Capacity Utilization and Productivity in India's Energy Intensive Sectors

The performance of energy intensive industries in India in terms of total factor productivity growth and capacity utilization displays dismal declining trend during post- reform period. The trend for this performance has been intensively researched in this study for the period 1979-80 to 2003-04. This study seeks to measure and analyze econometrically the performance of energy intensive industries in India in view of capacity utilization and total factor productivity growth . Main findings of the present work are not in line with the prevailing opinion. We have found that total factor productivity growth and capacity utilization in energy intensive industries in India registered significant declining growth rate after the path breaking economic reforms initiated in 1991.Liberalization process is generally found to have its adverse impact on total factor productivity growth as well as on capacity utilization of energy intensive industries in India. It has also been found that removal of cyclical effect from the estimated TFP growth of all energy intensive industries does not influence drastically its overall movement but remarkably mitigates its intensity.