Economic Reforms and Sources of Productivity Growth in Selected Organised Manufacturing Labour Intensive and Capital Intensive Industries in India - A Comparative Study

Abstract

This study uses the non parametric data envelopment technique to investigate the impact of economic reforms on Total Factor Productivity Growth in Selected 20 Indian Organised Manufacturing Industries by classifying them into Labour Intensive and Capital Intensive industries; by using non parametric DEA technique to four-digit panel data for the period 1990 to 2011. The study reveals that the Labour Intensive Industries have negative Total Factor Productivity Growth as -6.1% deteriorated mainly due to Technological Change which is -4%. Meanwhile, the Capital Intensive Industries have positive Total Factor Productivity Growth of 6.7%, mainly contributed by Efficiency Change of 1.6% and Technological Change of 5.0%. Eight out of ten Organised Manufacturing Capital Intensive Industries have shown positive Total Factor Productivity Growth during the economic reform period, whereas seven out of ten Organised Manufacturing Labour Intensive Industries showed negative Total Factor Productivity Growth due to lack of technological change.