Ch27 INDUSTRIAL DEVELOPMENT OF PUNJAB

CHAPTER-27 INDUSTRIAL DEVELOPMENT OF PUNJAB

INRODUCTION

Punjab, a state in northern India, has a rich history of industrial development. Known as the "Granary of India" due to its fertile land, Punjab has traditionally been an agrarian economy. However, over the years, the state has made significant progress in diversifying its industrial base and promoting industrialization.

Industrial development in Punjab can be traced back to the pre-independence era when the state was known for its textile mills, foundries, and engineering industries. After independence, the government of Punjab recognized the need to promote industrialization to boost economic growth and generate employment opportunities for its growing population.

Government Initiatives

The government of Punjab has implemented various initiatives and policies to attract industrial investment and foster industrial development in the state. Some key initiatives include:

Industrial Promotion Policy: The government has introduced favorable policies and incentives to encourage industrial investment in Punjab. These policies provide benefits such as tax incentives, subsidies, land allocation, and streamlined bureaucratic processes.

Industrial Parks and Special Economic Zones (SEZs): Punjab has established several industrial parks and SEZs to provide a conducive environment for industrial growth. These zones offer state-of-the-art infrastructure, uninterrupted power supply, and other necessary amenities to attract domestic and foreign investors.

Skill Development Programs: The government has taken steps to enhance the skill set of the local workforce through skill development programs. These programs aim to bridge the skill gap and provide trained manpower to the industries operating in the state.

LOCATION OF INDUSTRIES OR MAIN INDUSTRIAL CENTRES OF PUNJAB

Punjab has several industrial centers and locations that have emerged as key hubs for various industries. Here are some of the main industrial centers in Punjab:

Ludhiana: Ludhiana is the largest industrial city in Punjab and is often referred to as the "Manchester of India." It is known for its textile mills, hosiery manufacturing, garment industry, and machine tool manufacturing. Ludhiana is also a significant center for bicycle manufacturing, auto components, and agricultural machinery.

Jalandhar: Jalandhar is another major industrial city in Punjab, primarily known for sports goods manufacturing. It is a prominent hub for the production of sports equipment, including cricket bats, hockey sticks, footballs, and sports apparel. Jalandhar also has a significant presence in leather goods manufacturing, hand tools, and surgical instruments.

Amritsar: Amritsar, a historic city in Punjab, is known for its textile mills, woolen mills, and carpet manufacturing. It is also home to the Amritsar International Airport, which serves as a major logistics and transportation hub for trade and industries in the region.

Mohali and Chandigarh: Mohali, along with its neighboring city Chandigarh (which is the capital of both Punjab and Haryana), has witnessed significant growth in the IT and IT-enabled services (ITES) sectors. The region houses various IT parks and software development centers, attracting companies in software development, IT consulting, and business process outsourcing (BPO).

Bathinda: Bathinda, located in southern Punjab, has a large refinery complex known as the Bathinda Refinery. It is one of the largest oil refineries in North India and plays a crucial role in the petroleum and petrochemical industry. Bathinda also has a thermal power plant and is an emerging center for agrochemicals and fertilizers.

Patiala: Patiala is known for its engineering and machine tool industries. The city has a significant presence of foundries, agricultural machinery manufacturing units, and electrical equipment manufacturing.

Focal Points and Industrial Estates: Punjab has established several focal points and industrial estates across different cities and towns. These industrial areas provide infrastructure, land, and other facilities for industries to set up their operations. Some notable industrial estates include Focal Point Ludhiana, Focal Point Jalandhar, Focal Point Patiala, and Focal Point Amritsar.

These are just a few examples of the main industrial centers in Punjab. The state's industrial development extends to other cities and towns as well, contributing to its overall economic growth and employment generation.

NEED AND ROLE OF INDUSTRIALISATION

 

The industrialization of a region or country plays a crucial role in its economic development and societal transformation. Here are some of the key needs and roles of industrialization:

Economic Growth: Industrialization drives economic growth by creating new industries, generating employment opportunities, and increasing productivity. Industrial sectors tend to have higher value addition and contribute to higher GDP compared to traditional agrarian economies. The growth of industries leads to increased production, trade, and investment, which in turn stimulates overall economic development.

Employment Generation: Industrialization provides employment opportunities for a large number of people. As industries expand, they require a skilled and unskilled workforce, thereby reducing unemployment and underemployment. Industrial jobs often offer better wages, improved working conditions, and opportunities for career advancement, leading to increased income levels and improved living standards.

Technological Advancement: Industrialization promotes technological advancements by encouraging research and development, innovation, and the adoption of new technologies. Industries often invest in machinery, automation, and advanced production techniques, which lead to increased productivity and efficiency. Technological progress in industrial sectors also spills over to other sectors, driving overall economic growth and competitiveness.

Diversification of Economy: Industrialization facilitates the diversification of the economy by reducing reliance on a single sector, such as agriculture. By developing a robust industrial base, countries can reduce vulnerability to fluctuations in agricultural output or commodity prices. Diversification leads to a more balanced and resilient economy, reducing the risk of economic shocks and providing stability for long-term growth.

Infrastructure Development: Industrialization necessitates the development of essential infrastructure such as transportation networks, power supply, communication systems, and urban facilities. As industries require efficient logistics, reliable energy sources, and connectivity, governments often invest in infrastructure development to support industrial growth. Improved infrastructure not only benefits industries but also enhances the overall quality of life for citizens.

Foreign Exchange Earnings: Industrialization enables countries to generate foreign exchange earnings through exports of manufactured goods. By producing value-added products and participating in global supply chains, industrialized nations can earn revenue, improve their trade balance, and enhance their international competitiveness. Foreign exchange earnings can be reinvested in further industrial development, infrastructure, or social welfare programs.

Social Development: Industrialization has significant social implications. It leads to urbanization as people move from rural areas to cities in search of employment opportunities. Urbanization brings better access to education, healthcare, and social services. Additionally, industrialization promotes the development of a skilled workforce, leading to improved human capital, increased literacy rates, and enhanced technological literacy.

Entrepreneurship and Innovation: Industrialization encourages entrepreneurship and fosters a culture of innovation. As new industries emerge, there are opportunities for individuals to start their own businesses and contribute to economic growth. Industrialization encourages the development of a supportive ecosystem for entrepreneurship, including access to finance, mentorship, and networking opportunities.

In summary, industrialization is crucial for economic growth, job creation, technological advancement, and social development. It drives diversification, enhances infrastructure, promotes innovation, and generates foreign exchange earnings. By embracing industrialization, regions and countries can transform their economies, improve living standards, and achieve sustainable development.

CLASSIFCIATION OF INDUSTRIES

Industries can be classified into various categories based on different criteria. Here are some common classifications of industries:

 

Primary Industries: Primary industries are involved in the extraction and production of raw materials directly from natural resources. This category includes agriculture, forestry, fishing, mining, and oil extraction. Primary industries provide the essential inputs for other sectors and form the foundation of economic activities.

Secondary Industries: Secondary industries are involved in the processing and manufacturing of raw materials obtained from primary industries. They transform raw materials into finished or intermediate goods. Examples include manufacturing industries such as automobile manufacturing, textile production, electronics assembly, and food processing.

Tertiary Industries: Tertiary industries, also known as the service sector, involve the provision of services rather than the production of goods. This sector includes a wide range of industries such as banking, retail, transportation, healthcare, education, tourism, hospitality, and professional services like consulting and legal services. Tertiary industries play a crucial role in facilitating economic activities and meeting the needs of individuals and businesses.

Quaternary Industries: Quaternary industries are a subset of the service sector and involve the creation and dissemination of knowledge-based information. These industries are focused on intellectual activities such as research and development, information technology, software development, telecommunications, and consulting services. Quaternary industries play a vital role in driving innovation, technological advancement, and knowledge-based economies.

Heavy Industries: Heavy industries are characterized by large-scale production and require substantial capital investment. They involve the production of bulky goods or machinery and typically require heavy machinery and infrastructure. Examples include steel manufacturing, shipbuilding, chemical production, and power generation.

MEDIUM AND LARGE SCALE INDUSTRIES IN PUNJAB

Punjab has a significant presence of medium and large-scale industries across various sectors. Here are some examples of medium and large-scale industries in Punjab:

Textile and Garment Industry: Punjab has a thriving textile and garment industry, particularly in cities like Ludhiana and Amritsar. Numerous medium and large-scale textile mills and garment manufacturing units are engaged in the production of fabrics, yarn, hosiery, knitwear, and ready-made garments. These industries cater to both domestic and international markets.

Agro-based Industries: Given Punjab's agricultural abundance, there are several medium and large-scale agro-based industries in the state. These industries include food processing units, dairy processing plants, flour mills, rice mills, and sugar mills. Punjab's agro-based industries focus on processing agricultural produce and adding value to it.

Automobile and Auto Components: Punjab has emerged as a hub for automobile and auto component manufacturing. Several medium and large-scale automobile companies have set up manufacturing plants in the state. Additionally, there are numerous auto component manufacturing units that supply components to the automotive industry.

Pharmaceuticals: Punjab has a growing pharmaceutical industry with medium and large-scale pharmaceutical companies and drug manufacturing units. These industries produce a wide range of pharmaceutical products, including medicines, formulations, and medical devices.

Engineering and Machinery: Punjab is home to medium and large-scale engineering and machinery industries. These industries manufacture machinery and equipment for various sectors, including agriculture, construction, and industrial applications. Foundries, forging units, and machine tool manufacturing units are prominent in this sector.

STEPS TAKEN BY PUNJAB GOVERNMENT FOR INDUSTRIAL DEVELOPMENT

As of my knowledge cutoff in September 2021, here are some steps taken by the Punjab government in India for industrial development. Please note that the information may not be up-to-date, so it's always a good idea to refer to the latest official sources for the most accurate and current information.

Industrial and Business Promotion Policy: The Punjab government has formulated and implemented various Industrial and Business Promotion Policies over the years to attract investment and promote industrial development in the state. These policies provide incentives and support for setting up industries, such as tax benefits, subsidies, and easier regulatory processes.

Infrastructure Development: The government has focused on developing industrial infrastructure in the state. This includes the development of industrial parks, special economic zones (SEZs), industrial corridors, and industrial estates. These areas provide ready-to-use land, common facilities, and infrastructure like roads, power supply, and water resources to facilitate industrial activities.

Investment Promotion: The Punjab government has been actively promoting the state as an attractive investment destination through various initiatives. This includes participating in national and international investment summits, organizing investor meets and roadshows, and showcasing the potential and advantages of investing in Punjab.

Skill Development: The government has emphasized skill development and vocational training programs to enhance the employability of the local workforce. These initiatives aim to provide industry-specific skills and training to meet the demands of the growing industrial sector.

Single Window Clearance: To simplify and streamline the regulatory processes for industries, the Punjab government has implemented a single window clearance system. This allows investors to obtain various approvals, licenses, and clearances from multiple departments through a single online platform, reducing bureaucratic delays.

 

VERY SHORT QUESTIONS ANSWER

Q.1. Where the two big industries have been setup in Punjab by central government of India?

Ans. Bathinda and Ludhiana.

Q.2.In which district industries have been concentrated in Punjab?

Ans. Ludhiana.

Q.3. For which industries Ludhiana is famous for?

Ans. Textiles and garment manufacturing.

Q.4.What are main small scale industries in Punjab?

Ans. Textiles, food processing, pharmaceuticals, handicrafts, and agriculture-based industries.

Q.5. Mention two causes of growth of large scale industry in Punjab?

Ans. Availability of skilled labor and favorable government policies and incentives.

 

SHORT QUESTIONS ANSWER

Q.1. Briefly discuss the need of Punjab?

Ans. Punjab, a state in India, has several needs that require attention and action. Some key needs of Punjab include:

Agricultural Diversification: Punjab has historically been an agrarian state, heavily reliant on wheat and rice cultivation. There is a need to diversify the agricultural sector to reduce over-reliance on these crops and promote sustainable farming practices. This includes encouraging the cultivation of high-value crops, promoting organic farming, and adopting advanced agricultural technologies.

Industrial Development: Punjab needs to focus on industrial development to create employment opportunities and boost economic growth. There is a need to attract investments, promote entrepreneurship, and develop infrastructure to support industries across various sectors. This will help in reducing the dependence on agriculture and generating more diverse employment opportunities.

Education and Skill Development: Improving the quality of education and enhancing skill development initiatives is crucial for Punjab's growth. The state needs to invest in the education system, upgrade schools and colleges, and promote technical and vocational training programs. This will enable the youth to acquire relevant skills and enhance their employability in various sectors.

Water Management: Punjab faces challenges related to water scarcity and mismanagement. There is a need for efficient water management practices, including conservation, watershed management, and promoting sustainable irrigation methods. Additionally, addressing issues related to water pollution and groundwater depletion is essential for the long-term sustainability of the state.

Healthcare Infrastructure: Punjab needs to focus on strengthening its healthcare infrastructure and improving access to quality healthcare services. This includes upgrading hospitals, increasing the availability of medical facilities, and promoting healthcare awareness and outreach programs.

Q.2.What is the importance of small scale industry in Punjab?

Ans. The small scale industry in Punjab holds significant importance due to the following reasons:

Employment Generation: Small scale industries play a crucial role in generating employment opportunities, particularly for the local population. These industries have a relatively low capital requirement and can be set up with limited resources, making them accessible to a wide range of entrepreneurs. By providing jobs and livelihoods, they contribute to reducing unemployment and poverty levels in Punjab.

Economic Growth and Industrial Development: Small scale industries contribute to the overall economic growth of Punjab. They diversify the industrial base, promote entrepreneurship, and stimulate local economies. These industries often cater to niche markets and produce specialized goods, thereby adding value to the economy and increasing competitiveness.

Regional Development: Small scale industries help in balanced regional development by promoting industrial activities in rural and semi-urban areas of Punjab. They help in reducing the concentration of industries in specific regions and contribute to the decentralization of economic activities. This leads to more inclusive growth and development across different parts of the state.

Skill Development and Technology Transfer: Small scale industries provide opportunities for skill development, particularly in sectors such as textiles, handicrafts, and food processing. They offer training and employment to individuals with limited formal education, helping them acquire practical skills and knowledge. Additionally, these industries often adopt innovative technologies and practices, leading to technology transfer and knowledge dissemination in the local ecosystem.

Support for Large Industries: Small scale industries often act as ancillary units, providing inputs, components, and services to larger industries. They form an integral part of the supply chain and contribute to the overall competitiveness and efficiency of the industrial sector. Small scale industries in Punjab play a vital role in supporting and complementing the growth of larger industries, fostering industrial symbiosis.

In summary, small scale industries in Punjab have significant importance in terms of employment generation, economic growth, regional development, skill development, and supporting larger industries. They contribute to the overall industrial landscape of the state and play a crucial role in its socio-economic development.

Q.3. Discuss the growth of small scale industry in Punjab Explain about main small scale industries of Punjab?

Ans. The growth of the small scale industry in Punjab has been significant over the years. Several factors have contributed to its growth, including government support, availability of skilled labor, entrepreneurial spirit, and market demand. The state has witnessed the establishment of a diverse range of small scale industries, with some of the main sectors being textiles, food processing, pharmaceuticals, handicrafts, and agriculture-based industries.

Textiles: Punjab has a strong presence in the textile industry, particularly in the production of hosiery and knitwear. Cities like Ludhiana and Amritsar are known for their textile clusters, with numerous small scale units engaged in manufacturing garments, woolens, and textile accessories.

Food Processing: Punjab is known as the "Granary of India" due to its agricultural productivity. The state has seen the growth of small scale food processing units, including rice mills, flour mills, dairy processing units, fruit and vegetable processing units, and oil extraction mills. These industries add value to agricultural produce and contribute to the food processing sector's growth.

Pharmaceuticals: Punjab has a thriving pharmaceutical industry, with a significant presence of small scale pharmaceutical units. These units are involved in the production of generic medicines, formulations, and bulk drugs. The state offers a favorable environment for pharmaceutical manufacturing, with several industrial estates and clusters supporting this sector's growth.

Handicrafts: Punjab has a rich cultural heritage, and handicrafts form an essential part of its traditional art and craft. Small scale industries engaged in the production of Punjabi handicrafts, including Phulkari embroidery, Punjabi juttis (traditional footwear), woodwork, and pottery, have witnessed growth. These industries promote the preservation of traditional craftsmanship and cater to domestic and international markets.

Agriculture-based Industries: Given Punjab's strong agricultural base, several small scale industries have emerged in the agriculture sector. This includes the production of agricultural machinery and equipment, animal feed manufacturing, agrochemicals, and processing of agricultural commodities like spices, pulses, and oilseeds.

These small scale industries have played a crucial role in the socio-economic development of Punjab. They have contributed to employment generation, income generation, skill development, and value addition to local resources. The government of Punjab has implemented various policies and initiatives to support the growth of these industries, providing incentives, infrastructure, and access to finance. Additionally, the presence of industrial estates, clusters, and common facilities has facilitated the growth and competitiveness of the small scale sector in Punjab.

Q.4.What are the main problems of small scale industries in Punjab? what steps have been taken by Punjab government for progress of small scale industries?

Ans. The main problems faced by small scale industries in Punjab include:

Lack of Access to Finance: Small scale industries often face challenges in accessing adequate finance for their operations and expansion. Limited availability of credit, high interest rates, and stringent collateral requirements pose obstacles for small entrepreneurs.

Infrastructural Constraints: Inadequate infrastructure, such as power shortages, poor road connectivity, and limited access to transportation, hampers the efficiency and productivity of small scale industries. Insufficient availability of basic amenities like water supply and waste management facilities also pose challenges.

Regulatory and Administrative Burdens: Small scale industries in Punjab often face cumbersome regulatory procedures and bureaucratic red tape. Complex licensing requirements, multiple inspections, and delays in obtaining clearances create administrative burdens and hinder the ease of doing business.

Skill Gap and Labor Issues: There is a need for skilled labor in various sectors of small scale industries. However, the availability of skilled workforce can be limited, leading to challenges in recruitment and training. Additionally, labor disputes, compliance with labor laws, and issues related to wages and working conditions can impact the smooth functioning of small scale industries.

Market Challenges: Small scale industries face competition from larger players, both domestic and international. Lack of marketing infrastructure, limited access to markets, and inadequate market information pose challenges for small entrepreneurs in reaching customers and expanding their market share.

The Punjab government has taken several steps to address these challenges and promote the progress of small scale industries:

Financial Assistance and Incentives: The government provides various financial assistance schemes, subsidies, and incentives to support small scale industries. This includes credit facilitation, interest subsidies, tax benefits, and reimbursement of expenses for quality certification and technology upgradation.

Industrial Infrastructure Development: The government has established industrial estates, clusters, and common facilities to provide a conducive environment for small scale industries. These industrial infrastructure initiatives aim to address infrastructural constraints and provide ready-to-use industrial spaces and shared facilities.

Skill Development and Training: The government has initiated skill development programs and training schemes to enhance the skills of the workforce in small scale industries. These programs aim to bridge the skill gap, improve productivity, and enhance the employability of the local workforce.

Streamlining Regulatory Processes: Efforts have been made to simplify and streamline regulatory procedures for small scale industries. The government has introduced online platforms and single window clearance mechanisms to reduce bureaucratic delays and make it easier for entrepreneurs to obtain licenses, permits, and clearances.

Market Linkages and Export Promotion: The government facilitates market linkages for small scale industries by organizing trade fairs, exhibitions, and buyer-seller meets. Efforts are made to promote exports of products from small scale industries and provide support in accessing domestic and international markets.

Infrastructure Development: The government focuses on improving infrastructure, including power supply, roads, and transportation, to address infrastructural constraints faced by small scale industries. Efforts are made to ensure adequate power supply, improve road connectivity, and enhance logistical support.

Policy Support and Capacity Building: The government formulates and implements policies that are favorable to small scale industries. Regular consultations, awareness programs, and capacity-building initiatives are undertaken to create an enabling environment for the growth of these industries.

These steps by the Punjab government aim to address the challenges faced by small scale industries and promote their progress and sustainability in the state.

Q.5. Explain the growth of medium and large scale industries in Punjab what are the causes of slow growth of large scale industries in Punjab?

Ans. The growth of medium and large scale industries in Punjab has been relatively slower compared to small scale industries. There are several causes contributing to this slower growth:

Land Constraints: Punjab faces land constraints for large scale industrial development. The state has limited availability of large land parcels, which can be a constraint for setting up large industrial units that require significant land area.

Lack of Natural Resources: Punjab is not rich in natural resources like minerals and fossil fuels, which can be a limiting factor for the growth of certain large scale industries. Industries that rely heavily on natural resources for their operations may face challenges in establishing and sustaining their presence in the state.

Limited Market Size: Punjab's market size is relatively smaller compared to some other states in India. This can pose challenges for large scale industries, especially those that require a significant domestic market demand to achieve economies of scale. The limited market size may make it less attractive for certain industries to establish large manufacturing units in the state.

Infrastructure Bottlenecks: Despite progress in infrastructure development, Punjab still faces certain infrastructure bottlenecks that can impede the growth of large scale industries. Challenges such as inadequate power supply, transportation constraints, and limited availability of skilled labor can impact the competitiveness and viability of large industrial units.

Regional Competition: Punjab faces competition from neighboring states that have been more successful in attracting large scale industries. States like Haryana and Gujarat have implemented investor-friendly policies, developed industrial corridors, and created favorable business environments, making them more attractive investment destinations.

Regulatory Challenges: Large scale industries often face complex regulatory procedures and bureaucratic hurdles. The time-consuming and cumbersome processes for obtaining approvals, clearances, and licenses can be a deterrent for large investments in Punjab.

Perception of Agricultural State: Punjab has traditionally been seen as an agricultural state, with a strong focus on farming. This perception may lead to a lack of diversification into other sectors and a reluctance to invest in large scale industrial ventures.

To overcome these challenges and promote the growth of large scale industries, the Punjab government needs to focus on key areas such as infrastructure development, investor-friendly policies, improving the ease of doing business, attracting investments through targeted sector-specific initiatives, and addressing regulatory bottlenecks. Creating a favorable business environment, ensuring availability of skilled labor, and promoting market linkages can also contribute to the growth of large scale industries in Punjab.