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The Manufacturing Sector in India

Published in 2018

Abstract: Considerable concern has been expressed by Indian policy makers about the low share of manufacturing in GDP and the stagnation in this share.Growth of the manufacturing sector is also considered essential to provide employment necessary to bring down the high rates of unemployment particularly among the young. This paper analyses the performance of the manufacturing sector in India against its performance in developing countries, particularly, the BRICS countries. Trends in India are in line with what has been happening to the manufacturing sector in developing countries generally. The share of the sector in GDP has declined sharply in the other BRICS countries, except China. The performance of large companies is critical. This paper finds that investment by these companies has been declining because of both supply and demand factors, declining growth in sales and a declining rate of profit.