Friday, August 29, 2008
[IWS] OECD: INDIA'S GROWTH PATTERN AND OBSTACLES TO HIGHER GROWTH [11 August 2008]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Organisation for Economic Cooperation and Development (OECD)
ECONOMICS DEPARTMENT WORKING PAPERS No. 623
INDIA'S GROWTH PATTERN AND OBSTACLES TO HIGHER GROWTH [11 August 2008]
http://www.olis.oecd.org/olis/2008doc.nsf/LinkTo/NT0000365A/$FILE/JT03249513.PDF
[full-text, 28 pages]
by Sean M. Dougherty, Richard Herd, Thomas Chalaux and Abdul Azeez Erumban
Abstract:
India's growth performance has improved significantly over the past 20 years, but has been uneven
across industries and states. While some service industries, notably in the information and communications
technology sector, have become highly competitive in world markets yielding considerable gains for
employees and investors manufacturing industries have lagged and improved their performance only
recently. A divergence in performance has taken place, with firms in those states and sectors with the best
institutions gaining, and those in the more tightly regulated states and sectors falling further behind. As a
result, the competitive landscape is uneven across sectors and states and a high degree of concentration
continues to prevail in different industries. While this is partly the result of the legacy of licensing, change
has been politically difficult, making it harder for the manufacturing sector than for the service sector to
expand. The need for further institutional reforms is urgent, focusing on product and labour market
regulations at the central and state levels.
TABLE OF CONTENTS
INDIA'S GROWTH PATTERN AND OBSTACLES TO HIGHER GROWTH .......................................... 5
Productivity gains from shifting labour out of agriculture have been modest ............................................ 5
Manufacturing's contribution to growth could be much greater ................................................................. 8
Labour costs in manufacturing are comparatively low ............................................................................ 8
Manufacturing has not fully exploited its comparative advantage ........................................................ 10
Manufacturing firms have remained very small in size ..................................................................... 11
Individual firms and industries benefited from reforms ........................................................................ 14
Productivity-enhancing resource reallocation nevertheless remains low .............................................. 15
High concentration in industries reduces productivity gains from liberalisation .................................. 17
Conclusion ................................................................................................................................................ 20
BIBLIOGRAPHY ........................................................................................................................................ 22
Tables
1. Labour productivity and employment shares by industry and institutional sector .................................. 7
2. Growth in the value of merchandise exports ......................................................................................... 10
3. International comparison of industry concentration in 2002 ................................................................. 18
Figures
1. Share of manufacturing by per-capita income ......................................................................................... 6
2. Relative employee compensation, productivity and unit labour costs .................................................... 8
3. Relative unit labour costs across countries .............................................................................................. 9
4. International comparison of the distribution of firm size in manufacturing .......................................... 12
5. Gains in productivity from larger plant size in India ............................................................................ 12
6. Distribution of TFP levels across industrial plants ................................................................................ 14
7. Measures of regional specialisation ...................................................................................................... 17
8. Rate of return on assets, public and private firms ................................................................................. 19
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Organisation for Economic Cooperation and Development (OECD)
ECONOMICS DEPARTMENT WORKING PAPERS No. 623
INDIA'S GROWTH PATTERN AND OBSTACLES TO HIGHER GROWTH [11 August 2008]
http://www.olis.oecd.org/olis/2008doc.nsf/LinkTo/NT0000365A/$FILE/JT03249513.PDF
[full-text, 28 pages]
by Sean M. Dougherty, Richard Herd, Thomas Chalaux and Abdul Azeez Erumban
Abstract:
India's growth performance has improved significantly over the past 20 years, but has been uneven
across industries and states. While some service industries, notably in the information and communications
technology sector, have become highly competitive in world markets yielding considerable gains for
employees and investors manufacturing industries have lagged and improved their performance only
recently. A divergence in performance has taken place, with firms in those states and sectors with the best
institutions gaining, and those in the more tightly regulated states and sectors falling further behind. As a
result, the competitive landscape is uneven across sectors and states and a high degree of concentration
continues to prevail in different industries. While this is partly the result of the legacy of licensing, change
has been politically difficult, making it harder for the manufacturing sector than for the service sector to
expand. The need for further institutional reforms is urgent, focusing on product and labour market
regulations at the central and state levels.
TABLE OF CONTENTS
INDIA'S GROWTH PATTERN AND OBSTACLES TO HIGHER GROWTH .......................................... 5
Productivity gains from shifting labour out of agriculture have been modest ............................................ 5
Manufacturing's contribution to growth could be much greater ................................................................. 8
Labour costs in manufacturing are comparatively low ............................................................................ 8
Manufacturing has not fully exploited its comparative advantage ........................................................ 10
Manufacturing firms have remained very small in size ..................................................................... 11
Individual firms and industries benefited from reforms ........................................................................ 14
Productivity-enhancing resource reallocation nevertheless remains low .............................................. 15
High concentration in industries reduces productivity gains from liberalisation .................................. 17
Conclusion ................................................................................................................................................ 20
BIBLIOGRAPHY ........................................................................................................................................ 22
Tables
1. Labour productivity and employment shares by industry and institutional sector .................................. 7
2. Growth in the value of merchandise exports ......................................................................................... 10
3. International comparison of industry concentration in 2002 ................................................................. 18
Figures
1. Share of manufacturing by per-capita income ......................................................................................... 6
2. Relative employee compensation, productivity and unit labour costs .................................................... 8
3. Relative unit labour costs across countries .............................................................................................. 9
4. International comparison of the distribution of firm size in manufacturing .......................................... 12
5. Gains in productivity from larger plant size in India ............................................................................ 12
6. Distribution of TFP levels across industrial plants ................................................................................ 14
7. Measures of regional specialisation ...................................................................................................... 17
8. Rate of return on assets, public and private firms ................................................................................. 19
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
****************************************
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
**************************************** # posted by SBasefsky : 10:17 AM
