Industrial Growth and Structure: As seen Through Annual Survey of Industries

Type Journal Article - Economic and Political Weekly
Title Industrial Growth and Structure: As seen Through Annual Survey of Industries
Volume 17
Issue 40
Publication (Day/Month/Year) 1982
Page numbers 1610-1618
Based on the summary results of Annual Survey of Industries for 1978-79, this paper reviews the growth of and the structural changes in the factory sector in India during the 1970s. It is brought out that growth in the number of factories decelerated during the 1970s and that a preponderant part of the increase in recent years has taken place in small-size units and in the category of individual proprietorships and partnerships. While the share of the organised sector in fixed capital was broadly sustained, its relative share in employment as well as in emoluments fell conspicuously. In the disposition of value added in the factory sector, the share of wages fell while that of profits and interest payments rose sharply. Despite many limitations of the data, it can be asserted a priori that the ASI does not show any tendency for the capital-output ratio to rise. Also, over two-thirds of the productive capital in the ASI sector is borrowed capital. Over the years, the size distribution of factories has become more skewed, particularly when size of capital is considered. Interestingly, small-sized factories in terms of employment possess relatively large fixed and productive capital. The capital-output ratio for the 'unorganised' sectors was 0.90 while it was 1.07 for the private corporate sector. Age-wise the feature of high capital-output ratio is true of factories started during the Second Plan period as well as those started since 1971. Industry-wise, the electricity industry accounted for 44 per cent of fixed capital but less than 9 per cent of employment and 12.7 per cent of valueadded; its capital-output ratio in 1978-79 was as high as 8.25 against the average of 2.40. State-wise, the concentration of factories in the top four industrialised states was still as high as 44.7 per cent. While the relative positions of Maharashtra and West Bengal deteriorated, those of Gujarat and Tamil Nadu improved. Factory employment in West Bengal rose by 3.7 per cent as contrasted with the rise of 24.5 per cent in the country as a whole between 1973-74 and 1978-79. If the top nine states were considered, the concentration of factories can be said to have increased over the years. Also, in almost all the industries, the concentration of output in the respective top three states declined between 1973-74 and 1978-79, but only very slightly. [This article is being published in two parts. This, the first part, presents the results of the ASI for 1978-79 with comparable data for earlier years. The second part will deal with ownership and organisational patterns of factories, their characteristics by the period of their establishment, their industry-wise classification and the concentration of industry as revealed by the state-wise distribution of factories.]

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