Econometric Analysis of Productivity Growth in Indian Leather Industry

Abstract

The article tries to evaluate performance of Indian leather industry in terms of labour productivity growth and total factor productivity growth for the period; 1979-80 to 2008-09.SWOT analysis has also been conducted in estimating the industry‘s future growth prospects. The results on labour productivity of factors show improvement in productivity of labour during specific post-reform period (1990-91 to 1999-2000) but during the present decade (2000-01 to 2008-09) of post reform period, labour productivity growth has been declined negatively. Using Translog Divisia approach under three inputs framework, the result on the overall productivity displays that total factor productivity growth has dramatically improved during post-reform period as compared to pre-reform period. The liberalization process is found to have favourable impact on total factor productivity growth. Comparative picture of strength, weakness, opportunity and threat definitely suggests that the realization of potential growth for Indian leather industry, though seems difficult, is not impossible. The industry certainly can achieve its potential provided efforts are made at the planning and policy level to ease its constraints. To put it in other words, Indian leather industry can meet the challenges of globalization if appropriate steps are taken by the state in a timely manner.

Key words: Leather, productivity, liberalization, growth, industry.