Abstract

In the era of globalisation the growth of the Indian small scale industrial sector can brisk up with the investment driven growth and by enhancing the total factor productivity. The major thrust of the paper is to analyse the overall performance of Indian small scale industrial sector by analysing the partial and total factor productivity. The study is confined to the period 1980-81 to 2013-14 which is further divided in two phases i.e. pre reform period (1980-81 to 1990-91) and post reform period (1991-92 to 2013-14). The calculation of factor productivity requires data for which two inputs (number of labour units used by the SSIs and Capital invested by the SSIs) and one output (Gross Value Added). For the purpose of the study data has been curled from Annual Survey of Industries (ASI), statistics prepared by Small Industrial Development Organisation (SIDO) and Data compiled by Planning Commission. To preform the analysis the Malmquist Productivity Index (MPI) has been used. The result revealed that 6.04 percent overall compound annual growth rate and -5.72 percent of labor productivity. The multiple linear regression analysis have been used to analyse the determinants of productivity growth in Indian small scale industrial sector. Our policy suggestion is to harness the total factor productivity growth for which capital input be used judiciously as it is the major contributor to the output growth od Indian small scale industrial sector.

Keywords: Small Scale Industrial Sector, Globalisation, Total Factor Productivity, Economic Reforms