ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

A+| A| A-

Indian Electronics Hardware Industry: Growth and Productivity (1993-2004)

In 1987 the World Bank had recommended "greater liberalisation" in Indian electronics industry. Two of the predicted consequences of this were that policy reforms would aid an increase in productivity and greater research and development initiatives amongst the firms of the industry. This paper verifies those two predictions for the Indian electronics hardware industry. It finds that despite liberalisation, the performance with respect to partial and total productivity of the electronics hardware industry was dismal. The firms preferred to import technology over investing in research and development and developing it indigenously.


Indian Electronics Hardware Industry: Growth and Productivity (1993-2004)

Rumki Majumdar

In 1987 the World Bank had recommended “greater liberalisation” in Indian electronics industry. Two of the predicted consequences of this were that policy reforms would aid an increase in productivity and greater research and development initiatives amongst the firms of the industry. This paper verifies those two predictions for the Indian electronics hardware industry. It finds that despite liberalisation, the performance with respect to partial and total productivity of the electronics hardware industry was dismal. The firms preferred to import technology over investing in research and development and developing it indigenously.

Rumki Majumdar ( is with the National Council of Applied Economic Research, New Delhi.

he link between liberalisation in India and productivity of Indian industry has been a debatable issue. Several studies have examined the relationship between more liberal entry/exit, product licensing, export-related policies and exploitation of scale economies, better utilisation of existing capacity and an improvement of factor productivities including total factor productivity (TFP) (Goldar 2004; Ahluwalia 2006; Bosworth et al 2006). Some of these studies have found the link to be pronounced for only a few Indian industries (Pattnayak and Thangavelu 2005; Anita 2006; Bhaumik et al 2007). On the other hand, others failed to find a substantial link between greater liberalisation and improved industrial productivity (Parameswaran 2002; Balakrishnan and Babu 2003; Das 2004). In our analysis, we find that when the link between liberalisation and productivity is assessed for the Indian electronics hardware industry, the answer is unambiguous. For this industry, the story has been that of a persistent dismal performance and poor productivity growth during the liberalisation era. This is in contrast to the expectations of the World Bank, which during the late 1980s strongly recommended less regulation with respect to exports, more free imports and unrestrained play of market resources to the electronics industry. In this study, we empirically test (1) whether greater liberalisation of the electronics hardware industry resulted in greater competition and improved productivity, and (2) whether with liberalisation firms in the industry resorted to greater research and development (R&D).

1 The World Bank’s Recommendation

Earlier, the Indian electronics hardware industry pursued a highly restrictive regulatory policy framework in line with the recommendations made by Bhabha Committee in 1966. Policies strongly favoured self-reliance, while technology and capital imports were discouraged. It was in the 1980s that the industry saw a limited opening and hesitant reforms in terms of ensuring a greater play of market forces and a series of fiscal measures (Srinivasan and Krueger 2005). The electronics hardware industry experienced a significant growth in the early 1980s relative to the late 1970s in response to the series of new policies initiated in the early 1980s (Joseph 1989).

However, the World Bank in a report on Indian electronics industry stressed that “the new policy framework has not gone far enough” (Kumar 1988). According to the World Bank, high level of effective protection, little incentive to export and the Monopoly and Restricted Trade Practices (MRTP) and Foreign Exchange Regulation Act (FERA) restrictions led to continuation of inefficient firms and uneconomic scales (Kumar 1988). In a report on the

april 3, 2010 vol xlv no 14

Economic & Political Weekly


electronics industry, the World Bank (1987) reported the profit margins for Indian electronics firms to be higher by 18% to 40% than international standards, which, according to them, reflected lower competitive pressure in India. The World Bank criticised the government when it began to revise duty structures and raise import as well as excise duties relating to electronics in the late 1980s. For example, import duty on raw materials for i mported component was raised to 80% while the excise duty on 14 inch colour TV was raised from Rs 900 to Rs 2,000 in 1989, beside others (Joseph 1989). The World Bank expressed an apprehension that these policy changes would reverse the strategies that were taken so far to liberalise the industry. According to it, for a sector with obsolete production processes, poor product technology and low productivity and inefficiency, such policy r eversions would do no good.

The World Bank report pushed for policy reforms primarily related to import tariff structure, faster access to imports of essential raw materials and eliminating MRTP and FERA, among others. One of the many objectives behind these recommendations was that the World Bank expected that these changes would enhance productivity. Also, R&D efforts at the firm level would increase (Kumar 1988). The arguments behind these expectations were that with the removal of the entry barriers and licensing, the Indian firms would be exposed to competition from international market. Removal of trade barriers, both export and import, would force firms to cut the cost of production by providing access to better quality inputs and technology. Foreign investment will have a spillover impact compelling the firms to improve productivity and performance (Siddharthan 2004). With increased competition and flow of foreign investment it was expected that firms would incur R&D investments to adapt to foreign technology and develop indigenous technology that suited domestic demand better (Joseph 2004).

2 Policy Initiatives after 1991

It was in 1991 that Indian policy changed from its inward oriented, state directed and controlled development strategy to a liberal economy that opened up to external competition and investment. Various issues with respect to tariff policy, EXIM p olicy, hardware manufacturing cluster parks, supporting R&D, marketing “Made in India” brand, inviting multinational electronics manufacturing/ service companies to set up Indian operations, development of semiconductor industries, patenting, etc, were taken up in order to bring reforms in this industry (DoE 2004).

The industry experienced a gradual reduction of tariffs and excise duties along with continued reductions of internal regulations (Table 1). Peak tariff rates came down from 85% in 1993-94

Table 1: Policy Measures Initiated during Liberalisation in Indian Electronics Industry

Periods Peak Basic Peak Excise Import Policy for Sectors in Customs Tariffs (%) Duty Rates (%) the Electronics Industry

1993-94 85 15 Mostly restricted

1998-99 40 18 Mostly restricted, free for some but restricted as consumer goods
2000-01 35 16 Mostly free while a few restricted
as consumer goods
2004-05 20 16 Free

Source: (a) Various budget editions on custom tariffs, 1998 to 2005, edited by Arun Goel,

(b) Various budget editions on central excise duties, 1996-2005, edited by R K Jain, Central Publications Private Ltd.

Economic & Political Weekly

april 3, 2010 vol xlv no 14

to 20% in 2004-05. On the other hand, anomalies in the central excise duties were removed. The industry noticeably witnessed a liberalisation of import policy, but the procedure was gradual. It was only in 2001-02 that all the restrictions with respect to i mports were done away with.

The number of industrial licences and letters of intent in electrical equipment and telecommunication was amongst the highest during the 1980s. It peaked in 1985 when the total number of i ndustrial licences in electrical equipment touched 295, while for telecom it was 175. This was significantly higher than the numbers, 103 and 13, in 1980, respectively. The numbers came down gradually thereafter. The fall was significant only after the liberalisation policies were undertaken in 1991.

The impact of reduced licensing was reflected in the increase in the number of approved foreign collaboration and inflow of foreign direct investments (FDI) during this period as shown in Table 2. Table 2: Cumulative Approved Foreign Collaborations and Inflow of FDI since 1991

Periods Foreign Collaboration Amount of Inflow of FDI
Electrical Equipment Telecommunication Electrical Equipment Telecommunication
Including Electronics ( in numbers) Including Electronics ( in million Rs)
and s/w (in numbers) and s/w (in million Rs)
1991-95 1,139 # 214 # 10,593 1,431
1995-2000 1,791 410 47,893 45,801
2001-04 1,718 186 1,05,692 65,123

Source: (a) # Handbook of Industrial Policy and Statistics 1998 and Department of Industrial Development, Ministry of Industry, ( b) SIA News Letter, Annual Issue. 2001, 2002, 2003-05.

Since January 1993, the FERA companies have been treated on par with other Indian companies except in regard to carrying agricultural or plantation activities in India. Realising the FERA was not in tune with the economic reforms initiated since 1991, the government replaced it with a new legislation, vis Foreign E xchange Management Act (FEMA) in 1999 to “facilitate external trade and payment” (Chatterjee 2008: 15). The government of India further enacted a new law, the Competition Act, 2002 to uphold competition in the Indian economy. The Competition Commission of India was established in October 2003.

For the electronics hardware industry, in particular, most of the restrictions have been done away with except for a few by 2000. For example, there can be 100% FDI for some of the activities in the telecom sector. However, investment cap in telecommunications was still 49%, while the entertainment electronics industry is included among the list of 22 industries with respect of which divided balancing is applicable (Khilani 2006).

3 Impact of Liberalisation: Before and After

All the above point out to the fact that the industry did extend the liberalisation measures that were initiated in the early 1980s. However, the growth and export figures of the industry before and after liberalisation tell a different story to what was predicted. It is clear from Tables 3a and 3b (p 74) that the industry failed miserably in terms of output and export performance after liberalisation. Only sub-sectors that catered to market with products belonging to the low end of the technology spectrum, i e, the computer hardware and the component electronics industry performed well in terms of production after liberalisation.

We now turn towards the objective of the paper, i e, to analyse the impact of liberalisation on productivity growth of the industry, both partial and total, by using firm level data to assess whether


Sub-sectors 1975-81* 1981-86* 1985-90# 1991-95# 1995-99@ 2000-04@

Consumer electronics 20.0 39.6 33.6 14.9 14.6 7.1

Computers 53.5 55.0 28.9 -2.3 21.0

Components 14.9 26.2 37.4 10.4 8.9 9.9

Communication 7.6 28.9 34.4 17.3 7.5 0.5

Total electronics production 17.3 32.9 34.1 15.1 8.4 9.9

* Source: (a) Joseph (1989). # (b) Annual Report, DoE 1999. @ (c) Vikas Sahgal (2006), Indian Industry, Indian Economic Data Research Centre and Ministry of Communication and Information Technology.

liberalisation enhanced Table 3 (b): Annual Compound Growth Rates of Exports in Electronics Hardware Industry

productivity and R&D ef

1983-87* 1991-94 1995-99 2000-04

forts of firms in electronics

28.0 28.4 -8.9 16.3

industry. The focus here is * Source: (a) Muralidharan (1988); (b) Electronics Information and Planning Annual Reports 2001-02

the hardware industry.

and 2004-05.

4 Methodology to Estimate TFP Growth

In order to estimate Total Factor Productivity Growth (TFPG), we have made a novel attempt of combining two established theories. The estimation is carried out in two steps. The first step determines a potential stochastic production function using Aigner et al (1977) and Meeusen and Van den Broeck (1977) methodology. We propose a translog production function for a sub-sector (h) and for a time period (j), as mentioned in Equation 1.

Y = X * E +PolMsr* J + X* X'*K + X* D*O + v + u

Here Y represents log of value added1 and X represents the log of input variable. The input variables are labour hours2 and capital stock3 at replacement values in the production process. The variables are measured at constant prices with base period 1993

94.4 PolMsr represents policy initiatives like tariff structures, foreign collaborations, licensing measures and entry rate of new firms in an industry that significantly influences production function. All the variables are measured in log form. D represents year specific events for each sub-sector. These may reflect government policy announcements or macroeconomic shocks influencing the output of the sub-sector either directly or through inputs and production process. v accounts for influence of random factors and are independently and identically distributed normal random variables with zero mean and constant variance, V 2. In


this model specification u, associated with technical inefficiency are assumed to follow a truncated normal distribution with mean μ and constant variance, V 2 . The mean technical inefficiencies are


time invariant over a panel (i e, years within a period) but vary with firms.E is the coefficient for inputs in log forms, Q is the coefficient for the dummy, K is the coefficient for the interaction of the two input factors in log forms and O is the coefficient for the interaction of dummy and inputs in log forms.

The second step is to measure the growth of TFP for industry over the two periods and to derive the relative contribution TFPG and input growth (IG) using methodology established by Kalirajan et al (1996, 1997). The mathematical decomposition is given by,

Output Growth from period I to period II =

D = y2 – y1 **]

= [y1* – y1] + [y1** – y* 1] + [y2 – y1

= [y*1 – y1** – y1 **] + [y*2 – y*]

] + [y1 *] – [y2 – y1




= [y1* – y1] – [y1** – y1*] + [y2*– y2] + [y*2 – y1


= {[y1* – y1] – [y*2 – y2]} + [y1** – y1*] + [y2*– y1 We define {[y1* – y1] – [y2*– y2]} + [y**1 – y*1] = TFPG We get D = TFPG + OG where, D = y2- y1 is the Output Growth (OG), TFPG measures growth in TFP and IG is the input growth (Kalirajan et al 1996).

5 Scope of the Study and Data Sources

As liberalisation policies intensify, we compare TFPG over two p eriods of liberalisation to analyse the impact of opening up on productivity. Period I comprises years from 1993 to 1998 and period II comprises from 1999 to 2004. The year 1998 has been considered the point of separation because a separate ministry was formed for communication and information technology in 1997. The Department of Electronics was merged with the Department of Information Technology (IT) as a part of the ministry in October 1998 (Joseph 2007). This division of time period in this study enabled us to ascertain whether or not the major policy changes introduced in 1997-98 made any difference in terms factor productivities in one period relative to the other. Periods beyond 2004 represents another era for the hardware industry as four electronics hardware industry associations joined hands to make the Indian electronics hardware sector globally competitive. A zero duty regime came into force since 2005 in line with the agreement of IT signed by India under the World Trade Orga nisation (WTO). The study focuses on 81 sample firms with incessant o peration during the period of study. They have been divided into four homogeneous sub-sectors based on their use pattern; 13 firms belongs to communication equipment, 12 firms to computer hardware, 13 firms to consumer electronics and 43 firms to other electronics.

Firmwise data has been obtained from Prowess brought out by the Centre for Monitoring Indian Economy (CMIE). The scope of this study is confined only to the corporate sector in the Indian electronics industry. This is due to unavailability of consistent data for unregistered sector and for small and medium firms. National Accounts Statistics, Annual S urvey of Industries and Business Beacon by Prowess have also been used for construction of variables. Data on policy variables has been obtained from various budget editions on custom tariffs and central excise duties, SIA newsletter of the department of industrial policy and promotion and Handbook of Industrial Policy and Statistics and the department of industrial development, ministry of industry.

6 Verifying the Predictions Made by the World Bank

Prediction 1: Greater Liberalisation Results in Improved Productivity: Production function estimates revealed some interesting findings. The industry responded favourably to the policy measures that were undertaken during liberalisation. However, the response was less enthusiastic during the second period of liberalisation relative to the first period. All the four sub-sectors improved their production of output with the fall in basic custom duties or excise duty rates and increase in the number of foreign collaborations. The target of reducing customs duties on select imported electronics components and products to zero by 2005, in specific, improved labour productivity in 2004 for other

april 3, 2010 vol xlv no 14

Economic Political Weekly


Figure 1: Labour and Capital Productivity for the Four Sub-Sectors and for Two Time Periods at 1993-94 Prices

Labour Productivity Growth Computers

600 500 400 300 200 100 Consumer Communication Other

0 1993-99 1994-2000 1995-2001 1996-2002 1997-2003 1998-2004

Capital Productivity Growth 250

200 150 100 50 0 1993-99 1994-2000 1995-2001 1996-2002 1997-2003 1998-2004 Other Communication Computers Consumer

Source: Estimated.

s ub-sector. However, this was at the cost of capital productivity. While firms in communication equipment and computer electronics sub-sectors favoured a less competitive environment (measured by the rate of entry of new firms) for expanding their production operation, more competition among firms led to improved output in the other sub-sector. Surprisingly, the fall in industrial licensing failed to have any significant impact on output of the four sub-sectors. Output of firms in both communication and other electronics sub-sector benefited substantially from foreign collaborations but firms in consumer electronics failed to reap benefits from such collaboration after period I. Thus, the electronics industry did benefit from liberalisation policies as was expected by the World Bank. However, the response was not impressive from the perspective of factor productivity.

Despite being a capital-intensive industry, it was the labour elasticity that was significant and higher than the capital elasticity during liberalisation for all the four sub-sectors. However, l abour contribution for all sub-sectors declined in period II. Capital contribution remained insignificant for both the periods in the communication equipment and computer hardware sub-sectors. The patterns of the partial productivity of the subsectors were diverse. The computer hardware and consumer electronics experienced an increasing labour productivity growth, while growth in capital productivity declined in period II of liberalisation relative to period I. In contrast to that, the sub-sector of communication equipment and other electronics

Economic Political Weekly

april 3, 2010 vol xlv no 14

witnessed a fall in labour productivity growth. Capital productivity exhibited a growth for communication equipment, computer hardware and consumer electronics. However, after the initial momentum of growth, capital productivity fell substantially as the industry intensified its liberalisation moves. Capital productivity experienced an inconsistent improvement for the other sub-sector. This is shown in Figure 1. The year 2000-01 witnessed a significant fall in both labour and capital productivity in all the sub-sectors except for labour productivity in consumer electronics indicating the impact of dot-com recession on partial productivity.

The estimates of TFPG convey a grim scenario of the Indian electronics hardware industry in the second period of liberalisation relative to the first period. Communication equipment, computer hardware and other electronics sub-sectors exhibited a high dependence on TFPG for their OG during liberalisation as IG declined substantially. However, TFPG experienced a net decline for all the four sub-sectors in period II relative to period I. While the fall in TFPG had been consistent for communication equipment

Figure 2a: Components of OG and TFPG in Four Sub-Sectors

IG for the Four Sub-Sectors of Hardware Electronics 2





.4 0 Other Communication Consumer

|| | | | |

1993-99 1994-2000 1995-2001 1996-2002 1997-2003 1998-2004 TFPG for the Four Sub-Sectors of Hardware Electronics


1.2 .8 .4 Other Communication Computers Consumer
0 | 1993-99 | 1994-2000 | 1995-2001 | 1996-2002 | 1997-2003 |1998-2004
OG for the Four Sub-Sectors of Hardware Electronics
2.5 2 1.5 1 .5 Other Communication Computers Consumer
0 | 1993-99 Source: Estimated. | 1994-2000 | 1995-2001 | 1996-2002 | 1997-2003 |1998-2004


5 4 3 2 1 0TFPG IG

1993-99 1994-2000 1995-2001 1996-2002 1997-2003 1998-2004 Source: Estimated.

and consumer electronics, it marginally revived for computer hardware and other electronics sub-sectors for the last few years of period II (Figure 2a, p 75). The computer hardware was the only sub-sector with marginal improvement in OG o wing to the second highest TFPG and a significant increase in IG in period II.

The electronics hardware industry in aggregate primarily depended on TFPG for OG as India progressed to an era of greater liberalisation (Figure 2b). IG had been declining consistently from 2000 onwards relative to years in period I. What is alarming is that the industry experienced a net decline in TFPG resulting in OG to decrease.

In order to explain the poor TFPG of the industry, we looked into the RD investments efforts of each sub-sector. By RD effort of a firm we mean the proportion of sales revenue that a firm a llocates towards RD investment and is measured as RD expenditure in capital accounts as a percentage of sales (henceforth referred as RD per sales). The change in RD per sales by the sample firms of these sub-sectors in period II relative to period I challenges the other prediction of the World Bank report.

Prediction 2: Liberalisation Improves RD Efforts at the Firm Levels of the Industry: Figure 3 presents the absolute RD per sales and a polynomial trend line of the same for the four subsectors during 1993-2004. It is obvious from Figure 3 that the RD per sales for communication electronics and computer hardware sub-sectors in period II relative to period I declined substantially. Similarly, except for the years 2001 and 2002, both other and consumer electronics sub-sectors had a poor RD per sales in period II relative to period I.

Figure 3: RD Investment in Capital Accounts in the Four Sub-Sectors and the Industry (Rs crore) RD as a % of Sales for Sub-Sectors

60 50 40 30 20 10 0 Comm Comp Cons Other Poly (Comm) Poly (Comp) Poly (Cons) Poly (Cons) 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Source: Estimated.

The impact of the south-east Asian crisis on RD per sales was considerable for all the four sub-sectors during 1998-2000. The communication equipment sub-sector witnessed the largest fall in RD per sales during this crisis. RD investment for the four sub-sectors picked up post-1999. This increase in RD by the firms could be attributed to the new initiatives introduced by the ministry of IT on E-commerce, internet-based education, internet security, promotion of nano-technology and establishment of Media Lab Asia in association with Massachusetts Institute of Technology, US, in the Ninth Five-Year Plan. The Ministry of IT i ncreased the plan allocation of RD by 54% during 1997-2002 (Electronics Information and Planning 2002). However, RD per sales was hit again due to the dot-com recession. The year 2004 saw a revival in RD investment in all sub-sectors except for consumer electronics. This could be due to the expectations about better prospects for the industry owing to the developments like enforcement of zero duty market regime and formation of hardware industry associations (as mentioned earlier).

A relative fall in RD per sales for the firms in all the subsectors in period II was an outcome of the inability of RD investment to improve TFP. Assuming that there exists a time lag of few years in the influence of RD on TFPG for this industry, despite having the highest RD per sales in period I, the communication equipment sub-sector had a relatively poor TFPG in period II. On the other hand, consumer electronics had the highest TFPG d espite poor RD per sales during the entire period of liberalisation with the exception of 2002. Based on the discussions with experts from this industry as well as from DoE reports (1999), we found that the computer hardware sub-sector focused primarily on assembly-related work as competition increased due to l iberalisation. Thus, the emphasis on RD per sales witnessed a sharp decline in this sub-sector indicating low preference for innovation. The other electronics sub-sector too had a poor r esponse of RD on TFPG. As a matter of fact, this sub-sector had the highest absolute RD investment among the four sub-sectors.

In the absence of any data on royalty expenditure of firms, we estimated RD expenditure as a percentage of capital imports for the four sub-sectors. For the computer hardware and consumer electronics sub-sectors, the ratio decreased substantially with the progress of liberalisation in period II. These were also the sub-sectors with the highest TFPG among the four sub-sectors. A ssuming the embodiment hypothesis by Jorgenson (1966) was true, a fall in the ratio of RD to capital imports indicates a firm’s preference to direct their investment activity primarily towards the assimilation of imported technology rather than developing indigenous technology through RD. Faced with resource constraints, the rapid technology change and obsolescence in this industry, massive sunk cost associated with RD and the high time lag of the RD impact compelled firms to import technology. This was essential for profitmaking and to survive the competition from multinational corporations that intensified since the late 1990s as the industry opened up further. The question then arises is: if this industry was getting increasingly dependent on foreign technology for its growth? If that is true, what lies in future for the industry?

With limited resources, firms would be able to import poor technology. In such a situation, only those sub-sectors that cater to low end technology products would thrive while sub-sectors catering to products with advanced state of the art would perish. Such symptoms are already evident in the industry. OG in

april 3, 2010 vol xlv no 14

Economic Political Weekly


F igure 2a shows a relatively improving situation for computer 7 Summary and Conclusions hardware and other electronics sub-sectors during the later years Our analysis shows that despite reduction in tariff and excise duof period II while it declined for the other two sub-sectors. Is that ties, decrease in industrial licensing, increase in competitiveness an indication that the Indian electronics hardware industry and increase in foreign investment, the sub-sectors of the elecwould be confined to assembly related work and never move up tronics hardware industry failed to achieve an impressive growth the value chain? How sustainable would be the industry’s growth in output and TFP. At the same time, firms in the sub-sectors witin the long run? These are some of the critical questions that need nessed a fall in RD investment as a percentage of sales. to be addressed and probably simply liberalising policies as rec-It is obvious from the study that embarking upon changing ommended by the World Bank may not be the answer to them. macro policies will not be enough to improve productivity and

growth in this industry. The reasons for poor productivity and Limitations of the Study: The limited database, small sample poor response to RD initiative are more inherent to and associsize and the fact that sample firms belong to the corporate elec-ated with the characteristics of the industry. There is a need to tronics hardware industry are some of the major limitations restructure the Indian electronics hardware industry. Emphasis which are probably difficult, if not impossible to address. Besides, should be given to address the demand-related issues like the we could not include many foreign firms because they came into rapidly changing market dynamics and the supply-related issues operation several years after 1993. The sample of 81 firms, to like changing product technology, which are very unique to this some degree, presents a limited picture of the industry during industry. Inadequate infrastructure facilities, inappropriate polthe period considered for the study. The firm size, age and struc-icy support from various government organisations and lack of ture of firms could be other explanatory variables that need to be availability of quality resources, both financial and knowledge, considered. Their inclusion may bring about significant changes are some of the challenges that need to be addressed by the

in the analysis and would be addressed in our ongoing work. p olicymakers.


1 As per definition given by Prowess, value added is inclusive of salaries and wages, profit before d epreciation, interest and tax and rent income.

2 Labour hours have been calculated by dividing salaries and wages paid to the employees by wage rate per hour. Wage rate per hour is in turn estimated as the total emoluments paid to employees per mandays.

3 Methodology followed by Srivastava (1996) and Hashim and Dadi (1973).

4 The VA has been deflated by the wholesale price index for the electronics industry while GFA has been deflated with the wholesale price index for machinery and machine tools with base year 1993-94 = 100 before estimating the value of capital stock at replacement cost. Deflationary Series for Electronics industry has been calculated.


Ahluwalia, I J (2006): “Trade Liberalisation and I ndustrial Performance: A Disaggregated View of Indian Manufacturing in the 1990s” in S D Tendulkar, A Mitra, K Narayanan and D K Das (ed.), India: Industrialisation in a Reforming Economy, Essays for K L Krishna (New Delhi: Academic Foundation), pp 271-304.

Aigner, D J, C A K Lovell and P Schimdt (1977): “Formulation and Estimation of Stochastic Frontier Production Function Models”, Journal of Econometric, Vol 6, pp 21-37.

Anita, K (2006): “Productivity Growth in Indian Engineering Industries during P re-Reform and Post-Reform Periods: An Analysis at Company Level” in S D Tendulkar et al, op cit, pp 107-40.

Balakrishnan, P and S M Babu (2003): “Growth and Distribution in Indian Industry in the 1990s”, Special Articles, Economic Political Weekly, Vol 38(38), 20 September, pp 3997-99.

Bhaumik, S K, S Gangopadhyay, and S Krishnan (2007): “Entry, Reforms, Complementarity and Performance: A Tale of Two Indian Manufacturing Sectors”, Economic Systems, Vol 31 (4), December, pp 375-90.

Bosworth, B, S M Collins and A Virmani (2006): “Sources of Growth in Indian Economy”, presented in Indian Policy Forum, 31 July to 1 August.

Central Statistical Organisation (1993-2004): “Summary Results for Factory Sector”, Annual Survey of Industries (New Delhi: Government of India).

– (1993-2004): National Account Statistics (New Delhi: Government of India).

Chatterjee, A (2008): Sixty Years of Indian Industry 1947 to 2007, Growth, Reforms and Outlook (New Delhi: Century Publications).

CMIE (various editions): Prowess Database, Centre for Monitoring the Indian Economy, Mumbai, available at:

– (various editions): Business Beacon, Centre for Monitoring Indian Economy, Mumbai, available at:

Das, D K (2004): “Manufacturing Productivity under Varying Trade Regimes, 1980-2000”, Economic Political Weekly, Vol 39(5), 31 January, pp 423-33.

DoE (1999): Guide to Electronics Industry in India, Department of Electronics (New Delhi: Government of India).

– (2004): Annual Report 2004-05, Department of Electronics and Information Technology (New Delhi: Government of India).

EPW (1987): “Electronics: World Bank’s Prescriptions”, Economic Poli tical Weekly, Vol 22 (39), 26 September, editorial.

Electronics Information and Planning (2002): “RD for Information Technology”, Report for Journal Devoted to Techno Socio Economics Usage and Industry, Vol 20(5) (Information, Planning and Analysis Group of Department of Information Technology, New Delhi, India).

Goldar, B (2004): “Productivity Trends in Indian M anufacturing in the Pre- and Post-Reform Periods”, Working Paper No 137, Indian Council for R esearch on International Economic Relations, June.

Hashim, S R and M M Dadi (1973): Capital Output R elations in Indian Manufacturing (1946-1964) (M S Baroda University: University Publications Sales Unit).

Jorgensen, D W (1966): “The Embodiment Hypothesis”, Journal of Political Economy, Vol 74(1), 1-17 February.

Joseph, K J (1989): “Bridling Growth of Electronics?”, Economic Political Weekly, Vol 24 (16), April, pp 855-56.

– (2004): “The Electronics Industry” in S Gokarn, A Sen and R R Vaidya (ed.), Structure of Indian Industry (New Delhi: Oxford University Press), p 238.

Economic Political Weekly

april 3, 2010 vol xlv no 14

– (2007): “The Electronics Industry” in K Nagesh and K J Joseph (ed.), International Competitiveness and Knowledge-based Industries in India (New Delhi: Oxford University Press), pp 99-142.

Kalirajan, K P, M B Obwona and S Shiao (1996): “A Decomposition of Total Factor Productivity Growth: The Case of Chinese Agricultural Growth Before and After Reforms”, American Journal of Agricultural Economics, Vol 78, pp 331-38.

Kalirajan, K P and R T Shand (1997): “Sources of Agricultural Growth in India”, I ndian Journal of A gricultural Economics, Vol 52, pp 693-706.

Khilani, D T (2006): Foreign Exchange Management Manual (Mumbai: Snow White Publication).

Kumar, K G (1988): “Electronics Industry: World Bank’s Prescription”, Economic Political Weekly, Vol 23 (31), 30 July, pp 1563-64.

Meeusen, W and Van den J Broeck (1977): “Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error”, International Economic Review, Vol 18, pp 435-44.

Muralidharan (1988): “Electronics: Liberalisation Reconsidered”, Economic Political Weekly, August.

Parameswaran, M (2002): “Economic Reforms and Technical Efficiency: Firm Level Evidence from Selected Industries in India”, Working Paper 339, Centre for Development Studies, Thiruvananthapuram, India.

Pattnayak, Sanja S and S M Thangavelu (2005): “Economic Reform and Productivity Growth in Indian Manufacturing Industries: An Interaction of Technical Change and Scale Economies”, Economic Modelling, Vol 22 (4), July, pp 601-15.

Siddharthan, N S (2004): “Globalisation: Productivity, Efficiency and Growth An Overview”, Economic Political Weekly, Vol 35(5), 31 January, pp 420-22.

Srinivasan, T N and A Krueger (2005): “InformationTechnology-Enabled Services and India’s Growth Prospects”, Brooking Trade Forum, Offshoring White-Collar Work (The Brooking Institution).

Srivastava, V (1996): Liberalisation, Productivity and Competition: A Panel Study of Indian Manufacturing (New Delhi: Oxford University Press).

The World Bank (1987): India Development of the Electronics Industry A Sector Report. Industrial Development and Finance Division (South Asia Projects Department), Document, June.

Dear Reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here


To gain instant access to this article (download).

Pay INR 200.00

(Readers in India)

Pay $ 12.00

(Readers outside India)

Back to Top