Key Points
New Delhi: Indian manufacturing firms are increasingly choosing to distribute their workforce across multiple factories in the same stateor multi-plantsrather than scale up a single plant, new research has found...
These findings are part of a working paper published by the Madras Institute of Development Studies (MIDS) and authored by Abhishek Anand, visiting fellow at MIDS; Arvind Subramanian, former chief economic advisor to the Government of India and senior fellow at the Peterson Institute for International Economics in Washington, D.C.; and Naveen Thomas, associate professor at the O.P. Jindal University in Haryana...
The authors noted that the Annual Survey of Industries (ASI), the governments official database on the manufacturing sector, allows firms with multiple plants in a single state to file joint returns for them...
Relatively large Indian plants did not become larger and did not account for a larger share of employment over two decades despite this being a period of dynamism over two decades (oughties and teens) and a veritable boom in the first decade, the paper said.. Smaller factories means losing out to Bangladesh ..
It is striking how if we ignored multi-plants we would think that Indian plants were larger, we would then be left with the puzzle of why Bangladesh is a more successful and competitive exporter and why Bangladeshi plants export on average 95 percent of their output compared to 37 percent for India, the paper said...
