Industrial performance and government controls

Abstract

In this Paper examines the growth and utilization of industrial capacity in India, the factors responsible for inter- industry variations in capacity utilization and the policy implications of the finding s of the study. The period covered is 1960-71. The major findings are summarized below: - In the highest rates of growth were in the capital and intermediate goods segments of industry. The rate of growth of capacity declined from 6.1% in 1960-64 t 4.6 in 1967-70 - From a low rate of growth of 2% in 1960-64, the rate has increased to 4% since 1965 - The average utilization of capacity during the period 1961-71 is approximately 53%. Capital and intermediate goods sectors had relatively of the recession. - Selected industry characteristics and policy variables together explosion merely 72% of the inter-industry variations in capacity utilization. - There are policies and controls which work against the full utilization of capacity. A realignment of such policies is in order. It is argued that banning socially undesirable products will be preferable to the present system which leaves considerable scope for delays, influence and inconsistent decisions.