Let us make an in-depth study of the role of industrialisation in India’s Economic Development.

Economic development of any country is associated with industrialisation.

Western capitalist countries amply demonstrate this thesis. Their high rates of growth are attributed to industrialisation.

Therefore, there is a strong case for industrialisation of countries like India where the level of development is still low compared to that of capitalist countries. Along with agricultural development, industrialisation is a must for these countries since there is a strong interdependence between agricultural and industrial sectors.


Through a concerted programme of industrialisation, a country can provide a basis for a rapid rate of growth of national income and per capita income. The empirical evidence suggests that there is a strong relationship between industrialisation and high income.

The high rate of growth of income of industrially advanced countries is due to the fact that these countries are industrially advanced. And, that is why in these countries the contribution of the industrial sector towards national income is the highest.

Therefore, countries like India should give positive encouragement to rapid industrialisation. In 2007- 08, India’s industrial—or the so-called secondary sector’s share in GDP stood at 24.9 p.c.

Secondly, industrialisation brings about a favourable change in the country’s occupational pattern. Employment opportunities in the agricultural sector in the underdeveloped countries are rather slim. On the contrary, agriculture is highly overcrowded.


Industrialisation offers the only way to the creation of employment. Even by reorganizing agriculture, one cannot expect to absorb a large number of labourers in the agricultural sector. In this circumstance, i.e., in the light of employment creation, planners must give correct emphasis on industrial development.

Thirdly, no one denies the interrelationship between agriculture and industry, Agricultural development is largely conditioned by industrial development. As industrialisation proceeds demand for wage goods, like food grains, rises.

This causes the market for agricultural products as well as the demand for cash crops to rise. Ultimately, agro-based industries expand. Not only that, as the pace of industrialisation gathers momentum, demand for agricultural raw materials rises and industry expands. Thus, industrialisation creates a climate conducive to agricultural development.

Fourthly, there are some people who want to put more emphasis on the agricultural sector. These thinkers believe that a country can earn huge foreign exchange by exporting agricultural produce. Moreover, foreign exchange can be spent for importing goods required for industrialisation.


This is possible if agricultural sector is allowed to grow. However, one can make some counter­arguments against this. They argue that even in countries like India, demand for agricultural goods is not so high.

On the other hand, in the industrially advanced countries, as demand for agricultural goods is not so high, the possibility of earning foreign exchange by exporting agricultural products is limited. Thus, industrialisation seems to be a better route. In fact, such industries should be set up which are by nature import-substituting. This strategy will not only reduce the import demand for industrial goods but will also increase the export demand for the same.

Finally, for security consideration, no one denies the role of industrialisation in an economy. Dependence on foreign countries for defence goods is a dangerous and risky proposition. Thus, to protect one’s country against any type of contingency, all sorts of military goods must be produced domestically.

Self-sufficiency in defence materials can be achieved only through industrial development. Thus, it is quite clear that industrial develop­ment is of urgent necessity in a country like India. Of course, industrial development in these countries is often handicapped by certain problems which are varied in nature.

Problems may be economic or administrative or international. But these problems are not insurmountable. Furthermore, our plea for rapid industrialisation does not prevent us from making any programme for agricultural development. By excluding agricultural development, the path of industrialisation alone in a country like India is a suicidal one.