Changes in Skill Intensity in Indian Manufacturing Industry: Some Important Determinants

Abstract

The formulation and adoption of a new economic policy during the year 1991 which mainly focused on privatisation of Public Sector Undertakings (PSUs), liberalisation of regulations relating to trade, industries and globalisation of the Indian economy can be said to have facilitated the increased control of owners of capital over the production processes through their representatives, the managers, professionals and technocrats. This process has necessitated the change in demand for non-production and production workers in a firm or industry. Using the ASI data at 2-digit level an attempt has been made in this paper to identify some important factors which might have acted as important determinants of changes in the demand for non-production workers or skilled workers in Indian manufacturing industries. For this purpose the multiple correlation coefficients was computed between NP/P (dependent variable) on the one hand and various explanatory variables on the other. It was observed that the variables identified as important determinants of changes in the relative demand for the non-production workers (skilled workers) in Indian manufacturing industries exert their influence in different directions and in varying degrees on a particular industry and across industries also. Hence the policies formulated and implemented to augment the level of productivity and employment should be industry specific under the broad industrial policy framework