Significance and Role of Industries in National Development

1. Modernising Agriculture
   • Manufacturing industries help in modernising agriculture, which is the backbone of the Indian economy.
   • Provide modern tools, fertilizers, machinery, and technology to enhance productivity.
2. Reducing Dependence on Agriculture
   • By creating non-farm employment opportunities, industries reduce the heavy dependence of people on agriculture.
   • This lessens the human burden on agricultural land and resources.
3. Employment Generation & Poverty Reduction
   • Industrial development creates large-scale employment, a key step in eradicating unemployment and poverty.
   • This was a major reason for establishing public sector industries in India.
4. Balanced Regional Development
   • Setting up industries in backward and less developed areas reduces regional disparities.
   • Promotes balanced economic growth across the country.
5. Boosting Trade and Foreign Exchange
   • Export of manufactured goods expands trade and commerce.
   • It brings valuable foreign exchange, strengthening India’s international economic position.
6. Value Addition
   • Industries transform raw materials into finished goods, adding value.
   • They also enhance demand for skilled labour, fostering skill development.

In addition to its direct contribution to the economy, the secondary sector has a multiplier effect for job creation in the service sector. According to National Manufacturing Policy 2011, every job created in the manufacturing sector creates two-three additional jobs in related activities. In general, different amounts of labour and different types of skills are required in different industries. Some of the industries such as, textile, leather and food processing employ a larger number of labour as compared to machinery industry and are therefore, called labour intensive industries.

Industries add value to the existing goods and also to the skill of labour employed in it therefore, this sector is also considered as a transformational sector. In a country like India, where the agriculture sector is burdened with a large amount of surplus labour, the industrial sector can act as a good option for absorbing this surplus. As can be seen in Figure manufacturing and other industries have a larger share in the GDP as compared to the percentage of workforce employed in it as compared to the agricultural sector.

The demography of India having an expanding population i.e. large percentage of population in the working age-group supplements the importance of the industrial and service sector other than agriculture. The importance given to the secondary sector in several Five-Year Plans and growth of this sector in the future can provide a potential for employment to a large number of the population in the coming years.