(a) Compare the main features of development of jute and cotton textile industry in India during the British period. (20…

(a) Jute and cotton textiles in the British period. The first successful cotton mill opened in Bombay in 1854 and the first jute mill at Rishra on the Hooghly in 1855. Jute mills clustered along the Hooghly near Calcutta because raw jute came by river from eastern Bengal, which grew almost all of it, and the port served export markets; cotton mills concentrated in Bombay and Ahmedabad, near Deccan and Gujarat cotton and merchant capital. Jute was controlled by British, largely Scottish, capital and Calcutta managing agencies, organised in the Indian Jute Mills Association (1884), which regulated output; cotton was mainly Indian-owned, by Parsi, Gujarati and Marwari businessmen, also through managing agencies. Jute made sacking and hessian mostly for export, its main rival being Dundee; cotton mills first spun coarse yarn for China, then made cloth for a growing home market, competing with Lancashire imports. Cotton was affected by the 1894 import duty and the 1896 countervailing excise, resented as favouring Lancashire, and gained from the Swadeshi movement (1905) and from protection in the 1920s; jute, a near-monopoly of Bengal, needed none. Both drew migrant labour (from Bihar, UP and Odisha for jute; the Konkan, Deccan and UP for cotton) on long hours and low wages, with jute conditions generally poorer and unions weaker.

(b) Basic and capital goods before 1991. In the use-based classification (basic, capital, intermediate, consumer goods), the planned strategy from the Second Plan (Mahalanobis model) and the 1956 Industrial Policy Resolution favoured basic and capital goods, through public investment in steel (Bhilai, Rourkela, Durgapur), coal, power, heavy engineering and machine tools. Growth was rapid, with capital goods rising at double-digit rates in the Second and Third Plans, and their share in industrial output rose. Growth decelerated from the mid-1960s to the mid-1970s, hit by falling public investment, war, droughts and controls, capital goods suffering most; it recovered in the 1980s, with industrial growth of about 7 per cent a year, helped by easier imports of capital goods and technology and higher public investment. Persistent bottlenecks were power shortages, coal and rail constraints, low capacity utilisation and obsolete technology, so advanced equipment still had to be imported.

(c) Public sector enterprises before 1991. Central enterprises grew to about 244 by 1990–91. Gains: they built the infrastructure and heavy-industry base (steel, coal, power, oil, fertilisers, engineering); generated organised employment; spread industry to backward regions (Bhilai, Rourkela, Bokaro); and met strategic and import-substitution goals. Weaknesses: the return on capital employed was low, often below the cost of borrowing; capacity utilisation was low from poor planning and input shortages; many units were overstaffed and technologically obsolete; prices were administered, often below cost, so surpluses were not generated for reinvestment; political interference in appointments and investment decisions was common; soft budget constraints let loss-making units survive, and sick units multiplied (the BIFR was set up in 1987). Reform attempts included the Arjun Sengupta Committee (1984) and the memorandum of understanding system (1986–87). The verdict is mixed: strong on developmental objectives, weak on efficiency, which is why reform was sought after 1991.