he international experience of industrially advanced countries shows significant
reduction in energy use per unit of output, which is often known as energy conservation
in response to rising energy prices. Using ASI data this paper makes an attempt to
understand behaviour of labour and energy use in the organized manufacturing sector of
Maharashtra during 1980-81 to 1997-98. Both labour intensity and fuel intensity have
declined significantly during the period across the industries in Maharashtra. However,
the capital intensity registered a significant rise leading to increase in the total factor
productivity in the manufacturing sector of Maharashtra. The differential rises in the
prices of energy and labour induced industries to substitute fuel for labour in the
manufacturing industries such as wood and wood products, paper and paper products,
non-metallic mineral products, basic metal and alloys industries, and metal products.
However, fall in the fuel and labour intensity with rising capital intensity explains
technological change is the factor behind rising total factor productivity in the
manufacturing sector of Maharashtra.