Productivity & Competitiveness of Indian Toy Industry: Prospects & Challenges

By : K.P.Sunny, Rajesh Sund

Page No: 120-130

Abstract
This paper focuses on major issues and problems faced by Toy manufacturing sector and discuss potentials for the industry besides a comparison of export–import of Indian Toy industry vis-a vis China. The productivity levels of the sector are estimated in terms of labour productivity, capital productivity and total factor productivity during 2008-09 to 2011-12.The concept of ‘edutainment’ toys has dramatically changed the toy market in India. Toys no longer just fulfill the entertainment requirements of a child, but also cater to the growing requirement of skill development of children. There has been double-digit growth in the demand for toy products over the last five years, in spite of the fact that about 40% of toy manufacturing units closed down during this period. The inexpensive Chinese toys have replaced the branded Indian toys. It has been estimated that almost 80% of the toy market has been taken over by the Chinese toys. The export/import ratio has fallen sharply from a level of 0.65 in 2008-09 to 0.45 by 2012-13 indicating India’s declining global competitiveness with respect to toy manufacturing. The estimated partial productivity growth for both labour and capital as well as total factor productivity growth indicates that technology played a significant role in the productivity growth of Toy sector in India. Technology upgradation schemes are vital to make toy sector more productive and competitive in the globalized setting.

Author :
K.P.Sunny : Group Head (Economic Services & Support Services) and Rajesh Sund is Deputy Director (Economic Services), National Productivity Council, New Delhi-110003.