What Constrains Indian Manufacturing?

Poonam Gupta, Rana Hasan () and Utsav Kumar ()
Additional contact information
Rana Hasan: Asian Development Bank
Utsav Kumar: The Conference Board

No 119, ADB Economics Working Paper Series from Asian Development Bank

Abstract: India has undertaken extensive reforms in its manufacturing sector in the last 2 decades. However, an acceleration of growth in manufacturing, and a concomitant increase in employment, has eluded India. What might be holding the sector back? Using Annual Survey of Industries data at the 3-digit level, and difference in differences estimates, this paper finds that the post reform performance of the manufacturing sector is heterogeneous across industries. In particular, industries that were dependent on infrastructure or external finance and were labor-intensive have not been able to reap the maximum benefits of reforms. The results point to the importance of infrastructure development and financial sector development for the manufacturing sector's growth to accelerate further. They also emphasize the need to clearly identify and address the factors inhibiting the growth of labor-intensive industries.

Keywords: employment; growth; India; infrastructure; manufacturing (search for similar items in EconPapers)
JEL-codes: E23 O14 O25 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2008-08-01
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Citations: View citations in EconPapers (10)

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Working Paper: What Constrains Indian Manufacturing? (2008)
Working Paper: What Constrains Indian Manufacturing (2008)
Working Paper: What Constrains Indian Manufacturing?
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