Productivity growth in India since the 1980s: the KLEMS approach

Goldar, Bishwanath; Krishna, Kala; Aggarwal, Suresh Chand; Das, Deb Kusum; Erumban, Abdul Azeez; Das, Pilu Chandra

doi:10.1007/s41775-017-0002-y

Cited by 27 publications

(23 citation statements)

References 15 publications

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“…4. A similar methodology has been adopted in a number of earlier studies on TFP in Indian manufacturing (Goldar, 2015; and Goldar et al 2017), and therefore the details of methodology are not provided here.…”

Section: Notesmentioning

confidence: 99%

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Services input and productivity in Indian manufacturing plants

Goldar

2019

IGDR

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Purpose The purpose of this paper is to analyse econometrically determinants of total factor productivity (TFP) in Indian manufacturing plants with a focus on the influence of services input on productivity. Design/methodology/approach Plant-level data drawn from Annual Survey of Industries for the years 1998-1999 to 2012-2013 are used for the estimation of TFP at plant-level by applying the Levinsohn–Petrin methodology. Econometric models are estimated to explain variations in plant-level TFP. The explanatory variables used are services input intensity (split into manufacturing services purchased and other services), the share of information communication technology (ICT) assets in total fixed capital stock, the share of contract workers in total workers and the share of imported materials out of total materials used, with plant size taken as a control variable. Model estimation is done by applying the fixed effects model. Findings Econometric results indicate that services input and ICT intensity have a significant positive effect on productivity of manufacturing plants in India. Use of imported materials raises productivity, whereas the use of contract workers in place of regular workers tends to lower productivity. The impact of imported materials on TFP of manufacturing plants seems to be relatively bigger for labour-intensive, low technology industries. Originality/value Care has been taken for TFP measurement. Analysis of the impact of services input on TFP has been undertaken for Indian manufacturing using plant-level data for the first time.

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Section: Notesmentioning

confidence: 99%

“…7. For a discussion on the methodology of TFP measurement using gross output function framework, see Goldar (2015) and Goldar et al (2017). …”

Section: Notesmentioning

confidence: 99%

Services input and productivity in Indian manufacturing plants

Goldar

2019

IGDR

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“…To observe the impact of difference and divergence between proposed and existing approaches, we estimated the capital productivity derived from the estimated capital using both the approaches. The capital productivity is defined as the ratio of Gross Value Added (GVA) to capital (Goldar, Krishna, Aggarwal et al, 2017). Given that the capital is at the denominator of capital productivity computation, we expect the trend opposite to the one presented in Figure 4.…”

Section: Resultsmentioning

confidence: 99%

Real Capital Stock Estimation for Industries Using Perpetual Inventory Method: A Methodological Exploration

Soni

Subrahmanya

Bhattacharya

2019

The Indian Economic Journal

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A study of industrial structure and growth, in terms of capital intensity and capital productivity of industries, inevitably encapsulates the requirement and associated challenges of estimation of capital stock time series in real terms. An incorrect (under- or over-) estimation of real capital stock leads to dubious conclusion and, thus, ill-informed policy implications derived from the analysis. The industrial survey database–ASI–reports the time series of capital stocks for industries in nominal (at current prices) terms instead of in real (at constant prices) terms which is more meaningful for the analysis. The choice of correct deflator, consideration of suitable depreciation, discard and revaluation of capital stocks, make real capital stock estimation a matter of disquisition. A plethora of studies addresses these challenges of capital estimation deploying perpetual inventory method. However, the approaches used in the previous studies pose limitations in terms of price deflator selection, consideration of benchmark period for initial capital and choice of depreciation rates and methods. The present study addresses these limitations for the registered Indian manufacturing industries. The result of the present study exhibits a robust approach of real capital stock estimate and an advancement from the existing approaches.

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“…There have been studies in the past that documented India's GDP growth in the pre‐1980s, but there is hardly any attempt to understand the relative roles of capital accumulation and productivity in driving growth. Much of the studies on productivity in the Indian economy has been focusing on the post‐1980 period (see for recent studies Erumban and Das, 2016; Das et al ., 2016; Krishna et al ., 2016; Goldar et al ., 2017), while a comparative picture of the post and the pre‐1980 period is seldom available, particularly at sectoral level. The changes in the policy regime were expected to affect economic growth through both changes in the accumulation of factor inputs and changes in productivity.…”

Section: Productivity and Economic Growth In The Socialist Eramentioning

confidence: 99%

Economic Growth in India During 1950–2015: Nehruvian Socialism to Market Capitalism

Das

Erumban

Mallick

2019

Journal of Economic Surveys

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Comparisons of pre and postreform economic growth in India are widely researched in the literature. This paper adds to this literature, but with a sectoral growth accounting perspective. We compare the proximate sources of economic growth in India during the 1950–1980 periods, the so‐called Nehruvian socialist regime, with that of the post‐1980 period, which includes the pro‐business reforms in the 1980s and more aggressive pro‐market reforms in the 1990s. We document two important features of India's growth dynamics. First, the overriding importance of the services sector in India's growth is not new, but it has always been the case in independent India. However, there has been a major shift in the composition of service sector growth. While the socialist regime fostered more nonmarket services, including the government sector, the market services sector flourished in the market regime, in terms of labour productivity, TFP and economic growth. Second, the economic growth in the socialist period was substantially driven by capital accumulation, except in the nonmarket services, whereas the market regime sees a combination of both productivity and capital accumulation.

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Productivity growth in India since the 1980s: the KLEMS approach

Cited by 27 publications

References 15 publications

Services input and productivity in Indian manufacturing plants

Services input and productivity in Indian manufacturing plants

Real Capital Stock Estimation for Industries Using Perpetual Inventory Method: A Methodological Exploration

Economic Growth in India During 1950–2015: Nehruvian Socialism to Market Capitalism

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