Unveiling the Impact of Manufacturing Growth on Productivity Dynamics in India

Aamir Ahmad Teeli, Suadat Hussain Wani
Statistika, 105(3): 352–365
https://doi.org/10.54694/stat.2024.59

Abstract
The manufacturing sector plays a crucial role in driving economic growth and productivity in a country by creating jobs, advancing technology, and significantly contributing to GDP. Its prowess not only bolsters domestic industries but also underpins international competitiveness, cementing its pivotal role in sustaining economic dynamism.The present study examines the role played by manufacturing sector in productivity dynamics of India by examining relevance of Kaldor's growth laws from 1981–82 to 2019–20, affirming their empirical validity. To achieve this objective, ARDL bounds testing approach has been used for estimation. The results of the study reveal that first and third law does hold for the country during the study period. The findings reveal a substantial and positive contribution of manufacturing growth to overall economic and productivity growth in India. Based on the findings of the study it is advised for policymaker need to prioritize manufacturing sector growth through incentives like, improved infrastructure and a favourable business environment.

Keywords
Manufacturing sector, productivity growth, ARDL, Kaldor’s Growth laws, India