Industrial Development Bank of India:

Industrialisation plays strategic role in accelerating the pace of economic development. As the classical economists emphasize, industry is subject to the law of increasing return to scale, while the primary land-based sector is subject to diminishing return to scale (Kaldor, 1967). The growth of industry not only increases the Gross Domestic Product (GDP) with the net addition to the existing stock but also improves the standard of living and per capita income. Industrialisation is an inescapable part of the development process accompanying a gradual improvement in per capita income (Raul, 1959). Rapid rate of growth in industrial output results in quickening the pace of technological changes in the industrial sector and in accelerating the process of technological change in all other sectors like agriculture and services (Kaldor, 1967). In the initial stage, it is not possible to initiate and sustain such an industrialisation without an active role of the state in developing and adapting an institutional and policy framework to evolving circumstances and specific instruments of industrialisation suited to the stage of development of a country (Bhatt, 1993).