Productivity Performance of Punjab and Haryana vis-à-vis The Indian Economy: Production functions analytical Approach

Using time series data spanning over the period 1980–81 to 2009–10, the present study attempted to examine productivity performance (at both aggrega ted and disaggregated levels) of Punjab and Haryana states vis-à-vis the overall Indian economy. For this purpose, we have estimated Cobb-Douglas and CES production function by using net domestic product as output, and capital, labour and energy as three inputs. The analysis has revealed that at the aggregated as well as at sectoral levels in each of Punjab, Haryana and the Indian economy, output was more responsive to relative changes in labour compared to such changes in each of capital and energy, thus calling for the need to pay higher attention to labour input so as to achievefaster growth in the economies. At the aggregated level, both Haryana state and the overall Indian economy were observed to have operated under increasing returns to scale, whereas Punjab did so only under constant returns to scale.