873 and has a long and prosperous history. Being one of the
best in the world the Heidelberg Cement Company has its bases in different countries. The
Heidelberg Cement Company has two manufacturing units in India. A grinding plant in Mumbai
and a cement terminal near Mumbai harbor. A clinker plant is coming up in the state on Gujarat.

 Holcim Cement - Gujarat Ambuja Cements(GACL)

Holcim Cement signed an agreement of 14.8% take over with the Gujarat Ambuja Cements
(GACL). With new products, skilled personnel, superb management, and a outstanding market
strategy gives this tie up good edge over the other competitors. Holcim Cement Company is
among the leading cement manufacturing and supplying companies in the world. It is one of the
major employers in the world, having a work force of 90,000.The Holcim Cement Company has
units in excess of 70 countries all over the world.

 Italcementi cement - Zuari Cement Limited

Italcementi Cement Company with the help of the Ciments Français, a subsidiary for its global
activities, has acquired shares of the famous Indian cement manufacturer - Zuari Cement Limited.
The acquisition was of 50% shareholding and the deal was of about 100 million Euros.
Italcementi Cement is the 5th largest cement manufacturing company in the world. The
production capacity of the Italcementi cement company is about 70 million tons in a year. With
the construction boom in India the company looks for a stable future. In 2001 the Italcementi
cement entered the Indian market scenario. It took over the plant of the Zuari Cement Limited in
Andhra Pradesh in southern India. The joint venture earned revenues of around 100 million Euros
and an operating profit of 4 million Euros.

Lafarge India is the subsidiary of the Lafarge Cement Company of France. It was established in 1999 in
India with the acquisition of the Tisco and the Raymond cement plants. Lafarge Cement presently has
three cement manufacturing units in India. One of them is in Jharkhand which is used for the purpose of
grinding and the other two are in Chhattisgarh used for manufacturing. The Lafarge Cement Company
was set up in the year 1833 by Leon Pavin. Lafarge Cement Company situated in France is the leading
cement producing company in the world. It has plans for increasing the cement production through
technological innovations and maximization of the capacity of the plant. It has a large network of
distributors in the eastern part of India. The Lafarge Cement Company is presently producing nearly 5.5
million tons of cement for the Indian cement market.

Indian Economy on the eve of independence:

1) The sole purpose of British colonial rule was to reduce India into a feeder economy for Britain’s
rapidly growing industrial sector. As a result, Indian economy at the time of independence was in a very
bad shape.

(1)Low level of income and economic development during British rule

1) The Indian economy of the 18th century was primarily an agricultural economy. Agriculture was in a
good shape and looking up. India was also known for its handicraft industries in the whole world.
2) The prominent handicraft industries which gave prime place to India in the world market were cotton
and silk textile; metal industries; precious stone works; gold and silver jewellery; perfumery etc.
3) British government perused economic policies for the protection and promotion of economic interests
of Britain’s rather than the development of the Indian economy.
4) British government changed the whole structure of the Indian economy and transformed it into a
supplier of raw materials and consumer of finished product of British industries.
5) The growth of the aggregate real output (GDP) was less than 2% during the first half of the 20th
century and growth of per capita income was just 0.5%.

(2)Agricultural Sector
1) The main cause of the stagnation of agricultural sector were as follows:-

1. The new land tenure that was introduced by British rulers in India. This land tenure system had
three forms: Zamindari, Mahalwari and Ryotwari system. This gave birth to two classes – the
landlords and the landless cultivators. Especially, under the zamindari system the zamindars used
to exploit the cultivators to the maximum. They used to charge a very high rate of land revenue
from the agriculturalists as a result the surplus left with the cultivators was insufficient even for
their barest minimum sustenance.

1. The British rulers did not give much of attention to increase irrigation facilities and technological
up gradation in India.
2. British rulers initiated commercialisation of agriculture in which they encouraged the production
of cash crops. As a result, Britisher transformed Indian agriculture into a raw material activity to
England. As a result of reduction in the production of food crops and lack of proper policies the
country had to suffer from frequent occurrence of famines.
3. The partition of the country had also adversely affected the India’s agricultural production. It
created a serious problem of shortage of raw material for jute mills of Calcutta and textile mills of
Bombay and Ahmedabad. Also, rich food producing areas of the west Punjab and Sindh went to
Pakistan which created food crises in the country.

(3) Industrial Sector

1) The prime motive behind the de-industrialisation by the colonial government in India was done:

 To get raw material from India at cheap rate and thus to reduce India into a mere exporter of raw
material to the British industries.
 To sell British manufactured goods in India at higher prices.

2) Decline of the handicraft industries made the following impacts:

 It created large scale unemployment in the country.

 Unemployed craftsmen migrated from cities to villages. This increased the burden of population
on villages and agriculture.
  Consumer demand in the Indian market could not be met by the supply of locally made goods.
This encouraged the imports of goods made in Britain.

3) The credit of beginning of iron and steel industries in India during the British rule goes to Jamshedji
Tata. Tata iron and steel company known as TISCO was incorporated in august 1907 and it established its
first plant in Jamshedpur in Bihar. The plant started producing iron in 1912.
4) Two main drawbacks of the industrial sector during colonial rule were:-

 The growth rate of the industrial sector and its contribution towards the GDP was very small.
 There was very limited area of operation of the public sector in the new industrial sector of the
country Public sectors in those days remained confined to railways, power generation,
communication, ports, and some other departmental undertaking.

(4) Foreign Trade

1) Before the advent of British rule in India, India used to get gold , silver , and other precious stones.
2) A very significant feature of India’s foreign trade during colonial rule was the generation of a large
surpluse. Export surplus implies that the countries total exports were greater than the imports. But this
export surplus was disadvantageous to the country’s economy on the following bases:-

 Because of more exports several commodities were not available in the domestic market to the
comman consumer.
 This export surplus did not bring in gold or silver in the country. Rather this surplus was use to
make payments for the expenses war fought by the Britain and to finance the deficit in invisible
items like tourism, transport, insurance and banking services.

(5) Demographic Condition

1) India was in the first stage of demographic transition till 1921. The first stage implies that there was
high birth rate and high death rate in pre 1921 India. Since in this stage both birth rate and death rate were
high, the growth of population remained slow. Because of very slow growth in population this period was
termed as the period of stragnant population.
2) The main reason for the slow rate of growth of population during the British rule were poverty,
malnutrition, famines, epidemics and poor health facilities.
3) After 1921 India entered the second stage of demographic transaction. The average literacy rate was 16
% and woman literacy rate was only 7%. Infant morality rate was as high as 218 and life expectancy was
as low as 32 years.

(6) Occupational Structure

1) There are two important features of India’s occupational structure during the British period:-

 70% to 75% of India’s working population was involved with agricultural sector.10% were
engaged with manufacturing sector and 15% to 20% were with service sector.
 Growing regional variation.

(7) Infrastructure
1) The state of infrastructure facilities especially in the field of transport, communication and energy was
very poor in India during the British rule in India. However some efforts were made to develop basic
infrastructure like roads, railways, ports, water transport, and post by the Britishers.
2) The British rulers introduced railways in 1850 and Indian railways begun operations in 1853.
3)The development and the construction of railways by the British rulers had affected the Indian economy
in the following ways:-
  It provided cheap and rapid transport system especially for distant travel.
 It broke geographical barriers and thus promoted national unity and understanding.
 It created new employment opportunities.
 It helped in controlling famines.
 It promoted foreign trade but benefited British more than Indians.
 It encouraged the process of industrialisation.

4) The main reason of British rulers behind the beginning of railways in India were as following:-

 To have effective control and administration over the vast country. In view of this Britisher tried
to link important administrative and military centres through railway.
 Earning profit.