Advertisement

Growth and Regional Divergence in Industry and Services

  • Madhusudan Ghosh
Chapter
Part of the India Studies in Business and Economics book series (ISBE)

Abstract

This chapter analyses the processes of growth in output and the dynamics of its composition and regional distribution across 15 major states in India during 1970/1971–2008/2009. The upward trend in the growth rate of net domestic product (NDP) has been associated with an upward trend in the shares of industry and services and declining trend in the share of agriculture in NDP. The acceleration in the growth of NDP during the post-reform period was led significantly by the impressive growth in services. The sectors with higher growth rate have recorded lower instability in it. Per capita income from industry and services has grown differentially across the states, and the regional disparity in per capita income has increased over time in both the sectors. While the interstate disparities in per capita income have been persisting in industry, these are aggravated in services during the post-reform period. Structural changes in the economy have been associated with rising disparities in per capita income across states. While the regional disparities in physical, social and financial infrastructures have been responsible for the regional variations in per capita income from industry, the same in social and financial infrastructures have been primarily responsible for the regional disparities in per capita income from services. The results suggest that investment in physical, social and financial infrastructures could significantly improve the long-run growth performance of the states and reduce regional imbalances by accelerating growth in industry and services.

Keywords

Capita Income Growth Performance Service Sector Annual Growth Rate Economic Reform 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

References

  1. Aggarwal, A. (2012). India’s services sector: Gateway to development? Economic and Political Weekly, 47(26, 27), 119–123.Google Scholar
  2. Banga, R. (2005). Critical issues in India’s service-led growth (Working Paper No. 171). New Delhi: Indian Council for Research in International Economic Relations (ICRIER).Google Scholar
  3. Barro, R. J., & Sala-i-Martin, X. (1992). Convergence. Journal of Political Economy, 100(2), 223–251.CrossRefGoogle Scholar
  4. Barro, R. J., & Sala-i-Martin, X. (1995). Economic growth. New York: McGraw-Hill.Google Scholar
  5. Bhattacharya, B. B., & Mitra, A. (1990). Excess growth of tertiary sector in Indian economy: Issues and implications. Economic and Political Weekly, 25(44), 2445–2450.Google Scholar
  6. EPW Research Foundation. (2003). Domestic product of states of India 1960–61 to 2000–01 (1st ed.). Mumbai: EPW Research Foundation.Google Scholar
  7. EPW Research Foundation. (2004). National accounts statistics of India: 1950–51 to 2002–03 (5th ed.). Mumbai: EPW Research Foundation.Google Scholar
  8. Government of India. (2010a). State domestic product (state series). New Delhi: National Accounts Division, Central Statistical Organisation, Ministry of Statistics & Programme Implementation. http://www.mospi.nic.in. Accessed 2 Apr 2010.
  9. Government of India. (2010b). National accounts statistics. New Delhi: National Accounts Division, Central Statistical Organisation, Ministry of Statistics & Programme Implementation. http://www.mospi.nic.in. Accessed 2 Apr 2010.
  10. Klein, L. R. (1962). An introduction to econometrics. Englewood Cliffs: Prentice Hall.Google Scholar
  11. Mazumdar, S. (2010). Industry and services in growth and structural change in India: Some unexplored features (ISID Working Paper 2010/02). New Delhi: Institute for Studies in Industrial Development.Google Scholar
  12. Mitra, A. (1988). Disproportionality and the services sector: A note. Social Scientist, 16(179), 3–8.CrossRefGoogle Scholar
  13. Nagaraj, R. (1991). Excess growth of tertiary sector? Economic and Political Weekly, 26(5), 247–248.Google Scholar
  14. Nayyar, G. (2008). Economic growth and regional inequality in India. Economic and Political Weekly, 43(6), 58–67.Google Scholar
  15. Papola, T. S. (2005, December 27–29). Emerging structure of the Indian economy: Implications of growing inter-sectoral imbalances. Presidential Address, 88th conference of the Indian Economic Association, Andhra University, Vishakhapatnam.Google Scholar
  16. Papola, T. S. (2012). Structural changes in the Indian economy: Emerging patterns and implications (ISID Working Paper 2012/02). New Delhi: Institute for Studies in Industrial Development.Google Scholar
  17. Ramaswamy, K. V. (2011). Regional disparities in manufacturing growth in India. In D. M. Nachane (Ed.), India development report 2011 (pp. 81–91). New Delhi: Oxford University Press.Google Scholar
  18. Sala-i-Martin, X. X. (1996). The classical approach to convergence analysis. The Economic Journal, 106(437), 1019–1036.CrossRefGoogle Scholar
  19. World Bank. (2004). Sustaining India’s services revolution. South Asia Region/New Delhi: World Bank Group.Google Scholar

Copyright information

© Springer India 2013

Authors and Affiliations

  • Madhusudan Ghosh
    • 1
  1. 1.Department of Economics & PoliticsVisva- BharatiSantiniketan, BirbhumIndia

Personalised recommendations