Increasing capital intensity in Indian manufacturing sector leads to productivity decline.
The article examines how technology and capital intensity affect productivity in India's manufacturing sector. It finds that while technological efficiency was moderate, there were declines in the 1990s. Regions and product groups varied in efficiency and technological progress. Increasing capital intensity led to lower productivity in the 1990s, suggesting that spreading technology is better for boosting productivity. The study provides a regional efficiency matrix to help states focus on their strengths.