What Constrains Indian Manufacturing? [chapter]

Poonam Gupta, Rana Hasan, Utsav Kumar
2010 Emerging Giants  
India has undertaken extensive reforms in its manufacturing sector in the last two 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 ASI data at the three digit level and difference in differences estimates this paper finds that the post reforms performance of the manufacturing sector is heterogeneous across industries. In particular, industries dependent on infrastructure, or on
more » ... xternal finance, and the labor intensive industries 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 fully identify and address the factors inhibiting the growth of labor-intensive industries.
doi:10.1093/acprof:oso/9780199575077.003.0010 fatcat:4rrekh2o7ng67g3awdufxbtdyi