Agro-based traditional industries play a vital role in industrialisation in an underdeveloped economy. The Indian jute industry has been globally significant since colonial times and enjoyed a "major industry" status. Under globalisation it is found that the key structural ratios like labour productivity, capital intensity and total factor productivity have been increasing. But the falling trend of capital productivity with low growth of capitaloutput ratio signifies the general deterioration of the quality of investment and its improper utilisation over time. The lower ratio of value added to output also indicates the use of cost-ineffective technology by the industry. At the organisational level, this low value added to output also signifies smaller factory sizes and increasing horizontal integration within the sector.
