The present paper is an attempt the firm level performance of manufacturing
and service sectors in India in terms of the level of technical change,
technical efficiency change, and productivity growth. The study uses the
Malmquist Productivity Index (MPI) model to estimate the total factor
productivity growth index for manufacturing and service sectors with
decomposition into catching up effect and the innovation effect of the
common set of over the study period during 1991-92 to 2010-11. For
analytical convenience, this period has been divided into two sub-periods,
namely, 1990-91 to 1999-2000 (Phase-I: Liberalization) and 2000-01 to
2010-2011 (Phase-II: Liberalization). The study also examines the total
factor productivity growth (TFPG) of manufacturing and service sectors
and the factors determining the level of total factor productivity growth of
both sectors with the help of the regression model. The study also recommends
that for the enhancement of TFPG the level of openness, raw material,
energy, and advertising, profit margin, and investment are the major
contributions.