• FACTORS AFFECTING COUNTRY`S INDUSTRIAL PATTERN.– INTERNAL AND EXTERNAL

EXTERNAL: RELATE—> TO B.E NATIONAL AND INTERNATIONAL.

INTERNAL : OPERATIONAL ASPECT OF FIRM PRODUCTIVITY, EFFICIENCY AND PROFITABILITY

INDUSTRIAL POLICY

• POLICY SECTORS WHICH WILL BE SUPPORTED MORE– SOME SEGMENTS TO GROW FASTER– INVITE FOREIGN INVESTMENT SO SEE WHICH

SECTORS– SPECIAL FACILITIES– INCENTIVES– ETC.

COMPETITIVE CONDITIONS

• ITS RELATED WITH: DEMAND AND PROFITABILITY CONDITIONS THROUGH GOVERNMENT POLICY, REGULATIONS.

• IMPORTANT FACTORS SUCH AS:– SUPPORT TO ENTREPRENEURSHIP– AVALAIBILITY OF SKILLED LABOUR– TECHNOLOGYOTHER FACTORS ALSO AFFECT FDI.

CONTINGENT FACTORS

• UNFORSEEN, CANNOT ANTICIPATED IN ADVANCE.– EARTHQUAKES– SOCIAL UNREST– FLOODS– WAR– MONSOON FAILURESO SECTORS WHICH ARE MORE PRONE TO THIS

AFFECT IT.

• TAXATION AND PUBLIC EXPENDITURE VERY IMPORTANT FROM INDUSTRY PONT OF VIEW.– DIFFERENT RATE OF SALES TAX, EXICE TAX, VAT– IN OUR COUNTRY DIFFERENCE IN SALES TAX IN

DIFFERENT STATES.Capital Expenditure: ON infra and Direct

investment in certain location to encourage more industry, assistance in FINANCE, TECHNOLOGY,MARKETING,TRAINING or ENTREPRENEURSHIP

• GOOD PACKAGES WHERE COMPARATIVE ADVANTAGE IS THERE SUPPORT TO EXPORT.

• FOR IMPORT CONCESSIONAL IMPORT DUTIES ETC– FOREIGN EXCHANGE FACILITIES– CONCESSIONAL CREDIT– IMPORT DUTY BENEFITS

AVALIBILITY OF MODERN TECHNOLOGYGOOD R&D FACILITIESCAPITAL GOODS IMPORTFOREIGN TECHNOLOGICAL COLLABORATIONINTERNATIONAL LICENSING AND FRANCHISINGSO GOOD POLICY OF GOVERNMENT IS MUST FOR THIS.

HUMAN RESOURCES

• KEY TO INDUSTRIAL GROWTH

THESE ARE

YEAR MINING AND QUARRYING

MANUFACTURING

ELECRICITY GENERAL

WEIGHT 10.5 79.4 10.2 100

1994-95 9.8 9.1 8.5 9.1

95-96 9.7 14.1 8.1 13.0

97-98 6.9 6.7 6.6 6.7

2000-01 2.8 5.3 4.0 5.0

2001-02 1.2 2.9 3.1 2.7

ANNUAL GROWTH RATES OF INDUSTRIAL PRODUCTION IN MAJOR SECTORS OF INDUSTRY SINCE 1994-95ANNUAL GROWTH RATES OF INDUSTRIAL PRODUCTION IN MAJOR SECTORS OF INDUSTRY SINCE 1994-95

MINING PRODUCTS IS DERIVED DEMAND AS THESE USED AS RAW MATERIAL TO OTHER SECTORS AS THIS IS DECLING SO IS MANUFACTURING. POWER SECTOR DEPEND UPON TECHNICAL CONSTRAINTS AND FAILURE OF NEW INVESTMENT IN THE SECTOR TO COPE UP WITH RISING DEMAND FROM MANUFACTURING, HOUSEHOLD AND AGRI.

MINING PRODUCTS IS DERIVED DEMAND AS THESE USED AS RAW MATERIAL TO OTHER SECTORS AS THIS IS DECLING SO IS MANUFACTURING. POWER SECTOR DEPEND UPON TECHNICAL CONSTRAINTS AND FAILURE OF NEW INVESTMENT IN THE SECTOR TO COPE UP WITH RISING DEMAND FROM MANUFACTURING, HOUSEHOLD AND AGRI.

• CSO(CENTRAL STATISTICAL ORGANIZATION):– TAKES INTO ACCOUNT MINING,QUARRYING,

MANUFACTURING AND ELECTRICITY FOR COMPUTING (IIP): INDEX OF INDUSTRIAL PRODUCTION AND INDUSTRIAL GROWTH RATE.

– MILLION OF INDUSTRIES CONTRIBUTE TO GROSS NATIONAL PRODUCT.

– BACKWARD LINKAGES: WITH AGRICULTURE AND RAW MATERIAL PRODUCING SECTOR AND

– FORWARD LINKAGES WITH THE SERVICE SECTOR.– THIS FORMS A CLOSE LINK BETWEEN THE GROWTH

OF THE INDUSTRIAL SECTOR AND OTHER SECTORS HAVING TRANSACTIONS WITH IT.

CONTINUE……

• INDUSTRIAL POLICY PROVIDE:– FRAMEWORK FOR THE PROMOTION AND

REGULATION OF SECTOR AS PER MACROECONOMICS or PLANNING OBJECTIVES.

– IT EFFECTS DIRECT AND INDIRECTLY.– IN THIS DIFFERENT SEGMENTS OF INDUSTRY LIVE

AND ADJUST.– IT AFFECTS THE CONDITIONS OF• INDUSTRIAL INVESTMENT, OPERATIONS, GROWTH AND

MANAGEMENT.

CONTINUE..

• IT IMPACTS – COMPETITIVE ENVIRONMENT– FOREIGN INVESTMENT– CAPITAL FORMATION– LABOUR AND EMPLOYMENT CONDITIONS– FLOW OF INDIRECT TAX REVENUE– EXPORT AND IMPORT– VERY IMPORTANT: UNDER ITS FLOW TO REDIRECT

THE SCARCE RESOURCES TO PRIORITIES OF NATIONAL IMPORTANCE.

THE DESIGN OF POLICY:

• IN VIEW OF THE CONSTITUTIONAL OBLIGATIONS, RESOURCE AVAILABILITY, PAST TRENDS IN INDUSTRIAL GROWTH, FUTURE PROJECTIONS AND CURRENT INDUSTRIAL CHALLENGES AND OPPORTUNITIES.

WHAT AN INDUSTRIAL POLICY CONTAIN?

• Comparative Roles Of Public, Private, Joint And Cooperative Sector• Categorization Of Industries From The Point Of View Of Assistance , Market

Entry, Control Or Regulation.• Jurisdiction(geographical, Functional Or Product) Of The State Monopoly.• Structure Of Control For The Private Sector.• Role, Attitude And Policy Towards Foreign Investment And Companies• Thrust Or Priority Areas Of Industrialization• Incentive And Institutional Structure For The Promotion Of Industrialization• Role Of Cottage And Small Industries Vis A Vis Large Industries• Procedure For Establishment,operation,expansion,modernization And

Diversification Of Industries• Policy Towards Monopolies, Market Concentration And Competition