Looking Beyond the Methods: Productivity Estimates and Growth Trends in Indian Manufacturing (original) (raw)
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ECONOMIC REFORMS AND PRODUCTIVITY GROWTH IN INDIAN MANUFACTURING SECTOR – AN INTER STATE ANALYSIS
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SSRN Electronic Journal, 2013
The extent to which Indian organized manufacturing performance changed after the Economic Reform of 1991 has been an important question among empirical analysts. Using input-output data from the Annual Survey of Industries for the period 1970-71 through 2007-08, this paper compares the pre-and post-reform performances of Indian manufacturing in terms of total factor productivity growth. We use the non-parametric method of Data Envelopment Analysis to construct the Biennial Malmquist Index of total factor productivity for Indian states to determine if the states have experienced improvement in manufacturing productivity during the post-reform years. Results show that at the all-India level, total factor productivity growth rate in manufacturing is higher during the post-reform period. Although the majority of states experienced accelerated productivity growth, some states experienced declines in productivity after the reforms. However, the regional variation in the rates of productivity change diminished during the post-reform years. A non-parametric decomposition of the Malmquist productivity index into its components shows that both before and after the reforms technological progress was the most important component of the manufacturing growth process
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11.Growth of Industrial Production in Selected Indian Manufacturing Industries
The present article attempts to examine the contribution of inputs and total factor productivity growth to the growth of output by considering the aggregate manufacturing sector and seven selected manufacturing industries of India during the period 1979-80 to 2003-04. Major findings of the study indicate that output growth in the selected Indian manufacturing industrial sectors is driven mainly by inputs accumulation while the contribution of total factor productivity growth remains either minimal or negative. The growth rate of total factor productivity in almost all the industries under our study is gradually declining, especially during the post-reforms period. The change in pattern of sources of output growth may have taken place due to liberalization policies and structural reforms undertaken during the 1990s.
International Journal of Business Analytics and Intelligence, 2020
The study estimates and decomposes the sources of total factor productivity growth (TFPG) of the 2-digit manufacturing industries as well as total manufacturing industry in 15 major industrialized states in India as well as in All-India during the period from 1981-82 to 2010-11 (total study period), pre-reform period (1981-82 to 1990-91), post-reform period (1991-92 to 2010-11) and for two decades of the post-reform period (i.e., 1990-91 to 2000-01 and 2001-02 to 2010-11), using stochastic frontier production function. The methodology necessitates decomposition of the sources of TFPG into technological change, technical efficiency change, allocation efficiency change and scale change. The main findings of our decomposition are that the growth rates of TFP in most of the 2-digit industries in the major industrialized states in India as well as in All-India have declined during the post-reform period. Also, this decline in TFPG is mainly accounted for by the decline in technical efficiency change and allocation efficiency effect that happened during that period. With respect to scale effect, its contribution to TFPG in the 2-digit industries in the major industrialized states has become very negligible although the manufacturing industries of different states under study and India as a whole have benefitted from economies of scale. The behaviour of the allocation efficiency component clearly indicates inefficient resource allocation in almost all the 2-digit industries under study during the post-reform period. This implies that liberalization of the economy during the post-reform period has increased the price distortion measured by the gap between price and marginal cost of the product of 2-digit manufacturing industries in the major industrialized states in India and in All-India as well. However, the rates of technological progress of almost all the 2-digit industries in most of the states under study have increased. Notwithstanding, as the combined effect of technical efficiency change and allocation efficiency change of these industries outweigh the joint effect of scale change and technological change of the same, TFPG of these industries has declined during the post-reform period.