ABSTRACT
After independence from Britain in 1947 and the accompanying partition of the country between India and Pakistan, India embarked on an ambitious industrialisation drive with a view to transforming the structure of the economy. Historically, there has been a tradition of manufacturing production, but growth in the colonial period was slow and, at the beginning of the twentieth century, only around 0.5 million workers were estimated to be engaged in some way in industry, with the majority of these in the railways, cotton and jute textiles and coal mining. In the 1914-39 period, domestic industry was supported by protective import tariffs, which shielded it from the worst impact of the Great Depression of that period. Further boosts during the Second World War came from war-time expenditure (which increased the demand for items like cement, paper and steel) and from the break in international trade during this period. However, by 1947, the labour force in total factory employment was no more than 2 million (or around 2 per cent of the workforce) with manufacturing still dominated by the textile sector, which accounted for over two-thirds of manufacturing employment.1
