Chapter 6: Persisting Industrial Concentration and Signs of Industrial Dispersion: Evidence from Formal and Informal Manufacturing Sector

The spatial concentration of the manufacturing employment and production is the general feature in all the economy. Indian economy is not an exception from this scenario. The spatial pattern of Indian manufacturing sector reports a significant regional disparity. Since manufacturing is becoming more vital in the Indian economy, it is essential to understand the spatial distribution of the manufacturing sector. This chapter provides a detailed picture of India’s spatial distribution pattern in formal and informal manufacturing sectors. Using the well-known Ellison–Glaeser index, we measure the industrial agglomeration for all National Industry Classification (NIC) three-digit industries and further incorporate statewise manufacturing activity distribution. From the analysis, it is evident that there is a substantial regional concentration of manufacturing activity; however, the recent regional distribution pattern also depicts some signs of industrial dispersion.