INDUSTRIAL SECTOR IN PRE- REFORM PERIOD

Transcription

1 UNIT 11 INDUSTRIAL SECTOR IN PRE- REFORM PERIOD Structure 11.0 Objectives 11.1 Introduction 11.2 Industrial Policies in the Pre-reform Period An Overview 11.3 Industrial Sector in Pre-reform Period Pattern of Industrial Growth Diversification of the Industrial Sector Pattern of Manufacturing Growth at Dis-aggregated Levels 11.4 Let Us Sum Up 11.5 Exercises 11.6 Key Words 11.7 Some Useful Books 11.8 Answers or Hints to Check Your Progress Exercises 11.0 OBJECTIVES After going through this unit, you will be able to: provide an overview of industrial policies in the pre-reform period; analyse the pattern of industrial growth during pre-reform period; state the extent of diversification of Indian industries; and explain the pattern of growth of manufacturing sector INTRODUCTION To start with, let us first discuss the onset of the industrial policy reform process and clarify what is meant by pre-reform period. 52 The process of industrial policy reform started in 1970s. Automatic capacity expansions were permitted during the 1970s and 1980s and a few industries were delicensed in Systematic deregulation began in earnest in the mid- 1980s. Taxation reforms mainly the conversion of multi-point excise duties into a modified value-added tax (MODVAT) in all sectors except petroleum products, textiles and tobacco were also introduced by Industrial performance was influenced by reducing the taxation of inputs and the associated distortion (Panagariya, 2004). But this liberalisation was trivial. The intensive industrial policy reforms were launched when the New Industrial Policy (NIP) statement of 1991 introduced reforms in regulations governing licensing, monopoly, foreign investment, small-scale sector industries and in public sector enterprises. The series of economic reforms which have been discussed in unit 7 were unprecedented in their scope and magnitude. Thus, the era after 1991 is commonly termed as post-reform period and the one prior to 1991 as pre-reform period. Although prereform period may refer to the period between India s independence and

2 1990, the analysis with regard to the industrial sector will have an emphasis on its performance during 1980s. Industrial Sector in Pre-reform Period 11.2 INDUSTRIAL POLICIES IN THE PRE- REFORM PERIOD AN OVERVIEW Organised thinking concerning the direction of industrial development in India may be traced to the Statement of Industrial Policy, 1945, the Industrial Policy Resolution of 1948, the enactment of the Industries (Development and Regulation) Act, 1951, the First and Second Five Year Plan documents, and the Industrial Policy Resolution of The 1945 Statement of Industrial Policy is remarkable as a precursor of all the thinking that became enshrined in the key industrial policy resolutions after independence. The statement also mentioned the concept of industrial licensing. Special importance was given to the development of steel, heavy engineering, machine tools and heavy chemicals industries. This emphasis has been the characteristic of Indian industrial policy thinking ever since. The idea that the Government should actively participate in the setting up of certain important industries, either directly or by subscribing shares in such industrial undertakings, was also mooted in this industrial policy statement. Licensing was mainly thought to be an instrument for the dispersal of industries and to prevent the establishment of excess capacity in industries. The list of industries which were proposed to be brought under central control bears a resemblance to the original schedule of industries brought under the control of the Central Government through the Industries Development and Regulation (ID&R) Act of Thus, significant continuity is observed in thinking between pre-independence and post-independence Government as reflected in the Industrial Policy Resolutions of 1948 and In the 1950s and 1960s, the dominant view in the literature of development economics was that the Government had to play an important role and it should undertake activities that would compensate for market failure. Market Failure was perceived as the inability of the markets to optimally allocate resources over time. It was this line of reasoning that led Indian policy-makers to formulate economy-wide plans. The low growth of the economy persisted during 1970s despite Government of India s continuing rhetoric that a central goal of policy was to achieve improved living standards for the majority of the people in India. To that end, a succession of Five Year Plans set forth a large number of economic policies controlling and directing private economic activity and guiding public sector enterprises that absorbed a high and increasing fraction of investment. As you have learned in unit 6, the underlying philosophy of the second and subsequent Plans 1 was that industrialisation was perceived as the major engine of growth and that import-substitution policies would be used to stimulate growth, especially in the manufacturing industries. Simultaneously, cottage and small-scale industries were to be encouraged (as had been advocated by Gandhi) to provide employment. The Second Five Year Plan and even later Plans had been increasingly concerned with the allocation of 1 The First Five Year Plan did little more than bring together various projects that were already under way or in the advanced planning stage. In fact, the Second Five Year Plan is always seen as the conceptual basis of Indian planning. 53

3 Sectoral Performance-I public resources and much less with indications and policies to direct the whole economy in desired directions (Rakesh Mohon, 1992). The Plans were heavily influenced by P.C. Mahalanobis, whose economic model ignored foreign trade and assumed that domestic investment was limited by the domestic ability to produce capital goods. As we have learned in unit 6, the key elements of this model were import substitution, predominance of the public sector and promotion of heavy industry. With the passage of time, these policies combined with industrial licensing system and extensive bureaucratic control over production, import & export, capital issues, foreign exchange, allocation of raw materials, price & allocation of credit served to eliminate competition within the domestic market and to generate a highly inefficient and restrictive production system. Thus, in most regards, the Indian economy remained heavily controlled and insulated from the rest of the world and provided a difficult environment to undertake business. The planners and policy-makers in India understood the need for using a wide variety of instruments and controls to steer Indian industrial development in a desired direction. However, the original intention of licensing and control to promote selected important industries was later used to control almost all industries with the result that regulation rather than development became the important feature of the economic system. By the late 1970s and early 1980s, it was obvious that the pervasive regulation and controls over private economic activity by the Government had effects opposite to those intended and had inhibited economic efficiency and industrial growth. From that time onwards, the idea of bringing in industrial policy reforms in the Indian economy was in the air. Indeed, in 1984, the Government declared that its primary objective was to rationalise controls. The intent was clearly to reduce the number of overlapping and sometimes even inconsistent regulations INDUSTRIAL SECTOR IN PRE-REFORM PERIOD Having looked into the industrial control regime, let us now look at the industrial growth the rate and pattern of growth and the structural changes in the pre-reform period. The industrial sector in India fared quite impressively in the 1980s in terms of growth of output/value added, compared to the earlier decades. There has been much discussion in recent literature on the pattern of growth in the 1980s and the factors behind the observed pattern. We shall look at the available empirical evidence in some detail and review the explanation offered to account for the improved growth performance. The re-orientation of industrial and trade policies initiated in the mid-1970s received a fillip in 1985 with the introduction of some major policy reforms. It would be examined whether the growth performance in the second half of the 1980s was superior to that in the first half Pattern of Industrial Growth 54 Table 11.1 presents average annual growth rates in Gross Value Added (GVA) for the entire economy, the agricultural sector and the different subsectors of the industrial sector for the 1970s, 1980s and the two halves of the 1980s. There was appreciable increase in the growth rate in the 1980s in all sectors/sub-sectors for which comparable figures are given in the table. The

4 growth rate of Manufacturing Value Added (MVA) increased from 4.9 in 1970s to 7.0 per cent per annum in 1980s and contributed much to the rise in the overall growth rate of the economy. Within the manufacturing sector, the registered segment grew at 8.1 per cent while the unregistered segment grew much less impressively at 5.8 per cent per annum. Industrial Sector in Pre-reform Period Comparing the two halves of the 1980s, we observe that with the exception of registered manufacturing, all sectors/sub-sectors shown in Table 11.1 fared better in the second half. The unregistered manufacturing sub-sector improved its growth rate considerably from 4.1 to 7.5 per cent per annum and this improvement alone is responsible for the observed increase in the growth rate of the manufacturing sector from 6.2 to 7.8 per cent. The expectation that the policy changes undertaken in 1985 would have a direct positive impact on the growth performance of the registered manufacturing sector was belied, the growth rate of this sub-sector being the same in the two halves of the 1980s. However, it must be noted that the growth rate of this sub-sector accelerated from 0.5 per cent in to 7.1, 10.6 and 13.8 in , and , respectively. The year appears to be an exceptionally bad year for this sub-sector. Table 11.1: Sectoral Average Annual Rates of Growth of GVA: , (at prices) (Per cent per annum) Sector to to to to Agriculture, Forestry and Fishing Mining and Quarrying Manufacturing Registered Unregistered Electricity, Gas and Water Industry = (2)+(3)+(4) Total GDP Sources: 1) Dandekar (1992). 2) Central Statistical Organisation (CSO): National Accounts Statistics, various issues. The rising value added shares of industry and its major branches over the period to are described in Table The share of industry increased substantially over the 15-year period ( to ), from 12.8 to 19.1 per cent. The increase was marginal over the subsequent 15-year period ( to ) from 19.1 to 20.8 per cent. The structural change in favour of industry again gained momentum in 1980s. At the end of that decade, industry accounted for a little more than one quarter (25.1 per cent) of total GDP. The share of registered manufacturing in GDP increased impressively from 5.4 to 13.1 per cent over the forty-years period. The increase in the case of unregistered manufacturing was not striking, its share increased from 6.0 to around 7.5 per cent. 55

5 Sectoral Performance-I Table 11.2: Sectoral Shares in GDP at Prices: to (Per cent) Sector (1) (2) (3) (4) (5) (6) 1. Agriculture, Forestry and Fishing Mining and Quarrying Manufacturing Registered Unregistered Electricity, Gas and Water Industry = (2)+(3)+(4) Services Total GDP Source: CSO, National Accounts Statistics, Various issues. The contribution of manufacturing to industrial value added showed a progressive decline from about 89 per cent in to a little less than 84 per cent in (see Table 11.3). This decline is a reflection of the consistently higher growth achieved in the Electricity sub-sector. Within the manufacturing sector, the large-scale (or registered) sub-sector improved its share from 47.4 to 62.4 per cent over the four decades under review. Table 11.3: Share of Manufacturing in Industrial GVA and Share of Registered Manufacturing in Total Manufacturing GVA Sector (1) (2) (3) (4) (5) (6) Share of Manufacturing in Industry (%) Share of Registered Manufacturing in Total Manufacturing (%) Source: CSO, National Accounts Statistics, Various issues. It may be argued that over the 40-year period ( ), both the factory and non-factory branches of manufacturing displayed higher growth rates of value added than the agriculture sector. The growth record of the two branches improved considerably during the l980s. The four-decades under review witnessed significant structural change in favour of industry and factory sector, in particular, in terms of value added. 56 However, the growth performance of the industrial/manufacturing sector in India cannot be regarded as satisfactory in comparison with that in several

6 other economies such as China, South Korea, Thailand, Pakistan and Malaysia (see Table 11.4). The performance of South Korea, China and Thailand was very impressive throughout the period Industrial Sector in Pre-reform Period Table 11.4: Average Annual Growth Rate (per cent) of GDP in Industry and Manufacturing in India and some other Developing Countries: and Country Industry Manufacturing (1) (2) (3) (4) (5) India China Pakistan Thailand S. Korea Turkey Malaysia Indonesia Source: World Bank, World Development Report, 1992, Table 2, pages The industrial growth rates actually achieved invariably fell short of the targets set in the successive Five-Year Plans (see Table 11.5). The target was marginally exceeded only in the first Five-Year Plan. In the Seventh Plan, in the second half of the 1980s, the target of 8.7 per cent was nearly achieved, reflecting the improvement in the performance during the 1980s. Table 11.5: Growth Rates of Industrial Production (Per cent per annum) Five Year Annual Plans (s) Target Actual (1) (2) (3) I to II to III to Annual Plans to IV to V to Annual Plans VI to VII to Source: Ahluwalia (1991), Table 1.1, page

7 Sectoral Performance-I Check Your Progress 1 Note: i) Space is given below each question for your answer. ii) Check your answer(s) with those given at the end of the unit. 1) Give important highlights of Industrial Policy Statement, ) State the underlying philosophy of Second Five-Year Plan about industrialisation. 3) State whether following statements are true or false: i) Regulation and control during 1970s and 1980s inhibited economic efficiency and industrial growth. ( ) ii) During 1980s, the unregistered segment grew less impressively than that of registered segment within the manufacturing sector. ( ) iii) The growth performance of the industrial sector in India in pre-reform period was at par with South Korea, China and Thailand. ( ) Diversification of the Industrial Sector The most striking feature of Indian industrialisation is the extent of diversification it achieved in a relatively short period. Self-reliance through the building of heavy industry was emphasised in the strategy formulated by Mahalanobis in the mid-1950s and India launched a major drive for industrial diversification. Steps were taken for the establishment of machine tool industries, heavy electricals, machine building and other branches of heavy engineering industries. With a substantial increase in the output of basic chemicals coupled with introduction of new chemical products, chemical industry grew rapidly. In spite of certain setbacks after 1965, progress in diversification of the industrial structure was maintained. Table 11.6 depicts the progress over the period in respect of structural transformation. The share of capital goods in industrial value added increased steadily at a high pace from 4.7 per cent in 1956 to 23.7 per cent in The share of basic goods increased relatively moderately, from 22.3 per cent to 38.4 per cent. Consumer goods group declined considerably in relative importance, with the share in industrial value added falling from 48.4 per cent in 1956 to 20.5 per cent in Much of the structural change in favour of capital and basic goods industries was achieved by

8 Table 11.6: Diversification within the Industrial Sector (Weights of Use-based Sectors in the Index of Industrial Production) Industrial Sector in Pre-reform Period I Basic Goods II Intermediates Goods III Capital Goods IV Consumer Goods (a) Non-durables - (31.6) (28.1) (21.1) - (b) Durables - (5.7) (3.4) (2.6) - V Industry Source: 1) Sandesara (1992), Table ) Mohan (1992), Table 3. Table 11.7 provides the trend growth rates for the period to for consumer goods, and intermediate goods groups within registered manufacturing, and compares the growth rates for this period with those for the earlier periods and There was an all round increase in the growth rate during to , compared to the growth rates in the deceleration phase, to The increase from 8.0 to 14.2 per cent was very steep in the case of consumer durables, while the increase was quite moderate for the other three sub-sectors. In the case of capital goods, the increase was from 6.7 to 7.8 per cent, whereas during to this vital sector displayed the highest growth rate of 15.6 per cent. Sector Table 11.7: Growth Rates of Value added in Registered Manufacturing: Modified Use-based Classification Share in Value Added in Annual Growth Rates (%) to to to Intermediate Goods Capital Goods Consumer Non-durables Consumer Durables Registered Manufacturing Source: Ahluwalia (1991). The features of growth in the 1980s have received much comment from several economists. Some were sceptical about the sustainability of the high rates of growth. It was argued that both demand and supply factors would work to slow down the growth in later years. The rise in real incomes of people in the middle-income categories in the 1980s gave rise to large demand for consumer durables. Once the repressed demand from previous years was met, rates of growth would come down Pattern of Manufacturing Growth at Dis-aggregated Levels Before analysing the pattern of growth at dis-aggregated level, let us consider the structure of the manufacturing sector at the beginning of the 1980s. The shares of the different 2-digit industry groups in Manufacturing Value Added (MVA) in are given in col. 3 of Table Three largest industry groups, namely, textiles (with a share of 24.0%), chemicals (9.2%) and basic metals (7.6%) together accounted for more than two-fifths of MVA. Transport 59

9 Sectoral Performance-I equipment (6.9%), Repair Services (6.7%), Non-electrical machinery (6.4%), Food Products (6.2%), Metal Products (5.2%) and Electrical Machinery (5.0%) had shares ranging between 5 and 7 per cent. The other six industry groups shown in col. 2 of Table 11.8 had a combined share of about 23 per cent only. Let us now comment on the growth performance of the different industry groups. The figures are given in the last column of Table Electrical machinery had the highest growth rate of 20.1 per cent during to Rubber, Petroleum etc. (11.6%), Chemicals etc. (10.8%), Non-metallic mineral products (9.9%), Non-electrical machinery (9.3%), Food products (9.2%), Paper and Printing (9.2%), and Transport Equipment (8.6%) displayed above average growth rates. Among important industries, Textiles (4.9%), and Basic Metals (3.9%) grew slowly. High growth was registered in several industries belonging to either metal-based or chemicalbased industry groups. Thus, industrial growth in the 1980s was quite broadbased. Table 11.8: Share in and Growth Rates over the Period to of Two-digit Industry Groups of Manufacturing 60 NIC Code Industry Group Share in MVA in Trend Growth Rate over the Period to (per cent per annum) Food Products Beverages, Tobacco etc Textiles Wood, Furniture etc Paper & Printing Leather and Products Rubber, Petroleum etc Chemicals etc Non-metallic Mineral Products Basic Metals Metal Products Non-electrical Machinery Electrical Machinery Transport Equipment Other Manufactures Repair Services Total Manufacturing Source: 1) CSO, National Accounts Statistics. 2) Nagaraj (1989). We shall now attempt a comparative study of the registered and unregistered segments of the manufacturing sector. The per centage shares of the registered segment in manufacturing for the different 2-digit industry groups for the years and are given in columns (3) and (4) of Table In , the registered segment had a value added share of 57 per cent in aggregate manufacturing and a share of at least 60 per cent in all major industry groups except Textiles, Repair Services and Metal products. The

10 registered segment was particularly dominant in Chemicals, Electrical Machinery, Non-electrical Machinery and Transport equipment. The unregistered segment had a dominant share in Wood, Furniture etc., Repair Services, Leather and Leather products and Metal products industries. By , the share of the registered segment in aggregate manufacturing rose to 63 per cent, and its share in most of the individual industry groups too increased, the exceptions being Metal Products, Electrical Machinery and other Manufacturing. Thus, the relative importance of the unregistered segment declined. However, in Textiles there was little change in the position of the unregistered segment. The industry-wise trend growth rates for the two segments for the period to are given in columns 5 and 6 of Table In all industries (industry groups) except Textiles and Basic Metals, the unregistered segment of manufacturing recorded lower growth rates than the registered segment. The relative low growth rate of the unregistered segment was in evidence even in light industries like Food products, Wood, Furniture etc., Leather and Leather products and Beverages, Tobacco etc. Such slow down occurred in spite of the continuation of several promotional and protective measures for small industry. The observed relative slow down of this labour intensive segment of manufacturing during 1980s was cause for concern. Table 11.9: Industry Group Wise Shares of Registered Manufacturing in , and Growth Rates of VA in Registered and Unregistered Segments of Manufacturing over the Period to NIC Code Industry Group Share (%) of Regd. Manufacturing in Total Manufacturing Trend Growth Rate (% p.a.) to Regd. Manf. Unregd. Manuf Food Products Beverages, Tobacco etc Textiles Wood, Furniture etc Paper & Printing Leather and Products Rubber, Petroleum etc Chemicals etc Non-metallic Mineral Products Basic Metals Metal Products Non-electrical Machinery Electrical Machinery Transport Equipment Other Manufactures Repair Services All Industry Groups Source: 1) CSO, National Accounts Statistics. 2) Nagaraj (1989). Industrial Sector in Pre-reform Period 61

11 Sectoral Performance-I There are several opinions about the resurgence of growth in the 1980s. However, the most commonly cited factors attributing to the improvement in the growth rate are: (i) set-up in infrastructure investment and more efficient management of the infrastructure sectors, (ii) growth of per capita agricultural income and (iii) reforms in the industrial and trade policies. 62 Check Your Progress 2 Note: i) Space is given below each question for your answer. ii) Check your answer(s) with those given at the end of the unit. 1) To what extent Indian industries diversified in pre-reform period? 2) Do you think that industrial growth in 1980s was broad based? Give reasons in support of your answer. 3) Why was the relative slow down of labour intensive segment of manufacturing was a cause of concern? 11.4 LET US SUM UP The industrial growth and diversification during the pre-reform period has been analysd in this unit. The broad trends in industrial growth in relation to trends in GDP growth and agricultural growth over the period have been discussed. Both the registered and unregistered branches of manufacturing displayed higher growth rates than the agriculture sector and Indian economy at large, with the registered sub-sector performing much better. The Indian economy witnessed significant structural change in favour of industry and particularly registered manufacturing. However, the growth performance of Indian industry was inferior to that of China, South Korea, Thailand, Malaysia and, even Pakistan. Diversification of Indian industries in a short period is the most striking feature of Indian industrialisation.

12 At the dis-aggregated level of total manufacturing sector, Electrical machinery had the highest growth rate of 20.1 per cent during to Rubber, Petroleum etc. (11.6%), Chemicals etc. (10.8%), Non-metallic mineral products (9.9%), Non-electrical machinery (9.3%), Food products (9.2%), Paper and Printing (9.2%), and Transport Equipment (8.6%) displayed above average growth rates. Among important industries, Textiles (4.9%), and Basic Metals (3.9%) grew slowly. Industrial Sector in Pre-reform Period By , the share of the registered segment in aggregate manufacturing rose to 63 per cent, and its share in most of the individual industry groups too increased, the exceptions being Metal Products, Electrical Machinery and other Manufacturing. Thus, the relative importance of the unregistered segment declined in the aggregate and in most of the industry groups including Food products, and Beverages, Tobacco etc. However, in Textiles there was little change in the position of the unregistered segment. The industry wise trend growth rates of the two segments (registered unregistered) during the period to reveal that except for Textiles and Basic Metals, the unregistered segment of manufacturing recorded lower growth rates than the registered segment. There was a relative low growth rate of the unregistered segment in light industries like Food products, Wood, Furniture etc., Leather and Leather products and Beverages, Tobacco etc. Such slow down occurred in spite of the continuation of several promotional and protective measures for small industry. The observed relative slow down of this labour intensive segment of manufacturing during 1980s was cause for concern EXERCISES 1) The growth performance of manufacturing sector during four decades ( ) had witnessed significant structural change in favour of industry and factory sector. Comment. 2) Critically examine the diversification of industrial sector during prereform period. 3) Compare growth rate trends of registered and unregistered segment of manufacturing sector during the period to KEY WORDS Industrial Policy Resolutions: Industrial Policy Resolutions of 1948 and 1956 were the statements wherein the Government of India declared the various policies that would be adopted by it for the industrial development of the country. Industrial Licensing System: Industrial Licensing is governed by the Industries (Development & Regulation) Act, The Industrial Policy Resolution of 1956 identified the following three categories of industries: those that would be reserved for development in public sector, those that would be permitted for development through private enterprise with or without State participation, and those in which investment initiatives would ordinarily emanate from private entrepreneurs. Until the recent industrial and trade policy reforms, the establishment and operation of an industrial enterprise in India required approvals from the Central Government at almost 63

13 Sectoral Performance-I every step. Over the years, keeping in view the changing industrial scene in the country, the policy has undergone modifications. Industrial licensing policy and procedures have also been liberalised from time to time. Industrial Growth: It generally refers to the growth in industrial production. Industrial production is expressed as an index called the Index of Industrial Production (IIP). The IIP is a standard measure of the trends of industrial production and is being published as a monthly series since 1950 by the Ministry of Industry, Government of India. Revisions of IIP are carried out from time to time by shifting the comparison base to a more recent period and by reviewing coverage of items/industries for reflecting changes in the structure of the Indian industry sector. The Department of Statistics set up a Technical Advisory Committee (TAC) in June 1995 to examine all technical issues relating to comparable state level IIPs and make recommendations thereon. Industrial Diversification: It refers to the diversification of the industrial sector of an economy into various activities. For example, self-reliance through the building of heavy industry was emphasised in the strategy formulated by Mahalanobis in the mid-fifties and India launched a major drive for industrial diversification. Steps were taken for the establishment of machine tool industries, heavy electricals, machine building and other branches of heavy engineering industries. With a substantial increase in the output of basic chemicals coupled with introduction of new chemical products, chemical industry grew rapidly SOME USEFUL BOOKS Ahluwalia, I.J. (1991); Productivity and Growth in Indian Manufacturing, Oxford University Press, Delhi. Basu, K. (1993); Structural Reforms in India, , Economic and Political Weekly, pp: Dandekar, V.M. (1992); Forty Years After Independence in Jalan, B. (Ed.), The Indian Economy: Problems and Prospects, Viking Penguin India, Delhi. Misra, S.K. and Puri, V.K. (2001); Indian Economy, 19 th Edition, Himalaya Publishing House, Mumbai. Mohon, Rakesh (1992); Industrial Policy and Controls in Bimal Jalan (Ed.), The Indian Economy: Problems and Prospects, Viking Penguin India. Nagaraj, R. (1989); Growth in Manufacturing Output since 1980: Some Preliminary Findings, Economic and Political Weekly, July 1. Sandesara, J.C. (1992); Industrial Policy and Planning, , Sage Publications, New Delhi. World Bank (1992); World Development Report

14 11.8 ANSWERS OR HINTS TO CHECK YOUR PROGRESS EXERCISES Industrial Sector in Pre-reform Period Check Your Progress 1 1) Active participation of Government in industrial activities either by setting up important industries or by subscribing shares, Prevention of establishment of excess capacity in industries. 2) See Section ) i) True ii) False iii) False Check Your Progress 2 1) See Sub-section ) See Sub-section ) See Sub-section