Productivity Trends in India's Manufacturing Sectors in the Last Two Decades

26 Pages Posted: 28 Jan 2006

See all articles by Bulent Unel

Bulent Unel

Louisiana State University, Baton Rouge

Date Written: January 2003


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.

Keywords: Labor productivity, factor productivity

JEL Classification: O40, O47, E10

Suggested Citation

Unel, Bulent, Productivity Trends in India's Manufacturing Sectors in the Last Two Decades (January 2003). Available at SSRN: or

Bulent Unel (Contact Author)

Louisiana State University, Baton Rouge ( email )

Department of Economics
2134 Patrick F. Taylor Hall
Baton Rouge, LA 70803
United States

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