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Links between Structural Changes and Economic Growth in India

Author

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  • M.R. Singariya
Abstract
The structural changes of an economy that entail the dynamics of sector shares (industrial, agricultural and services) are related to each other and to economic growth as well. Using panel data collected from CSO for states and UTs of India for the period of 2004-05 to 2011-12 at the constant prices of 2004-05, the present paper highlights the effect of population change on economic growth in India. As statistical method we have used OLS and after panel diagnostics random effect was found unbiased. Further year dummies and state dummies have been used for an in-depth analysis.The growth pattern of different sectors of the economy shows an emergence of the service sector as the major contributor, decline in the share of agriculture sector and industry sector has seen a steep decline during this period. It indicates that some states were able to shift their labour force from low – productivity agriculture to higher productivity industry and service sectors, and to increase productivity within those sectors, despite the rapid growth of populations. Results of Random Effects Model suggest that states & UTs like Chandigarh, Delhi, Goa, Haryana, Maharashtra, A&N Islands and Pondicherry have statistically significant at the 5 % level positive association between a logarithm value of the population and logarithm value of per capita NSDP, while Assam, Bihar, Madhya Pradesh, Uttar Pradesh, Rajasthan, Orissa, Manipur, Chhattisgarh and Jharkhand have significant at the 5 % level negative association in this period. Thus the impact of population change is not automatic and homogenous throughout the Indian States during the study period. Whether India will be able to capitalize on its favorable age structure depends on how well the EAG states are able to reform their economies.

Suggested Citation

  • M.R. Singariya, 2014. "Links between Structural Changes and Economic Growth in India," Growth, Asian Online Journal Publishing Group, vol. 1(1), pages 1-9.
    • Handle: RePEc:aoj:growth:v:1:y:2014:i:1:p:1-9:id:770
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    File URL: http://asianonlinejournals.com/index.php/Growth/article/view/770/798
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    Citations

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    Cited by:

    1. Prajapati, Vishwajeet Singh & Priya, Ashutosh & Pradhan, Vikas, 2023. "The Middle-Income Trap – A Problem Of Definition And Empirical Research," Economic and Regional Studies (Studia Ekonomiczne i Regionalne), John Paul II University of Applied Sciences in Biala Podlaska, vol. 16(3), September.
    2. Altaf Hussain Padder & Mathavan Bommayasamys, 2023. "Structural transformation path across Indian states: Findings from panel data analyses," American Journal of Social Sciences and Humanities, Online Science Publishing, vol. 8(1), pages 89-112.
    3. E.G. Russkova & I.V. Mitrofanova & O.Yu. Vatyukova & N.P. Ivanov & V.V. Batmanova, 2017. "Structural Changes In The Gdp Of Russia In 1995-2015: Sectoral Approach," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 17(1), pages 39-52.
    4. Prajapati Vishwajeet Singh & Priya Ashutosh & Pradhan Vikas, 2023. "The middle-income trap – a problem of definition and empirical research," Economic and Regional Studies / Studia Ekonomiczne i Regionalne, Sciendo, vol. 16(3), pages 459-472, September.

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