Manonmani, M2017-04-062017-04-062014https://ir.avinuty.ac.in/handle/avu/2843Since Independence India has achieved self sufficiency in the manufacturing sector. It is assumed that growth is needed in manufacturing sector to eliminate poverty. Hence an attempt in this paper is made to analyse the performance of aggregate manufacturing sector of India considering the pre and post liberalisation period by testing certain indicators of development such as ability to pay hypothesis, verdoorn's law, and wagetechnology relationship. The reference period of the shidy for the pre liberalization covers between 1972-73 and 199-91 and post liberalization period between 1991-92 and 2010-11. Augmented Dicky Fuller (ADF) test and linear regression model were applied to analyse the data. It was found that labour productivity influenced the level of wage strongly in both the periods. In both the periods' verdoorns law was approved. It was concluded that productivity can be augmented only through employment generation and higher wages.