Manufacturing Growth and Liberalisation in India (1960-1999): A Demand Side Analysis

Rahul Amolak Shastri

Industrial Organization from EconWPA

Abstract: The trend in manufacturing has not shifted post-91. Liberalisation shares in the high trend phase in manufacturing, that was ushered in after 1981, which continued even after 1991. Liberalisation however, seems to have changed the structure of demand responses of manufacturing output. In contrast to pre-liberalisation years, after 1991, manufacturing growth seems to have become highly sensitive to growth in personal consumption expenditure. After 1991, a one percentage point increase in personal consumption expenditure seems to change manufacturing growth by nearly 2 percentage points! Liberalisation also seems to have increased the responsiveness of manufacturing growth to fluctuations in growth of gross capital formation and exports. However, the increase in responsiveness to changes in export growth is not statistically significant.

Keywords: Liberalisation; Indian Manufacturing; Demand-side analysis; personal consumption; exports; Keynesian Economics (search for similar items in EconPapers)
JEL-codes: A E L N (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his and nep-mac
Date: 2005-04-15
Note: Type of Document - pdf; pages: 7
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpio:0504018

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