Cost Structure of the Indian Cement Industry

Analyses the structure of costs in the cement, lime and plaster industry of India. Using aggregative data for the period 196061 to 198283 a generalised translog cost function is estimated. It is discovered that (1) this industry has been characterised, by and large, by allocative efficiency; (2) production is characterised by increasing returns to scale; (3) technical progress has been biased against the use of capital; and (4) there exist considerable opportunities for substitution between factors of production. Several policy conclusions of the analysis are also examined.