Technical Change and Productivity Growth in the Indian Sugar Industry

This paper applies MPI approach to measure technical change and productivity growth in 40 Indian sugar companies for the period 2004-05 to 2013-14. The empirical findings show that on an average, Indian sugar companies have registered a negative TFP growth rate of 0.7 percent per annum, though it varies considerably across years, indicating to the existence of sugar cycle. Decomposition of TFP growth into technical change and technical efficiency change reveals that the negative growth is only due to technological regress. The study suggests that apart from bringing the technical change, rationalization of sugarcane price policy is need of the hour.