|7th Five Year Plan (Vol-2)||<<
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INDUSTRY AND MINERALS
7.170 As an agro-based processing industry, sugar industry acts as a catalyst in the process of rural transformation. The spread of sugarcane cultivation and the establishment of sugar factories over the years have changed the traditional location pattern. There were 307 sugar factories with an installed capacity of 6 million tonnes in 1980-81 (sugar year). The number has gone up to 359 with the installed capacity of 7.5 million tonnes by 1984-85. The present licensed capacity is 8.8 million tonnes spread over 398 sugar factories.
7.171 Sugarcane production in the country fluctuated between 154 and 189 million tonnes during the Sixth Plan period. Sugarcane yield per hectare over the years has remained stagnant (the highest was in 1981-82 at 58.4 tonnes per hectare) and only a breakthrough in productivity can help to attain higher production without extension of the area under sugarcane. The year to year fluctuations of sugarcane production cause severe stress and strain on the industry. Sugar production varied from 51 lakh tonnes to 84 lakh tonnes during the Sixth Plan period. A long term solution to the problems of the sugar industry lies in an harmonious blending of the interests of sugarcane growers, manufacturers and consumers of sweetening agents (sugar, gur and khandsari) through a rational pricing policy for sugarcane and sugar.
7.172 The output of sugarcane is projected to increase from 180 million tonnes in 1984-85 to 217 million tonnes in 1989-90. The consumption of sugar has been going up from 5.0 million tonnes in 1980-81 to 7.5 million tonnes in 1983-84 and is projected at 9.8 million tonnes in 1989-90. The exports are expected to be of the order of 0.4 million tonnes. The capacity and production targets for sugar for 1989-90 are envisaged at 10.7 million and 10.2 million tonnes, respectively.
7.173 A pragmatic approach needs to be adopted in creating additional capacity in the sugar industry. Due consideration should be given for the expansion of the existing units so that they could reach optimum capcity and diversify their activities to utilise byproducts. It will be essential to identify clusters of sugar factories which can collectively make available bagasse for paper making.
7.174 Steep escalation in the project costs has rendered establishment of new projects and expansion unviable. A review of the incentive scheme for sugar factories is called for. Another problem which requires to be tackled on a priority basis during the Seventh Plan is the modernisation/rehabilitation of uneconomic/sick units. Efforts will have to be made in the Seventh Plan period to forge a more intimate link between industry, R and D organisations and the financial institutions to work out a concrete plan of action for improving productivity, up-gradation of technology and proper maintenance of sugar factories.
7.175 Oil seeds and oil occupy a pivotal position in the mainstream of the country's economy. Next to foodgrains, oil seeds in India constitute the principal commercial crop and the second major agricultural crop in tonnage and value. The bulk of vegetable oil prodcution in India is derived from groundnut, rapeseed, mustard, sesame, sunflower, safflower, niger and soyabean. The development of oil seed production has been included in the 20-point programme. Against the demand of 49.06 lakh tonnes of edible oils by the end of the Sixth Plan (1984-85), the indigenous production was 36.68 lakh tonnes leaving a gap of 12.38 lakh tonnes which was bridged through imports. Average per capita consumption of oil during 1984-85 has been estimated at 6.63 kg per annum.
7.176 The demand for edible oil by the end of the Seventh Plan (1989-90) is estimated at 60.22 lakh tonnes. Indigenous production is estimated at around 47.38 lakh tonnes leaving a gap of 12.84 lakh tonnes which may be met through imports. The per capita consumption of oil during 1989-90 is expected to be 7.50 kg per annum. In view of the large gap between demand and indigenous production, vigorous efforts are needed to augment indigenous production.
7.177 The production target of 9.50 lakh tonnes of vanaspati by the end of the Sixth Plan was achieved. For the production of vanaspati imported oil was supplied to the extent of 60 per cent of requirements and the remaining 40 per cent was indigenously procured. There are 92 vanaspati units in the country with an installed capacity of 13.70 lakh tonnes. The entire demand of vanaspati is met through indigenous production and the production target for 1989-90 is 12.05 lakh tonnes. For the production of 12.05 lakh tonnes of vanaspati by the end of Seventh Plan period, the total capacity requirement is of the order of 15.06 lakh tonnes. Taking into account the licensed capacity of vanaspati and the projected production by the end of Seventh Plan there may not be any need for the creation of additional vanaspati capacity except marginally in certain unserved areas. In order to ensure availability of edible oils and vanaspati at reasonable prices to the consumer, it is desirable to supply these products through fair price shops under the public distribution system.
Soaps and Detergents
7.178 The manufacture of laundry soap has been reserved exclusively for the development in the small scale sector since 1967. More than 95 per cent of the production of toilet soap is in the organised sector. The production of detergents is both in the organised and in the small scale sector and is open to FERA and MRTP houses also. The production of laundry soaps by the end of Sixth Plan has been estimated at around 9 lakh tonnes and the production of toilet soap at 2.20 lakh tonnes. The production of synthetic detergents was about 2.3 lakh tonnes divided equally between the small scale and the organised sector. There has been substantial increase in the consumption and demand for the toilet soaps and synthetic detergents during the Sixth Plan period.
7.179 The demand for synthetic detergents in 1989-90 is estimated at around 11.13 lakh tonnes and that for washing soaps around 11.12 lakh tonnes. The production by the end of the Seventh Plan of synthetic detergents in the organised sector is estimated at around 5.57 lakh tonnes and that in the small scale sector around 5.56 lakh tonnes. In order to meet the demand for synthetic detergents in the Seventh Plan, a total capacity of 6.96 lakh tonnes is required in the organised sector and an equivalent capacity in the small scale sector.
7.180 The demand for toilet soap in the organised sector is likely to increase to 3.74 lakh tonnes by the end of Seventh Plan for which a capacity of 4.7 lakh tonnes may be required.
Leather and Leather Goods
7.181 The leather industry in India, being a traditional industry, is highly employment oriented. India is the world's largest single raw material source of leather due to its livestock population. Against the production target of 25 million pairs of leather footwear in the organised sector, production of 16 million pairs of footwear was achieved. However, prodcution of finished leather pieces from hides at the end of the Sixth Plan was 33.65 million numbers and production of finished leather pieces from skins was 74.30 million numbers. Against the production target of 320 milion pairs of footwear in the decentralised sector, the actual production was around 300 million pairs and against the Sixth Plan target of one million numbers of leather garments, the actual production was three lakh numbers. There has been substantial increase in the production of other varieties of leather goods. Production of footwear in the organised sector is estimated at 44 million pairs by the end of the Seventh Plan for which a capacity of 55 million pairs may be needed.
7.182 There is need for technological improvement in the methods of tanning and finishing of leather with a view to upgrading the quality and output, and realising optimum value in the export markets. Pollution has been another major problem of the industry and needs to be controlled by lesser use of water pollutants, toxicants, economic treatment methods, fuller utilisation of materials, recycling and better utilisation of solid and liquid wastes. Treatment of tannery effluents should be made obligatory and implementation of effluent treatment should be taken up throughout the country on priority basis during the Seventh Plan. There is need for strengthening the R and D activity for leather and leather goods industry in respect of raw materials, processing materials, ancillaries, machinery, utilisation of byproducts, finished leather goods, trained technical man-power and environmental pollution.
7.183 The industry has a great export potential. The exports of leather and leather goods in 1984-85 were of the order of Rs. 584 crores. The share of semi-finished leather in total exports has come down from 82 per cent to 12 per cent in 1983-84, with a corresponding increase in the exports of finished leather and leather goods. It should be possible to achieve the target of Rs. 1000 crores by 1989-90 with the use of sophisticated modern machinery and increase in productivity.
Drugs and Pharmaceuticals
7.184 The production of drugs covers a wide range of bulk drugs, steroids and hormones, synthetics, photo-chemical vitamins, biological products, etc. The technology adopted for the production of bulk drugs covers intricate and sophisticated fermentation technology, synthetic operation and extraction and purification of active principles contained in the plant and animal kingdom.
7.185 The total demand of bulk drugs and formulations at the end of Sixth Plan period (1984-85) was estimated at Rs. 815 and Rs. 2450" crores, respectively. The actual production during 1984-85 was of the order of Rs. 377 crores of bulk drugs and Rs. 1837 crores of formulations.
7.186 Although the production of bulk drugs and formulations has shown a steady increase during the Sixth Plan period, there was shortfall in production mainly because the demand did not pick up as anticipated due to the high cost of drugs. The production in the small scale sector has also increased substantially.
7.187 The requirement of bulk drugs and formulations by 1989-90 is expected to be of the order of Rs. 1033 crores and Rs. 3775 crores, respectively. The indigenous production of bulk drugs is estimated to be of the order of Rs. 808 crores and bulk drugs worth Rs. 225 crores may have to be imported. In order to realise these projections, sustained efforts have to be made for developing cost effective technology for the manufacture of vital life saving drugs from the basic stages which are at present being imported at a high cost. The indigenous technology at present being used for the manufacture of various drugs and formulations has to be updated to reduce the cost of production. India has a vast potential of medicinal plants and this resource needs to be properly utilised to increase exports.
7.188 It is necessary to intensify R and D activities in the drug industry during the Seventh Plan to bring about improvement in the process technology in order to reduce the cost of production and to develop new drugs for combating major diseases. There should be close interaction between national laboratories and industrial units in order to modernise and up-date their processes. The goal should be to achieve self-sufficiency and to make available quality drugs at reasonable prices to the people. There has also to be selectively in the manufacture of drugs in the country based on internal consumption, exports, health needs, technological excellence etc. Production and use of drugs prescribed by the Indian systems of medicine, namely, Ayurvedic, Homoeopathy and Unani should also be encouraged.
7.189 Most of the machinery required by the drug industry is manufactured in the country but during the Seventh Plan period efforts have to be made for producing efficient, automatic, and high speed equipment for quality and R and D use.
7.190 There are 5 public sector units manufacturing drugs and formulations, namely, Indian Drugs and Pharmaceuticals Ltd., Hindustan Antibiotics Ltd., Smith Stanis-treet Pharmaceuticals Ltd., Bengal Chemical and Pharmaceutical Ltd. and Bengal Immunity Ltd. The performance of these public sector undertakings during the Sixth Plan has not been satisfactory mainly due to low capacity utilisation and high production cost. High production costs resulted from high cost of raw materials, use of obsolete technology and uneconomic scale of operations. These problems are to be addressed seriously during the Seventh Plan.
7.191 In this growing segment of engineering industry which includes products such as wrist watches, bicycles, dry cells, electric fans, electric lamps, sewing machines, domestic refrigerators and razor blades, the demand has been met almost entirely by the domestic industry. With the spread of industries, improvement in agricultural incomes, expansion of rural electrification and improved transportation, the rural market base is growing rapidly. Technological developments both in product design and in mass production techniques may have to be introduced selectively in the domestic industry to increase the availability of better quality products at lower prices. These would also require a network of marketing and service outlets to support the large number of smaller production units, on the one hand, and to render better service to the consumers on the other. There is considerable potential for employment of skilled persons in the manufacturing, sales and service activities relating to consumer durables. Consumer movements to curtail sub-standard products, and to promote 'Quality Culture' would be encouraged. A substantial component of final energy consumption in the economy occurs through the use of consumer durables such as pumps, household appliances, electric lamps and domestic refrigerators. Measures to promote R and D effort to evolve more energy efficient products, and for increasing their production and offtake will be taken.
7.192 During the Sixth Plan period, the major schemes completed in the public sector were PVC, petroleum Resin and Acrylates Projects of Indian Petro-chemical Corporation Ltd. (IPCL), DMT and Xylenes Projects of Bongaigaon Refineries and Petrochemicals Ltd. (BRPL) and Polyster filament yarn expansion project of Petrofils Cooperative Ltd. The aromatic recovery facilities of Bharat Petroleum Corporation Ltd. (BPCL) and the polyester Staple Fibre Project of BRPL would be operational in the Seventh Plan. In the private sector, capacities for DMT, polyster filament yarn and other synthetic fibres have been created during the Sixth Plan. Government have approved Maharashtra Gas Cracker Complex (MGCC), Benzene Recovery facilities at Cochin and expansion schemes of IPCL, in the public sector and additional capacity for DMT/PTA, polyster staple fibre, nylon filament yarn, acrylic fibre, polybutadiene/styrenebutadiene rubber, oxo-alchohols and linear alkyi benzene, in the private sector. These projects are likely to be commissioned during the Seventh Plan period.
7.193 During the Sixth Plan period, attempts were made to set up economically viable plant sizes and use technologies that could manufacture products at internationally competitive prices. While licensing new capacity, the need for economies of scale was kept in view. Preference was, therefore, given to the expansion of the existing units. Use of the latest technology and achievement of economies of scale by expansion are contemplated wherever the existing plants are using outdated technologies and are of sub-optimal sizes both in the public and private sectors. The major public sector undertaking, namely, IPCL has embarked on a very extensive energy conservation programme.
7.194 During the Seventh Plan, the important considerations for further development of the petro-chemical industry are: (i) absorption/up-gradation of the existing technologies and import of the latest technology on a selective basis where required, (ii) expansion of activities in the public/cooperative/private sectors wherever these could make units economically viable and internationally competitive, (hi) new plant capacities being chosen, keeping in view the total economies of production of which economies of scale are but a component, and (iv) productivity increase in the petro-chemical units.
7.195 The strategy for development of Olefins capacity in the Seventh Plan would be: (i) making a choice of feedstock (gas or naphtha) for the cracker, (ii) selecting of a location depending upon the choice of feedstock, (iii) approving economic size ethylene, propylene and butadiene based down stream units at locations earlier decided based on imported feedstock, and (iv) setting up of economic size gas/naphtha cracker in the public sector, joint sector or private sector as and when demand for ethylene, propylene and/or butadiene becomes large enough to justify setting up the crackers.
7.196 The expansion of aromatics capacity would take into consideration the regional disposition of demand, availability of feedstock on long-term sustained basis, expansion of existing plant capacities if it results in minimising investment costs and effectively utilising existing facilities. The above strategy has been contemplated to ensure that internationally competitive plants based on modern technology are set up and the existing plants are modernised/rehabilitated with contemporary technologies and competitive scale economics. The product, pattern would be chosen keeping in view the domestic demand, international demand-supply scenario and the competitiveness within and outside the country.
7.197 The norms of viability of petro-chemical plants are being updated. The phasing of new capacities would take into account the possibilities of imports untill there is a significant gap between demand and supply to justify the setting up of economically viable units. The objective of bringing competitiveness within industry and increasing its productivity is proposed to be achieved through liberal licensing, 'broad banding' the industry and making necessary adjustments in the duty structure wherever required. A ten-year horizon is proposed to be kept in view for purposes of licensing. These measures are to generate surplus capacity and production and bring about competitiveness, enhanced efficiency and increased productivity within the industry. Petro-chemical intermediates are vital inputs for a variety of industrial products and consumer goods. The cost of these inputs will influence the growth of all these downstream industries and it is desireable to keep these costs at the minimum. The impact of different taxes and levies on such basic inputs has to be continually reviewed.
7.198 It is proposed to set centres for training and technical assistance in plastics conversion industry to generate the required skills. These centres are to be located in different regions of the country and would concentrate on developing excellence in specific spheres in plastic activity like agriculture use, engineering application and bio-medical application. Growth of consumption of plastics in large new areas requires coordinated developmental/promotional efforts by the petro-chemical and user industries and development Institutions.
7.199 The larger petro-chemical corporations, especially IPCL, have well coordinated programmes in the S and T areas which are guided by the research advisory committee in the Department of Petroleum. Research will be directed towards improvements of currently used processes, new catalysts for aromatics production and polymerisation, synthesis and use of new co-monomers in poly olefins, conversion of gas fractions to liquid intermediates and development of new applications for polymers. A major advance will be made by establishing pilot facilities for the production of a range of catalysts. A pilot plant for polymerisation studies will be established. Co-ordinated efforts will be made for the development of polymer alloys, engineering polymers and fibers, and composites. New techniques for separation and purification of gaseous and liquid intermediates will be developed. Process imulation, heat and mass balance studies, and mathematical modelling will all be employed for higher production, energy conservation, improved conversion and separation. Extraction of valuable intermediates from refining streams to produce aromatics and trials with alternative feed-stocks will be particularly valuable.
7.200 The programmes of Atomic Energy under the industry and mineral sector aim at an orderly development of sources for fuel, heavy water, special materials and electronic control equipment for a range of activities extending from uranium.exploration to the operation of nuclear power plants. Development of technology and facilities for application of radiation and radioisotopes in the fields of industry, medicine and agriculture are also included.
7.201 The Plan provision is mainly for completion of on-going schemes of the undertakings/organisations under the Department of Atomic Energy. Heavy water projects at Thal Vaishet, Manuguru and Phase-l of power reactor fuel reprocessing plant at Kalpakkam are scheduled for completion in the Seventh Plan. New starts proposed to be taken up in the Plan are new heavy water plant, fuel-re-processing plant (PREFRE-III) for Narora Atomic Power Project (NAPP) and Kalpakkam Atomic Power Project (KAPP) expansion of Nuclear Fuel Complex (NFC) and exploratory underground development of uranium, new mine and mills etc. which have been drawn up in consonance with the Nuclear Power Profile.
7.202 The output of electronic goods had increased from Rs. 162 crores in 1973-74 to Rs. 670 crores in 1979-80 and further to Rs. 2090 crores in 1984-85. The major growth was in the field of consumer etectronics and computer controls and instruments whereas the growth in electronic components was less than planned.
7.203 In qualitative terms, a sound base for further development has been established during the Sixth Plan period. A solid foundation has been laid in the area of LSI/VLSI chips with the commencement of production at Semi-Conductor Complex Limited, Chandigarh. Bharat Electronics Limited started manufacturing electronic components and devices finding application in micro-wave communication besides meeting the demand for a wide range of defence electronic equipment. Bharat Heavy Electricals Limited has commenced manufacture of industrial electronic control equipment. Electronic Corporation of India Limited is meeting the requirements of control equipment for nuclear plants. The manufacture of a number of new products like colour TV receivers, microprocessors, mini computers, electronic control equipment for railways, steel, cement, power plants etc., programmable logic controllers and microwave communication devices started during the Sixth Plan period. A beginning has also been made towards absorption of new technologies in the field of fibre optics and high voltage direct current transmission of power in bulk.
7.204 The establishment of 15 State Electronics Development Corporations to promote development and production of electronics products has enabled regional dispersal of the activities. Some of the State Corporations have achieved sizeable electronics turn-over and have emerged as leading producers of quality electronics products. In order to assist the large number of electronics units spread throughout the country, a number of regional testing laboratories and electronics testing and development centres have been established under the Standardisation, Testing and Quality Control Programme. These facilities are being continuously upgraded to meet the emerging technological requirements.
7.205 The electronics industry in India is, however, small in size by international standards, though not in terms of inherent strength and the potential for future growth. There is need for reduction of prices in most of the products. We have also to keep ourselves abreast of the technological development taking place in this industry in other parts of the world.
7.206 Electronics has a tremendous potential for improving the standards of living and quality of life of the people. The relevance and rationale of electronics to India lies, not so much in its being the most modern technology but in the fact that because of its versatility and easy adaptability, it offers some of the most appropriate technological choices suited to our conditions for solving many of our socio-economic problems and the objectives of growth and employment. The electronics industry provides maximum- employment per unit of investment. The potential of electronics in educating our masses, in improving agricultural productivity and in health and medicine is tremendous but largely untapped so far.
7.207 Learning from past experience, Government have recently taken steps to formulate new promotional policies to accelerate the growth of electronics in the country. The basic thrust of the policy to be pursued in the Seventh Plan is in the following directions:
Some of these concepts have been built into the policies that have been announced recently such as the Colour Television Receivers Policy, the Communication Equipment Policy and the Policy on Computers.
7.208 Recognising that electronics can make a very significant contribution towards improvement in productivity, the Seventh Plan envisages rapid introduction, of electronics in almost all sectors of the economy. Technological developments in most of the industrial and services sectors will also require much greater application of electronic. The communications sector will now largely be based on electronic switching system, the manufacture of which has already been taken up and will be substantially expanded in the Seventh Plan. Power generation and transmission network will make increasing use of electronics. Thermal power plants will be based on electronic control and instrumentation systems. High Voltage Direct Current Transmission using high power thyristor controls will be introduced during the Plan period. Operation of steel plants will be optimised through the introduction of on-line computers for a more effective and dynamic control and monitoring of the production facilities and integrated operation of the different units of the plant. Benefits of electronics have already been demostrated in sugar mills. These will be extended further to cover most of the sugar mills in the country. Railway transport network will use computers in freight operation, informations system and in passenger reservation. Model coal mines using electronic equipment for communications, safety and other activities are being set up. Electronics is expected to change radically the organisational and physical set up of coal mines in the country. Other capital intensive sectors where programmes for introduction of electronics are under way, are fertilisers, oil exploration and production and textiles. System engineering organisations will play a vital role in the application of electronics in diverse sectors by stimulating electronics production through their backward and forward linkages with the manufacturers and the using sectors.
7.209 A new dimension will be the introduction of electronics in services. In the health services, electronic diagnostic aids are to be widely used. The extension of communication and broadcasting services to the rural population is expected to assist substantially the programmes for rural development. Timely information is a vital input to the planning and the executing agencies. The national information set-up based on computerisation will be extended right upto the district level to facilitate exchange of information on monitoring and implementation of schemes and timely collection of various statistics on economic performance. A pilot project on the use of computers as an aid to the education system is being evaluated.
7.210 The potential benefits from electronics in the vital sectors of the economy and industry will be monitored regularly and suitable schemes for introduction of electronics in those sectors will be implemented.
7.211 The development of electronic components and materials industry is being given a special emphasis. A liberal and flexible approach towards acquisition of technology, financing of investments and fiscal measures will be pursued. The setting up of 'National Silicon Facility' to produce silicon, the basic material forelectronics industry, is under consideration.
7.212 Scientific and technical manpower resources that are available will be utilised for the rapid development of computer software industry which can make a substantial contribution towards the build-up of our exports to the developed countries. Specific schemes for promoting computer software industry through the development of overseas markets and provision of appropriate hardware have been drawn up.
7.213 A target of Rs. 10,860 crores worth of domestic electronic production is envisaged for 1989-90 as against the present level of around Rs. 2,090 crores. The vast expansion of television network and satellite communication facilities created during the past few years and an ambitious programme of expansion and digitalisation of telecommunication network have created the right framework for rapid expansion and quantum jump in electronics.
7.214 Concerted efforts towards technology absorption, upgradation and development will be mounted through national projects. Under the Centre for Development of Telematics, the design of the 'Switch' suitable for the needs of the country will be evolved and commercial production taken up. A national programme for develop ment of capabilities in the field of micro-electronics will be implemented. By the end of the Plan, 2-3 micron technology capability will be achieved. A Centre for Development of Materials for Electronics has been proposed. Technology development programmes for the fifth generation computer, telematics and robotics will also be taken up.
7.215 The policies and programmes for the industrial sector envisaged in the Seventh Plan would thus provide a framework in which the joint efforts of the private and public sectors, of the workers and management would enable Indian industry to surmount its difficulties and make significant progress on the road to modernisation. This would be the beginning of a new phase in our process of industrialisation. The new phase would also be characterised by a conscious development of linkages with other sectors of the economy, in particular, the agricultural sector, which would continue to provide the foundation for the industrial growth in the Indian economy. There would be a need for developing perspective plans for industries like steel fertilisers petrochemicals, aluminium and engineering goods. The gestation period for creating additional capacities, upgradation of technology and modernisation, developing new products etc. easily extends over 8-10 years. It is proposed to draw up long-term perspective plans for such industries and make institutional arrangements for their monitoring and implementation.
7.216 While accomplishing the immediate task of raising the competitiveness of our products and making mass consumption goods available in the right quality and at reasonable prices, some sectors of the Indian industry would be able to carve for themselves a niche in the world economy.
* Sixth Plan provisions included under
Ministry of Petroleum (Sl. No. Ill) and Department of Fertilisers (Sl.
No. IV) above
Annexure 7.1 (Continued)
ANNEXURE 7.1 (continued)
ANNEXURE 7.1 (continued)
ANNEXURE 7.1 (continued)
ANNEXURE 7.1 (continued)
Seventh Plan Outlay-States/Union Territories
* Figures relate to sugar year (October-September).
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