IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Crowding out: The role of state companies and the dynamics of industrial competitiveness in India

Listed author(s):
  • Sumit K. Majumdar
Registered author(s):

    This article examines growth patterns of government companies in India, whether their presence has crowded out private entrepreneurial activity and whether there has been a decline in the competitiveness of India's industry, measured as relative productive efficiency, for a 45 year period from 1957-1958 to 2001-2002. There was a significant growth in the number of government companies in India that effectively crowded out the entry and growth of private enterprise. This took place from the mid to late 1950s to the late 1980s and early 1990s. Correspondingly, the amount of private equity capital invested in firms declined until the late 1980s and early 1990s when there was an upsurge of private investment activity. Another feature was that a small number of government companies absorbed most of the corporate sector equity investment in India. The growth in the share of government companies in India that crowded out the entry and growth of private enterprises has had a significantly negative effect on India's industrial competitiveness. After the introduction of reforms in 1991, there has been a significant crowding in by private enterprises, displacing the government companies from their key position as holders of a very large portion of equity capital, and also reversing the trend in the decline of competitiveness of Indian industry as a whole. Copyright 2009 , Oxford University Press.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Oxford University Press in its journal Industrial and Corporate Change.

    Volume (Year): 18 (2009)
    Issue (Month): 1 (February)
    Pages: 165-207

    in new window

    Handle: RePEc:oup:indcch:v:18:y:2009:i:1:p:165-207
    Contact details of provider: Postal:
    Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK

    Fax: 01865 267 985
    Web page:

    Order Information: Web:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:oup:indcch:v:18:y:2009:i:1:p:165-207. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press)

    or (Christopher F. Baum)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.