Total Factor Productivity Growth in Manufacturing Industry

Total Factor Productivity Growth in Manufacturing Industry P Balakrishnan K Pushpangadan IN our article [Balakrishnan and Pushpangadan 1994] we had argued that appropriate measurement of value added at constant prices is a prerequisite for the estimation of productivity. We had then proceeded to provide a demonstration of this principle by providing estimates of total factor productivity growth for Aggregate Manufacturing in the Indian economy. We observed that the measurement of value added has implications for the estimated growth of TFP. We consider it to be a reflection of the fact that our point has been taken seriously that our original paper has been replied to.1 In this brief note we reply toourcritics. Here we report the results of substantial further work on TFP growth in manufacturing industry. These results strengthen the conclusion of our original paper.