Global competitiveness and Total Factor Productivity in Indian manufacturing

In the face of intensified global competition and liberalised trade, productivity has emerged as a key indicator of successful restructuring and upgrading by firms and industries. Traditionally, productivity growth has been regarded as one of the main sources of income growth, along with the factors such as capital accumulation and the deepening of human capital development. Over the past two decades, liberalisation has become an important part of many countries' development strategies. The present study analyses the review of earlier studies on productivity and observes the changes in productivity in the industries after the 1991 reforms. The paper has been divided into seven sections. Section 1 is the Introduction giving a brief overview of productivity. Section 2 presents a review of earlier studies. Section 3 deals with data and methodology. Section 4 relates with Productivity growth during the pre-1980s. Section 5 presents the Productivity growth during the 1990s – the post reform period. Section 6 presents the Analysis of productivity growth in Indian manufacturing at aggregative-level and also industry wise trends in Total Factor Productivity for the entire period as well as for two sub-periods – period I, the pre globalisation period, i.e. 1980–1981 to 1990–1991 and period II, the post-1991 period, the period associated with liberalisation, competitiveness and globalisation. Finally, Section 7 contains the summary and conclusions highlighting the contributions of the researcher.