The stand of the Government of India regarding industrial development and growth is that “the Indian industry must be an efficient and competitive one able to stand on its own in the face of foreign competition”. The capacity to provide goods and services of high quality and low cost is the proof of an efficient industry. The Indian Government is committed to the elimination of infrastructural constraints in the sectors of power, transport and telecommunications. In order to keep up its commitment and promote efficiency in the Indian industry the following measures have been initiated in the year 2000-2001 extending to April-December 2001 :-
• Rationalization of excise duties.
• Removal of Corporate Tax surcharge to boost corporate profitability.
• Removal of Income Tax surcharge to stimulate demand.
• Reduction in interest rates.
• Further opening of FDI.
• Implementation of privatization.
Industrial slowdown results from poor demand of products, fall in revenue receipts, low overall revenue expenditure, etc. Some of the features of industrial slowdown are higher fiscal deficit, higher revenue deficit, lower GDP etc. The industrial slowdown consists of both demand and supply components. The rapid industrial growth of India in 1980s and 90s was closely linked with the rise in the real private consumption demand. Industrial slowdown covers all the important sectors like manufacturing, electricity and mining and all end use based groups such as capital goods, intermediate goods, consumer goods both durables and non-durables. The slowdown in the domestic and global demand is the major factor responsible for the constraints in the industrial growth. Since Indian economy has a low level of external demand sector, domestic demand and supply side factors play the key role for the industrial slowdown.
