What is it about?

This article examines the location pattern of unorganised manufacturing enterprises across districts in India. Using a unique data set of 435 districts spread across 25 states, drawn from the Enterprise Survey data of the National Sample Survey (NSS) 1994–95 and 2005–06 ‘thick’ rounds, we find that unorganised manufacturing enterprises are concentrated in a few leading districts, mostly in the metropolitan areas, but their share has declined in the post-reform (post-1991) period, and some new metropolises and suburban districts have emerged as new industrial destinations. The spatial concentration in the distribution of the unorganised manufacturing enterprises across districts has marginally declined—both at the aggregated and disaggregated industry level—in the post-reform period. Our econometric analysis shows that the level of economic development, infrastructure facilities, labour productivity, capital productivity, population size, population density, availability and stock of raw materials, presence and size of organised industries and urbanisation have significant positive effects on the location of unorganised manufacturing enterprises, while economic diversity has a strong negative impact.

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Why is it important?

The specificity of this study is that we use district-level data, which allows us to capture the variations across regions within a state. Thus, the analyses of the paper provide a relatively comprehensive view of the location pattern of unorganised manufacturing enterprises in India, thereby providing additional guidance for policymakers on targeting their attention.

Perspectives

Most of the previous studies on industrial location in India have focused on the organised manufacturing sector at the state level. While focusing on the organised manufacturing sector these studies have missed out the vast and diverse unorganised manufacturing sector, and by focusing on a state-level analysis they have missed the broad trends and patterns at the sub-state level. Therefore, this paper attempts to cater to the long-felt need to document the location pattern of unorganised manufacturing enterprises across Indian districts, and by doing so we provide new insights to the existing literature on regional industrial studies in India.

Mr Dilip Saikia
Darrang College, Tezpur, Assam

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This page is a summary of: Location Pattern of Unorganised Manufacturing Industries in India: A District-level View, Margin The Journal of Applied Economic Research, March 2016, SAGE Publications,
DOI: 10.1177/0973801015625377.
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