productivity trends in India

[Jaydeep]

Starting in the late 1970s, the Indian authorities implemented
a series of reforms aimed at exposing the economy to greater
competition and at liberalizing key aspects of economic activity. This
paper investigates productivity trends in India's (registered)
manufacturing sectors during the 1980s and 1990s. The main findings of
the paper are (i) labor and total factor productivity (TFP) growth in
total manufacturing and many of the component sectors since 1980 were
markedly higher than that in the preceding two decades, although the
extent of the acceleration in TFP growth depends critically on the
underlying assumptions about factor elasticities and the assumed
structure of the production function; (ii) productivity growth for
total manufacturing as well as for many subsectors picked up further
after the 1991 reforms; and (iii) classification of the best
performing sectors and the weakest performing sectors, based on
comparative TFP, remains robust to changes in underlying assumptions.