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

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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.

Faltering Manufacturing Growth and Employment

Declining growth and a stagnating employment share of manufacturing in a high-growth regime in India are disconcerting, given the pride of place assumed by manufacturing as the "engine of growth." The sustainability of high growth is linked intrinsically to a trajectory that creates gainful employment. This paper argues that the manufacturing sector, which recorded declining employment elasticity in the organised sector, will not be able to mend the gap between growth and employment. Rather the goal of rejuvenating manufacturing has to be contextualised in a larger strategy of full employment with interventions related to demand structures, technology, size structure of firms, as well as a calibrated engagement with the global market.

Continuous Revisions Cast Doubts on GDP Advance Estimates

Two recent press releases by the Central Statistics Office substantially revise the new series of National Accounts Statistics. The new releases are more than just routine updates, and entail methodological changes and incorporate new sources of data, perhaps in response to various critiques. Yet, on comparing the advance estimates released with past such estimates, the CSO's latest growth projections once again turn out to be far too optimistic.

Industrial Policy and Performance since 1980: Which Way Now?

Since 1980-81, manufacturing sector output has grown at 7 per cent per year, with economic reforms making little difference to the trend in the 1990s. But growth has decelerated over the last seven years, after peaking in 1995-96. Why is this so? The reforms have narrowly focused on policy-induced restrictions on supply, ignoring the demand constraint due to the cut in public infrastructure investment since the late 1980s, and indifferent agricultural performance in the 1990s. These issues have to be squarely addressed to revive industrial growth, and to reap the benefits of the investment boom in organised manufacturing in the last decade.

TFPG in Manufacturing: The 80s Revisited

Establishing accelerated productivity growth in the 1980s is contingent on the use of single deflation, a procedure flawed in principle. There is no credible option to double deflation when working with value added as the output measure in physical terms.

Fertiliser Industry in India: Moulded by Government Policies

Government policies on the fertiliser sector have been uncertain and inconsistent in the past decades, resulting in a growing subsidy burden and distortion of the optimal ratio of N P K consumption, especially after partial decontrol. Several studies and commissions have presented their conclusions on the retention pricing scheme, plant capacity assessments and subsidy reduction. These include among others, total decontrol of the sector in a time-bound manner. But political compulsions are likely to determine the vigour and pace of reforms in the fertiliser sector.

Economic Reforms and Industrial Structure in India

This paper focuses on the impact of India's economic reforms on industrial structure and productivity. It reveals a disappointing overall performance in both output growth and employment. This, however, is not the result of exogenous factors,but the consequence of the type of policies being followed under economic reforms. If mistakes were made in the past, they need to be corrected. But efforts should be made to ensure that demand is high enough for more output to be produced, more people to be employed, poverty to be reduced.

Strange Alliances

Shankar Gopal, in ‘American AntiGlobalisation Movement’ (EPW, August 25-31), forcefully argues that American groups protesting in Seattle in 1999 often ignored the concerns of developing nations about the inclusion of a labour rights ‘social clause’ in trade agreements. Too often, concerns of economic protectionism expressed by developing nations’ governments and trade unions were dismissed as elite driven and overly nationalistic. No doubt this is true. At the same time, however, I believe that activists and scholars in the developing world who are engaged with these issues also need to question their own assumptions about the motivations behind western support for a social clause. By sticking firmly to conventional wisdom (on both sides), unintended and strange political alliances are formed that cannot be helpful for workers. Instead, a new international dialogue needs to take place about how trade might be used to improve the lives of workers everywhere.

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