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India’s Growth Pattern and Obstacles to Higher Growth

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Author Info
Sean Dougherty
Richard Herd
Thomas Chalaux
Abdul Erumban ()

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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. This working Paper relates to the 2007 Economic Survey of India (www.oecd.org/eco/surveys/india).

Profil de croissance de l’Inde et obstacles à une accélération de la croissance
La croissance en Inde s’est sensiblement améliorée depuis une vingtaine d’années, mais les performances sont inégales d’un secteur ou d’un État à l’autre. Si certaines industries de services, notamment dans le secteur des technologies de l’information et des communications, sont désormais très compétitives sur les marchés mondiaux – à l’origine de gains considérables pour les salariés et les investisseurs – les industries manufacturières restent à la traîne et n’ont commencé que récemment à améliorer leur performance. Les écarts se sont creusés, les entreprises des États et secteurs dotés des institutions les plus efficaces allant de l’avant, tandis que celles des États et secteurs plus strictement réglementés accusaient plus encore leur retard. D’où un paysage concurrentiel fort dissemblable d’un secteur ou d’un État à l’autre, et une forte concentration, notamment aux mains de la puissance publique, dans plusieurs secteurs d’activité. S’il faut y voir pour une part un héritage du système des autorisations administratives, les évolutions ont été politiquement délicates, rendant plus difficile l’expansion du secteur manufacturier que celle du secteur des services. Il est impératif de poursuivre les réformes institutionnelles, en privilégiant la réglementation des marchés de produits et du travail, aux niveaux aussi bien de l’administration centrale que des États. Ce document de travail se rapporte à l’Étude économique de l’Inde 2007 (www.oecd.org/eco/etudes/inde).

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Paper provided by OECD Economics Department in its series OECD Economics Department Working Papers with number 623.

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Date of creation: 04 Aug 2008
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Handle: RePEc:oec:ecoaaa:623-en

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Related research
Keywords: productivity productivité réglementation regulation specialisation spécialisation firm microdata micro-données d'entreprise regional concentration concentration régionale manufacturing development développement industriel

Find related papers by JEL classification:
D4 - Microeconomics - - Market Structure and Pricing
F15 - International Economics - - Trade - - - Economic Integration
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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This page was last updated on 2008-11-17.

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