Productivity
“The Indian manufacturing sector has a low share in India’s GDP; quite lower than its peers. There is a low preference for manufacturing sector among job seekers. India’s manufacturing sector is growing at one of the lower rates, unable to keep pace with inflation and labour costs, when the services sector has improved its GDP share with its focus on training and productivity”, a Boston Consulting Group (BCG) report said.
India’s economy is experiencing a number of difficulties as it suffers major macroeconomic challenges through high inflation, slowing exports, and a slowdown in structural reforms. This lack of reforms hampers an improved performance of the labour market and slows the development of sectors for new foreign investment – all of these factors have a direct impact on productivity growth. Productivity growth in India which slowed dramatically in 2011 to 4.2% (from 6.2% in 2010), fell further to 3.7% in 2012 – the slowest growth rate in the country since 2002. The slowdown in productivity happened despite weaker employment growth – from 2.2% in 2011 to 1.8% in 2010 – because output declined much faster—from 6.5 percent in 2011 to 5.5% in 2012. According to provisional estimates of total factor productivity growth, the efficiency of resource use virtually stalled in 2012.
India’s economy is experiencing a number of difficulties as it suffers major macroeconomic challenges through high inflation, slowing exports, and a slowdown in structural reforms. This lack of reforms hampers an improved performance of the labour market and slows the development of sectors for new foreign investment – all of these factors have a direct impact on productivity growth. Productivity growth in India which slowed dramatically in 2011 to 4.2% (from 6.2% in 2010), fell further to 3.7% in 2012 – the slowest growth rate in the country since 2002. The slowdown in productivity happened despite weaker employment growth – from 2.2% in 2011 to 1.8% in 2010 – because output declined much faster—from 6.5 percent in 2011 to 5.5% in 2012. According to provisional estimates of total factor productivity growth, the efficiency of resource use virtually stalled in 2012.