Industrial Growth-Further Evidence and towards an Explanation and Issues

This paper, first, provides some further evidence (in support of our earlier findings) on the growth of manufacturing output in the eighties using the Annual Survey of Industries. Noting the limitations of attributing the improved growth rate mainly (or solely) to an increase in the output of consumer durables and/or to the (once over) changes in the policies, the paper then attempts to explore the possible 'real' factors to account for the observed phenomenon in the context of the debate on industrial growth and 'stagnation' A re-examination of some of the prominent hypotheses in the light of the experience of the eighties suggests (a) some favourable changes in the composition of capital formation, (b) an improvement in the rate and structure of public investment in general and (perhaps as a result of it) performance of infrastructure industries in particular, and (c) a reversal of the adverse movement in intersectoral terms of trade; all of which could have favourably contributed to the observed higher growth rate of the manufacturing sector..