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PROJECT

NUMBER
3
PROJECT NUMBER 3
GROUP
GROUP11
Gaurav Gupta | Milind Aggarwal | Navdeep Sehrawat | Shashank Jain | Simran Singh Vohra
64

76

77

91

95

Identify the policy issues on technology, innovation growth in India?

TheScience, Technology and Innovation Policy 2013outlinesthemajorpolicyinitiatives


tostrengthentheinnovationecosystemandgiveaboosttothedevelopmentof
innovation-ledentrepreneurshipinIndia
VariousgovernmentsinIndiahavegivenprioritytoscience,technology,andinnovation,
andthereforeIndiahasevolvedalargepubliclyfundedR&Dstructure.
Broadlyspeaking,aninnovationecosystemisacombinationoftwodistinctbutlargely
separatedeconomies:i)theknowledgeeconomy(comprisedofknowledgeproducers),
whichisdrivenbyfundamentalresearch,andii)thecommercialeconomy(comprisedof
knowledgeusers)
Thevariousstructuresandmechanismsfacilitatethesmoothtranslationofinnovations
throughthevarioussegmentsofacomplexinnovationchainthattakesideasfrom"mind
tomarket

Fragmented policy and policy implementation:


Therehasbeennocomprehensivepolicyfocusingoninnovationand
entrepreneurshipsofar
Themechanismstooperateexisting,fragmentedpoliciesarenotuniform
Failuretoachievethedesiredeffects
Inadequate funding of R&D:
LittlenationalfundingisavailableforR&D
EvenlessfundingisavailabletotheacademicandR&Dinstitutions.
OutofthetotalR&Dexpenditureincurredinthecountry,morethanhalfofthe
expenditureisincurredbythegovernmentitself
ThisisimportantaswearestillonapublicfundedR&Dmodel.
Difficult and lengthy funding procedures:
Theproceduresforaccessingsuchfundingareoftencomplex,cumbersome,
lengthy,andbureaucratic,inotherwords,notconducivetoinnovationand
entrepreneurship
Despitethesedifficultandlengthyprocedures,thesystemseeksimmediatereturns
However,thereturnsfrominnovationareoftenuncertain,late,ornotquantifiable
immediately.

Angel, venture capital, and seed funding:


Themagnitudeofdealsisverylowcomparedtothenumbersfromabroadandfall
shortofIndiasrequirements
Thereportalsoindicateslowlevelsofearly-stageventurecapitalinvestment:
aroundUS$240millionperyear
Indianangelsareconstrainedbyregulationsthatmakeinvestmentandexit
cumbersome(PlanningCommission,2012).
Weak linkages between stakeholders:
Thelinkagesbetweenindustry,especiallymediumandsmall-scaleenterprises
andR&Doracademicinstitutionsareweak
Industryrequiresproventechnologies,buttheinstitutionscanonlyoffer
technologiesatconsiderablyearlierstages(i.e.,atmostlyalaboratoryorpilot
scale
Thereisalsoconsiderablylessfundingandmentorshipsupportavailablefromthe
privatesector
Thereisnoeasyexchangeofmanpowerbetweentheindustriesandacademiaor
R&Dinstitutions,whichlimitstheircapacityformutualunderstandingand
technologytransfer

Non-conducive education system:


Thegeneraleducationsystemisstilltoofocusedongradesandcareersandis
notorientedtowardinnovationandentrepreneurship.
Lackofinfrastructureandgoodfacilitiesintheeducationalinstitutions;delaysin
thefundingsystem
Delaysinthefundsorothersupportreachinginnovationprojects
Whileindustrycravessolutionstotheirproblems,theacademicinstitutionsare
generallytoobusyperformingroutineacademicexercises
Poor infrastructure facilities in villages:
BasicinfrastructurefacilitiesarenotevenlydistributedinIndiaandoftenweakin
smallercitiesortownsandruralpartsofthecountry.
Thereby,thereislessscopeforinnovationandentrepreneurship
Risk aversion among entrepreneurs:
Indianentrepreneursoftenseekestablishedtechnologyasabasisforstarting
theirbusiness;theyarehesitanttotakeoninnovativeideasbecauseoftherisks
involved
Lowavailabilityandhighcostoffundsthatoftenarrivetoolate
Thepotentiallyhigherreturnsfrominnovationtaketimetorealize,andnotenough
entrepreneursarewilling(orable)toaccepttherisks

Small and medium sized enterprises:


SME sector is responsible for 45% of total
manufacturingoutputand70millionpeople
Lack of adequate cash flow caused by low credit
availability
Thepolicyinitiativeshavenotbeenenoughtobringa
rapidimprovementinthesectorintermsoffostering
R&D
Inadequate protection of intellectual property rights:
InIndia,theintellectualpropertyregimeisweak.
Innovatorsdonotgenerallyseekprotectionfor
theirintellectualpropertyunlessforcedto.
Formostentrepreneurs,patentsandotherformsof
protectiontaketoolongandcosttoomuch.
Patentliteracyisverylow,evenamongeducated
innovators,andthereisalackofexperthelp
available,exceptinthemedicineand
pharmaceuticalindustry.

Identify the policy issues on productivity growth in India?


Postindependence

andtill1980,GDPgrowthinIndiaaveraged

around3.5percent.
The

1980s sawgrowthexceeding 5percentper annum ona


consistentbasis.
Economic reformswereinitiatedin1991butforadecade,therewas
noaccelerationinGDPgrowthitstayedconstantat5.5percentper
annum.
Starting 2003, however, there has been a marked acceleration in
GDPgrowthtomore than8percentperannum.
Is there a connection between economic performance and policy
regimes- We set out to explore the productivity performance of
Indian economy under different policy regimes.

Classification of broad sectors

Note:ThedivisionofmanufacturingintothreesubgroupsisbasedonpercentileofL/kratio
obtained
fromIndiaKLEMSdataset

Even though average GDP growth in 2000s jumped to 7.4% from


5.9% decade before, contribution of TFP growth declined to 1.3%
from 1.6% in 1990s
Total Economy
%
12

1990s

1980s

10

2000s

8
5.
7

6
4 3.
4

2
0

1.
0. 8 0.
8
5
-1.5

0.
8 0.
1

-2

1.
0 0.
4

0.
3

3.
8

2. 2. 2.
2 3 0

3.
2. 7
6
-0.3-0.5

1. 1.
1 2

0.
9

2. 2.
7 9

3.
9
1.
2 -0.2 0.
6

0.
5

2008

2011

-2.2 -2.3

-4
1981

1984

1987

1990

1993

1996

GDPgrowth

1999
TFP
Growth

2002

2005

The pick-up in GDP growth during 2000s is mostly explained by


almost doubling of contribution of capital services compared to last
two decades
Contribution to GDP Growth: Total Economy
(%)
8.00

7.38%

7.00
6.00
5.00

1.33

5.35%
1.29

5.86%

1.38

1.56

TFPG
CapitalQuality

4.00
3.00

6.29%

4.22
2.27

CapitalServices
3.23

2.93

LabourPerson

2.00
1.00

0.38

1.47

0.29

0.91

1.30

1.25

1990s

2000s

1980-2011

0.00

1980s

LabourQuality

At an aggregate level capital services started growing much


faster than GDP after 2000. In case of Manufacturing the
started
in mid 1990s and services it has converged
divergence

The aggregate TFP growth in Indian economy and services sector


in particular followed very similar distribution in the last 3
but
manufacturing sector had experienced very large volatility
decades
Total Factor Productivity growth:1980-2011
30%
Average Total Economy
TFPG=1.4%

25%

Average Services TFPG=1.7%

Density

20%
15%
10%
5%

Average Manufacturing
TFPG=1.6%

0%
-16 -14 -12 -10

-8

-6

-4

-5%

-2

10

TFP growth (%)


TotalEconomy

Manufacturing

Services

12

14

16

18

In Manufacturing, 1990s was a decade of factor accumulation


gradual
diffusion of technology may have contributed to surge in
but
TFP growth in 2000s
Contribution to GDP Growth: Manufacturing
(%)
10.00
9.19%

8.00

2.69

8.92%

5.93%

2.57

8.21%
1.56

6.00
TFPG

4.00

4.68

5.99

CapitalQuality
5.27

5.27

LabourQuality

2.00
0.00

CapitalServices
LabourPerson

1.19

0.76

0.71

0.88

2000s

1980-2011

-1.37

-2.00

1980s

1990s

There was sharp fall in manufacturing TFP growth in 1990s


jumped
which to 2.6% in 2000s, reversed was observed in case of services
sector, where average TFP growth declined in 2000s
TFP growth
%
15

1990s

1980s

10

2000s

5
0
-5
-10
-15
1981

1984

1987

1990

1993

1996

Manufacturing

1999
Services

2002

2005

2008

2011

Agriculture factor experienced surge in growth during 1990s


to
substantial jump in TFP growth. There has been doubling of
owing
capital services contribution in 2000s
Contribution to GDP Growth: Agriculture
(%)
4.00
3.50

3.07%

3.47%
2.88%

3.00
2.50
1.63

2.23

1.17

3.10%
1.61

CapitalQuality

2.00

LabourQuality

-0.50

1.55

0.91
0.8

0.50
0.00

CapitalServices

0.15

1.50
1.00

TFPG

0.43

0.22

0.18
-0.17

LabourPerson
1.13

1980s1990s2000s1980-2011

In Services, 1990s saw sudden jump in TFP growth but 2000s has
been a decade of capital accumulation

Contribution to GDP Growth: Services


(%)
10.00

8.79%

9.00
8.00

7.63%

1.71

7.00
6.00
5.00

5.84%

1.7

2.29

TFPG
CapitalQuality

1.23

CapitalServices

5.16

4.00
3.00

7.49%

2.39

3.81

3.55

LabourPerson

2.00
1.00

1.82

0.00

1980s

LabourQuality

0.45

0.38

1.22

1.3

1.45

1990s

2000s

1980-2011

Manufacturing TFP was higher than aggregate economy till mid


1990s but in 2000s Services TFP started growing faster than
economy
Total Factor Productivity
Index:1980=100
180
160
140
120
100

1980s

80

2000s

1990s

60
40
20
0
1980

1983

1986

Totaleconomy

1989

1992

Agriculture

1995

1998

Manufacturing

2001

2004

Nonmanufacturing

2007

2010

Services

Low labour intensive manufacturing TFP grew much faster


total
than economy till mid 1990s but fell sharply in second half of 1990s

Total Factor Productivity: Manufacturing sector


Index:1980=100
300
250
200
150
100

1980s

1990s

2000s

50
0
1980

1983

1986

Totaleconomy

1989

1992

Highlabourintensive

1995

1998

2001

MediumLabourIntensive

2004

2007

2010

LowLabourIntensive

Till 2000,Non market services TFP grew faster than total economy
but in 2000s, Market services TFP picked up

Total Factor Productivity: Services sector


Index:1980=100
200
180
160
140
120
100
80

1990s

1980s

60

2000s

40
20
0
1980

1983

1986

1989

Totaleconomy

1992

1995

1998

Marketservices

2001

2004

Nonmarketservices

2007

2010

Capital services growth in High Labour Intensive Manufacturing,


has been highest, the pace got faster in 2000s

Capital Services
Index:1980=100
1600

1980s

1400

1990s

2000s

1200
1000
800
600
400
200
0
1980

1983

1986

1989

Agriculture
LLI-Manufacturing
NonMarket
Services

1992

1995

1998

HLI-Manufacturing
Non
Manufacturing

2001

2004

2007

MLI-Manufacturing
MarketServices

2010

Non-manufacturing and market services contributed majorly to the


additional employment after 2000. Employment in construction was
the major driver in non-manufacturing sectors job creation
Labour Person
Index:1980=100
700

1980s

600

1990s

2000s

500
400
300
200
100
0
1980

1983

1986

1989

Agricult
ure
LLI-Manufacturing
NonMarket
Services

1992

1995

1998

HLI-Manufacturing
Non
Manufacturing

2001

2004

2007

MLI-Manufacturing
MarketServices

2010

Till almost 2005, labour person grew at faster rate than labour
productivity in the economy. After 2005, Labour productivity growth
has doubled
Total Economy
Index:1980=100
300.0
250.0
200.0
150.0
100.0
50.0

1980s

0.0
1980

1983

1986

2000s

1990s
1989

LabourProductivitygrowth

1992

1995

19982001

LabourShareinGDP

2004

LabourPerson

2007

2010

LabourQuality

Examiningdifferentpolicyregimes

Performance of 26 industries: Based on acceleration in TFPG


Value Added approach ofTFPGrowthestimation
20

10
5
0
-5
-10
-15

Coke,
Refine

dPetroleum

-30

1
2

ucts

Chemical&chemical
products
produ

Acceleration in TFPG in 2000s over


1990s

15

W ood &W ood


Prod

Post
Post&Telecom
Rubber&P
Rubber&Plastic

Pap
Paper&printing
Textile &leather

TransportEq
Transport uipment
Eq
Hote s&
l
Restaure

3
-25

Manufacturing,nec

-20

-15
-10
-5
0
5
Acceleration in TFPG in 1990s over 1980s

Goodperformerbothin1990s&2000s
Goodperformerin2000sbutbadperformerin
1990s

nts

3
4

10

WorstPerformer
Goodperformeronlyin
1990s

15

Manufacturing sector including Non market services contributed


majorly to TFP growth in 1980s
TFP Growth (%):1981-1990
6 5.7

LowLI-Manufa cturing

Industry

NonMarketServices
NonMarketServi
MediumLI-Manufacturing

4
3

Agriculture

2.5

Services

HighLI-Manufacturing

2.1

1.8

Agriculture

1.6

MarketServices
NonManufacturing

1
-0.1

0
-1
-2

05
101520253035
40455055606570758085
0
5 10
15 20 25 30 35 40
45 50 55 60 65 70 75 80 85

90

95 100

GVA Share (%):1990

-3
-4

-3.8

With the opening up of the economy in 1991,services sector TFP


growth saw substantial jump compared to 1980s
TFP Growth (%):1992-1999
NonMarketServices

2.8

Industry
MarketServices

2.
2

2.4

Agriculture

Mediu
MediumLI-Manufacturing
Agriculture

Services

1.9

NonManufacturing
HighLI-Manufacturing

1
0
-1
-2

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

85
-0.6

90

95 1
100

GVA Share (%):1999


-2.1

-3
-4
-4.2
-5

LowLI-Manufacturing

Market services and Low labour intensive manufacturing achieved


relatively high TFP growth during 2000s, the 2 sector contributed
almost 35% of GVA in 2011
TFP Growth (%):2000-2011
LowLI-Manufacturing

6.4

MarketServices

Agriculture

HighLI-Manufacturing

Industry

5
4
3

Services
Agriculture

3.7
2.4

1.2
1

NonMarketServices

0
-1

0 05101520253035
5 10 15 20 25 30 35 4040455055
45 50 5560606570
65 70 75
7

-2
-3

80

GVA Share (%):2011

-0.7

MediumLI-Manufacturing
NonManufacturing

85
-0.9

90
95100
90951

-2.3

Manufacturing sector including Non market services contributed


majorly to Labour productivity growth in 1980s
LP Growth (%):1981-1990
9

LowLI-Manufacturing

9.0

HighLI-Manufacturing
HighLI

Agriculture

MediumLI-Manufacturing

NonMarketServices

5.9

Industry
Services

5.1

Agriculture

3 .7

MarketServices

3
1.8

2
1

NonManufacturing

0.4

0
-1 0
-2
-3

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

85

9095100

GVA Share (%):1990


-2.7

Labour productivity growth increased from 2% in 1980s to 3.7% in


1990s because of substantial jump in services sectors contribution
LP Growth (%):1992-1999

MediumLI-Manufacturing

NonMarketServices

6.0

Agriculture

5.5

Industry

Services

MarketServices

4.3
4

HighLI-Manufacturing
Agriculture

3.4

LowLI-Manufacturing

2.9

2.4

2
0.9

NonManufacturing

0
0

10

15

20

25

30

35

40

45

50

55

GVA Share (%):1999

60

65

70

75

80

85

90

95 100

Labour productivity growth increased from 3.7% in 1990s to 4.4% in


2000s, Manufacturing sector contributed along with Market services
LP Growth (%):2000-2011
LowLI-Manufacturing

11 10.3
10

MarketServices

Agriculture
Industry

HighLI-Manufacturing

Services

7.7

8
7

MediumLI-Manufacturing

6.2

NonMarketServices

Agriculture

3.8

3.5

3.4

3
2
NonManufacturing

1
0
-1 0

-0.5

10

15

20

25

30

35

40

45

5055

GVA Share (%):2011

60

65

70

75

80

85

90

95100

-10%
0%

1981-1990
1992-1999

Note:W oodandproductsofwoodshasbeenremovedfromthelistasitwasan
outlier

2000-2011

OtherServices

Education
HealthandSocialWork

PublicAdministrationand
Defence

FinancialIntermediation

PostandTelecom

TransportandStorage

HotelsandRestaurants

Trade

Construction

Utilities

Manufacturing,nec

TransportEqp

ElectricalEqp

Machinery,nec.

BasicMetals

OtherNon-Metallic

RubberandPlasticProducts

ChemicalsandProducts

Coke,RefinedPetroleum

Paper&printing

Textile&leather

FoodProdutcs

Mining

Agriculture

Contribution of Services growth in Gross Output growth


(Services growth/Gross Output growth)
Services

50%

40%

30%

20%

10%

Summing Up

IncreasesinaverageGDPgrowthin2000sisnotaccompaniedbyanincreaseinoverallTFPG,
rathergrowth has been primarily driven by capital accumulation
Whilegrowthofmanufacturingsectorhasbeenquitevolatile,economicgrowthinIndiafollowed
the
pattern of services sector quite well
Policychangesinthe1990sseemstohavehelpedimprovemanufacturingproductivity,though
afteralong period of intensive capital accumulation
TFPgrowthinmanufacturingsectorhasimprovedin2000s,whileinthe1990sfollowingthe
liberalmarketreforms,manufacturinghasseensubstantialcontribution from capital
accumulation.
TFPGinlesslabor intensive sectors picked up in 2000s,wherecapitalservicesalsogrew
quitesubstantiallyinthe1990s.
However,TFPGintheservicessector,ingeneral,has decelerated in the 2000s,comparedto
1990s.
Marketservices,nevertheless,hasshownanimprovementinTFPG
Post and Telecom, Textiles and Transport Equipment areamongthebestperformersin
2000s.
Theliberalmarketreformsinthe1990sseemtohavebenefitted market services in expanding
investment, productivity and growth in the post reform period, whileithelpedaccumulationof

capitalinsomesegmentsofmanufacturingimmediatelyafterthereforms,openinguptoforeign
technologyandimportofcapitalgoodswhichmightbetranslatingintobetterproductivitygainin
thelatterperiod.
Yet,therearesubstantialchallengesahead,as infrastructure and labor market rigidities
still remain asmajorconstraintformanufacturinggrowthinIndia.

Manufacturing productivity through the years


Period

Productivity growth

1981-82to1990-91

0.61%

1991-92to1997-98

0.25%

1998-99to2001-02

-0.09%

2002-03to2007-08

1.41%

1.60%
1.40%
1.20%
1.00%
0.80%

0.61%

0.60%
0.40%
0.20%
0.00%
1991-1997
-0.20%

1998-2001

2002-2007

Whydidproductivitygodowninitiallyandthengobackup?
TheabovedataprovidedshowsthatitisaJ-curvepatternslowingdownintheinitialyearsafter
liberalizationbutpickingupsteamafterwards.
REASONS:
Dramatic import liberalization, the balance of payments deterioration and the exchange rate
reform,allofwhichcameasashocktoindustry
Withtheremovalofimportrestrictionsonconsumergoods,certaintypesofcapitalgoodswere
renderedobsolescent,whichledtolowercapacityutilizationinthelate1990sandearly2000s,
andevenlowerproductivity
As firms learned to cope and the benefit of new technologies and products became
widespread,productivityimproveddramaticallyfromthemid-2000s

Share of value-addition of sectors in GDP for selected years(in %)


Year

Agriculture

Industry

Manufacturing

Services

1980

35

25

16

40

1990

29

26

16

44

1995

26

27

17

46

2000

23

26

15

51

2006

18

29

16

53

2010

18

28

15

54

2012

17

26

14

57

CONCLUSION:ManufacturingalwayshadalowshareinGDP.Butwhy?
Asexplainedpreviouslythemanufacturingproductivitydippedfrom0.65%to-0.25%in90s
and1.4%in2000s.Comparedthiswithlowerjobcreationinmanufacturingbecauseofstrict
laborlawsmeantshareofmanufacturinginIndiasGDPnevercrossed17%

APPENDIX

Average annual growth rates in Gross Value added ,


by Broad sector, ( % per annum)
Sectors
12
Total economy
Agriculture
Manufacturin
g
High labour intensive
Medium labour
Intensive
Low labour Intensive
Non manufacturing
Services
Market services
Non market services

Page39

1980-81 to 1990-91
5.35
3.06
9.18
7.89
9.02
12.36
3.82
5.84
5.35
6.33

1992-93 to 1999-00
5.86
3.47
5.93
4.69
9.89
3.92
3.83
7.62
8.15
6.94

2000-01 to 2011-12
7.38
2.88
8.92
7.79
6.14
13.17
6.73
8.8
10.88
6.2

1980-81 to 20116.3
3.1
8.21
6.99
8.1
10.43
4.98
7.5
8.31
6.44

Sectoral Shares (%) in nominal value added and employment in


midpoint of each sub period
Sector
Agriculture added
Manufacturing
Highlabourintensive
Mediumlabour
intensive
Lowlabourintensive
Non manufacturing
Services
Marketservices
Nonmarketservices
Total Economy

Page40

1985
Value
Employment
Value
added
31.28
66.92
16.69
8.74
4.63
3.32
9.56
42.47
21.31
21.16
100.00

10.80
8.70
1.23
0.87
3.84
18.44
10.55
7.89
100.00

1995
Value
Employment
added
26.15
17.93
8.29
5.07
4.57
10.06
45.87
26.00
19.87
100.00

63.16
10.67
8.11
1.62
0.94
4.52
21.65
12.67
8.98
100.00

2005
Employment
18.81
15.39
5.99
4.50
4.90
12.75
53.06
30.40
22.66
100.00

55.90
11.21
8.53
1.58
1.09
7.02
25.87
15.72
10.15
100.00

Industry origin of value added growth , input and TFP contribution


to aggregate growth

Value Added
Agriculture
Manufacturin
g

1980-81 to
1990-91
12 5.35
Industry
Contribution
0.99
1.53
0.68
0.43
0.42
0.36
2.46
1.12
1.33

1992-93 to
1999-00

2000-01 to
2011-12

1980-81 to
2011-

5.86

7.38

6.3

0.96
0.98
0.36
0.45
0.17
0.39
3.53
2.06
1.47

0.59
1.33
0.47
0.28
0.58
0.82
4.65
3.22
1.43

0.86
1.32
0.52
0.38
0.41
0.55
3.57
2.15
1.42

1.30
0.38
4.22
0.15
1.33

1.25
0.29
3.24
0.14
1.38

High labour intensive


Medium labour Intensive
Low labour Intensive
Non manufacturing
Services
Market services
Non market services
Inputs and TFP growth contribution
Labour person
1.47
0.91
0.21
0.27
Labour quality
2.27
2.93
Capital stock
0.11
0.19
Capital quality
1.29
1.56
TFP growth
Page41

Growth rates in GVA and contribution of factorinputs and TFP to


GVA, by broad sectors ,1980-81 to 2011-12

Sectors

GVA

Total economy
6.30
Agriculture
3.10
Manufacturing
8.21
High labour intensive 6.99
Medium labour 8.10
Intensive 10.43
Low labour Intensive 4.98
7.50
Non manufacturing
8.31
Services
Market services 6.44
Non market services

Labour
person
1.25
0.13
0.88
0.71
1.17
0.87
3.50
1.45
1.65
1.25

Note : *Contribution of land input is included in capital


stock
Page42

Labour
Quality
0.29
0.12
0.30
0.31
0.28
0.34
0.31
0.38
0.26
0.52

Contribution
Capital
stock

Capital
quality

TFPG

3.24*
1.13*
5.27
4.86
5.42
5.63
3.41
3.81
4.34
3.20

0.14
0.11
0.20
0.13
0.23
0.27
0.08
0.15
0.12
0.18

1.38
1.61
1.56
0.98
1.01
3.33
-2.32
1.70
1.95
1.29

Annual Average growth rates of labour productivity and total factor


productivity, by industry ( % per annum)
1980-81to1990-911992-93to1999-00 2000-01to2011-12 1980-81to2011-12
Industry

RGVA/Person

Agriculture, Hunting,ForestryandFishing^
1.84
MiningandQuarrying
3.11
Food Products,Beverages andTobacco
3.57
Textiles, Textile Products,Leather andFootwear
2.61
-4.42
WoodandProductsofWood
4.74
Pulp,Paper, Paper Products,PrintingandPublish
5.61
Coke, Refined Petroleum ProductsandNuclear
Fuel
5.93
4.25
Chemicals andChemicalProducts
6.90
RubberandPlasticProducts
1.51
OtherNon-Metallic Mineral Products
3.07
BasicMetals andFabricatedMetal Products
4.97
Machinery,nec
3.87
ElectricalandOpticalEquipment
1.74
TransportEquipment
3.81
Manufacturing,nec;recycling
-2.88
Electricity, GasandWater
1.38
Supply
2.78
Construction
0.73
Trade
0.92
Hotels andRestaurants
3.21
TransportandStorage
4.11
PostandTelecommunication
FinancialIntermediation
PublicAdministrationandDefense;Compulsory
4.59
Social
Health andSocialW
6.02
Education
ork
N o t e : T FPGcomputedusinglabourinput, c a

the r S er vic es

a2s.7a8ninp1.u39t

Page43

TFP

RGVA/Person

TFP

RGVA/Person

TFP

RGVA/Person

TFP

1.63
-1.34
1.03
-1.42
-8.88
1.45
-2.45
5.25
-2.05
-1.08
-1.58
0.52
4.00
0.65
-0.71
1.37
-2.32
0.76
-0.70
1.22
-1.21
2.36
2.69

2.85
5.84
3.37
6.71
-4.19
-0.59
-5.56
7.02
-0.10
6.50
2.78
3.37
1.31
8.86
9.43
8.40
0.40
4.20
6.13
1.97
7.38
7.67
6.32

2.23
2.43
0.66
-0.68
-7.60
-2.46
-13.38
1.72
-5.08
-1.10
-0.77
-1.17
-1.03
0.36
5.61
3.79
-1.19
2.19
5.32
1.75
5.69
1.19
5.50

3.38
2.41
5.68
4.37
1.72
6.21
15.49
7.28
5.24
2.87
4.30
5.57
8.48
2.20
1.18
2.83
-0.11
8.44
5.42
4.66
17.73
4.64
7.33

1.17
-3.36
1.85
1.05
-3.23
3.45
3.47
3.78
0.89
-1.09
-1.25
1.90
4.84
0.34
-1.62
0.83
-2.26
2.57
1.59
1.86
13.91
4.08
5.60

2.73
3.56
4.36
4.41
-1.90
3.91
6.58
6.76
3.49
5.18
2.96
4.15
5.40
4.53
3.57
4.64
-0.89
4.96
4.73
2.63
9.37
4.97
5.99

1.61
-1.14
1.26
-0.23
-6.28
1.21
-3.00
3.72
-1.68
-1.09
-1.23
0.62
2.99
0.45
0.61
1.80
-1.99
1.87
1.82
1.62
6.68
2.74
4.61

0.82
0.91

4.25
3.79

0.07
-0.61

2.09
1.99

-4.55
-5.31

3.50
3.81

-1.53
-1.98

3 .2 8pitalstoc3k.3.5TFPGoft5o.0ta4lecono2m .57yandAgr0i.c8u6lture

inc-l1u.0d4 esland

Contribution of factor inputs and TFP to GVO growth:


1980-81 to 2011-12
Industry

Contribution of inputs and TFPG

GVO growth
Labour input
TFPG
Agriculture
2.99
0.18 Capital input
0.83 Intermediate input
0.46
1.52
MiningandQuarrying
5.50
0.88
4.05
1.89
-1.33
7.34
0.26
0.60
5.80
0.68
FoodProductsandbeverages
6.86
0.21
1.37
4.81
0.47
Textiles&LeatherProducts
0.08
0.14
2.25
0.93
-3.23
W oodandProducts
7.41
0.49
0.90
5.24
0.78
Pulp,Paper,paperproducts
8.14
0.05
1.40
6.82
-0.13
Coke,RefinedPetroleum
8.39
0.26
0.83
6.35
0.94
ChemicalsandProducts
9.76
0.40
1.64
7.41
0.31
RubberandPlasticProducts
8.01
0.34
2.49
5.02
0.15
OtherNon-MetallicMineral
7.24
0.21
1.18
6.18
-0.33
ProductsBasicMetalsand
7.81
0.53
1.31
5.10
0.88
FabricatedMetalMachinery,
10.17
0.40
1.11
7.16
1.50
nec.
9.34
0.27
1.24
7.11
0.72
ElectricalandOpticalEqp
10.83
0.53
1.64
7.47
1.19
TransportEquipment
7.08
0.57
1.33
3.70
1.48
Manufacturing,nec
7.07
1.97
0.87
5.95
-1.71
Electricity,GasandW aterSupply
7.67
1.17
3.89
1.17
1.44
Construction
8.50
0.57
1.69
5.47
0.77
Trade
7.30
1.08
1.22
4.85
0.15
HotelsandRestaurants
14.66
1.94
4.19
2.40
6.14
TransportandStorage
10.14
1.94
4.05
1.87
2.28
PostandTelecom
6.11
0.56
0.64
1.62
3.30
FinancialIntermediation
6.76
1.40
6.27
0.61
-1.52
PublicAdministrationandDefense
5.05
0.83
4.10
2.10
-1.99
Education
HealthandSocialW ork
OtherServices
7.211.882.402.01 0.92

Page44

Relationship between TFP growth and Labour productivity growth


Total Economy
(1981-2011)
25

TFP growth(%)

20
15
10
5
0
-5

-10
-15
-20

-15

Totaleconomy

Page45

-10

-5
0
Labour Productvity growth (%)

Agriculture

Manufacturing

Services

10
Non-Manufacturing

15

Relationship between TFP growth and Labour productivity growth


Manufacturing
(1981-2011)

TFP growth (%)

35
30
25
20
15
10
5
0
-5
-10
-15
-20
-30

-20

Totaleconomy

Page46

-10
0
10
Labour Productivity growth(%)
HLI-Manufacturing

MLI-Manufacturing

20
LLI-Manufacturing

30

Relationship between TFP growth and Labour productivity growth


Services
(1981-2011)
25

TFP growth (%)

20
15
10
5
0
-5
-10
-5

0
Totaleconomy

Page47

5
10
Labour Productivity growth(%)
Services

Marketservices

15

NonMarketServices

20