Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics

Sarbapriya Ray ¹, Mihir Kumar Pal ²

Affiliations
1 Department of Commerce, Shyampur Siddheswari Mahavidyalaya, Howrah 7111104, West Bengal, IN
2 Department of Economics, Vidyasagar University, Midnapore (West) 721102, West Bengal, IN

Abstract

This paper examines productivity performance of India’s aluminium industry in the pre and post-economic reforms and tries to relate economic capacity utilization with productivity growth. The results on partial productivity of factors show improvement in productivity of material and capital but not of labour. The total factor productivity growth in the post-reform period, however, declined. Total output growth in Indian aluminium industry is found to be mainly input-driven rather than productivity-driven. With adjustment for variations in capacity utilization, trend in total factor productivity growth remains declining. The paper also reconfirms the important links that exist between manufacturing productivity, trade orientation, industry specific characteristics and some macro economic variables. The liberalization process is found to have adverse impact on total factor productivity growth.

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Sarbapriya Ray ¹, Mihir Kumar Pal ²

Affiliations
1 Department of Commerce, Shyampur Siddheswari Mahavidyalaya, Howrah, West Bengal, IN
2 Department of Economics, Vidyasagar University, Paschim Midnapur, West Bengal, IN

Abstract

The present study attempts to estimate rate of capacity utilization in Indian Chemical Industry at aggregate level and analyse its trend during a period of 25 years. In this paper, optimal output is defined as the minimum point on the firm’s short-run average total cost curve and the rate of capacity utilization is merely ratio of its actual output to capacity output level. A mode is used to determine the optimal capacity output. We find that economic measure of capacity utilization is always higher than engineering measure and at times greater than unity and varies widely than engineering measure. A declining trend of capacity utilization is noticed after mid 90’s due to slow increase in actual output resulting from stagnated demand and rapid expansion of capacity output as a result of abolition of licensing rule consequent to economic reform.

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