The term Industry indicates to an economic activity that is concerned with the processing of raw materials and manufacture of goods in factories. Indian Industry covers a wide range of activities and has enormous possibility of growth.

In other definition it has been said that the word ‘industry’ is a classification that indicates to a group of companies that are linked in terms of their principal business activities. There are various different industry classification in modern economies that are normally grouped into larger categories called sectors.

The word ‘Industry’ has its origin in the Latin word industria’ meaning diligence, “hard work”. The word still has its basic meaning intact and used with that meaning.

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Major Indian Industry in India

Software Industry

This sector of India Industry, although it is not a very old and conventional sector, in this last 10 years has recorded a huge expansion. The software industry augurs India’s standing as the knowledge based economy having a Compounded Annual Growth Rate (CAGR) of 42.3 per cent.

Textile Industry

This sector of the Indian Industry covers a wide range of activities. These activities include the generation of raw materials such as jute, wool, silk and cotton; and not only this these activities also include the generation of greater value added goods such as ready made natural fibre as well.

It has been roughly estimated that almost 35 million individuals are provided job opportunity by Textile Industry showing its major role that it plays in the nation’s economy. While the Textile industry shares 35% of the gross export income besides annexing 14% of value addition in merchandising section, it has 4 percent share in GDP (Gross Domestic Product).

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Cement Industry

In this sector of Indian Industry, there are 10 large cement plants that are governed by different State Governments. Besides these 10 plants, in India there are 115 cement plants and around 300 small cement plants.

While big cement plants have installed capacity of 148.28 million of tones per annum, the mini cement plants have total capacity of 11.10 million tones per annum.

Some major cement companies of India are : Ambhuja cement, JK cement, Aditya Cement and L&T Cement, etc.

Steel Industry

As one of the major kinds, this sector of Indian Industry has a history of 400 years behind its existence. It has a past record of more or less 4% growth during the last ten years. Indian Steel Industry is the 10^th largest in the World as it becomes obvious from the fact of its contribution of Rs. 9,000 crore of capital contribution; and not only this, it has also provided employment opportunities to more than 0.5 million people. In India the key players in this sector are : Steel Authority of India Limited (SAIL), Bokaro Steel Plant, Rourkela Steel Plant, Durgapur Steel Plant and Bhilai Steel Plant.

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Food Processing Industry

This sector of the Indian Industry has enormous possibility of growth. India’s share in the global food business is less than 1.5%. This situation prevails despite the fact that India is one of the key food producing nations across the world.

According to the GDP estimates the rough expansion of this sector is between 9-12%; however, the growth rate of this sector was measured around 6-8% during the tenth Five Year Plan period. The Food Processing Industry, that is estimated to increase by 37 million by 2025, caters job opportunities to around 1.6 million people.

Petroleum Industry

This sector of the Indian Industry began its operations in 1867; it is rightly so claimed to be the oldest Indian Industry. India, the most flourishing oil markets in the in the World, has registered in the last few decades the expansion of top national companies, of this sector, such as ONGC, HPCL, BPCL and IOC.

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Chemical Industry

This sector of Indian Industry is understood to be the oldest in terms of volume, domestic sector in India. In the context of productivity it renders a sense of pride to India by getting a place as the 12^th largest producer of chemicals. Some of the other rapidly growing sectors under Chemical industries are petrochemical, agrochemical and pharmaceutical industries.

Mining Industry

This sector of Indian Industry contributes 2.2% to 2.5% to GDP; however, one takes into consideration the GDP of total industrial sector it contributes around 10% to 11%. Even if mining is done on small scale it still contributes 6% of the entire cost of mineral production. Indian Mining Industry takes the responsibility of providing jobs to around 0.7 million individuals.

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Industrial Rules and Policies in India

It has been widely acclaimed that if the industrial sector in India has to grow, then there has to be enough foreign capital in the country. However, it has also been a bitter fact that it is not easy to invest in India, a fact many foreign firms would immediately attest to.

However, the incumbent government, in an attempt to make things better for international firms, has amended some Foreign Direct Investment (FDI) rules that will allow interested Non-Resident Indians (NRIs) to invest in India.

It has been recently disclosed that in sectors having provision for automatic rules for FDI, foreign companies need not to obtain permission from Foreign Investment Promotion Board (FIPB) if they want to merge with a company in India or just acquire it.

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NPA i.e. Non-Performing Assets are the term loans given by banks on which either interest and/or principal have remained ‘overdue’ or have not been paid by the borrower for 90 or more days.

Any asset of bank can be of two types: Standard Assets and NPA

• Standard Assets are loans which do not have any difficulty and less likely to get defaulted.
• NPA are further classified into three categories:

1. Substandard Assets: These are the ones which have been declared  NPA for a period not exceeding 12 months.
2. Doubtful Assets: These are the loans which remained NPA for a period exceeding 12 months.
3. Loss Assets: On these loans, a loss has been identified by the auditor (external or internal) or by the central bank inspector. But the amount is yet to be written off.

Reasons for NPA in India

For India, NPA is not an alien concept. It existed before too, but due to economic boom and flourishing Indian economy before 2008 crisis, it was not a threat to the banking sector and hence was not in news.

There are many factors which have led to this NPA problem in India. Some of the important ones are as follows:

1.  2000-07 was a period of economic boom. Indian economy along with the world was growing leap and bound during this time. To sustain this economic growth large amount of money was pumped in the energy and the infrastructure sector. But these sectors have long gestation period.
With the advent 2008 financial crisis, economies around the world slowed down. India too did not remain untouched. This economic slowdown adversely affected those long gestation projects thus loans started defaulting.

2. Government slow response and red tapism have also aggravated the problem. Profitable projects due to the passage of time and growing cost became infeasible and defaulted on loans.

3. Political interference and nepotism have also added to the NPAs. Political pressures were misused for getting loans without proper paper work or feasibility study.

4. Priority sector lending and loan waiver (mainly to farmers) have also added to the menace.

Time to clear some misconceptions

Here, we need to be clear that NPAs though bad for the health of the banking sector cannot be avoided. It is part and parcel of any healthy economy. Government or banks need not be blamed for favoring industrialists. As loans disbursed to large projects (Infrastructure, energy, MSME sector etc.) are the growth engines of any economy. It provides a fillip to the economic growth at the same time addresses the problem of unemployment.

Way forward

Union government along with RBI has taken several steps to improve the health of the Indian banking sector. Sarfaesi Act, Insolvency and Bankruptcy code, Indradhanush Plan (don’t confuse it with Mission Indradhanush), Bad Bank, Public Sector Asset Rehabilitation Agency (PARA), Banking Regulation Bill are to name a few.

Capitalism is an economic system in which trade, industry, and the means of production are largely or entirely privately owned and operated for profit. Central characteristics of capitalism include capital accumulation, competitive markets, and wage labor. In a capitalist economy, the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged.

The production of goods and services is based on supply and demand in the general market (market economy), rather than through central planning (planned economy). Capitalism is generally characterized by competition between producers. Other facts, such as the participation of government in production and regulation, vary across models of capitalism.

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The degree of competition, the role of intervention and regulation, and scope of public ownership varies across different models of capitalism. Economists, political economists, and historians have taken different perspectives in their analysis of capitalism and recognized various forms of it in practice.

Capitalism has existed under many forms of government, in many different times, places, and cultures. Following the demise of feudalism, capitalism became the dominant economic system in the Western world.

Capitalism was carried across the world by broader processes of globalization such as  imperialism and, by the end of the nineteenth century, became the dominant  global  economic system, in turn intensifying processes of economic and other globalization.

The British East India Company and the Dutch East India Company inaugurated an expansive era of commerce and trade. These companies were characterized by their  colonial and expansionary powers given to them by nation-states. During this era, merchants, who had traded under the previous stage of mercantilism, invested capital in the East India Companies and other colonies, seeking a return on investment.

The recognition of individual rights entails the banishment of physical force from human relationships: basically, rights can be violated only by means of force. In a capitalist society, no man or group may initiate the use of physical force against others . The only function of the government, in such a society, is the task of protecting man’s rights, i.e., the task of protecting him from physical force; the government acts as the agent of man’s right of self-defense, and may use force only in retaliation and only against those who initiate its use; thus the government is the means of placing the retaliatory use of force under objective control.

Must Read: Communism

Capitalism rose to prominence with the end of feudal economies and has become the dominant economic system in developed countries. Specific tenets of capitalism, such as property rights and wage labor, can also be considered cornerstones of representative government.

Capitalism is often closely associated with economic growth, as production and price are determined by the market rather than by governments. Private property rights provide individuals with the freedom to produce goods and services they can sell in the market.

Capitalism has been criticized for its underlying focus on profit, and how that focus can lead to social and economic inequality. Further, it is also criticized for its emphasis on consumption, as the constant purchase of goods and services is necessary for capitalism’s success.

Capitalism has been dominant in the Western world since the end of mercantilism. It was fostered by the Reformation, which sanctioned hard work and frugality, and by the rise of industry during the Industrial Revolution, especially the English textile industry (16th–18th centuries). Unlike earlier systems, capitalism used the excess of production over consumption to enlarge productive capacity rather than investing it in economically unproductive enterprises such as palaces or cathedrals.

The strong national states of the mercantilist era provided the social conditions, such as uniform monetary systems and legal codes, necessary for the rise of capitalism. The ideology of classical capitalism was expressed in Adam Smith’s Wealth of Nations (1776), and Smith’s free-market theories were widely adopted in the 19th century. In the 20th century the Great Depression effectively ended Laissez – Faire economics in most countries, but the demise of the state-run Command Economies of Eastern Europe and the former Soviet Union and the adoption of some free-market principles in China left capitalism unrivaled by the beginning of the 21st century.

Critics of capitalism associate the economic system with social inequality; unfair distribution of wealth and power; a tendency toward market monopoly or oligopoly (and government by oligarchy); imperialism; counter-revolutionary wars; various forms of economic and cultural exploitation; materialism; repression of workers and trade unionists; social alienation; economic inequality; unemployment; and economic instability.

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Socialism is a social and economic system characterised by social ownership of the means of production and co-operative management of the economy, as well as a political theory and movement that aims at the establishment of such a system. “Social ownership” may refer to cooperative enterprises, common ownership, state ownership, citizen ownership of equity, or any combination of these.

There are many varieties of socialism and there is no single definition encapsulating all of them. They differ in the type of social ownership they advocate, the degree to which they rely on markets or planning, how management is to be organised within productive institutions, and the role of the state in constructing socialism.

A socialist economic system is based on the organisational precept of production for use, meaning the production of goods and services to directly satisfy economic demand and human needs where objects are valued based on their use-value or utility, as opposed to being structured upon the accumulation of capital and production for profit.

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The socialist political movement includes a diverse array of political philosophies. Core dichotomies within the socialist movement include the distinction between  reformism  and  revolutionary socialism and between state socialism and libertarian socialism.

The origins of socialism as a political movement lie in the Industrial Revolution. Its intellectual roots, however, reach back almost as far as recorded thought—even as far as Moses, according to one history of the subject. Socialist or communist ideas certainly play an important part in the ideas of the ancient Greek philosopher Plato, whose Republic  depicts an austere society in which men and women of the “guardian” class share with each other not only their few material goods but also their spouses and children. Early Christian communities also practiced the sharing of goods and labour, a simple form of socialism subsequently followed in certain forms of monasticism. Several monastic orders continue these practices today.

The term “socialism” was created by Henri de Saint-Simon, one of the founders of what would later be labelled “utopian socialism”. The term “socialism” was created to contrast against the liberal doctrine of “individualism”, which stressed that people act or should act as if they are in isolation from one another. The original socialists condemned liberal individualism as failing to address social concerns of poverty, social oppression, and gross inequality of wealth.  The term socialism is attributed to Pierre Leroux, and to Marie Roch Louis Reybaud in France; and in Britain to Robert Owen in 1827, father of the cooperative movement.

The system of social organization in which private property and the distribution of income are subject to social control; also, the political movements aimed at putting that system into practice . Because “social control” may be interpreted in widely diverging ways, socialism ranges from statist to libertarian, from Marxist to liberal. The term was first used to describe the doctrines of Charles Fourier, Henri De Saint – Simon, and Robert Owen, who emphasized non-coercive communities of people working non competitively for the spiritual and physical well-being of all.

Must Read: Communism

Karl Marx and Friedrich Engels, seeing socialism as a transition state between Capitalism and Communism, appropriated what they found useful in socialist movements to develop their “scientific socialism.” In the 20th century, the Soviet Union was the principal model of strictly centralized socialism, while Sweden and Denmark were well-known for their non-communist socialism.

Christian socialism is a broad concept involving an intertwining of the Christian religion with the politics and economic theories of socialism. Islamic socialism is a term coined by various Muslim leaders to describe a more spiritual form of socialism. Muslim socialists believe that the teachings of the Qur’an and Muhammad are compatible with principles of equality and public ownership drawing inspiration from the early Medina welfare state established by the Prophet Muhammad. Muslim Socialists are more conservative than their western contemporaries and find their roots in Anti-imperialism, anti-colonialism, and Arab nationalism. Islamic Socialist leaders believe in Democracy and deriving legitimacy from public mandate as opposed to religious texts.

Libertarian socialism is a group of political philosophies that promote a non-hierarchical, non-bureaucratic society without private property in the means of production. Libertarian socialists believe in converting the present-day private productive property into  common or  public goods, while retaining respect for personal property.

Anti-capitalism, anarchism, and the anti-globalisation movement rose to prominence through events such as protests against the World Trade Organization Ministerial Conference of 1999 in Seattle. Socialist-inspired groups played an important role in these movements, which nevertheless embraced much broader layers of the population and were championed by figures such as Noam Chomsky.

Also, Read:

• Capitalism
• Naxalism in India
• Five Year Plans of India
• Colonial Exploitation of Indian Economy

The Indian Economy is the 9^th largest economy of the world and also one of the fastest growing world economies. The most top industries contributing to Indian economy are:

10 Industries that Contribute to Indian Economy are:

Retail and Wholesale Trade

Retail industry is the chief pillar supporting the Indian economy and contributes 23% towards the national GDP. The retailing industry comprises of general stores, hand cart vendors, convenience stores and domestic outlets. The new concept of retail supermarkets has worked well and accounts for 4% of total retail market.

Agriculture

India is the 2^nd largest producer of farm produce. Agriculture Industry, apart from farming also includes forestry and fishing. It employs half the production of India and makes a contribution of 15.7% to the GDP. The Green Revolution in India has brought significant wealth to the farmers of Indian states of Punjab, Haryana and Uttar Pradesh.

Real Estate

The urban sectors of India are expanding which means increasing land requirements for educational institutions, healthcare, offices and buildings. It has attracted both domestic real estate developers as well as foreign investors. It contributes around 13.5% of GDP.

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Banking and Insurance

It is well-evolved industry serving as a boon for economic development of India by providing long-term funds for development of infrastructure. Besides, it strengthens the risk taking capacity of the country. The country’s gross domestic saving stands around 32.7%, most of it invested in personal assets like land, property or gold.

IT and ITES Industry

The Information technology industry is a knowledge based industry with skilled professionals in India. It has been the chief industry that has led the services sector account for whooping 64% of the entire GDP. The IT sector contributes almost about 9%the national GDP. Exports from the essence of the IIT-IITES industry earns about 77% of the total industry income.

Transportation Industry

The transportation industry of India is large and expansive viz. roadways, highway, ports, aviation industry and railways all form a part of transportation industry. It is a growing sector which contributes around 8.5% to India’s GDP.

Engineering and Machinery

A large section of capital goods essential for power plants, agriculture technology, cement and construction and steel plants as well as mining essentials are manufactured in India. It is also an efficient producer of tractors, harvesters, earth movers, cars, air pollution control equipment etc. In 2012 this sector alone made a contribution of 8% to the Indian GDP.

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Chemical Industry

It is one of the earliest of all Indian industries contributes considerably to Indian Economy. It manufactures 70,000 products ranging from toiletries and plastics, to cosmetic, pharmaceuticals, fertilizers and many more. This industry contributes around 7% annually to GDP of India.

Tourism

It provides for around 6.23% of the national GDP and also accounts for 8.7% of the total national employment. Added to it is the diversity in terrain which attracts tourists who wish to enjoy a complete package. Medical, business as well as sports to tourism has become popular and adds more to the potentials of this industry.

Textile Industry

Indian Textile Industry is one of the leading textile industries in the world and largely depends upon the textile manufacturing and export. The textile sector accounts for 14% of the total industrial production, contributes about 4% to nation GDP and earns India 17% of its total exports. Around 35 million people are directly employed in this industry.

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