Explain the importance of industrial sector in the economy of a country.

Question

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Solution

Following points highlight the importance of industry in an economy:

Structural transformation: Industrial develop ment brings about structural transformation in the economy. It means that dependence of our economy on agriculture will be reduced.
Source of employment: Indian economy has a very large skilled workforce which is still unemployed. It is the establishment of industries only, which can generate employment opportunities on a large scale.
Enhancing further the economic growth: As industrialisation progresses, the capital goods industry also starts to flourish. This helps in further economic growth and also helps an economy to attain self-sustaining development.
Infrastructural growth: With the spread of industrialisation, the need for economic infrastructure such as roads, dams, banking, insurance and communication facilities also rises and this leads to their growth. Also, with the improvement in quality of life, the demand for social infrastructure i.e., facilities related to health and education, also rise and leads to their development.
Share in GDP: Industries contribute towards the GDP of the country. During the years, the share of the industrial sector has increased from 16.6% in 1950-51 to about 30% in 2011-12 (at constant prices).
Strengthening the economy: Industries help to strengthen the economy in following ways:

With the growth of capital goods industry, the country is able to produce a number of goods in large quantities and at low cost.
It helps in the establishment of infrastructure goods like dams, railways, etc, which cannot be imported.
Industrialisation has helped our country to become self-reliant in defence goods.

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