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Grad Student Considers Cause of India’s Lagging Manufacturing
May 24, 2019

Portrait of Aradhya Sood

Portrait of Aradhya Sood
Photo by Phuong Tran, CLAgency student

While she was growing up in India, land governance was often central to dinner table discussions in Aradhya Sood’s house. Later in life, she learned that very little research was being conducted in terms of policy analysis and structural models related to land reforms in the country. “I saw a gap in the literature and that’s why I chose to look at land,” she says.

“There are a lot of impoverished, unskilled people in India,” says Sood, who is in her fifth year of the graduate program in the Department of Economics. She believes that growth in the manufacturing sector might be able to change that. She posits that the manufacturing sector in India is lagging behind due to the fact that it cannot get adequate land to set up its factories. 

In her research dissertation, “Land Market Frictions and Manufacturing in India,” Sood explores the effects that various land market issues, such as land fragmentation and different land transaction tax rates, have on the manufacturing sector of the country. 

The Hard Climb For Data

Sood’s research draws on data from multiple sources, including the annual survey of industries and the agricultural census of India. While data mining is never easy, it becomes exponentially harder when done from halfway across the globe. “Collecting all this data has been a huge challenge, and I can understand why people don’t do this,” says Sood.

Data collection becomes an even greater challenge for Sood’s research because land is governed by the states in India. Hence, getting access to land data involves contacting revenue departments in each of India’s 29 states. “I’ve interviewed a couple of officers from different revenue departments across different states and also a couple of academics,” says Sood, who plans to conduct more interviews to improve understanding of the land transaction taxes across different periods of time in various states.

Silver Linings 

While data collection was a tedious process in the past, some of the data Sood requires is now available in various online sources, allowing quicker, more convenient access. Furthermore, the guidance that she received from her research committee and her advisor, Professor Thomas Holmes, helped focus her research. 

“They help me formulate the bigger picture but also help me out with smaller details,” she explains. “They have helped me from trying to understand how to best model my problem to realizing what data I will require to answer this question.”

Research and Reform

With her findings, Sood hopes to prove a correlation between land aggregation difficulties and hindered growth of the manufacturing sector in India. She hypothesizes that because land is acquired in small parcels with an average size of 2.8 acres, it is difficult to garner enough property for growth in size and output in the manufacturing industry. 

Although land has, so far, not been considered a major contributor to the sluggish growth in manufacturing by most research papers in economics, Sood’s research seeks to change that by providing a more intensive and methodological approach to land policy. She intends to suggest tangible policy reforms that address this issue. “With my research, I hope to quantify the costs of land acquisition barriers on Indian growth and development and to study the relative effectiveness of different government policies,” states Sood.

“Aradhya is asking a big question,” believes Professor Holmes. “Why is the manufacturing sector weak in India, especially compared to China? Her idea of looking at obstacles in the market for land is a very creative one, and she has already produced very interesting results.”

Future Plans and Aspirations

Sood believes that the multifaceted utility of land makes it a subject she can continue to research in the future. While she is currently looking at the problems that land fragmentation poses to the manufacturing sector in India, she ultimately hopes to extend her research to explore the impact that land has on the lives of different people in different sectors, from industry to daily life.  

Aradhya’s perseverance is what truly sets her apart. “She keeps going and going and going,” says Holmes, “and is a great role model for her fellow students in the way she gets her work done!” 

This story was written by an undergraduate student in CLAgency. Meet the team.