Performance Of Maharashtra's Manufacturing Sector

Maharashtra occupies a very significant position in the industrial economy of India. However, over the period of time Maharashtra’s share in India’s industrial sector has declined. The composition of industries in the state is undergoing major changes. The share of consumer goods industries in value-added declined from 52 per cent in 1960 to 16 percent in 1997-98. The performance of the manufacturing sector of Maharashtra during the pre-liberalisation period was poor with respect to employment, output and fixed capital. However, there is major revival in the manufacturing sector of Maharashtra during the post-liberalisation period and most of the industries registered recovery in case of employment, output and fixed capital. The overall performance of NAGRIND is better than that of AGRIND during the post-liberalisation period. However, there is a fall in total factor productivity growth in the manufacturing sector of Maharashtra during the post-liberalisation period. The location quotient also registered a fall for many industries during this period implying that the localization of industries in the state is declining. The manufacturing sector of the state faces many problems such as industrial disputes, high state taxes, high power tariff with shortage of electricity and rising systemic inefficiencies. Maharashtra’s comparative advantage in the industrial sector has to be supplemented with competitive advantage to accelerate the pace of industrial development in the state.