Economic Reforms and Productivity Trends in Indian Manufacturing

This paper analyses the trends in growth and efficiency in the utilisation of resources in the Indian manufacturing industry before and after the introduction of economic reforms. It uses a comparative analysis of all-India figures with Gujarat, one of the most industrially developed states of the country. The study shows that both the organised and unorganised sectors in Gujarat seemed to be doing better than the all-India average in terms of growth of value added. Growth in the manufacturing sector in Gujarat was also more efficient than average all-India growth after the reforms were introduced. Gujarat's strategy of physical infrastructure development, leading to industrialisation, has been the main reason for the growth of the state's manufacturing sector.