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Citation Information

Type Working Paper - University of Connecticut Department of Econommics Working Paper Series
Title Economic reforms and total factor productivity growth of Indian manufacturing: An inter-state analysis
Author(s)
Publication (Day/Month/Year) 2013
URL http://web2.uconn.edu/economics/working/2013-04.pdf
Abstract
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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