Transiting towards green productivity: Evidence from Indian organized manufacturing industries.

Abstract

Promoting green growth and decarbonizing economies to achieve sustainable economic development has become critically important globally. This study calculated the energy-induced carbon emissions and green total factor productivity (GTFP) for the organized manufacturing sector in India utilizing factory-level Annual Survey of Industry datasets. The GTFP has been calculated utilizing the Global Malmquist-Luenberger index methodology at both the aggregate and industry levels. Additionally, it examines the convergence hypothesis for the major Indian states from 2001-02 to 2021-22 by employing the Phillips and Sul (2007, 2009) methodology to analyze the distribution dynamics of GTFP. It analyzes structural changes in carbon emissions and carbon productivity, while also identifying the most polluting industries at the sector level. The study's findings indicate that labour-intensive industries contribute the least to GVA while producing substantial emissions. There is a complete divergence across the regions in GTFP, indicating two clubs and one non-convergent group. Our findings offer novel insights to policymakers on the dynamics of GTFP and enhancements in productivity, while integrating environmental considerations.