INDUSTRIAL INVESTMENT INTENTION AND IMPLEMENTATION IN INDIA: BROAD TRENDS AND PATTERNS AT THE STATE-LEVEL

Abstract

With liberalisation in India, there has been a rise in competition in the industrial sector. But a question that remains to be explored is if this rise in competition has led to a surge in industrial activity outburst or not. This short commentary focuses on the broad trends and patterns exhibited by industrial entrepreneurship in India at the state level for the period 2006-2017. The study measures industrial investment/ entrepreneurship by focusing on both intention and implementation using three sets of variables- proposals filed, implemented and the rate implementation level and captures both incidence and volume of investments. The study finds that industrial investment intention has fallen and continues to remain concentrated in certain states. As a next step, the study attempts to examine possible explanation for this by focusing on a set of factors that affect industrial activity- land, labour, bureaucratic complexities, institutional constraints and infrastructure capacities. The results indicate association between these variables and industrial activity. Further, bureaucratic complexities and infrastructure capacities are more relevant variables in shaping the industrial investment intention across states.