Indian Economy 1950-1990 — Economics STD 12 Humanities & Commerce — Question

The following benefits are credited to the country by following this trade policy:

1. Increased rate of industrial growth leading to structural transformation: This strategy, followed by the Indian Government, helped the domestic industries to survive and expand their operations.

This resulted in an increased rate of industrial growth. The share of industrial sector towards the GDP of the country also increased from 12% in 1951 to approximately 25% in 1990, thus ensuring structural transformation in the country.

2. Diversification of industrial growth: This strategy helped in diversifying the industrial activities in the country. Till 1950, modern industries were merely confined to textile and jute industries, but the introduction of this policy helped in diversification of industries.
3. Created opportunities for investment: The policy of the government to protect small scale industries induced the investors to invest in them. These industries needed less capital and created opportunities for self-employment. The establishment of these industries promoted growth with equity and ensured that small savings are also channelised towards the economic growth of the country.