ABSTRACT
This chapter attempts to provide a detailed overview of the industry. The condition of Indian industry before the initiation of the First Five-Year Plan was weak, skewed and concentrated with lack of government intervention. Later there was a remarkable shift towards public or state ownership of industries which has been better known as “capturing the commanding heights of the economy”. Then the chapter attempts to investigate trends and performance of industrial sector under various industrial policy regimes, which is broadly divided into three broad phases: (a) increasing role state intervention (1948–1980); (b) a transitional phase of moderate reforms (1980–1991) and (c) extensive market-oriented reforms (1991–2020). Then the chapter provides a detailed evaluation of the performance of public sector enterprises in India, with specific focus on the rationale, trends, recent performance and employment generation. Then it describes the key issues in disinvestment and privatization – reasons, history of disinvestment and a critical evaluation. This is followed by a recent case study of “privatization of Air India”. In the next part the chapter discusses one of the significant features of Indian industrial development, that is, the development of micro, small and medium enterprises (MSMEs) – its role, growth, performance and the government policy initiatives. Finally, the chapter ends with the debate on foreign direct investment in Indian industries. The “Make in India” initiative has been an added feature in this regard.
