Organization Type and Productive Efficiency
The chapter highlights the structure of India’s industry and the performance of its constitutive components. The Molecular sector has employed a third of all people in industry. The Private sector has always been dominant in output and employment. The State sector has never commanded the heights. After liberalization, the boundaries of the State sector reduced. The shrinkage of the State sector has been achieved without privatization. Molecular sector efficiency had been highest before liberalization, but has declined over time. The Private sector’s high efficiency score after liberalization has come at the cost of wasting substantial capital. The State sector has had a spectacular post-liberalization efficiency catch-up. Once grossly inefficient, the State sector recorded the best comparative performance, helped by efficiency enhancements, among the three organization types driving India’s capitalism experiments. Finally, ownership does not matter but organizational processes do, as the case of Maruti Suzuki shows.