Indian manufacturing sees improved productivity post-reform, with regional convergence in TFP
The article examines productivity growth in Indian industrial manufacturing from 1982 to 2001. They analyzed efficiency and technological changes in 15 major states. The study shows that there was an improvement in total factor productivity (TFP) post-reform, driven by technical progress. Before the reforms, gains were due to improved technical efficiency. The research also found that technological progress in manufacturing favored capital use. Regional differences in TFP decreased after reforms, with states converging in growth rates. States that were efficient before the reforms remained innovative.