Total Factor Productivity Growth in the Indian Food Processing Industry: A Non-parametric Investigation

Abstract

This study analysed total factor productivity growth (TFPG) in the Indian food processing industry in the organised sector. The results showed that TFPG in this industry resulted from technical progress and that the role of change in technical efficiency was insignificant. Therefore, for sustainable output growth, the application of new technologies must be followed by adaptation. In this context, policymakers should consider sub-sectoral heterogeneity when designing policies for the Indian food processing industry so that the rates of applying technology and its adaptability can be matched for each industry sub-sector. Thus, the study offers a strong note of caution about investments in technological improvements.