Trends in regional industrial growth in India

The purpose of this paper is to provide a profile of regional industrial growth in wake of the competition among Indian states to accelerate the pace of industrialization. The results indicate tendency towards concentration of manufacturing activities even in the reform era.

The attempt is to compare trends since 1991 to the earlier decade and decipher the extent of the effectiveness of policy changes in disbursing industrial activity regionally.

The paper finds that organized manufacturing activity is concentrated in few states. The early movers continue to dominate cornering substantial share of the national industrial investments and production. Even in an era of market reforms the trend continues. This indicates a degree of “path dependence” in industrialization in the economy. There seems to be slight dispersal of activities in the unorganized segment. New forms of organization of production have fostered industrial growth in the unorganized segment. However, regions which dominate in the organized segment have been able to increase their share in the value added of the unorganized segment as well.

There is dearth of studies that examine the extent of the effectiveness of policy changes in disbursing industrial activity regionally.