India - labor productivity growth

Year-on-year labor productivity growth in India from 2013 to 2022

Characteristic	Year-on-year growth rate
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Release date

December 2024

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Region

India

Survey time period

2013 to 2022

Special properties

as of December of each year

Supplementary notes

CEIC calculates annual labor productivity growth from annual real GDP and annual employment.

Values have been rounded for clarity.

Date of access is the date of publication.

Citation formats

In 2022, India’s labor productivity growth rate was **** percent, a decline from the previous year. The growth rate of labor productivity has almost halved since 2011, having reached its peak in 2016. Labor productivity measures the hourly output of a country's economy, and its growth is based on human capital, saving, investing in physical capital, and the use of new technology.

Do long work hours lead to better productivity?

While many top executives in India have advocated working long hours, this has not positively correlated with labor productivity. According to economic theory, working long hours leads to diminishing returns. Long working hours also present an obstacle to upskilling, which is considered a low-pay trap for employees and the country.

Reasons for low labor productivity in India

Labor productivity, measuring the labor efficiency in producing goods and services, is an important indicator of economic growth, competitiveness, and living standards.

Factors attributed to low productivity in India include deteriorating quality of labor rooted in the education system, skilling, and employability. A holistic approach addressing gaps in the education system, promoting technological advancements, and implementing comprehensive labor market reforms can enhance the country’s competitiveness and foster economic growth.