The research programme was born out of the philosophy of planned development, which sought to achieve high growth, self-reliance, balanced national development and social justice. However, the major transformation of India’s economic policy environment have undergone changes within a few years of setting up of the Institute which affected a number of institutions and instruments. The Institute quickly reoriented its research programme to accommodate the issues that came into sharp focus in the new regime. Keeping in view the changed economic policy environment, it was felt that there is need to further widen the ambit of the research programme to encompass select contemporary relevant issues. The academic activities of the Institute are organized under the following broad themes:
- Industrialization: Industrial policy, manufacturing sector, MSMEs, technology development, production networks, industrial clusters/corridors, SEZs, land acquisition, natural resources, regional development, entrepreneurship, sustainability, etc.;
- Internationalization: Cross-border flows of capital flows, FDI, technology transfer, IPRs, balance of payments, trade and investment agreements, etc.;
- Corporate Sector: Ownership and control, finance and governance, financial institutions, company law, securities legislation, regulatory bodies, M&As, business groups, public enterprises, public-private partnership, business ethics, CSR, etc.;
- Labour and Employment: Employment growth and structural transformation; labour force; skill development; quality of employment, labour flexibility; differentiations and disparities; informal sector and un-organised workers; etc.;
- Public Health: Social, cultural and economic determinants of health; structure of health systems; research and capacity building in the areas of pharmaceuticals, medical devices and healthcare sectors; IPRs and other areas of industry-health interface, etc.;
- Media & Communication: Studies in the area of media, communication and advertising.
A few recent developments underline the relevance of the research that is being undertaken at the Institute. One of the major pitfalls of high growth trajectory that India experienced in the past decades is the pre-mature take-off of services sector together with low and stagnant share of manufacturing in GDP. Since manufacturing is associated with some intrinsic features that ensure high productivity growth and linkage effects, its decline in the share of the economy cannot be ignored. Despite some welcome signs of recent spurt in manufacturing growth driven by high growth in some sectors, it is still far short of pulling up manufacturing share in GDP to the tune of 25 per cent as targeted by the policymakers. The 12th Five Year Plan document aimed to reach the target by 2025. The Make in India initiative (with its focus on further liberalisation of FDI policy, heavy emphasis on Ease of Doing Business and improving the infrastructure), announced in 2014, is even more ambitious and expects the goal to be reached by 2022.
The post-financial crisis global scenario has thrown up further challenges: recovery of global demand continues to be weak and declining oil prices and volatile commodity prices took a toll on manufacturing demand. Despite the significant trade liberalisation carried out by the country, India’s recent export performance has become a matter of policy concern. The high investment growth mainly by the private corporate sector that provided traction to India’s growth story in the past decade also seems to be losing its steam.
Nearly three decades of liberalised regime has placed market mechanism at the centre in organising the economy and society. The underlying assumption was that deregulating industry, decontrolling capital flows and de-reserving erstwhile protected segments and liberalising imports and exports would provide enough stimulation to both domestic and foreign capital. This by itself was expected to revitalise the manufacturing growth. The reality, however, being different, the current as well as the previous governments thought of a targeted policy response (‘National Manufacturing Policy’ and ‘Make in India’) followed by other facilitating measures in governance and skill development. The government has also announced its intention to issue a new industrial policy.
It is important to recognise that the relationship between openness of an economy and competitiveness of industry is not an automatic and linear one; strategic policy interventions are required in order to generate complementarities between the two. Strategic trade, investment and technology policies remain a crucial part of the industrial policy framework required for improving India’s manufacturing sector growth (especially in the context of the ‘Make in India’ mission) and for building up domestic technological capabilities needed for achieving global competitiveness. Despite sluggish world manufacturing growth, the fact remains that contribution of developing and emerging economies to world manufacturing growth accounts for 90 per cent. In this backdrop, India’s strategies to achieve high growth in manufacturing should address the following questions: a) how to increase India’s share in world manufacturing given the fact of slow global growth; b) how to expand domestic demand; c) how to mobilise internal and external sources of finance and investment to build capacities physical as well as human; and d) what could be the role of various categories of firms – by ownership and scale of operation.
In addition to a number of other studies, efforts will be made, under a research programme, over the next two years to (i) identify continuities and departures in production pattern, investment trends, degree of engagement through trade and technology assimilation, status of infrastructure and human capabilities and (ii) comprehend an industrialisation strategy given the constraints and emerging opportunities. Thus it can be seen that the Institute’s research programme encompasses some of the issues that the proposed new industrial policy is bound to deal with. The Institute can take up a few more specific aspects once the contours of the new policy are known and it will continue to enhance the scope of policy relevant studies.