The Growth Structure of Indian Economy – An Empirical Dissection
Please cite the paper as:
“Guha, Atulan, (2013), The Growth Structure of Indian Economy – An Empirical Dissection, World Economics Association (WEA) Conferences, No. 3 2013, Conference on the Inequalities in Asia, 27th May to 12th July 2013”
The GDP growth structure of India is dominated by the growth in service sector. The Baumolian theories argue that the higher productivity in services is primary mover behind this growth pattern. On the other hand, Kaldorian theories argue that service sector or IT sector with its strong linkages with the rest of the economy is driving the growth. This paper argues that none of these two theories explain the Indian growth structure. The demand pattern, which is independent of production structure, is the main factor responsible for this growth pattern. This demand pattern has primarily arisen out of external demand and increasing income inequality.