Profitability in India's Organized Manufacturing Sector: The Role of Technology, Distribution and Demand

摘要

Using aggregate data from the Annual Survey of Industries, we analyze profitability in India's organized manufacturing sector from 1982-83 to 2012-13. Over the whole period of analysis, the rate of profit grew at about 1% per annum, primarily driven by a rising share of profits. We use visual inspection to identify five shorter-run profitability regimes: 1982-91, 1991-96, 1996-2001, 2001-07 and 2007-12. Profit rate decomposition analysis shows that both technological factors and aggregate demand have been important determinants of changes in profitability in these shorter periods.