INDUSTRIAL PERFORMANCE: AFTERMATH THE ECONOMIC REFORMS
Introduction The Industrial sector has always been the backbone of India. In 1990–1, Industry contributed 26 percent of India’s GDP, employing 15 per cent of the workforce and using 39 percent of the economy’s capital stock. In the 1980s, industry was the economy’s ‘leading’ sector, growing annually at over 6 per cent, while the domestic output grew annually at around 5.5 per cent and exports, of which two-third were from manufacturing, at 8.5 per cent. The decade witnessed modernisation of the production structure with a step up in infrastructure, delicensing of investment and output controls, and a shift in trade policy from quotas to tariff. However, in 1991, the economy faced a liquidity crisis on account of the Gulf war, (b) collapse of the Soviet Union, and (c) the domestic political uncertainty, paralysing policymaking. Encouraged by the industrial and export boom of the 1980s, the orthodox economic reforms initiated in 1991 sought to (i) make a bonfire of the rema