Abstract
This paper presents measures of relative efficiency for nine small scale industries in fifteen major states of India. An index of relative efficiency based on total factor productivity is used. It is observed that there are wide differences in efficiency of these industries among the states. The extent of variations in efficiency is much wider in intermediate product and consumer non-durable industries than in consumer durable industries. Relative size, as measured by the value of production per unit, is found to be an important source of inter-state differences in efficiency. It is also found that intermediate product industries have substantial economies of scale.
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