Labour productivity falls in India: Report
New Delhi, Oct 31 (KNN) Labour productivity in India has fell down over the last eight years from the average of 7.4% between 2010-11 and 2014-15 to a low of average 3.7% during fiscal year 2015-16 to 2017-18, says an analysis of India Ratings and Research.
“Labour productivity fell to 2.6% and 2.9% in FY17 and FY18 respectively compared to high growth phase of FY04-FY08 when it grew 14.2%,” Ind-Ra analysis of data of Annual Survey of Industries (ASI) said on a slowdown in labour productivity growth in the Indian organised manufacturing sector on Thursday.
According to Ind-Ra, longer and sustainable labour productivity growth is dependent on investments in innovation, knowledge, and intangible capital by businesses, and governments’ commitments towards structural reforms.
“Therefore, a lot needs to be done quickly both on the policy front as well as companies’ level because productivity is the most powerful engine of driving and sustaining manufacturing growth, and making the sector globally competitive,” the report further said.
“Importance of labour productivity growth can also be gauged from the fact that globally labour productivity growth alone accounted for about two-thirds of the gross domestic product (GDP) growth during FY01-FY10, leaving only one-third to labour/employment growth,” the report added.