Productivity is the key factor in economic growth that reflects its importance. Keeping this in mind, this paper evaluates productivity growth for three selected major industries in organized manufacturing sector - aluminium, iron and steel products, and refined petroleum products - at the 3-digit level NIC classification, over the period 1973-74 to 2004-05. The conventional growth accounting approach is complemented with the production function approach in the calculation of total factor productivity growth. The paper examines the productivity growth for two sub-periods, i.e., 1973-74 to 1992-93 (pre-reform period) and 1993-94 to 2004-05 (post-reform period), for possible structural changes due to policy reforms. As far as iron and steel industry is concerned, productivity growth has declined in the second sub-period (post-reform period).

Technological progress during the 1990s was significantly slackened though it remained positive. On the other hand, aluminium and refined petroleum industries have maintained consistency in their productivity growth without much volatility. It is worth noting that the productivity in refined petroleum products has continued to rise consistently in spite of two big oil crises and increasing cost of crude oil. Labor productivity for all the three industries shows a positive and significant trend. An implication of this finding is that the reason for the poor performance of iron and steel industry has to be sought in the inefficient utilization of factors of production, in particular underutilization of the labor input in accordance with the changing demand, together with sluggish growth in technological progress.

It was half a century back that the Nobel Laureate Robert Solow in 1957 asserted that a large part of output growth in the rapidly developing economies is attributable to technological progress. This phenomenon was thus established as a major determinant of economic growth. For a great part, almost half of the 20th century it had remained, by and large, excluded from the scope of main stream economic analysis. But what brought the importance of technological progress to the forefront was the empirical evidence that had accumulated by the mid-1950s suggesting unequivocally that a substantial part of output growth in the rapidly growing economies are attributable to technological progress. The period since mid-1950s has witnessed the emergence of voluminous literature on technological progress (See Nadiri, 1970; and Kennedy and Thiriwall, 1972 for a survey). No wonder, we are today widely talking about the `knowledge-driven economy'.