Technical Efficiency in the Informal Manufacturing Enterprises: Firm level evidence from an Indian state

The small and medium enterprise sector plays a pivotal role in the socio-economic development and growth of nations. But there is evidence that the firms in this sector are less efficient than those in the large enterprise sector. Hence it is imperative to examine their efficiency levels in order to identify the factors that contribute inefficiency in these firms and to generate information for designing support policies for them. In this study, level and sources of technical efficiency in the unorganised manufacturing sector in the Indian state of Kerala is examined using translog stochastic frontier production function. The analysis is conducted for five broad industry groups and the sector as a whole using firm level data. The findings show that high levels of technical inefficiency, which reduce their potential levels significantly, characterize the unorganised manufacturing enterprises in Kerala. Regarding the factors contributing to inefficiencies, it is observed that size, ownership, region (location) and nature of seasonality of operation significantly influence technical efficiency level in most of the industry groups. We also find that credit availability and employment of hired labour play an important role in explaining technical efficiency levels.Technical Efficiency; Stochastic Frontier Production Function; Unorganised Manufacturing Sector; Kerala

Analytics and Implications of Services Sector Growth in Indian Economy

Given the magnitude of services growth and its inter-linkages with other sectors of the economy, it is important to understand the impact of services sector on other macro-economic variables. The present paper attempts to identify some of the critical issues in India’s services-led growth and tests certain hypotheses that are currently in debate. These relate to: (a) whether the robust growth of the services sector has added a dimension of stability to India's GDP growth; (b) whether there has been a growing complementarity between services and industrial sectors of the economy; (c) whether like other commodity-producing sectors, the services sector also experienced 'jobless' growth; (d) whether the imposition of services tax has boosted the Indian Government’s efforts at mobilising more resources; and (e) whether high growth of services sector in India had an inflationary impact on the economy. Our analysis found the first four hypotheses to hold true. In respect of the last hypothesis, in contrast to the expectations that high services sector growth has an inflationary impact on the economy, we found that the rising share of services sector in GDP has not contributed to inflation in the Indian economy.Services; Industry; Tax; Employment; Inflation

Competitiveness of India's Manufacturing Sector: An Assessment of Related Issues

This paper provides an analytical abstract of various parameters of manufacturing competitiveness of the Indian economy. India's manufacturing exports have risen impressively in the past decade or so and found to be directly linked to the world GDP and inversely related to real effective exchange rate (REER). Indian manufacturing industries have certain inherent strengths and advantages in having a relatively inexpensive, adequate and skilled labour force, cost-effective and competitive prices of goods produced, large manufacturing base and proximity to fast growing Asian markets. India is one of the leading producers and exporters in a number of commodities and enjoys significant advantages in terms of lower labour costs as compared to other economies. Nevertheless, India's competitiveness is lost on account of lower labour productivity and higher input and material costs. To improve the competitiveness of the Indian manufacturing goods, issues like further diversification of export basket, upgradation of export quality, improvement in productivity, increased technology intensity in production, enhanced R&D activity, encouraging business environment, less cumbersome regulatory environment, flexible labour laws, removal of infrastructural bottlenecks and SME related issues need attention of all concerned.Manufacturing sector, Competitiveness

SIW cavity-backed patch antenna for X-band applications

164-167In this paper, substrate integrated waveguide (SIW) based cavity-backed patch antenna is presented. The performance of the proposed antenna in terms of gain and cross-polarization levels is improved by inserting a pair of shorting pins in nearby non-radiating edges of the rectangular patch. The maximum gain realized for the proposed design is 8.6 dBi at the resonant frequency of 10 GHz with 95 % efficiency, which is much higher than that of the conventional patch antenna. The proposed design exhibits an impedance bandwidth of 870 MHz, ranging from 9.59 GHz to 10.46 GHz. Moreover, the proposed design owns unidirectional and stable radiation characteristics in the boresight direction. The simulated results are validated with fabrication and measurement which show a close agreement with each other

SIW cavity-backed patch antenna for X-band applications

In this paper, substrate integrated waveguide (SIW) based cavity-backed patch antenna is presented. The performance of the proposed antenna in terms of gain and cross-polarization levels is improved by inserting a pair of shorting pins in nearby non-radiating edges of the rectangular patch. The maximum gain realized for the proposed design is 8.6 dBi at the resonant frequency of 10 GHz with 95 % efficiency, which is much higher than that of the conventional patch antenna. The proposed design exhibits an impedance bandwidth of 870 MHz, ranging from 9.59 GHz to 10.46 GHz. Moreover, the proposed design owns unidirectional and stable radiation characteristics in the boresight direction. The simulated results are validated with fabrication and measurement which show a close agreement with each other

Does the institution of State Business Relations matter for Firm Performance? – A study of Indian Manufacturing

This paper examines the role of the external institutional environment captured by effective state-business relations on firm performance. By effective state-business relations, we mean a set of highly institutionalized, responsive and public interactions between the state and the business sector. We find that effective state-business relations have had a discernible positive impact on firm performance in Indian formal manufacturing for the years 2000-01 and 2004-05. We also find internal and external institutional factors are complementary to firm performance - smaller firms, firms in urban areas, older firms and firms in simpler organizational forms benefit more.State business relations; firm productivity; manufacturing sector; India

Rain, Rain, Go Away? The Investment Climate, State Business Relations and Firm Performance in India

It is commonly argued that a better investment climate reform – that is, lower distortions in the institutional, policy and regulatory environment in which firms operate - lead to discernible improvements in firm performance. In this paper, we argue that effective state business relations condition better investment climate outcomes and that the deeper institutional determinants of firm performance are the former. We examine the effect of effective state-business relations of total factor productivity (TFP) for formal sector firms in India for the years 2000-01 and 2004-05 and find support for this hypothesis.State business relations, total factor productivity, India

Organized versus Unorganized Manufacturing Performance in India in the Post-Reform Period

This paper analyses the productivity performance of the Indian manufacturing sector using unit level data, which is aggregated at four-digit industry level for the period 1994-95 to 2004-05 for 15 major states. The study focuses on both the organized and unorganized segments of the manufacturing sector. Both partial and total factor productivity (TFP) measures have been employed to trace the productivity performance of formal and informal manufacturing sector. TFP is estimated using Cobb-Douglas production functions at the four-digit industry level. The estimation is carried out by employing the Levinsohn-Petrin method, which uses intermediate inputs as the proxy to address the potential simultaneity bias in production function estimations. Our analysis reveals that labour productivity has increased for the organized sector over time whereas both labour productivity and capital intensity growth have slowed down in the unorganized sector during the 2000-01 to 2004-05 period. The production function analysis shows that capital has played a more significant role in the production process in both the sectors. TFP growth accelerated in the organized manufacturing sector during 2001-05 over 1995-2001 while the TFP decline that started in the first period (1995-2001) continued unabated even in the second period (2001-2005) in the unorganized manufacturing sector. We also find that output growth in both the sectors is productivity driven and not input driven. The improvement in TFPG of organized manufacturing in the post-2000 period as compared to the second half the 1990s across most states in India and that output growth was mostly productivity driven are important positive features of manufacturing performance in the post-reform period. However, the declining total factor productivity on one hand and increasing capital intensity of the unorganized sector is a cause of worry and raises several important questions.Productivity, Organized manufacturing, Unorganized sector, Industrial Sector