The role of monetary and fiscal policy in industrial development: industrial revolution in developing countries

The purpose behind to construct the macroeconomic policies is to stabilize the fluctuation in business cycle. Usually, fiscal and monetary policies in industrial countries have been expansionary in response to weak domestic conditions.In spite of high prevalence of vulnerable employment and working poverty in developing Asia, full employment is not a legislated objective of any industrial countries. This paper presents a broad overview of fiscal issues dealing with developing countries. We focus the factors which associated to weak institutional framework that play a key role in explaining sub-optimal policy decisions and weak integration to either domestic or international financial markets.In this paper we investigate the multifaceted correlation between industrial development and economic structure, by focusing on one of its trade implications, the effect of international specialization patterns on export performances of countries.This analysis is stand on secondary data which is based on industrial policy of India, ILO, Indian government-annual industrial growth data and World Bank report. This study is favored by critical approach and shows that the trade performances and their evolution over time can be explained by the specialization pattern in the international distribution of economic activities as well as macroeconomic aspects.