Dynamics of manufacturing cluster : a case of Patna district

Abstract

Clusters are a proximate group of interlinked firms, are a prominent feature of any country, state, region or economy. The role of clusters becomes more important for one of the least developed states in India such as Bihar where the growth in the manufacturing sector was registered just at 0.38% against the national average of 7.8% during 2002-07. Also, for the past 27 years, it ranked last among Indian states in the Human Development Index, thus showing the decline in social and economic development. This thesis is focused on cluster-based city development approach which uses the existing resources and assets in a more sustainable and viable way rather than conventional development approach of setting up SEZs (Special Economic Zones) and attracting large FDI (foreign Direct investments) for Patna District. Patna which is the major administrative, educational and trading hub in Bihar is selected for the present study based on the two criteria- (a) size of the cluster and (b) role in state’s economy. In the present study, it is intended to explore the evolution of manufacturing clusters in Patna district and their role in economic development. The scope of this study is limited to the cluster falling under MSME in Patna district only. Only employment and production factors have been taken into consideration for cluster analysis. The aim is proposed to be achieved through three objectives. The first objective involves the identification of existing and potential clusters in the district using secondary data which are verified through the field survey. Twenty-three identified clusters are analysed through Location Quotient Analysis on the basis of employment to find out the competitive strength of clusters in the regional economy. Three clusters having better LQ and which also follow certain criteria are selected out of 23 for further study. In the second objective, the spatio-economic ramification of each identified cluster is analysed through Porter’s Diamond Analysis, Shift Share Analysis (to analyse trends or changes in economic activities over time), Deficiency Gap Analysis, etc. For this, the structural and spatial mapping (spatial variations of land use and built-up over the year) is done and necessary studies such as their interdependencies, market trends, forward-backwards linkages, competitiveness, issues and potential are studied in these ABSTRACT Dynamics of Manufacturing Cluster: A Case of Patna District three identified clusters. In the last objective, the central and state government policies, schemes and interventions are studied and measures for promoting and regulating the clusters are suggested based on the result of the analysis. The outcome of this thesis is expected to conclude that although there are many clusters in the district which are still tucked within households and remained invisible; these clusters can take good advantage of the easily available cheap labour force, Government schemes and other favourable conditions. With the example of these three clusters; and the measures and strategies used, other clusters can be studied and made prosperous and organized to foster long term urban economic development in the study area.