India is the sixth largest exporter of textiles and apparel in the world, with a 4% share of global trade. The Ministry of Textiles, Government of India, launched the technology upgradation fund scheme (TUFS) in 1999, which continued further as modified TUFS, re-structured TUFS, and revised restructured TUFS. Considering the size of the textile sector and efforts made for technology upgrade, it is indeed important to revisit the technical efficiency of firms. The paper attempts to measure the technical efficiency of firms in the textile and apparel industry in India using panel data under different frameworks of analysis within the broad framework of stochastic frontier analysis (SFA). The data used is from 1998 to 2018 for textile sector firms and from 2007 to 2018 for apparel sector firms at the five-digit level of the National Industrial Classification (NIC). As far as the parametric estimation of technical efficiency in the textile and apparel industry in India using panel data is concerned, this paper, to the best of the author's knowledge, is the first of its kind and suggests that although the input intensities have increased, the technical efficiencies of the firms have remained stagnant.
Kashyap et al. (Thu,) studied this question.
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