
Contents
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10.1 Introduction 10.1 Introduction
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10.2 Stylized facts and preliminary evidence 10.2 Stylized facts and preliminary evidence
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Indian policy framework Indian policy framework
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Performance of Indian manufacturing Performance of Indian manufacturing
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10.3 Evidence from enterprise surveys 10.3 Evidence from enterprise surveys
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10.4 Econometric analysis 10.4 Econometric analysis
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Construction of variables Construction of variables
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Empirical results from the ASI data Empirical results from the ASI data
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Econometric framework Econometric framework
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Robustness of results Robustness of results
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10.5 Conclusion 10.5 Conclusion
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Appendix 10A. Data sources and construction of variables Appendix 10A. Data sources and construction of variables
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10 10 What Constrains Indian Manufacturing?
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Published:April 2010
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Abstract
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 Annual Survey of Industries data at the three-digit level and difference in estimates this chapter finds that the post-reform performance of the manufacturing sector is heterogeneous across industries. In particular, industries dependent on infrastructure or external finance, and 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 clearly identify and address the factors inhibiting the growth of labor-intensive industries.
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