ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Quest for an Indian Manufacturing Future

Industrialisation for Employment and Growth in India: Lessons from Small Firm Clusters and Beyond edited by R Nagaraj, New Delhi: Cambridge University Press, 2021; p 260, ` 950 (hardback).

Mobile Phone Manufacturing in India

In financial year 2019, India produced around 29 crore units of mobile phones, which comes to an investment of around `2,780 crore, at 2017 prices. These investment figures turn out to be much lower than those reported in the popular press. Original equipment manufacturers and electronic manufacturing service firms dominate the Indian manufacturing scene. The analysis of the five-digit Annual Survey of Industries data for 2016–17 and 2017–18 makes it apparent that the impetus towards domestic assembly of mobile phones through various policy measures has made a positive impact on the growth of investments, particularly in plant and machinery assets. As a result, the direct employment generated per unit fixed asset has decreased in 2017–18. Value addition for a majority of the firms at the five-digit level was less than 10% in 2017–18.

India’s Withdrawal from RCEP

One major driver behind India’s decision to embrace the “eastern” regional trade agreements during 2010–11 and graduate from the “Look East Policy” (1991) to the “Act East Policy” (2014) has been the urge to integrate the domestic manufacturing sector with “Factory Asia.” The article analyses India’s trade pattern through an endogenous structural break analysis with monthly data for 10 major sectors, involving the Association of Southeast Asian Nations, China, Japan, and South Korea separately. The analysis concludes that the recent stream of events in the aftermath of the COVID-19 pandemic offers India an opportunity to consolidate the domestic manufacturing sector.

National Manufacturing Policy

With the introduction of the National Manufacturing Policy, 2011, India envisioned capacity expansion and sustainable growth. As the NMP is approaching its target deadline of 2022, this article is a reality check on the progress of its major objectives. Introspecting these objectives, it argues for the need to devise and enact the rehabilitation of manufacturing strategies to suit the changing times.

Rural–Urban Linkages in Bihar

The growth of the manufacturing sector is important for employing a growing labour force and much is also dependent on their skill level. Enterprise surveys in six sample towns of Bihar, a state characterised by slow industrialisation and urbanisation, find evidence of fairly strong rural–urban linkages for manufacturing enterprises. Although the linkages indicate that the manufacturing sector has the maximum potential to create employment by absorbing the surplus labour in the rural areas, it was found that this sector has been languishing in the sample towns. The findings also flag the challenges and areas of growth for industries.

Revisiting the GDP Estimation Debate

The National Accounts Statistics series with the base year 2011–12 raised controversy on the integrity of the gross domestic product estimates. The revised growth rates are significantly higher than the earlier figures and are out of line with macroeconomic covariates, especially for the...

The Real i in the Apple Universe

Dying for an iPhone: Apple, Foxconn and the Lives of China’s Workers by Jenny Chan, Mark Selden and Pun Ngai, Chicago: Haymarket Books, 2020; pp xvi + 277, $19.95.

Time for a Massive Fiscal Stimulus

Only bold interventions by the government can ensure a quick recovery of the economy.

Fighting Fires: Migrant Workers in Mumbai

Migrant workers in one of Mumbai’s most industrially dense areas with 3,500 small manufacturing and recycling units face a number of hazards, with fires being among the common ones. This article looks closely at the causes and aftermaths of these fires and notes how the workers cope with them even as their skills and knowledge prevent even bigger accidents.

Trade Liberalisation and Women’s Employment Intensity

Whether trade can be used as an instrument for generating greater employment opportunities for women is an important question for policymakers in developing countries. This paper analyses the role of various trade-related factors in determining female employment intensity in a panel of India’s manufacturing industries during 1998–2011. Import tariff rate is found to exert a negative effect on female employment intensity, supporting the hypothesis that firms, when exposed to international competition, tend to reduce costs by substituting male with female workers. Further, the relative demand for female workers increases to the extent that trade liberalisation leads to resource reallocation in favour of unskilled labour-intensive industries. By contrast, greater use of new technology biases the gender composition of workforce against females. Liberalisation has not led to large growth of female employment in India because the resource reallocation effect has not been strong enough to offset the negative technology effect.

The Nokia SEZ Story

The closure of Nokia's mobile phone assembly plant in Sriperumbudur, near Chennai, just eight years after it commenced production, illustrates how corporations can quit operations at a point when it is no longer profitable for them to continue, while the impact of such closures on workers is profound. The special economic zones policy of the state actively promoted corporate-led industrialisation promising employment, and creating aspirations among young workers. There was no accountability or labour-centred exit policies factored into the state's industrial policies when state governments welcomed private investments. With the closure of Nokia, not only have promises been broken, but its workers and supply companies have lost their livelihoods and future possibilities of work.

What Causes Agglomeration— Policy or Infrastructure?

How significant are industrial dispersal policy incentives for agglomeration of organised manufacturing in India? Using plant-level data for 1997-98, the locational choices of 66 manufacturing industries in 21 Indian states are investigated. First, the degree of agglomeration (Ellison-Glaeser index) is calculated in each of these industries to ascertain in which states they are clustered, followed by an econometric investigation of industrial dispersal policy after controlling for different factors that affect agglomeration. The analysis yields that the dispersal policy has not been successful in most specifications. Factors like presence of infrastructure, coastlines, and labour market pooling determine agglomeration. The results also indicate that the nature of the product, high electricity tariff, and per capita energy gap have induced several industries to disperse.

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