Journal of Commerce and Accounting Research

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Growth of the Industries under Alternative Policy Regimes:A Disaggregated Policy Review with Special Reference to Indian Manufacturing Sector


Affiliations
1 Department of Commerce, The University of Burdwan, West Bengal, India
     

   Subscribe/Renew Journal


The ever increasing role of the manufacturing sector in realising the dreams of establishing the 'socialistic pattern of the society' can never be undermined in the context of Indian economy. Since independencea number of industrial policies were taken up to foster the growth of manufacturing sector and other industries in India. The first phase of globalisation measures were initiated in late 1980s which resulted into an unsustainable growth story led by huge external borrowing andthat ultimately culminated into the exchange rate crisis of 1991. In combating with such a severe crisis, the New Economic Policy was promulgated on 24th July, 1991 following the Structural Adjustment Programme (SAP) initiated by the Government of India as per IMF directions. The present paper evaluates the growth of the industry especially manufacturing industry under alternative policy regimes. Aggregate data on national economy and manufacturing sector were collected from National Account Statistics accessed from EPW Research Foundation database. The analysis of the study suggested that the growth of GDP of Indian economy and manufacturing sector (both registered and unregistered) stepped up notably in the post-liberalisation period as compared to those in the pre-liberalisation era indicating the positive impact of the liberalisation measures on the economy in general and manufacturing sector in particular. The capital formation of the manufacturing sector was also positively influenced by the pro-market reforms policies initiated in the late 1980s and in the early 1990s. The productivity of the manufacturing sector improved in the post-liberalisation era as compared to the pre-reform period as signified by the decreasing capital output ratio in the post-reform regime.

Keywords

New Economic Policy, GDP, Capital Formation, Liberalisation, Regulation, Industry.
Subscription Login to verify subscription
User
Notifications
Font Size


  • Aghion, P., Comin, D., Howitt, P., & Tecu, I. (2006, May). When does domestic savings matter for economic growth? NBER Working Paper Series Number 12275 (pp. 1-46), Cambridge, USA.

  • Bosworth, B., Collins, S. M., & Virmani, A. (2007, February). Sources of growth in the Indian economy, NBER Working Paper Series Number 12901 (pp. 1-65), Cambridge, USA.

  • Chari, A. (2007, November). License reform in India: theory and evidence. Working Paper, Department of Economics, Yale University, New Haven, Connecticut.

  • Fujita, N. (1994). Liberalization policies and productivity in India. Developing Economies, 32(4), 509-524.

  • Ghosh, A. (1956). Capital output ratio: Its uses and abuses. The Economic Weekly, 6(4), 707-710.

  • Hooley, R. W. (1967). The measurement of capital formation in underdeveloped countries. The Review of Economics and Statistics, 49(2), 199-208.

  • Joshi, V., & Little, I. M. D. (1996). India’s economic reforms: 1991-2001. Oxford University Press, United Kingdom.

  • Kochhar, K., Kumar, U., Rajan, R., Subramanian, A., & Tokatlidis, I. (2006), India’s pattern of development: What happened, what follows? Journal of Monetary Economics, 53(5), 981-1019.

  • Kotwal, A., Ramaswami, B., & Wadhwa, W. (2011), Economic liberalization and Indian economic growth: What’s the evidence? Journal of Economic Literature, 49(4), 1152-1199.

  • Mitra, D., & Ural, B. P. (2008). Indian manufacturing: A slow sector in a rapidly growing economy. The Journal of International Trade & Economic Development, 17(4), 525-559.

  • Nomura, K. (2005, March). Turn the tables! Reframing measurement of capital in Japanese national accounts. Paper presented at the Conference on the Next Steps for the Japanese SNA, Tokyo, Japan.

  • Panagariya, A. (2004). Growth and Reforms during 1980s and 1990s. Economic and Political Weekly, 39(25), 2581-2594.

  • Rajan, R. G. (2006). Has finance made the world riskier? European Financial Management, 12(4), 499-533.

  • Rajan, R. G. (2006a). India: The past and its future. Asian Development Review, 23(2), 36-52.

  • Rodrik, D., & Subramanian, A. (2005). From Hindu growth to productivity surge: the mystery of the Indian growth transition. IMF Staff Papers, 52(2), 193-228.

  • Rostow, W. W. (1990). The stages of economic growth: A non-communist manifesto. Cambridge university press, England.

  • Soo, K. T. (2008). From License Raj to Market Forces: The Determinants of Industrial Structure in India after Reform. Economica, 75(298), 222-243.

  • Van der Eng, P. (2009). Capital formation and capital stock in Indonesia, 1950-2008. Bulletin of Indonesian Economic Studies, 45(3), 345-371.

  • Virmani, A. (2006). India’s economic growth history: Fluctuations, trends, break points and phases. Indian Economic Review, 41(1), 81-103.

  • Wallack, J. S. (2003). Structural breaks in Indian macroeconomic data. Economic and Political Weekly, 38(41), 4312-4315.


Abstract Views: 290

PDF Views: 1




  • Growth of the Industries under Alternative Policy Regimes:A Disaggregated Policy Review with Special Reference to Indian Manufacturing Sector

Abstract Views: 290  |  PDF Views: 1

Authors

Sumit Kumar Maji
Department of Commerce, The University of Burdwan, West Bengal, India
Arindam Laha
Department of Commerce, The University of Burdwan, West Bengal, India
Debasish Sur
Department of Commerce, The University of Burdwan, West Bengal, India

Abstract


The ever increasing role of the manufacturing sector in realising the dreams of establishing the 'socialistic pattern of the society' can never be undermined in the context of Indian economy. Since independencea number of industrial policies were taken up to foster the growth of manufacturing sector and other industries in India. The first phase of globalisation measures were initiated in late 1980s which resulted into an unsustainable growth story led by huge external borrowing andthat ultimately culminated into the exchange rate crisis of 1991. In combating with such a severe crisis, the New Economic Policy was promulgated on 24th July, 1991 following the Structural Adjustment Programme (SAP) initiated by the Government of India as per IMF directions. The present paper evaluates the growth of the industry especially manufacturing industry under alternative policy regimes. Aggregate data on national economy and manufacturing sector were collected from National Account Statistics accessed from EPW Research Foundation database. The analysis of the study suggested that the growth of GDP of Indian economy and manufacturing sector (both registered and unregistered) stepped up notably in the post-liberalisation period as compared to those in the pre-liberalisation era indicating the positive impact of the liberalisation measures on the economy in general and manufacturing sector in particular. The capital formation of the manufacturing sector was also positively influenced by the pro-market reforms policies initiated in the late 1980s and in the early 1990s. The productivity of the manufacturing sector improved in the post-liberalisation era as compared to the pre-reform period as signified by the decreasing capital output ratio in the post-reform regime.

Keywords


New Economic Policy, GDP, Capital Formation, Liberalisation, Regulation, Industry.

References