Growth Performance of Indian Electronics under Liberalisation

under Liberalisation THERE is an increasing recognition that industrial growth in India has picked up in the eighties in contrast with the stagnation since mid-sixties.1 The growth revival is generally attributed to the greater play of market forces consequent upon the government's 'New Economic Policy', which introduced an environment of liberalisation as against the earlier 'regime' of controls. A priori, liberalisation policies would achieve a higher growth rate inter alia by industrial restructuring and diversification: production of such industrial goods as the market forces determine would expand. The improvement in the overall industrial growth would be the result of the rapid growth of certain industries, and not necessarily across the board. In fact, the statistical evidence put forth in substantiation of higher industrial growth in the eighties is based on the revised index of industrial production (with 1980-81 100) wherein a higher weightage is given to such 'sunrise' industries as electronics, petrochemicals and automobiles.2 These new industries are the major ingredients of the growth recipe and among them electronics is the fastest growing one. Electronics industry produces not only products that are in the nature of consumer goods but its products are processes in other industries; hence it has higher linkages with rest of the economy. Thus electronics plays a major role in the restructuring of the industrial sector. Therefore, it will be timely from the policy perspective to have a close look at the growth performance of this industry. The present study is an attempt towards analysing the growth performance of Indian electronics industry in terms of structural changes and impact on different facets of industrial growth: income, employment and foreign exchange.