Gupta, Poonam and Kumar, Utsav (2010): Performance of Indian Manufacturing in the Post Reform Period. Forthcoming in:
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Many emerging countries in recent decades have relied on a development strategy that focused primarily on promoting the manufacturing sector and the exports of manufactured goods. However, an acceleration of growth of output and employment in manufacturing has eluded India. This is despite the fact that the central focus of the reforms in the 1980s and 1990s was to unshackle the manufacturing sector. Instead it is the services sector which has grown rapidly, contributing about two-third of GDP growth in recent years. This paper discusses the reasons behind the modest performance of the manufacturing sector in India post reforms. It argues that there are many factors that have inhibited the growth of industrial sector in India. One major factor is the rigid and strict labor laws which have affected the industrial performance in a number of ways, by keeping the size of the establishments small, by not encouraging the production of labor intensive goods, by pushing activities to the unorganized sector, and by keeping the Indian industry uncompetitive. Besides the labor laws other factors that are responsible for the modest performance of the manufacturing sector include difficulty in the acquisition of land for industrial use, inadequate financing and infrastructure, and cumbersome business climate. The paper presents arguments and evidence which shows the importance of these factors.
|Item Type:||MPRA Paper|
|Original Title:||Performance of Indian Manufacturing in the Post Reform Period|
|English Title:||Performance of Indian Manufacturing in the Post Reform Period|
|Keywords:||Delicesning, employment, growth, India, infrastructure, labor market regulations, liberalization, manufacturing, reforms, services|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O10 - General
O - Economic Development, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East
L - Industrial Organization > L5 - Regulation and Industrial Policy > L50 - General
L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General
|Date Deposited:||14. Sep 2010 11:36|
|Last Modified:||12. Feb 2013 02:19|
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