Input Output Modelling of Employment and Productivity as Base of Growth

India has concertedly endeavored to upgrade the technological base of production from 1956 to the mid 1970’s. Thereafter, the process somehow appears to have slowed down resulting in technological stagnation, which extended right upto the late eighties. The nineties were an era of improvement in technology and managerial practices that bore results in the period of globalisation and liberalization. New technology tends to be more Knowledge and Capital intensive and Labour Displacing. The movement of the national economy from lower to higher stages of techno centric development requires a transformed production from Material Processing to Knowledge and Information Processing. The modern age Industrial Revolution is manifested as Knowledge Revolution. Hence, highly knowledgeable persons alone can mange new technology. Competencies need to be broadened as production requires greater expertise in terms of knowledge and skills. A shift from general to professional/ technical/ vocational streams of education becomes an essential requirement of this transformation process. Labour displacement processes result in Labour Extension and Augmentation in so far as production capacity of human capital gets increased. As against this, greater capital intensity leads to augmentation of capital, both in quantity and quality through enhancement of capital’s productivity. The resultant effect of both these is reduction in costs. The theories of growth, propounded by Clark and Lewis, also come into operation at this mature stage in so far as tertiary sector emerges in the center stage of development at the cost of primary and secondary sectors. Tertiary sectors are more human than physical capital intensive. This process of growth may be designated as, using Barewald’s terminology, Factor Transformation Process.