Age and Productivity of Machine Tools in India

P Mohanan Pillai J Srinivasan Given the capacity utilisation two major factors are alleged to contribute to low poductivity of Indian industries. They are (I) over-manning of the existing capital stock leading to an increase in the capital-labour ratio, and (2) the presence of old capital stock, i e, prolonging the life of capital to the extent of outliving its economic utility. It is because of the latter that the impression that our machine tools are obsolete has received credence though this hypothesis has not been empirically tested. In the light of data provided by the machine tool surveys this paper attempts to determine the age of machine tools in India. Though productivity of this industry is stagnant or falling, Indian machine tools are of relatively newer vintage. This phenomenon of young machine stock and low productivity can be explained in terms of the strategy of diversification, import of technology and organisation of production.