Growth accounting analysis in India with specific reference to the economies of Punjab and Haryana

Using Index Number Approach, the present study endeavours to estimate in quantitative terms, the role played by TFP as a source of economic growth in Punjab and Haryana states in relation to the overall Indian economy, spanning 1980–81 to 2009–10. The analysis has revealed that in a majority sectors of Haryana state and overall Indian economy, output growth was faster than inputs growth. However, in Punjab, none of the sectors experienced such a phenomenon. Further, in both the states, TFP contributed the most in output growth during pre-reforms period, while labour force acted as a prime mover during post-reforms period. However, in the Indian economy as a whole, TFP continued to be the major source of economic growth during the entire study span. Thus, although liberalization policy seem to have paid dividends in the country as a whole, yet there have been considerable variations in pace and extent of implementation of the policy across the states. Consequently, for states (like Punjab) to surge ahead, it is important to address regional problems in order to enhance TFP, which has become virtually synonymous with economic growth.