 ndia is still dependent on foreign imports for transport equipments, machineries (electrical and non-electrical), iron and steel, paper, chemicals and fertilisers, plastic material etc. In the total industrial production consumer goods contribute 38 per cent.

 There is low demand for industrial products in the country due to low consumption level, weak purchasing power and poor standard of living. The domestic market is chronically underdeveloped through lack of enthusiasm generated by the middle and upper class segment who do not wish to raise their standard and improve their living conditions.

 Most of the industries are located in and around metropolitan cities like Mumbai, Kolkata, Delhi etc. Tables 18.1 and present uneven concentration of indus­tries. While the states like Maharashtra, Gujarat, Tamil Nadu etc are well ahead in industrial develop­ment others like Meghalaya, Manipur, Jammu and Kashmir, Himachal Pradesh, Tripura, Orissa, As­sam etc are far behind. This has not only created regional imbalance and regional disparity but has encouraged fissiparous tendency including unrest, violence and terrorism.

 policy of the government char­acterised by redtops and inefficiency and strained labour- management relations most of these public sector enterprises are running in loss. Every year the government has to incur huge expenditure to cover up this loss and meet obligations of paying wages to the employees.

 ) deficient management, (ii) under-utilisation of capacity due to shortage of raw materials, coal and power and transport, (iii) obsolete machinery, equip­ment and production techniques, (iv) uneconomical scale of production, (v) faulty choice of products and processes, (vi) difficulties in selling the products, (vii) diversion of funds to new units under same ownership, and (viii) conflict between different in­terest groups among the owners.

 An inadequate infrastructural facility is another major problem faced by the Indian industries. En­ergy crisis has a great bearing on the industrial development and production. Although the installed capacity of electricity increased from million km in to million km in but it is much short of the actual demand.

 Industrial locations, in several instances, were established without reference to cost- effective points. Each state clamors for the establishment of major industries in the public sector within its boundaries, and the location decisions are often politically motivated.

 Indian industrial development is facing acute shortage of capital. The short-term and long- term loans from international agencies like World Bank and Asian Development Bank etc have done more harm to the economy than taking it out from the crisis. A lot of foreign exchange is being utilised in the payment of these loans.

 Indian Agricore, the major source of indus­ trial raw material, is still dependent on the monsoon. Natural calamities like drought, famine, flood etc badly affect agricultural production as well the sup­ply of industrial raw material. Failure of monsoon even affects the purchasing power of the people and also the demand for industrial products. It some­times creates glut in the market and industrial plumpness. Cement industry is recently facing such crisis.

 This increases the cost of production and brings down the quality of products produced. Since these industries have virtual mo­nopoly they hardly bother to improve their quality. Public sector units, under direct control of the gov­ernment, frequently increase the prices which provide golden opportunity to private industrialists also to increase the prices. Our industrial products are not able to make wide market abroad.  The low purchasing power of the people even reduces home demand. The situtation is likely to change during globalisation when there is apprehension of wide spread closure of these industries due to stiff compe­tition offered by multinational companies. This is also not good for the country and the Indian indus­ tries.

 The license policy approving the site, capac­ity, type and expansion of industries is a typical example of excessive state interference and red tapes which hinder the industrial development. Recently some examples of political vendetta have come to surface whereby central government over delayed the approval of industries from such states where hostile political party is in power. Ministers and influential political leaders are pres­surising industrialists to install industries in their electoral area so as to approve their licenses. With the introduction of liberalisation policy many of the shortcomings of the license policy have been re­moved.

 Industrialization started in India roughly a century later than in the developed countries. That is why, when it was in mature stage in the Western countries it was in infantile stage in India. Hence, India had to perform dual task of promoting indus­ trialisation as well as to equip herself with latest technology in the field of electronics, nuclear sci­ence, space research etc.

Unbalanced Industrial Structure