Nature of agglomeration of the manufacturing sector –a study of Indian Districts

Abstract

The paper estimates the degree of agglomeration of the Indian organised manufacturing sector and examines its evolution pattern across districts over the period 2000-01 to 2009-10.  The estimation of the degree of industrial agglomeration is based on plant-level data from the Annual Survey of Industries. The paper uses the spatially-weighted Ellison Glaser Index to control for the inter-district spillover effect. The overall degree of agglomeration has been moderate and, over time, it registered a declining trend. While analysing the nature of industrial agglomeration, it has been observed that most of the low-tech and medium-low-tech industries are found to be highly agglomerated. 42% of the highly agglomerated industries are also highly polluting in nature. During the period 2000-01 to 2009-10, the second-tier cities observed a rise in the number of plants belonging to the polluting industries. High-tech industries are found to be concentrated in the already industrialised states. In contrast to this, the medium-high-tech industries have been spreading across districts. The distribution of low-tech industries is found to be even across the districts.