This is an innovative study on the two-way relationship between wages and productivity in India and the variations across industries and across the states. Though there is two-way relationship between wages and productivity yet the lagged effect of wages on labour productivity has been more pronounced. It has been found that the relationship between labour productivity and wage rate during post-reform era has strengthened in many prosperous states. After liberalisation when market forces have more important role to play, the labour productivity has become more responsive to wage rate. Efforts have been made to highlight different problems relating to wage and salary administration and to suggest suitable remedial measures with regard to wage-productivity relationship in Indian industries.
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