Jimmy Corton Gaddam
The present paper studies the employment and output elasticities of automobile industry in India. It explains the relationship between employment with respect to output and fixed capital and also studies the relationship between output with respect to employment and fixed capital for the period 1985-86 - 2006-07. This paper concludes that there exist complementary relationship between employment and output and substitute relationship between employment and fixed capital in the industry. In this analysis the positive output elasticities with respect to labour and fixed capital indicate that the employment of these two factors (labour and fixed capital) in the industry enhances production. Objectives: To study the employment elasticity of the automobile industry in general; to examine the output elasicities of the automobile industry in India during 1986-2007; & to make necessary suggestions for the improvement in the employment and output elasticities.