Growth Performance of the Unorganised Manufacturing Sector in India During 1984–85 to 2015–16: An Activity Level Analysis*

Abstract

The Unorganised Manufacturing Sector (UMS) in India is a diverse and vibrant segment of the economy, encompassing a wide array of enterprises that vary significantly in terms of input base, financial resources, and technical expertise. This sector is responsible for producing a broad spectrum of products, ranging from traditional clay pots and intricately embroidered garments to sophisticated mobile chips and essential motor vehicle components. This production not only caters to the consumer goods market but also supplies intermediate products to larger manufacturing industries. Furthermore, many of these products are integral to the global value chain, highlighting the sector's extensive reach and significance. Over the past three decades, the UMS has navigated through two distinct policy landscapes: a ‘protectionist’ regime until the mid-1980s and a ‘liberalised’ regime commencing in 1991. Recognising the challenges these units face in the competitive landscape ushered in by economic liberalisation, the government has implemented various direct policy measures since 2000 aimed at supporting the sector. Against this backdrop, this study aims to scrutinise the growth performance of the UMS in India focussing on employment, gross value added, and labour productivity at the two-digit activity level utilising unit-level data from the National Sample Survey Office (NSSO) spanning from 1984–85 to 2015–16. It also seeks to classify these activities based on their performance in terms of labour productivity and employment generation. Furthermore, the study endeavours to identify distinguishing characteristics of activities that have been successful in generating new employment in recent years.

Citation

Mitra, M. (2024), "Growth Performance of the Unorganised Manufacturing Sector in India During 1984–85 to 2015–16: An Activity Level Analysis* ", Pal, M.K. and Das, P. (Ed.) Informal Manufacturing and Environmental Sustainability, Emerald Publishing Limited, Leeds, pp. 83-99. https://doi.org/10.1108/978-1-83549-998-620241007