Organized Manufacturing Sector of Himachal Pradesh: A Case Study of Chemical and Chemical Products Industry

In this paper, the growth and productivity performance of the organized manufacturing sector and the chemical and chemical products industry of Himachal Pradesh is undertaken. The period covered in the analysis is from 1980–81 to 2012–13, which is broken into three sub-periods dividing the study period into the pre and post-reform period and the data is taken from the Annual Survey of Industries. The percentage share of the chemical products industry has increased during the post-reform period, particularly after the year 2005–06 and industry emerged as a dominant industry. The paper concludes that the growth rate of the output, value added, capital and the employment in the organized manufacturing sector has decelerated, due to decelerated growth rates of the labour and capital productivity along with the total factor productivity, during the first decade of the reform period as compared to the pre-reform period. Nevertheless, the growth rate of the above mentioned variables has accelerated during the second decade of the reform period. The industry has realized increased growth rates of the number of factory units, the total person employed and the number of employees, but there was declined growth rate of the fixed capital, which has brought deceleration of the growth rate of the output and value added during the second decade of reform period as compared to the first decade of the reform period. The growth rate of the labour productivity and capital intensity has increased during the first decade of the reform period, but has declined during the second decade of the reform period. Total factor productivity has improved during the post-reform period.