Purpose

This study aims to investigate the effect of monetary policy transmission on the use-based classification of manufacturing industries in India, an integral aspect influencing the overall economic growth of the nation.

Design/methodology/approach

The empirical study applies a panel autoregressive distributed lag model to examine the relationship/association between monetary policy transmission mechanism and the output of manufacturing industries in the long run and short run.

Findings

In the long run, the findings reveal a negative association between money supply and manufacturing industries’ output, indicating that an increase in money supply corresponds to a decrease in manufacturing output. Conversely, a positive relationship is observed between manufacturing industries’ output and banks’ credit, indicating that an increase in bank credit leads to a corresponding increase in manufacturing output. In the short run, the results highlight a significant positive relationship between manufacturing output and monetary policy transmission variables, including money supply, statutory liquidity ratio, real exchange rate and foreign direct investment. The use-based classification of manufacturing industries such as primary goods, capital goods and intermediate goods exhibits greater responsiveness to monetary policy shocks than consumer durables and non-durables goods.

Research limitations/implications

Policymakers are advised to regulate credit expansion to support the industry without risking financial instability, with key recommendations including stimulating consumer demand and adopting sector-specific policies to promote sustainable growth across diverse manufacturing sectors.

Originality/value

India, being a developing economy, efficient monetary policy transmission is crucial for boosting manufacturing output and employment. Nevertheless, there has been a scarcity of research concentrated on this pivotal intersection. This study aims to fill that gap, providing fresh insights into how monetary policy affects the growth of the manufacturing industry.

中文翻译：

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货币政策传导对印度制造业基于用途分类的影响：经验证据

 目的

本研究旨在调查货币政策传导对印度制造业基于用途分类的影响，这是影响国家整体经济增长的一个不可或缺的方面。

设计/方法论/途径

实证研究采用面板自回归分布滞后模型来考察长期和短期货币政策传导机制与制造业产出之间的关系/关联。

 发现

从长期来看，研究结果显示货币供应量与制造业产出之间存在负相关关系，表明货币供应量的增加对应于制造业产出的减少。相反，制造业产出与银行信贷之间存在正相关关系，表明银行信贷增加会导致制造业产出相应增加。短期来看，结果凸显了制造业产出与货币政策传导变量（包括货币供应量、法定流动性比率、实际汇率和外国直接投资）之间存在显着的正相关关系。初级产品、资本品和中间品等制造业基于用途的分类比耐用消费品和非耐用品对货币政策冲击的反应更大。

研究局限性/影响

建议政策制定者在不冒金融不稳定风险的情况下规范信贷扩张以支持该行业，主要建议包括刺激消费者需求和采取针对特定行业的政策以促进不同制造业的可持续增长。

 原创性/价值

印度作为发展中经济体，有效的货币政策传导对于提高制造业产出和就业至关重要。然而，针对这一关键交叉点的研究却很少。这项研究旨在填补这一空白，为货币政策如何影响制造业的增长提供新的见解。