Growth Episode of the Eighties D N Sen Gupta This paper reviews the process of growth in Indian manufacturing in the 80s with a view to exploring the broad interlinkages between growth and the various elements that impinge on it, such as demand, productivity, costs and prices, investment, employment, structural change and the balance of commodity trade Introduction IN many ways, the decade of the 80s was one of the most interesting periods in the history of Indian manufacturing industry. During this period, it broke loose from a state of stagnancy that had persisted foi much of the two previous decades. The rate of growth achieved was high not only by Indian standards, but comparable to that of star performers like Korea, Indonesia, Malaysia, Thailand and Turkey. Unlike during the first three Five-Year Plans, growth during this period was not externally induced. It came naturally, in response to a relaxation in policy-based constraints to growth and set in motion a number of highly desirable outcomes. Even so, this growth episode was terminated rather abruptly at the end of the decade, when the government resorted to a programme of demand contraction and import compression to tackle a balance of payments (BoP) crisis of unprecedented magnitude.
