The present study is confined to manufacture of transport equipments and parts industry of organised manufacturing sectors of Punjab for the period of 1980-81 to 2002-03, at three digit level. Major source of data for the study is Annual Survey of Industries (ASI). Employment elasticity with respect to output in transport equipment and parts industry turned to be low and positive in pre-reform as well as post-reform period. Marginal productivity of capital is positive but marginal productivity of labour is negative for transport equipment and parts industry. In transport equipment and parts industry the negative and significant value (in pre-reform period) of employment elasticity with respect to capital puts a question mark on the absorption of labour with increase in capital. Output elasticity with respect to capital is negative for manufacture of railway, tramway locomotive and rolling stock industry (NIC-352) in pre-reform period, and negative significant for manufacture of transport n.e.c. industry (NIC-359) in post-reform period, puts a question mark on the extension of production capacity.