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INDEX
SYNOPSIS
ACKNOWLEDGEMENTS
1.1 INTRODUCTION
BIBLOGRAPHY
SYNOPSIS
Total Quality Management is a new mantra in ever organization. It is defined involvement of all
basis. The present study was conducted in a cement industry in Hyderabad Viz. Hetero Drugs,
Hyderabad. For collecting the data and input . One of the quality philosophy is adopted by
Toyota Company in Japan, General Motors in USA, Honda company in Japan, Maruti Udyog in
India, Tata Steel, TVS Group of companies, Mahindra and Mahindra group of Companies has
adopted Total Quality Management principles in their organizations. There are so many
intellectuals working towards the principles of Quality management system. Edward Deming,
Shewart, Juran are pioneers for implementing the quality management principles and given
organization. The Total Quality Management principles not only applicable to organizations and
it can be adopted in service organizations as well. Applo Hospitals, Sun Rise Hospitals, in
Hyderabad has adopted Total Quality Management System in their service organizations.
• Outline the various definitions of quality and project TQM’s viewpoint about
Quality
• Bring out the characteristics features of TQM
• Give special attention the way TQM has been presented as a model.
• Guiding the organization by its values, vision, mission, and goals set through ‘strategic
planning processes.
• Changing the organization from function focused to customer focused, where customer
• Making the organization flexible and learning oriented to cope with change
• Provide confidence to its internal management and other employees that the
1.Reduction in wastage
It ensures things are done right and first time ok, so this reduces wastage and defects
Quality Assurance . TQM guarantees that all the products and even operations in the org. are of
a certain quality standard. This promotes trust to the consumers and also maintains a healthy
2. Customer-based
TQM focuses on the needs of the customers and can be used effectively, to
3. Failure Analysis
TQM is a statistical tool also. Hence provides a learned person with the faults
and failures in various processes. This in turn can be used to make corrective progress.
4. Make Continuous Improvement
A TQM organization will also view change positively whether the change
involves a process change or a change in customer needs and expectations. This is because
employee involvement in design and planning. Process improvement Reduced waste and cycle
6. Employee empowerment
7. Process improvement
Chapter II gives the Literature Review of the Total Quality Management System adopted and
Chapter III gives the brief introduction of the company and the scope of present study and data
Chapter IV gives conclusions and recommendations of the present study limitations of the
present study
Bibliography indicates the list of Journals , Books refered for the preparation of the present
study.
CHAPTER I
1.1 Introduction:
Total quality management has evolved from the quality assurance methods that were first
developed around the time of the First World War. The war effort led to large scale
manufacturing efforts that often produced poor quality. To help correct this, quality
inspectors were introduced on the production line to ensure that the level of failures due to
improving the quality of various products and services. Earlier it was just related with the
quality of products which an organization is producing but now other concepts like marketing,
finance design, customer service has also joined the area. TQM works on one belief that
mistakes can be avoided and defects can be prevented. And management should believe in
watching each and every step. It is the process designed to focus external/internal customer
2. Quality means productivity, competitive cost, and timely delivery, total customer
satisfaction.
4. Conformance to requirements.
6. Quality means getting every one to do what they have agreed to do and to do it right the first
TOTAL QUALITY :-
It means all the people of the organization are committed to product quality by doing right
things right, first time, every time by employing organization resource to provide value to
customer.
TOTAL QUALITY MANAGEMENT: -
building ,commitment to quality in the workforce and promoting to open decision making
TOTAL:
Every one associated with the company is involved in continuous improvement, in all functional
QUALITY:
MANAGEMENT:
2. Management by fact
4. Continuous improvement
5. Strong leadership
1. Commitment 2. Competence
TQM is the way of managing for the future, and is far wider in its application than just assuring
product or service quality – it is a way of managing people and business processes to ensure
complete customer satisfaction at every stage, internally and externally. TQM, combined with
effective leadership, results in an organization doing the right things right, first time.
The core of TQM is the customer-supplier interfaces, both externally and internally, and at each
interface lie a number of processes. This core must be surrounded by commitment to quality,
communication of the quality message, and recognition of the need to change the culture of
the organisation to create total quality. These are the foundations of TQM, and they are
supported by the key management functions of people, processes and systems in the
organisation.
What is quality?
A frequently used definition of quality is “Delighting the customer by fully meeting their needs
reliability, maintainability,cost effectiveness and price. It is, therefore, imperative that the
organisation knows what these needs and expectations are. In addition, having identified them,
the organisation must understand them, and measure its own ability to meet them.
Quality starts with market research – to establish the true requirements for the product or
service and the true needs of the customers. However, for an organisation to be really
effective, quality must span all functions, all people, all departments and all activities and be a
necessary to achieve a total quality organization, in the same way that the Japanese achieve
There exists in each department, each office, each home, a series of customers, suppliers and
customer supplier interfaces. These are “the quality chains”, and they can be broken at any
point by one person or one piece of equipment not meeting the requirements of the customer,
internal or external. The failure usually finds its way to the interface between the organization
and its external customer, or in the worst case, actually to the external customer.
Failure to meet the requirements in any part of a quality chain has a way of multiplying, and
failure in one part of the system creates problems elsewhere, leading to yet more failure and
problems, and so the situation is exacerbated. The ability to meet customers’ (external and
(If not, what prevents this from happening when the capability exists?)
• Do my suppliers have the capability to measure and meet these needs and expectations?
The origin of TQM can be traced to 1949, when The Union of Japanese Scientists and Engineers
improving Japanese productivity and quality of life (Cole 1998, Powell 1995). American firms
began to take TQM seriously around 1980, when some observers argued that Japanese
manufacturing quality equaled or exceeded U.S. standards, and warned that Japanese
productivity would soon surpass that of American firms. Productivity trends supported these
assertions, predicting that Japanese and other Asian countries would soon dominate world
trade and manufacturing (Powell 1995). The reliability of certain Japanese made products (cars
and semiconductors) was 5-10 times better than comparable U.S. products. At the same time,
consumers started to pay attention to product quality. For example, quality was a low priority
among car buyers in the 1970s, yet in the early 1980s, it was the most significant (Cole 1998).
President Reagan signed the legislation for mandating national study (U.S) in 1982, with the
intent to encourage productivity and competitiveness. The final report from that study included
that “a national quality award similar to Deming Price; should be awarded annually…
committee to establish the national quality award in 1985 and to the creation of the
Malcolm Baldrige National Quality Improvement Act of 1987. The Malcolm Baldrige National
management improvement efforts in the U.S. The quality award model, together with ISO 9000
series quality systems, has been the leading force in shaping and spreading the quality
management ideology and practices during the last decade. CPE represents the latest era in the
evolution of quality management discipline. This evolution process51 has four distinct stages
1) Inspection: In the early stages of the discipline, simple inspection processes were used
to ensure the quality of the product. Product and services were compared to pre-
determined standards to ensure the appropriate quality levels for customers. This
inspection process generally did not have any influence on production activities or in the
(2) Quality control: Under quality control, statistical tools and methods are used to
control the manufacturing process. The focus shifted from inspection to reducing
process variability. However, the ultimate target had remained the same to meet the
the immediate cause for variability and root causes for failure.
(3) Quality assurance: This stage began the era of quality planning. While quality
control was still a reactive approach for detecting problems and fixing them, quality assurance
focused upon proactively anticipating and avoiding those problems. Additional advances
planning for quality and improving the design of the products were required. These approaches
still relied heavily on statistical and cause-effect analyses which, contrary to the quality control
(4) Total quality management: The fourth stage of managing quality was introduced during the
last decade. The original approach to TQM53 relies on the approaches created in the previous
The above development of the discipline demonstrates how total quality management has
evolved from being narrowly focused on statistical process control to encompass a variety of
statistical process control is a precise set of quality improvement techniques, TQM extends
these methods to all functions and management levels of an organization (Grant et al. 1994).
The change of scope moved quality management to a completely new arena, a holistic
During the late 1990s, additional developments took place. Early analysis of TQM
identified the role of quality in strategy as one of the main differences between the TQM and
management theory perspectives (Dean and Bowen 1994; Cole 2000). This difference was
evident in the early years of the awards, but the modification of the award criteria in 1995
changed this limited scope of quality award criteria in the area of strategic planning. The
strategy development process was given a wider scope and included items beyond planning for
Grant et al. (1994) identifies four distinct features in the origin and the diffusion of TQM as a
microeconomics, psychology and sociology. On the contrary, TQM has origins in statistical
process control. The originators of TQM innovations have been pioneers of the discipline, who
worked in industry and had background mainly in engineering and physics. This foundation
contradicts the origin of most new management ideas as being developed by academia and
American national origin. TQM is based on the integration of management techniques, which
were developed in Japan and brought to North American industry. This dissemination process
was led originally by smaller companies such as Florida Power and Light
The History and early development of TQM is important for this study, because it can be
theorized that some of TQMs basic underlying assumptions are based on early applications of
TQM. Additionally, the content and structure of the discipline have been impacted by the fact
that it has been introduced as a training platform and/or consultant product to audiences
having a background in engineering. In this role it has formed into rational approach to
management, which brings forward only generally acceptable issues (such as the important role
of customer). TQM has rarely been presented in the context of complex social relations such as
2. LITERATURE REVIEW
1. TQM is only one of many approaches to getting work done and accomplishing goals.
Several experiences have shown that by using a TQM approach, organizations can increase
their capacity to do work, increase the quality of work done and, at the same time, hold
2. The organization recognizes that the vast majority of problems are caused by people doing
the wrong things right: work that should never be done, even though it is done very well.
3. The organization recognizes that those problems are caused by ineffective systems and
procedures. That recognition extends to the belief that the people who do the work are
4. The organization recognizes that in order to unleash the talents of everyone in the
company, people must be provided with opportunities to learn new skills and to practice
5. organization also believes that given the opportunity, people willingly participate in
Philip Crosby (1979 ) argued that quality is neither intangible nor immeasurable. Instead it is a
strategic imperative that can be used to improve the bottom line. Quality is defined as
requirements, subjectivity disappears. Any service, product or process that conforms to its
requirements is a quality service, product or process. If requirements are not met, non-
conformance results. Requirements define the output, the input or the process itself by
understanding and agreement between customers and their suppliers. Requirements are
based on customer expectations and are integrated into each of the activities of a work
process flow. Often, customer expectations are expressed in terms of convenience, comfort,
ease of use, and aesthetics. For example, a customer may want a piece of equipment that is
"state of the art" or information that is "up to date." When this happens, the suppliers must
use the knowledge of the processes involved to translate those needs or desires into specific
meaning of TQM and the differences between TQM and qualityassociated activities such as
quality assurance, quality control and quality management. This confusion leads, in many
cases, to the use of these expressions interchangeably. Therefore, it is very important to have
The American Society of Civil Engineers (ASCE) defines "quality assurance (QA) in its
publication “Quality in the Constructed Project” (1990) as "A program covering activities
necessary to provide quality in the work to meet the project's requirements. QA involves
necessary to produce quality. The design professional and constructor are responsible for
developing an appropriate program for each project." On the other hand, ASCE defines
quality control (QC) as "The specific implementation of the QA Program and it includes
checking and reviewing design and construction related activities. Effective QC reduces 4the
possibility of changes, mistakes and omissions, which in turn results in fewer conflicts and
disputes." The most common problem with a quality assurance program is that the
contractor/vendor assumes that his QA program is not based on 100% assurance. As long as
this is the impression of the contractor/vendor, he will never have a working QA program.
One element of quality, which the contractor/vendor seems to always forget, is the element
that requires him to examine any problem fully and determine the cause of the problem for
complete elimination of the same problem in the future. If this element of quality was
fulfilled, then eventually the contractor/vendor would have a 100% defect-free quality
assurance program. As long as a contractor/vendor aims for anything less than 100%, his
quality assurance program will never attain a status of 100%, nor will it ever be a fully
implemented quality assurance program. In addition, as long as owners expect less than 100%
from the contractor/vendor, they will never be supplied with the quality required, and as long
as owners continue to waive the required quality by allowing anything less than the
specfication materials.
“Quality” has been defined in many different ways. Among these definitions are the following
(Flood, 1993):
1. ASCE defines quality as the conformance to predetermined 5requirements.
2. The British Standard defines quality as the totality of features and characteristics of a
product, service or process, which bear on its ability to satisfy a given need from the customer's
viewpoint.
4. Deming (1986) defines quality as a predictable degree of uniformity and dependability, at low
5. Taguchi defines quality as the minimum loss imparted by the product to society from the
8. Hoshin defines quality as correcting and preventing loss, not living with loss.
9. Flood, (1993) in his book "Beyond TQM," defines quality as "meeting The customer's (agreed)
requirements, formal and informal, at the lowest cost, first time, every time." This definition
The second important term is “total”. The term total quality indicates how TQM is a company-
wide effort. In fact, TQM involves everyone's effort in the organization in order to improve
performance. This makes TQM an instrument that considers quality as a strategic objective for
an organization (Burati, 1990). In other words, TQM can be achieved through an integrated
improving performance. The integrated effort among personnel can be achieved by having
effective and comprehensive management. This leads to the third keyword “management." The
6should be responsible for managing their own jobs and this integrates managers with their
The essence of TQM is to achieve customer satisfaction, cost effectiveness, and defect-free
work. TQM does this through focusing on process improvement, customer and supplier
The customer, in the TQM culture, does not mean only the final recipient of the organization's
end product or services. The customer is also every individual or department within the
organization (Logothetis, 1992). The TQM culture varies from one company to another and
from one industry to another. However, the TQM culture, regardless of its differences from one
company to another, aims to achieve common objectives; namely removal of waste, reduction
of costs, improvement of reputation and increased market share. As can be observed, TQM
objectives are dynamic in their nature and this dictates continuous updating and upgrading
(Logothetis,1992).
2.2 Benefits of Introducing TQM
The most important benefits of introducing TQM into a company are the following (Fox, 1993):
1. It makes the company focus clearly on the needs of its market. This is essential for a company
2. It helps in achieving a top quality performance in all areas, not only in the final product or
service quality. In fact, achieving top quality performance in all areas reflects substantially on
3. It assists in implementing the simple procedures necessary for the achievement of quality
performance.
competitive strategy.
9. It reviews continuously the processes to develop the strategy of never ending improvement
10. Management objectives, such as customer satisfaction, meeting specifications, larger
market share, higher productivity, zero defects, increase in sale and decrease in costs, can be
change. Changing an organization's culture is a very difficult task, which often faces resistance.
The challenge of implementing TQM is due to the fact that TQM is not a slogan, nor a tool, nor
dealing with replacing, rather than 8modifying, the organization's culture. Furthermore, the
transformation from the traditional Western paradigm to the TQM paradigm is a radical
change.
Glover, (1992) showed the significant differences between the two management approaches.
A study conducted by Longenecker and Scazzero, (1993) revealed that managers and
supervisors in the organization that they surveyed were reluctant to change their behavior to
The reason for this is that it is difficult, even in normal times, for managers in any organization
The main reasons for their reluctance to change include the following:
1. senior management's lack of commitment to the process, as evidenced by their failure to
practice TQM.
3. mixed signals in terms of the pressure to get immediate results without reduced production
output.
5. little positive feedback on individual performance, while criticism and negative feedback are
plentiful.
Among the other difficulties in implementing TQM is the failure to have some means of
monitoring and managing the overall progress of TQM implementation, and the failure to
provide skills training immediately before TQM is applied. Finally, regarding TQM as only an
internal process and thus failing to involve suppliers, subcontractors, and others in the process
Brown, et al., (1994) identified what they believe are the reasons for TQM implementation
failure. Organizations go through three identifiable phases during the pursuit of TQM. These
phases are:
1. Start-up: This is the initial stage where workers at all levels get themselves acquainted with
the basic principles of TQM. This phase involves, also, implementing quality improvement
3. Integration: In the third phase, the organization integrates TQM principles into every aspect
of the organization's operations. Each phase has its own challenges and common mistakes.
Table 1 lists the common reasons for TQM failure in each phase.
I. Start-up
II. Alignment
1. Divergent strategies
2. Inappropriate measures
4. Inappropriate rewards
III. Integration
Lakhe and Mohanty (1994a) discussed a case study of TQM implementation. The major
One of the major obstacles that have bedeviled the successful implementation of TQM is the
non – recognition of quality teams in organizations in the quest for a successful strategy that
will lift the organization above its competitors (Stanford, 2005). Team effectiveness is crucial to
the implementation of TQM because the development of people and their involvement in the
operations of an organization through teamwork is very essential ,and for it not to be seen as
such ,will only ruin the collective effort of inputs towards the actualization of a functional
customers and suppliers with a major objective of meeting the set target of achieving quality. In
doing this, it is pertinent to note that certain criteria have to be fulfilled in order to get the
desired result from a quality improvement team, since it embraces almost all the stakeholders
that lay claim to a business, and these criteria, according to Geirhybein (2004) include choosing
the leader and members of the team. In doing this, the team leader must:
Make certain that the team members are conversant with the modus operandi of team
meetings/activities.
Endeavour to make certain that meeting venues are secured well ahead of time.
Engage in meeting with front line managers on favourable times for team meetings.
Sets an agreed time for the next meeting as well as communicates minutes and ensure that
Ability to identify training needs of the quality team in addition to be a good contributor and
listener, and this can be achieved by being dedicated to the intended purpose of the team
Similarly, Geirhybein (2004) suggested what members need to have in order to be effective in
Members must be willing, not forced or coerced to join a quality team for the fun of it.
Members need to be passionate about what the quality team sets out to achieve at all times as
the direct result of such commitment is the outright benefit of quality service.
Members should be prepared to share their experiences with the team leader as well as among
issues to raise as well as, be able to communicate effectively with both the team leader and
members.
Members should equally be ready to take down minutes at the request of the team leader, be
prepared to follow up actions when directed and never be afraid to say ‘I don’t understand’
Members need also to be able to contribute meaningfully to discussions on the floor during
Quality improvement initiatives typically involve the directed efforts of quality improvement
teams. Making adequate use of quality improvement teams and empowering employees to
solve quality-related issues using such tools as AMO(Ability, Motivation and Opportunity) as
exemplified in the work of Purcell et al.( 2003) can serve as a leverage for the implementation
of a TQM system. The effective use of quality improvement teams, and the TQM system as a
whole, can be strengthened by the basic application of principles of motivation, especially the
the recognition of team achievements as against those of individual employees, and the
effective use of goal setting for team efforts, are crucial in driving the process of TQM. The HRM
designing appraisal and reward systems that focus on team performance, Fran, (2002).
2.5 INSTITUTING TQM CULTURE IN ORGANISATIONS: EMPLOYEE INVOLVEMENT
culture in the employees, so as to be able to deliver quality products and services to customers,
Collinson et al, (2003). Human resource management can play a crucial role in the i
and selecting high-quality employees, the continuous training and development of these
employees, and the creation and sustenance of reward systems. Therefore, TQM sees to the
control of processes that are pivotal to the accomplishment of cultural changes often required
for TQM to be successfully implemented, Haigh and Morris, (2002). Directing the TQM cultural
change and moving beyond simple compliance toward a total commitment to TQM processes.
According to De Wit and Mayers, (2005), holding a significant connecting role between top
management and employees, HRM has many avenues to institute communication channels
between top management and other members of the organization. Using these channels, HRM
practitioners can ensure that employees realize that they are the organization's number one
priority in implementing TQM. Engendering trust and confidence through an open interchange
of purposeful ideas can help eliminate fears regarding the work-role changes that TQM needs.
This can provide the building block for all employees to be trained to see their colleagues in
other divisions as equal internal customers to the organisation. This is another avenue for HRM
to highlight this new outlook by example. Through this means, that is, focusing on satisfying the
needs and wants of the customer first and foremost, HRM can institute a departmental view of
employee attitudes. This expertise can be significantly essential in driving the process for a
proper implementation of TQM, since getting it right from the onset (conceptualization stage)
preliminary action is to implement an employee assessment, targeting two prime areas. One
requires the identification of the difficult parts of organizations’ current operations, where
innovations in quality can have the most significant impact on an organizations’ performance
level. The other part, targets the perceptions and attitudes of employees towards quality as a
fundamental issue, so as to ensure that, the implementation of TQM can be revitalized, for
Achieving assistance from other divisions in an organization in the use of surveys to a great
extent depends largely on their perception of HRM's position in the survey process. The
challenge is to ensure that HRM is not having an over bearing influence on other departmental
functions, but rather, to be seen as an important ally in making their own quality
improvements. Achieving this status, can be accomplished in the participative nature of the
TQM philosophy by involving other divisions in the organization, towards the development of
the survey instrument to be used. This involvement begins the process of carrying each division
Industry Profile
Pharmaceutical Industry
“The Indian pharmaceutical industry is a success story providing employment for millions and ensuring
that essential drugs at affordable prices are available to the vast population of this sub-continent.”
Richard Gerster
The Indian Pharmaceutical Industry today is in the front rank of India’s science-based industries with
wide ranging capabilities in the complex field of drug manufacture and technology. It ranks very high in
the third world, in terms of technology, quality and range of medicines manufactured. From simple
headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of
Playing a key role in promoting and sustaining development in the vital field of
medicines,Indian Pharma Industry boasts of quality producers and many units approved by regulatory
authorities in USA and UK. International companies associated with this sector have stimulated, assisted
and spearheaded this dynamic development in the past 53 years and helped to put India on the
India's pharmaceutical industry is now the third largest in the world in terms of volume. Its rank is 14th
in terms of value. Between September 2008 and September 2009, the total turnover of India's
pharmaceuticals industry was US$ 21.04 billion. The domestic market was worth US$ 12.26 billion. This
was reported by the Department of Pharmaceuticals, Ministry of Chemicals and Pharmacys. As per a
report by IMS Health India, the Indian pharmaceutical market reached US$ 10.04 billion in size in July
2010. A highly organized sector, the Indian Pharma Industry is estimated to be worth $ 4.5 billion,
growing at about 8 to 9 percent annually. Know more out this in our article on Indian Pharmaceutical
In the domestic market, Cipla retained its leadership position with 5.27 per cent share. Ranbaxy
followed next. The highest growth was for Mankind Pharma (37.2%). Other leading companies in the
Abbott (25%)
Pfizer (23.6 %)
Lupin (18.8 %)
The Indian pharmaceuticals market is expected to reach US$ 55 billion in 2020 from US$ 12.6 billion in
2009. This was stated in a report title "India Pharma 2020: Propelling access and acceptance, realising
true potential" by McKinsey & Company. In the same report, it was also mentioned that in an aggressive
growth scenario, the pharma market has the further potential to reach US$ 70 billion by 2020
Due to increase in the population of high income group, there is every likelihood that they will open a
potential US$ 8 billion market for multinational companies selling costly drugs by 2015. This was
estimated in a report by Ernst & Young. The domestic pharma market is estimated to touch US$ 20
billion by 2015. The healthcare market in India to reach US$ 31.59 billion by 2020. The sale of all types
of pharmaceutical drugs and medicines in the country stands at US$ 9.61 billion, which is expected to
reach around US$ 19.22 billion by 2012. Thus India would really become a lucrative destination for
There was another report by RNCOS titled "Booming Pharma Sector in India" in which it was projectedt
that the pharmaceutical formulations industry is expected to prosper in the same manner as the
pharmaceutical industry. The domestic formulations market will grow at an annual rate of around 17%
in 2010-11, owing to increasing middle class population and rapid urbanisation. Read More in Future
The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. It has
expanded drastically in the last two decades. The leading 250 pharmaceutical companies control 70% of
the market with market leader holding nearly 7% of the market share. It is an extremely fragmented
market with severe price competition and government price control.
The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, drug
intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles. There are
about 250 large units and about 8000 Small Scale Units, which form the core of the pharmaceutical
industry in India (including 5 Central Public Sector Units). These units produce the complete range of
pharmaceutical formulations, i.e., medicines ready for consumption by patients and about 350 bulk
drugs, i.e., chemicals having therapeutic value and used for production of pharmaceutical formulations.
Following the de-licensing of the pharmaceutical industry, industrial licensing for most of the drugs
and pharmaceutical products has been done away with. Manufacturers are free to produce any drug
duly approved by the Drug Control Authority. Technologically strong and totally self-reliant, the
pharmaceutical industry in India has low costs of production, low R&D costs, innovative scientific
manpower, strength of national laboratories and an increasing balance of trade. The Pharmaceutical
Industry, with its rich scientific talents and research capabilities, supported by Intellectual Property
Why India?
Competent workforce: India has a pool of personnel with high managerial and technical competence as
also skilled workforce. It has an educated work force and English is commonly used. Professional
cost-beneficial chemical synthesis for various drug molecules is excellent. It provides a wide variety of
Legal & Financial Framework: India has a 53 year old democracyand hence has a solid legal framework
and strong financial markets. There is already an established international industry and business
community.
Information & Technology: It has a good network of world-class educational institutions and established
Globalisation: The country is committed to a free market economy and globalization. Above all, it has a
Consolidation: For the first time in many years, the international pharmaceutical industry is finding great
opportunities in India. The process of consolidation, which has become a generalized phenomenon in
Indian companies need to attain the right product-mix for sustained future growth. Core competencies
will play an important role in determining the future of many Indian pharmaceutical companies in the
post product-patent regime after 2005. Indian companies, in an effort to consolidate their position, will
have to increasingly look at merger and acquisition options of either companies or products. This would
help them to offset loss of new product options, improve their R&D efforts and improve distribution to
penetrate markets.
Research and development has always taken the back seat amongst Indian pharmaceutical companies.
In order to stay competitive in the future, Indian companies will have to refocus and invest heavily in
R&D.
The Indian pharmaceutical industry also needs to take advantage of the recent advances in
biotechnology and information technology. The future of the industry will be determined by how well it
markets its products to several regions and distributes risks, its forward and backward integration
capabilities, its R&D, its consolidation through mergers and acquisitions, co-marketing and licensing
agreements.
The Indian pharmaceutical industry is the world's second-largest by volume and is likely to lead the
manufacturing sector of India.1India's bio-tech industry clocked a 17 percent growth with revenues of
Rs.137 billion ($3 billion) in the 2009-10 financial year over the previous fiscal. Bio-pharma was the
biggest contributor generating 60 percent of the industry's growth at Rs.8,829 crore, followed by bio-
services at Rs.2,639 crore and bio-agri at Rs.1,936 crore.2 The first pharmaceutical company are Bengal
Chemicals and Pharmaceutical Works, which still exists today as one of 5 government-owned drug
manufacturers, appeared in Calcutta in 1930. For the next 60 years, most of the drugs in India were
imported by multinationals either in fully formulated or bulk form. The government started to
encourage the growth of drug manufacturing by Indian companies in the early 1960s, and with
the Patents Act in 1970, enabled the industry to become what it is today. This patent act removed
composition patents from food and drugs, and though it kept process patents, these were shortened to
a period of five to seven years. The lack of patent protection made the Indian market undesirable to the
multinational companies that had dominated the market, and while they streamed out, Indian
companies started to take their places. They carved a niche in both the Indian and world markets with
their expertise in reverse-engineering new processes for manufacturing drugs at low costs. Although
some of the larger companies have taken baby steps towards drug innovation, the industry as a whole
Statistics
Revenue Revenue
Rank Company
2010(Rs crore) 2010(Rs billion)
formulations and bulk drugs. 85% of these formulations were sold in India while over 60% of
the bulk drugs were exported, mostly to the United States and Russia25. Most of the players in
the market are small-to-medium enterprises; 250 of the largest companies control 70% of the
Indian market 1. Thanks to the 1970 Patent Act, multinationals represent only 35% of the
Most pharma companies operating in India, even the multinationals, employ Indians almost
exclusively from the lowest ranks to high level management. Mirroring the social structure,
firms are very hierarchical. Homegrown pharmaceuticals, like many other businesses in India,
are often a mix of public and private enterprise. Although many of these companies are publicly
owned, leadership passes from father to son and the founding family holds a majority share.
In terms of the global market, India currently holds a modest 1-2% share, but it has been
growing at approximately 10% per year27. India gained its foothold on the global scene with its
innovatively engineered generic drugs and active pharmaceutical ingredients (API), and it is
now seeking to become a major player in outsourced clinical research as well as contract
manufacturing and research. There are 74 U.S. FDA-approved manufacturing facilities in India,
more than in any other country outside the U.S, and in 2005, almost 20% of all Abbreviated
New Drug Applications (ANDA) to the FDA are expected to be filed by Indian companies21,27.
Growth in other fields notwithstanding, generics are still a large part of the picture. London
research company Global Insight estimates that India’s share of the global generics market will
Indian companies are also starting to adapt their product development processes to the new
environment. For years, firms have made their ways into the global market by researching
generic competitors to patented drugs and following up with litigation to challenge the patent.
This approach remains untouched by the new patent regime and looks to increase in the future.
However, those that can afford it have set their sights on an even higher goal: new molecule
discovery. Although the initial investment is huge, companies are lured by the promise of hefty
profit margins and the recognition as a legitimate competitor in the global industry. Local firms
have slowly been investing more money into their R&D programs or have formed alliances to
As promising as the future is for a whole, the outlook for small and medium enterprises (SME) is
not as bright. The excise structure changed so that companies now have to pay a 16% tax on
the maximum retail price (MRP) of their products, as opposed to on the ex-factory price.
Consequently, larger companies are cutting back on outsourcing and what business is left is
shifting to companies with facilities in the four tax-free states - Himachal Pradesh, Jammu &
manufacturers shifted their plant to these states, as it became almost impossible to continue
operating in non tax free zones. But in a matter of a couple of years the excise duty was revised
on two occasions, first it was reduced to 8% and then to 4%. As a result the benefits of shifting
to a tax free zone was negated. This resulted in, factories in the tax free zones, to start up third
party manufacturing. Under this these factories produced goods under the brand names of
As SMEs wrestled with the tax structure, they were also scrambling to meet the July 1 deadline
for compliance with the revised Schedule M Good Manufacturing Practices (GMP). While this
should be beneficial to consumers and the industry at large, SMEs have been finding it difficult
to find the funds to upgrade their manufacturing plants, resulting in the closure of many
facilities. Others invested the money to bring their facilities to compliance, but these operations
were located in non-tax-free states, making it difficult to compete in the wake of the new excise
tax.
Challenges
All of these changes are ultimately good for the Indian pharmaceutical industry, which suffered
in the past from inadequate regulation and large quantities of spurious drugs. They force the
industry to reach a level necessary for global competitiveness. However, they have also
exposed some of the inadequacies in the industry today. Its main weakness is an
underdeveloped new molecule discovery program. Even after the increased investment, market
leaders such as Ranbaxy and Dr. Reddy’s Laboratories spent only 5-10% of their revenues on
R&D, lagging behind Western pharmaceuticals like Pfizer, whose research budget last year was
greater than the combined revenues of the entire Indian pharmaceutical industry13, 37. This
disparity is too great to be explained by cost differentials, and it comes when advances in
genomics have made research equipment more expensive than ever. The drug discovery
process is further hindered by a dearth of qualified molecular biologists. Due to the disconnect
between curriculum and industry, pharmas in India also lack the academic collaboration that is
R&D
Both the Indian central and state governments have recognized R&D as an important driver in
the growth of their pharma businesses and conferred tax deductions for expenses related to
research and development. They have granted other concessions as well, such as reduced
interest rates for export financing and a cut in the number of drugs under price control.
Government support is not the only thing in Indian pharma’s favor, though; companies also
have access to a highly developed IT industry that can partner with them in new molecule
discovery
Labor force
India’s greatest strengths lie in its people. India also boasts of well-educated, English-speaking
labor force that is the base of its competitive advantage. Although molecular biologists are in
short supply, there are a number of talented chemists who are equally as important in the
discovery process. In addition, there has been a reverse brain drain effect in which scientists are
returning from abroad to accept positions at lower salaries at Indian companies. Once there,
these foreign-trained scientists can transfer the benefits of their knowledge and experience to
all of those who work with them13,25. India’s wealth of people extends benefits to another
part of the drug commercialization process as well. With one of the largest and most genetically
diverse populations in any single country, India can recruit for clinical trials more quickly and
perform them more cheaply than countries in the West47. Indian firms have just recently
started to leverage.
Biotechnology
Unlike in other countries, the difference between biotechnology and pharmaceuticals remains
fairly defined in India. Bio-tech there still plays the role of pharma’s little sister, but many
outsiders have high expectations for the future. India accounted for 2% of the $41 billion global
biotech market and in 2003 was ranked 3rd in the Asia-Pacific region and 11th in the world in
number of biotechs.45 In 2004-5, the Indian biotech industry saw its revenues grow 37% to
$1.1 billion.2,9 The Indian biotech market is dominated by biopharmaceuticals; 75% of 2004-5
revenues came from biopharmaceuticals, which saw 30% growth last year. Of the revenues
from biopharmaceuticals, vaccines led the way, comprising 47% of sales46. Biologics and large-
molecule drugs tend to be more expensive than small-molecule drugs, and India hopes to
sweep the market in biogenerics and contract manufacturing as drugs go off patent and Indian
Revenue Revenue
Rank Company
2010(Rs crore) 2010(Rs billion)
As it expands its core business, the industry is being forced to adapt its business model to
recent changes in the operating environment. The first and most significant change was the
January 1, 2005 enactment of an amendment to India’s patent law that reinstated product
patents for the first time since 1972. The legislation took effect on the deadline set by the
mandated patent protection on both products and processes for a period of 20 years. Under
this new law, India will be forced to recognize not only new patents but also any patents filed
after January 1, 1995.3 Indian companies achieved their status in the domestic market by
breaking these product patents, and it is estimated that within the next few years, they will lose
In the domestic market, this new patent legislation has resulted in fairly clear segmentation.
The multinationals narrowed their focus onto high-end patients who make up only 12% of the
market, taking advantage of their newly bestowed patent protection. Meanwhile, Indian firms
have chosen to take their existing product portfolios and target semi-urban and rural
populations
Top 20 Biotechnology Companies in India, 2010
Revenue Revenue
Rank Company
2010(Rs crore) 2010(USD millions)
11 GlaxoSmithKline 78 17.9
14 Novozymes 69 15.9
16 Wockhardt 67 15.4
20 Biological E 36 8.3
USD 1 = Rs 43.5
Source: BioSpectrum Top 20: A threshold crossed
Most companies in the biotech sector are extremely small, with only two firms breaking 100
million dollars in revenues. At last count there were 265 firms registered in India, over 75% of
which were incorporated in the last five years.2,47 The newness of the companies explains the
industry’s high consolidation in both physical and financial terms. Almost 50% of all biotechs
are in or around Bangalore, and the top ten companies capture 47% of the market. The top five
companies were homegrown; Indian firms account for 62% of the biopharma sector and 52% of
to grow the industry to $5 billion in revenues generated by 1 million employees by 2009, and
data from the Confederation of Indian Industry (CII) seem to suggest that it is possible.7,47
The Indian biotech sector parallels that of the U.S. in many ways. Both are filled with small
start-ups while the majority of the market is controlled by a few powerful companies. Both are
dependent upon government grants and venture capitalists for funding because neither will be
commercially viable for years. Pharmaceutical companies in both countries have recognized the
potential effect that biotechnology could have on their pipelines and have responded by either
investing in existing start-ups or venturing into the field themselves.36 In both India and the
U.S., as well as in much of the globe, biotech is seen as a hot field with a lot of growth potential.
Relationship with IT
Many analysts have observed that the hype around the biotech sector mirrors that of the IT
sector. Biotech colleges have been popping up around the country eager to service the pools of
students that want to take advantage of a growing industry.7 The International Finance
Commission, the private investment arm of the World Bank, called India the “centerpiece of
IFC’s global biotech strategy.” Of the $110 million invested in 14 biotech projects investment
globally, the IFC has given $43 million to 4 projects in India.29 According to Dr. Manju Sharma,
former director of the Department of Biotechnology, the biotech industry could become the
“single largest sector for employment of skilled human resource in the years to come.”5 British
Prime Minister Tony Blair was similarly impressed, citing the success of India’s biotech industry
as the reason for his own country’s own biotech opportunities.22 Malaysia is also looking to
Government support
The Indian government has been very supportive. It established the Department of
Biotechnology in 1986 under the Ministry of Science and Technology.47 Since then, there have
been a number of dispensations offered by both the central government and various states to
encourage the growth of the industry. India’s science minister launched a program that
provides tax incentives and grants for biotech start-ups and firms seeking to expand and
establishes the Biotechnology Parks Society of India to support ten biotech parks by 2010.
Previously limited to rodents, animal testing was expanded to include large animals as part of
the minister’s initiative.10 States have started to vie with one another for biotech business, and
they are offering such goodies as exemption from VAT and other fees, financial assistance with
The government has also taken steps to encourage foreign investment in its biotech sector. An
initiative passed earlier this year allowed 100% foreign direct investment without compulsory
licensing from the government1.6 In April, a delegation headed by the Kapil Sibal, the minister
of science and technology and ocean development, visited five cities in the U.S. to encourage
investment in India, with special emphasis on biotech.32 Just two months later, Sibal returned
to the U.S. to unveil India’s biotech growth strategy at the BIO2005 conference in Philadelphia.9
Challenges
The biotech sector faces some major challenges in its quest for growth. Chief among them is a
lack of funding, particularly for firms that are just starting out. The most likely sources of funds
are government grants and venture capital, which is a relatively young industry in India.
Government grants are difficult to secure, and due to the expensive and uncertain nature of
biotech research, venture capitalists are reluctant to invest in firms that have not yet developed
a commercially viable product.26 As previously mentioned, India hopes to solve its funding
problem by attracting overseas investors and partners. Before these potential saviors will invest
significant sums in the industry, however, there needs to be better scientific and financial
accountability. India is slowly working towards these goals, but it will be a while before they are
India’s biotech firms share another problem with their pharmaceutical cousins: a lack of
qualified employees. Biotech has the additional disadvantage of competing against IT for
ambitious, science-minded students but not being able to guarantee the same compensation.
An aspiring researcher in India needs 7–10 years of education covering a range of specialties in
order to qualify to work in biotech. Even if a student does choose to go on the biotech path, the
to work in the field once finished. One estimate shows that 10% of upper-echelon biotech
recruits have come from foreign countries. While this is not a problem, per se, it drives up cost
in a country whose competitive advantage is based on cheap, high-quality labor. Far from
ending with scientists, there is also a shortage of people with a knowledge of biotechnology in
While little has been done about the latter half of the employee crunch, the government has
addressed the problem of educated but unqualified candidates in its Draft National Biotech
Development Strategy. This plan included a proposal to create a National Task Force that would
work with the biotech industry to revise the curriculum for undergraduate and graduate study
in life sciences and biotechnology. The government’s strategy also stated intentions to increase
the number of PhD Fellowships awarded by the Department of Biotechnology to 200 per year.
These human resources will be further leveraged with a “Bio-Edu-Grid” that will knit together
the resources of the academic and scientific industrial communities, much as they are in the
U.S.5
Major players
Glenmark
Ranbaxy Laboratories
Ranbaxy is the leader in the Indian pharmaceutical market, taking in $1.174 billion in revenues
for a net profit of $160 million in 2004. It was the first Indian pharmaceutical to have a
FDA, and the U.S. market accounts for 36% of its sales. 78% of Ranbaxy’s sales are from
IMS Health estimated that Ranbaxy is among the top 100 pharmaceuticals in the world and that
it is the 15th fastest growing company. By 2012, Ranbaxy hopes to be one of the top 5 generics
producers in the world, and it consolidated its position with the purchase of French firm RGP
Aventis in 2003. Ranbaxy also has higher aspirations, however, “to build a proprietary
prescription business in the advanced markets.” To this end, it keeps a dedicated research
facility in Gurgaon staffed with over 1100 scientists. They currently have two molecules in
Phase II trials and 3-5 in pre-clinical testing. It spent $75 million in R&D in 2004, a 43% increase
management team.38,39
Founded in 1984 with $160,000, Dr. Reddy’s was the first Asia-Pacific pharmaceutical outside of
Japan and the sixth Indian company to be listed on the New York Stock Exchange. It earned
$446 million in fiscal year 2005, deriving 66% of this income from the foreign market. In order
to strengthen its global position, Dr. Reddy acquired UK-based BMS Laboratories and subsidiary
Although 58% of Dr. Reddy’s revenues come from generic drugs, the company was committed
to WTO-compliance long before the 2005 bill took effect, and most of these products were
already off patent. Dr. Reddy has long been a research-oriented firm, preceding many of its
peers in setting up a New Drug Development Research (NDDR) in 1993 and out-licensing its first
compound just four years later. Dr. Reddy’s has since outlicensed two more molecules and
Although Dr. Reddy’s is publicly traded, the Reddy family (including founder/chairman K. Anji
Reddy, son-in-law/CEO GV Prasad and son/COO Satish Reddy) holds a hefty 26% share in the
company.11,44
Nicholas Piramal
The company led by Asish Mishra grossing $350 million per year, Nicholas Piramal started its
existence with the 1988 acquisition of Nicholas Laboratories and grew through a series of
mergers, acquisitions and alliances. The company has formed a name for itself in the field of
custom manufacturing. It cites its 1700-person global sales force as another core strength; with
its acquisition of Rhodia’s inhalation anaesthetics business, Nicholas Piramal gained a sales and
Nicholas Piramal is well-poised for the challenge of surviving in the aftermath of product patent
protection. The company has respected intellectual property rights since its inception and
Instead, it decided to make its own intellectual property and opened a research facility last
November in Mumbai with hopes of launching its first drug in 2010 at a cost of $100,000.24,33
Cipla
Cipla is one of the oldest drug manufacturers in India. It is led by Dr. Yusuf K. Hamied,
Chairman and Managing Director. Cipla burst into the international consciousness in 2000 with
Triomune, an AIDS treatment costing between $300 and $800 per year that infringed upon
patents held by several companies who were selling the cocktail for $12,000 per year. Long
before this news, Cipla had been building a strong global presence, and it now distributes its
800-odd products in over 140 countries. Privately held Cipla holds a prominent spot in its home
country as well; it is the leader in domestic sales, having just unseated GlaxoSmithKline for the
first time in 28 years. Revenue in 2004 totaled $552 million (using Rs 43.472 = $1) about 75% of
which was derived in India. Cipla did not report having a research program.8,18
|Dr. Kiran Mazumdar-Shaw is the Chairman and Managing Director of BiocoIrish chemicals
company seeking to break into the Indian market, Biocon is now the leading biotech in India,
bringing in Rs 646.36 crore (almost $150 million) in revenue for fiscal year 2004. It initially made
its money by producing enzymes, but Biocon recently decided to become a research-oriented
The company went public in March 2004, and "its shares were oversubscribed by 33 times on
opening day." Eight months later it launched Insugen, a bio-insulin that is its first branded
product. Biocon also has two wholly owned subsidiaries, Syngene and Clinigene, that perform
The Serum Institute of India can make the enviable claim that 2 out of every 3 children in the
world are immunized with one of their vaccines. It is the world’s largest producer of measles
and DTP vaccines, and its portfolio includes other vaccines, antisera, plasma products and
anticancer compounds. The Serum Institute earned Rs 565 crore ($130 million) in revenue in
fiscal year 2005, selling mainly to UN agencies and to the Indian government. The Serum
Institute is part of the Poonawalla Group, whose holdings include a horse stud farm and
manufacturers of industrial equipment and components. Dr. Cyrus Poonawalla is the Chairman
of the company.
CHAPTER IV
COMPANY PROFILE
Hetero Company Profile
Chemicals & Finished Dosages. Ever since its establishment in 1993, Hetero showed a tradition
of excellence and deep sense of commitment in developing cost effective processes to offer
leading international supplier with a rich portfolio of over 200 products from wide range of
Hetero’s manufacturing facilities are cGMP compliant meeting global standards in terms of
infrastructure and systems. Majority of them are approved by the various regulatory authorities
of USFDA, WHO-Geneva, Australian TGA, Spanish agency of medicines & health care products,
With full-fledged marketing capabilities, the company has been able to market its products in
Hetero Drugs, the parent company established in 1993 is one of the largest Indian
pharmaceutical companies with over 2000 crores in revenues and employs more than 5000
Hetero operates in more than 100 countries and its manufacturing facilities meet various
national and international standards including USFDA. Hetero has a portfolio of more than 200
products and is a leading company in bringing new generic molecules to the market.
About Founder.
A Visionary Scientist
Dr. Bandi Parthasaradhi Reddy, Chairman & Managing Director of Hetero group is academically
endowed with a Post Graduate and Doctoral degrees with distinction in the field of synthetic
chemistry. Prior to founding of Hetero Drugs Limited, Dr. B.P.S Reddy had a stint in leading
pharmaceutical companies as the head of the Research & Development division. His sharp
analysis and ability to synthesize various chemical compounds lead to the discovery of new
During the said period Dr.B.P.S Reddy has the credit of introducing many new molecules for the
A visionary the world knows as Dr. B.P.S.Reddy, is the driving force behind this growing
pharmaceutical phenomenon called “HETERO”. Dr.B.P.S.Reddy’s dream child, Hetero was born
in the year 1993 as a small API unit. Today, 17 years later, the name is synonymous with
leadership in pharmaceuticals with more than 18 manufacturing units and 8000 employees. An
entity that is grown in stature by virtue of its combined strength in research, manufacturing and
marketing.
Dr. B.P.S.Reddy steered Hetero towards the forefront of global pharmaceutical industry with his
vision to be recognised as an aggressive company that combines its strength of R&D and
manufacturing with definite advantages in terms of cost and chemistry with a strong emphasis
Dr. B.P.S.Reddy is now focusing on giving new dimensions to Hetero in terms of research and
Hetero has been scaling new heights on a continual basis. These achievements have been the
result of concerted efforts on the part of different functions within the organisation to achieve
In its path to success, Hetero has seen many a milestone being crossed and achieved many
awards on various fronts. Awards for exemplary work in R&D and marketing are just a few to
name.
A track of few events that saw Hetero reaching its Zenith of glory are :
2009
2006
• Chemexil Trishul export award for outstanding export performance 2001 Excellence &
National Integration award in recognition of the efforts for excellence with affairs connected
with educational specialties and creating teaching skills besides promoting harmony at all levels
in the college.
1999
domestic competitors.
1998
1996
• National award for "Best Efforts in Research and Development" from the Department of
Scientific and Industrial Research, Ministry of Science and Technology, Government of India, in
Hetero Group always believes in the concept of giving back to the society to uplift the living
standards in the surrounding society as one of the prime responsibilities and always took the
lead. The Group is committed for implementation of various CSR initiatives and contributes
Hetero Group received appreciation from the Government of Andhra Pradesh, for its
Environment Protection:
Completed Plantation in newly acquired 15 acres land and a total of 25000 Nos. of saplings
made.
Provided substantial amount to the industrial association for the development of infrastructure
high quality and safe medicines to society. Hetero Research Foundation is one of the most
Hetero Research Foundation (HRF) has a team of over 400 dedicated scientists working in the
areas of Process, Analytical and Discovery Research. R & D centre conforms to international
standards and has advanced equipment for both basic and applied research.
Process R&D
HRF has developed process for 150 plus molecules for various markets. The R&D team actively
HRF has always been emphasizing to ensure that the processes being adopted for the products
are cost effective, safe to handle and with optimum advantage in terms of yield and quality.
Analytical R&D
characterisation of API’s/ NCE’s. Further, the team is well versed with regulatory filings and has
vast experience in documentation. The infrastructure includes advanced instruments like LC-
MS-MS, GC-MS, NMR, Powder XRD apart from several HPLC systems.
Having a strong commitment and experience in bringing quality
Less than year after the launch of Hetero Pharmacy in Hyderabad, we scaled up to more than
100+ pharmacies across AP. We are still growing aggressively to serve our customers better.
Hetero also has its outlets at the prestigious Nizam’s Institute of Medical Sciences (NIMS)
Helps you comply with prescription instructions. No scope for spurious drugs, expired medicines and
substitution
Storage as specified
Stocking drugs as per prescribed temperature standards, thereby retaining their quality and
effectiveness
Computerized billing system
Proper display of batch numbers, price & expiry with no waiting time
Low Prices
We have emphasised in the previous chapters the need for a substantial and rapid improvement in
agriculture in order to increase the supply of foodgrains and raw materials needed in the country. The
fact that at the present juncture it is necessary to give the highest priority to agricultural development
including the building up of the necessary basic services like irrigation and power does not, however,
mean that industrial development is in any sense less important. In the development of an
underdeveloped economy there is really no conflict between agricultural and industrial development.
Improvement in agriculture cannot proceed beyond a point unless the surplus working force on the land
is progressively diverted to industries and services. Similarly, industrial development itself cannot
advance sufficiently without a large increase in the supply of food necessary to maintain the population
thus diverted and of the raw materials needed to enable industries to expand production. The fact that
the productivity of labour in industry is much higher than in agriculture also points to the need for rapid
industrial development. Moreover, in an underdeveloped country the surpluses created in the industrial
sector are likely to be available for investment relatively more easily than surpluses in the agricultural
sector. The pattern of industrialisation to be adopted, that is, the relative emphasis on capital goods
industries and consumer goods industries and the degree of capital intensiveness in different lines of
industry, has, of course, to be decided in the light of several technical, economic and social factors. But
there is no doubt that over a period the desired rate of economic progress will necessitate a rapid
diversification of the occupational structure through development of industry, together with trade and
transport.
2. The relative backwardness of industiral development in India may be judged from the fact that in
1948-49 factory establishments accounted for only 6.6 percent of total national income. The total labour
force engaged in such establishments is about 2.4 million or 1.8 percent of the working population in the
country. While in the aggregate India's industrial output may look massive, per head of population it is
3. Prior to the first world war the only major industries which had developed substantiaflly were cotton'
and jute textiles, for which the country had exceptional natural advantages. The industrial development
since the twenties is associated with the adoption of a more progressive industrial and fiscal policy.
The industrial sector is one of the main sectors that contribute to the Indian GDP. The country ranks
fourteenth in the factory output in the world. The industrial sector is made up of manufacturing, mining
and quarrying, and electricity, water supply, and gas sectors. The industrial sector accounts for around
27.6% of the India GDP and it employs over 17% of the total workforce in the country. The Growth Rate
of the Industrial Sector in India GDP came to around 5.2% in 2002- 2003. In this year, within the India
GDP, the mining and quarrying sector contributed 4.4%, the electricity, water supply, and gas sector
The Growth Rate of the Industry Sector in India GDP came to around 6.6% in 2003- 2004 and in this year,
the electricity, water supply, and gas sector contributed 4.8%, the mining and quarrying sector
contributed 5.3%, and the manufacturing sector contributed 7.1% in India GDP. Industry Growth Rate in
India GDP came to 7.4% in 2004- 2005, with the manufacturing sector contributing 8.1%, the mining and
quarrying sector contributing 5.8%, and the water supply, electricity, and gas sector contributing 4.3% in
India GDP.
Industry Growth Rate in India GDP came to 7.6% in 2005- 2006. In this year, the mining and quarrying
sector contributed 0.9%, the manufacturing sector contributed 9.0%, and the water supply, gas, and
electricity sector contributed 4.3%. The Growth Rate of the Industrial Sector finally came to 9.8% in
2006- 2007. This shows that Industry Growth Rate in India GDP has been on the rise over the last few
years.
The reasons for the rise of Industry Growth Rate in India GDP
The reasons for the increase of Industry Growth Rate in India GDP are that huge amounts of investments
are being made in this sector and this has helped the industries to grow. Further the reasons for the rise
of the Growth Rate of the Industrial Sector in India are that the consumption of the industrial goods has
increased a great deal in the country, which in its turn has boosted the industrial sector. Also the
reasons for the increase of Industry Growth Rate in India GDP are that the industrial goods are being
exported in huge quantities from the country.
Industry Growth Rate in India GDP thus has been registering steady growth over the past few years. This
has given a major boost to the Indian economy. The government of India thus must continue to make
efforts to boost the industrial sector in the country. For this will in turn help to grow the country's
economy.
Industrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in
agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social,
economic and cultural conditions of the times. It began in Britain, then subsequently spread throughout
The Industrial Revolution marks a major turning point in human history; almost every aspect of daily life
was influenced in some way. Most notably, average income and population began to exhibit
unprecedented sustained growth. In the two centuries following 1800, the world's average per capita
income increased over tenfold, while the world's population increased over sixfold. In the words of
Nobel Prize winner Robert E. Lucas, Jr., "For the first time in history, the living standards of the masses
of ordinary people have begun to undergo sustained growth ... Nothing remotely like this economic
Starting in the later part of the 18th century, there began a transition in parts of Great Britain's
the increased use of refined coal. Trade expansion was enabled by the introduction of canals, improved
The introduction of steam power fuelled primarily by coal, wider utilisation of water wheels and
powered machinery (mainly in textile manufacturing) underpinned the dramatic increases in production
capacity. The development of all-metal machine tools in the first two decades of the 19th century
facilitated the manufacture of more production machines for manufacturing in other industries. The
effects spread throughout Western Europe and North America during the 19th century, eventually
affecting most of the world, a process that continues as industrialisation. The impact of this change on
The First Industrial Revolution, which began in the 18th century, merged into the Second Industrial
Revolution around 1850, when technological and economic progress gained momentum with the
development of steam-powered ships, railways, and later in the 19th century with the internal
combustion engine and electrical power generation. The period of time covered by the Industrial
Revolution varies with different historians. Eric Hobsbawm held that it 'broke out' in Britain in the 1780s
and was not fully felt until the 1830s or 1840s, while T. S. Ashton held that it occurred roughly between
Some 20th century historians such as John Clapham and Nicholas Crafts have argued that the process of
economic and social change took place gradually and the term revolution is a misnomer. This is still a
subject of debate among historians. GDP per capita was broadly stable before the Industrial Revolution
and the emergence of the modern capitalist economy. The Industrial Revolution began an era of per-
capita economic growth in capitalist economies. Economic historians are in agreement that the onset of
the Industrial Revolution is the most important event in the history of humanity since the domestication
The earliest use of the term "Industrial Revolution" seems to be a letter of 6 July 1799 by French envoy
Louis-Guillaume Otto, announcing that France had entered the race to industrialize. In his 1976 book
Keywords: A Vocabulary of Culture and Society, Raymond Williams states in the entry for "Industry":
"The idea of a new social order based on major industrial change was clear in Southey and Owen,
between 1811 and 1818, and was implicit as early as Blake in the early 1790s and Wordsworth at the
turn of the century." The term Industrial Revolution applied to technological change was becoming more
common by the late 1830s, as in Louis-Auguste Blanqui description in 1837 of la révolution industrielle.
Friedrich Engels in The Condition of the Working Class in England in 1844 spoke of "an industrial
revolution, a revolution which at the same time changed the whole of civil society". Credit for
popularising the term may be given to Arnold Toynbee, whose lectures given in 1881 gave a detailed
account of it.
Innovations
The only surviving example of a Spinning mule built by the inventor Samuel Crompton
Textiles – Cotton spinning using Richard Arkwright's water frame, James Hargreaves'sSpinning
Jenny, and Samuel Crompton's Spinning Mule (a combination of the Spinning Jenny and the Water
Frame). This was patented in 1769 and so came out of patent in 1783. The end of the patent was
rapidly followed by the erection of many cotton mills. Similar technology was subsequently applied
to spinning worsted yarn for various textiles and flax for linen. The cotton revolution began in Derby,
which has been known since this period as the "Powerhouse of the North".
Steam power – The improved steam engine invented by James Watt and patented in 1775 was
initially mainly used to power pumps for pumping water out of mines, but from the 1780s was
applied to power other types of machines. This enabled rapid development of efficient semi-
automated factories on a previously unimaginable scale in places where waterpower was not
available. For the first time in history people did not have to rely on human or animal muscle, wind
or water for power. The steam engine was used to pump water from coal mines; to lift trucks of coal
to the surface; to blow air into the furnaces for the making of iron; to grind clay for pottery; and to
power new factories of all kinds. For over a hundred years the steam engine was the king of the
industries.
Iron making – In the Iron industry, coke was finally applied to all stages of iron smelting,
replacing charcoal. This had been achieved much earlier for lead and copper as well as for
producing pig iron in a blast furnace, but the second stage in the production of bar irondepended on
the use of potting and stamping (for which a patent expired in 1786) or puddling (patented by Henry
These represent three 'leading sectors', in which there were key innovations, which allowed the
economic take off by which the Industrial Revolution is usually defined. This is not to belittle many other
inventions, particularly in the textile industry. Without some earlier ones, such as the spinning
jenny and flying shuttle in the textile industry and the smelting of pig iron with coke, these
achievements might have been impossible. Later inventions such as the power loom and Richard
Trevithick's high pressure steam engine were also important in the growing industrialisation of Britain.
The application of steam engines to powering cotton mills and ironworks enabled these to be built in
places that were most convenient because other resources were available, rather than where there was
In the textile sector, such mills became the model for the organisation of human labour in factories,
epitomised by Cottonopolis, the name given to the vast collection of cotton mills, factories and
administration offices based in Manchester. The assembly line system greatly improved efficiency, both
in this and other industries. With a series of men trained to do a single task on a product, then having it
moved along to the next worker, the number of finished goods also rose significantly.
Also important was the 1756 rediscovery of concrete (based on hydraulic lime mortar) by the British
engineer John Smeaton, which had been lost for 1300 years.[17]
In the early 18th century, British textile manufacture was based on wool which was processed by
individual artisans, doing the spinning and weaving on their own premises. This system is called a
cottage industry. Flax and cotton were also used for fine materials, but the processing was difficult
because of the pre-processing needed, and thus goods in these materials made only a small proportion
of the output.
Use of the spinning wheel and hand loom restricted the production capacity of the industry, but
incremental advances increased productivity to the extent that manufactured cotton goods became the
dominant British export by the early decades of the 19th century. India was displaced as the premier
more even thickness, developed with the help of John Wyatt in Birmingham. Paul and Wyatt opened a
mill in Birmingham which used their new rolling machine powered by a donkey. In 1743, a factory was
opened in Northampton with fifty spindles on each of five of Paul and Wyatt's machines. This operated
until about 1764. A similar mill was built by Daniel Bourn in Leominster, but this burnt down. Both Lewis
Paul and Daniel Bourn patented carding machines in 1748. Using two sets of rollers that travelled at
different speeds, it was later used in the first cotton spinning mill. Lewis's invention was later developed
and improved by Richard Arkwright in his water frame and Samuel Crompton in his spinning mule.
Other inventors increased the efficiency of the individual steps of spinning (carding, twisting and
spinning, and rolling) so that the supply of yarn increased greatly, which fed a weaving industry that was
advancing with improvements to shuttles and the loom or 'frame'. The output of an individual labourer
increased dramatically, with the effect that the new machines were seen as a threat to employment,
To capitalise upon these advances, it took a class of entrepreneurs, of which the most famous is Richard
Arkwright. He is credited with a list of inventions, but these were actually developed by people such as
Thomas Highs and John Kay; Arkwright nurtured the inventors, patented the ideas, financed the
initiatives, and protected the machines. He created the cotton mill which brought the production
processes together in a factory, and he developed the use of power—first horse power and then water
power—which made cotton manufacture a mechanised industry. Before long steam power was applied
The major change in the metal industries during the era of the Industrial Revolution was the
replacement of organic fuels based on wood with fossil fuel based on coal. Much of this happened
somewhat before the Industrial Revolution, based on innovations by SirClement Clerke and others from
1678, using coalreverberatory furnaces known as cupolas. These were operated by the flames, which
contained carbon monoxide, playing on the ore and reducing the oxide to metal. This has the advantage
that impurities (such as sulphur) in the coal do not migrate into the metal. This technology was applied
to lead from 1678 and tocopper from 1687. It was also applied to iron foundry work in the 1690s, but in
this case the reverberatory furnace was known as an air furnace. The foundry cupola is a different (and
later) innovation.
This was followed by Abraham Darby, who made great strides using coke to fuel his blast
furnaces at Coalbrookdale in 1709. However, the coke pig iron he made was used mostly for the
production of cast iron goods such as pots and kettles. He had the advantage over his rivals in that his
pots, cast by his patented process, were thinner and cheaper than theirs. Coke pig iron was hardly used
to produce bar iron in forges until the mid 1750s, when his son Abraham Darby
II built Horsehay and Ketley furnaces (not far from Coalbrookdale). By then, coke pig iron was cheaper
Matthew Boulton helped James Watt to get his business off the ground. he set up a massive factory
Bar iron for smiths to forge into consumer goods was still made in finery forges, as it long had been.
However, new processes were adopted in the ensuing years. The first is referred to today as potting and
stamping, but this was superseded by Henry Cort's puddling process. From 1785, perhaps because the
improved version of potting and stamping was about to come out of patent, a great expansion in the
output of the British iron industry began. The new processes did not depend on the use of charcoal at all
Up to that time, British iron manufacturers had used considerable amounts of imported iron to
supplement native supplies. This came principally from Sweden from the mid-17th century and later
also from Russia from the end of the 1720s. However, from 1785, imports decreased because of the new
iron making technology, and Britain became an exporter of bar iron as well as manufactured wrought
ironconsumer goods.
Since wrought iron was becoming cheaper and more plentiful, it also became a major structural material
following the building of the innovative The Iron Bridge in 1778 by Abraham Darby III.
An improvement was made in the production of steel, which was an expensive commodity and used
only where iron would not do, such as for the cutting edge of tools and for springs. Benjamin
Huntsman developed his crucible steel technique in the 1740s. The raw material for this was blister
The supply of cheaper iron and steel aided the development of boilers and steam engines, and
eventually railways. Improvements in machine tools allowed better working of iron and steel and further
Mining
Coal mining in Britain, particularly in South Wales started early. Before the steam engine, pits were
often shallow bell pits following a seam of coal along the surface, which were abandoned as the coal
was extracted. In other cases, if the geology was favourable, the coal was mined by means of an adit or
drift mine driven into the side of a hill. Shaft mining was done in some areas, but the limiting factor was
the problem of removing water. It could be done by hauling buckets of water up the shaft or to a sough
(a tunnel driven into a hill to drain a mine). In either case, the water had to be discharged into a stream
or ditch at a level where it could flow away by gravity. The introduction of the steam engine greatly
facilitated the removal of water and enabled shafts to be made deeper, enabling more coal to be
extracted. These were developments that had begun before the Industrial Revolution, but the adoption
of James Watt's more efficient steam engine from the 1770s reduced the fuel costs of engines, making
mines more profitable. Coal mining was very dangerous owing to the presence of firedamp in many coal
seams. Some degree of safety was provided by the safety lamp which was invented in 1816 by Sir
Humphry Davy and independently by George Stephenson. However, the lamps proved a false dawn
because they became unsafe very quickly and provided a weak light. Firedamp explosions continued,
often setting off coal dust explosions, so casualties grew during the entire 19th century. Conditions of
work were very poor, with a high casualty rate from rock falls.
Steam power
The development of the stationary steam engine was an essential early element of the Industrial
Revolution; however, for most of the period of the Industrial Revolution, the majority of industries still
relied on wind and water power as well as horse- and man-power for driving small machines.
The first real attempt at industrial use of steam power was due to Thomas Savery in 1698. He
constructed and patented in London a low-lift combined vacuum and pressure water pump, that
generated about one horsepower (hp) and was used in numerous water works and tried in a few mines
(hence its "brand name", The Miner's Friend), but it was not a success since it was limited in pumping
The first safe and successful steam power plant was introduced by Thomas Newcomen before 1712.
Newcomen apparently conceived the Newcomen steam engine quite independently of Savery, but as
the latter had taken out a very wide-ranging patent, Newcomen and his associates were obliged to come
to an arrangement with him, marketing the engine until 1733 under a joint patent. Newcomen's engine
appears to have been based on Papin's experiments carried out 30 years earlier, and employed a piston
and cylinder, one end of which was open to the atmosphere above the piston. Steam just above
atmospheric pressure (all that the boiler could stand) was introduced into the lower half of the cylinder
beneath the piston during the gravity-induced upstroke; the steam was then condensed by a jet of cold
water injected into the steam space to produce a partial vacuum; the pressure differential between the
atmosphere and the vacuum on either side of the piston displaced it downwards into the cylinder,
raising the opposite end of a rocking beam to which was attached a gang of gravity-actuated
reciprocating force pumps housed in the mineshaft. The engine's downward power stroke raised the
pump, priming it and preparing the pumping stroke. At first the phases were controlled by hand, but
within ten years an escapement mechanism had been devised worked by a vertical plug tree suspended
A number of Newcomen engines were successfully put to use in Britain for draining hitherto unworkable
deep mines, with the engine on the surface; these were large machines, requiring a lot of capital to
build, and produced about 5 hp (3.7 kW). They were extremely inefficient by modern standards, but
when located where coal was cheap at pit heads, opened up a great expansion in coal mining by
allowing mines to go deeper. Despite their disadvantages, Newcomen engines were reliable and easy to
maintain and continued to be used in the coalfields until the early decades of the 19th century. By 1729,
when Newcomen died, his engines had spread (first) to Hungary in 1722, Germany, Austria, and
Sweden. A total of 110 are known to have been built by 1733 when the joint patent expired, of which 14
were abroad. In the 1770s, the engineer John Smeaton built some very large examples and introduced a
Chemicals
The large scale production of chemicals was an important development during the Industrial Revolution.
The first of these was the production of sulphuric acid by the lead chamber processinvented by the
Englishman John Roebuck (James Watt's first partner) in 1746. He was able to greatly increase the scale
of the manufacture by replacing the relatively expensive glass vessels formerly used with larger, less
expensive chambers made of riveted sheets of lead. Instead of making a small amount each time, he
was able to make around 100 pounds (50 kg) in each of the chambers, at least a tenfold increase.
The production of an alkali on a large scale became an important goal as well, and Nicolas
Leblanc succeeded in 1791 in introducing a method for the production of sodium carbonate. TheLeblanc
process was a reaction of sulphuric acid with sodium chloride to give sodium sulphate andhydrochloric
acid. The sodium sulphate was heated with limestone (calcium carbonate) and coal to give a mixture
of sodium carbonate and calcium sulphide. Adding water separated the soluble sodium carbonate from
the calcium sulphide. The process produced a large amount of pollution (the hydrochloric acid was
initially vented to the air, and calcium sulphide was a useless waste product). Nonetheless, this
synthetic soda ash proved economical compared to that from burning specific plants (barilla) or
from kelp, which were the previously dominant sources of soda ash,[22] and also to potash (potassium
inventions, replacing many small-scale operations with more cost-effective and controllable processes.
Sodium carbonate had many uses in the glass, textile, soap, and paper industries. Early uses for
sulphuric acid included pickling (removing rust) iron and steel, and for bleaching cloth.
The development of bleaching powder (calcium hypochlorite) by Scottish chemist Charles Tennant in
about 1800, based on the discoveries of French chemist Claude Louis Berthollet, revolutionised the
bleaching processes in the textile industry by dramatically reducing the time required (from months to
days) for the traditional process then in use, which required repeated exposure to the sun in bleach
fields after soaking the textiles with alkali or sour milk. Tennant's factory at St Rollox, North Glasgow,
In 1824 Joseph Aspdin, a British bricklayer turned builder, patented a chemical process for
making portland cement which was an important advance in the building trades. This process
involves sintering a mixture of clay and limestone to about 1,400 °C (2,552 °F), then grinding it into a fine
powder which is then mixed with water, sand and gravel to produce concrete. Portland cement was
used by the famous English engineer Marc Isambard Brunel several years later when constructing
the Thames Tunnel Cement was used on a large scale in the construction of the London sewerage
After 1860 the focus on chemical innovation was in dyestuffs, and Germany took world leadership,
building a strong chemical industry A spring chemists flocked to German universities in the 1860-1914
era to learn the latest techniques. British scientists by contrast, lacked research universities and did not
train advanced students; instead the practice was to hire German-trained chemists
Gas lighting
Another major industry of the later Industrial Revolution was gas lighting. Though others made a
similar innovation elsewhere, the large scale introduction of this was the work of William Murdoch, an
employee of Boulton and Watt, the Birmingham steam engine pioneers. The process consisted of the
large scale gasification of coal in furnaces, the purification of the gas (removal of sulphur, ammonia, and
heavy hydrocarbons), and its storage and distribution. The first gas lighting utilities were established in
London between 1812-20. They soon became one of the major consumers of coal in the UK. Gas
lighting had an impact on social and industrial organisation because it allowed factories and stores to
remain open longer than with tallow candles or oil. Its introduction allowed night life to flourish in cities
and towns as interiors and streets could be lighted on a larger scale than before.
The latest data for Index of Industrial Production (IIP) has been released for the month of October 2008.
It shows that industrial growth in India has turned negative for the first time since 1993. According to
figures of IIP, the overall growth rate of industrial production as measured by the IIP has been -0.4% in
The detailed data for the IIP is given in the following table:
Growth Rate of Industrial Production over the corresponding period of the previous year
Month Mining Manufacturing Electricity General
Source: Press Note -: Quick Estimates of Index of Industrial Production and Use-based Index (Base 1993-
From the above table it is seen that the growth rate of the overall index declined from a high value of
12.2% in October 2007 to a negative -0.4% in October 2008. If we compare the growth rates of April-
October 2007 and that of 2008 we see that the growth rate declined from 9.9% in 2007 to 4.1% in 2008.
In September 2008, this growth rate was 4.8%. (Source: http://mospi.nic.in/mospi_iip.htm). This
massive decline in the growth rate of the overall industrial index is driven mainly by a drastic fall in the
It is seen from the above table that the growth rate of Manufacturing registered the maximum fall,
whereby it declined from 13.8% in October 2007 to a negative -1.2% in October 2008. On the other
hand, the growth rate of manufacturing declined to 4.1% in April-October 2008 as compared to 9.9% in
the same period in the previous year. The growth rate of manufacturing in September 2008 was 4.8%.
sector has resulted in a negative growth rate for the overall IIP.
As far as mining is concerned, it is seen that the growth rate declined from 5.1% to 2.8%, while there has
been a minor increase in the growth rate of electricity production from 4.2% to 4.4%.
Let us also look into the growth rate of the 6 core infrastructure companies, whose figures have also
Petroleum
Products
(carbon)
Overall 26.7 4.6 3.4 6.6 3.9
December 2008
From the above figure it is clear that the overall growth rate of the infrastructure industries declined
from 4.6% in October 2007 to 3.4% in October 2008. There was a massive decline in the growth rate of
steel production from 5.2% to a negative growth of -0.5%. It is seen that the growth rate of cement
The above two tables show that there has been very significant slowdown in the industrial sector
growth rate in India, which is almost spread across the board. In order to understand the nature of this
decline in the growth rate of industrial production, let us first look at the Use-Based categorization of
Source: Press Note -: Quick Estimates of Index of Industrial Production and Use-based Index (Base 1993-
October 2008 as compared to October 2007. The most noteworthy aspect is the fact that there has been
a drastic decline in the growth rate of capital goods industries, which declined from a very high figure of
20.9% in October 2007 to a low figure of 3.1% in October 2008. if we consider the intermediate
industries, then also a similar picture emerges, where the growth rate declined from 13.9% ion October
2007 to a negative growth rate of -3.7% in October 2008. Similar is the story of the consumer goods
industries, where the growth rate declined from 13.7% in October 2007 to -2.3% in October 2008.
Within the consumer goods sector, the growth rates of both consumer durables as well as non-durables
turned negative in October 2008, while both these growth rates were quite high in October 2007.
The question is what explains this overall slow down in the growth rate of industrial production in India.
Firstly, it must be remembered that the Indian economy has been adversely affected by the global
financial crisis. It has been the case that as a result of the global economic crisis, there has been a crisis
of credit even in the Indian economy. As a result, banks have become more stringent in giving loans to
individuals or companies to meet their consumption or investment needs. This has adversely affected
the investment decisions of firms and companies. As a result we are witnessing that the growth rate of
production of capital goods industry has declined sharply in the country. Capital goods production
essentially depends on the investment decisions of firms. In a situation where the overall economic
scene is positive,firms increase their investments which get reflected in an increase in the production of
capital goods. By the same logic, a sharp decline in the production of capital goods essentially shows
Why have firms become reluctant in taking investment decisions? One reason for firms’ reluctance to
make investments has been already mentioned in the previous paragraph which is in terms of higher
interest rates on loans. There is however an additional reason for this reluctance, which is the following.
Investment decisions of firms are based upon expectations of the future which in turn is formed on the
basis of the demand performance at the present. If at present, there is a drop in demand, then for the
firms this will manifest itself as an increase in their unutilized capacity and/or a build up of
their inventories.In this case, the firms perceive that their earlier investment decisions were
overestimates, since there exist unutilized capacities and therefore they cut back on investment
decisions. To some extent this is currently happening in the Indian economy. We have seen how big
firms like TATA Motors or Ashok Leyland closed down their units for some days or JSW steel cutting
production and so on and so forth. This is nothing but a manifestation of a demand problem, which is
reflected in the fact that the growth rate of the consumer goods sector has turned negative in October
2008 from a very high level in October 2007 as has been shown in the above table.
Now, the question is what accounts for the fall in the demand in the Indianeconomy,which is reflected
in the drastic fall in the growth rate of consumer goods. It must first be noted that the demand in the
Indian economy which has led the good growth performance of the last few years is very narrowly
based. It stems mainly from the demand of the rich and the middle class based upon easy loans made
available to them by banks. Now, with the global financial crisis hitting India, the banks stopped giving
easy loans which has resulted in the decline in demand for consumer goods, particularly consumer
durables in India. At the same time, with massive poverty existing, particularly in the Indian countryside,
there is very little demand that this segment of the population generates. Therefore, what is needed is a
plan of action which tries to put more purchasing power in the hands of the poor, whose demand can
then increase the overall demand base in the economy and lead India towards a sustained demand led
growth.
On the other hand it has also been the case that in the fact of global recession, particularly in
the USA, India’s exports have also been badly hit. In fact the export growth in October 2008 has been
negative, the lowest in many years. So, the external demand for Indian industrial output has also not
rich and middle class on the basis of soft loans, what is essential is interest cuts, which will then
automatically increase the demand in the economy. This however is not necessarily the case. The
present crisis is a crisis of confidence, where even with low interest rates, banks might just refuse to
lend to any borrowers other than the truly credit worthy one. On the other hand, given the uncertainties
in the market, the borrowers are also less than willing to take such loans. In other words, only an
injection of liquidity in the market may not solve the problem, since people may just hold on to the
excess liquidity without creating any demand, a case which Keynes called the liquidity trap. The current
world as well as the Indian economic situation is akin to this phenomenon. (See, ‘In Search of a real
Stimulus’, Jayati Ghosh, Another argument can be made at this point which is the following. Even if it is
granted that by a mere reduction of interest rates will not solve the problem,the current stimulus
package announced by the Government will take care of the problem which talks about an additional
fiscal stimulus and also tax cuts in the form of a cut in excise duties. Firstly, it needs to be pointed out
that the fiscal expenditure of Rs 20,000crores planned by the Government is only 0.5% of
the IndianGDP and is grossly inadequate to quell the crisis. Secondly, the tax cuts in terms of cuts in
excise duties will increase demand only if they are passed on to the consumers through a price cut.
More importantly, however such cuts in the excise duties is aimed at only a short term solution of giving
rise to a demand bubble based on lower prices. But it completely ignores the aspect of increasing the
purchasing power of the poor by direct intervention of the state in funding the Public Distribution
System, expenditure in rural areas etc. In short the current stimulus package is inadequate to meet the
Questionnaire:-
No 53 26.5
Respondents
147
53
yes no
Interpretation:-the above analysis is showing organization is quality conscious toward
yes 18 9
no 182 91
Respondents
182
18
yes no
Interpretation :- the above analyses about the organization have the certification of ISO 9000
YES 168 84
NO 32 16
persantage
NO
16%
YES
84%
Interpretation :- the above analyses about the organization providing quality assurance system
& operation 84% are say yes and 16% are say no.
4. Does the organization have quality circle?
NO 75 37.5
Percentage
62.5
37.5
YES NO
Interpretation:- the above analysis are showing organization have quality circle 62% are aware
Below 10 83 41.5
above 10 15 7.5
above 15 11 5.5
Respondents
100
90
80
70
60
50
Respondents
40
30
20
10
0
Below 10 above 10 above 15 can’t say
Interpretation:-the above chart showing 41% are maintain below 10 employees are in quality
Weekly 14 7
biweekly 25 12.5
monthly 79 39.5
yearly 82 41
Percentage
41
39.5
12.5
circle 75 are weekly , 12.5% are biweekly ,39% are monthly, 41% are yearly in the total 200
members
7. Do you know about the agenda of information or any other information?
Yes 138 69
No 62 31
Respondents
138
62
Yes No
Interpretation:-the above chart showing 69% are says yes know about the agenda of
NO 45 22.5
can’t say 68 34
34
22.5
Interpretation:-77% no idea about the organization is going for the quality audit, 22% no idea
YES 116 58
NO 72 36
can’t say 12 6
can’t say
6% Percentage
NO
36%
YES
58%
Interpretation:-that above survey about the organization has quality information system 58%
told yes 36% say no 6% are not say anything about the quality information system.
10.Are the information system is regularly updated?
YES 82 41
NO 73 36.5
Percentage
Percentage
41
36.5
22.5
Interpretation:- the above analysis about the information system is regularly updated 41% say
Option Resp %
No 20 10%
160
140
75%
120
100
Series2
80 150 Series1
60
40
20 10% 15%
30
20
0
Yes No Can't Say
1. Total Quality Management plays important role for focusing improvement of quality
2. It is the basis for improve the quality characteristics both internal and external
customers. By implementing the TQM customer satisfaction has been improved and
5. By forming the quality circles, employees are delighted for the ideas they are generated
7. Implementation of statistical tools in the shop floor quality has been improved by 60 to
8. Company has improved the exports orders after implementing the TQM
1. Anderson J., Rungtusanatham M., Schroeder, R., 1994. A Theory of Quality Management
2. Business Week, 1992. Quality: Small and midsize companies seize the challenge - not a
3. Crosby P., 1979. Quality is Free: The Art of Making Quality Certain. McGraw-Hill.
4. Deming, E.W., 1986. Out of crisis. Cambridge University Press. MGrant, R.M., Shani R.,
6. Juran J.M., 1974. The Quality Control Handbook, 3rd edition. McGraw-Hill. New York.
7. Powell, T., 1995. Total Quality Management as Competitive Advantage: a Review and
Questionaire:-
YES NO
a. YES NO
3. Is the organization providing quality assurance system & operation?
a. YES NO
a. YES NO
a. YES NO