Decomposing productivity growth in the Indian sugar industry

Abstract

We measure the growth in the total factor productivity (TFP) of the Indian sugar industry from 2002–03 to 2017–18 using the stochastic frontier production approach. The TFP grew at –10% per annum on average during the study period. The growth was negative because the allocative change and scale effect declined. To arrest the negative growth, the technical change must be improved urgently, modern processing technology must be adopted on a large scale, and the pricing policy of inputs, especially production factors, must be rationalized.