ABSTRACT
Indian machinery industry (IMI) represents manufacture of machinery and equipment n.e.c. that is the division 28 in National Industrial Classification: All Economic Activities-2008 (NIC-2008). It comprises two types of machinery producing industries, namely general purpose machinery (or group 281) and special purpose machinery (or group 282) at three digit level of NIC-2008. Following import substitution strategy of development, Government of India (GoI) promoted this industry (notably special purpose machinery segment of this industry) through public investment, as an important part of capital goods sector. As a result, production capacities were built in important segments of this industry. There are some evidence based on industry/enterprise surveys and data pertaining to the post-1991 reform period that the major part of capital goods industry: (a) has been unable to enhance its production capacity (in line with rising domestic demand for the same) and (b) lacks competitiveness even in comparison to the latecomers like China, Taiwan and South Korea due to: (i) the firm-specific factors like deficient technological capabilities, management and operational inefficiencies, inferior quality and finish of goods, lack of global market
Pradeep Kumar Keshari*
1. Introduction
Indian machinery industry (IMI) represents manufacture of machinery and equipment n.e.c. that is the division 28 in National Industrial Classification: All Economic Activities-2008 (NIC-2008). It comprises two types of machinery producing industries, namely general purpose machinery (or group 281) and special purpose machinery (or group 282) at three digit level of NIC-2008. Following import substitution strategy of development, Government of India (GoI) promoted this industry (notably special purpose machinery segment of this industry) through public investment, as an important part of capital goods sector. As a result, production capacities were built in important segments of this industry. There are some evidence based on industry/enterprise surveys and data pertaining to the post-1991 reform period that the major part of capital goods industry: (a) has been unable to enhance its production capacity (in line with rising domestic demand for the same) and (b) lacks competitiveness even in comparison to the latecomers like China, Taiwan and South Korea due to: (i) the firm-specific factors like deficient technological capabilities, management and operational inefficiencies, inferior quality and finish of goods, lack of global market
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