Article

Structural Transformation and Jobless Growth in the Indian Economy

Rubina Verma

in The Oxford Handbook of the Indian Economy

Published in print March 2012 | ISBN: 9780199734580
Published online November 2012 | | DOI: http://dx.doi.org/10.1093/oxfordhb/9780199734580.013.0010

Series: Oxford Handbooks

 Structural Transformation and Jobless Growth in the Indian Economy

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This article develops a three-sector general equilibrium model to account for India's unique pattern of structural transformation. Although this article also documents the rise of India's service sector, it constructs a theoretical growth model to understand India's pattern of growth vis-à-vis other Organization for Economic Cooperation and Development (OECD) and emerging economies to highlight what is sui generis about the Indian case. The preeminence of services in recent years meant that there has been a shift from agriculture to services, bypassing industry. Further, changes in GDP structure in India are asymmetrical to the workforce (employment in agriculture continues to persist at 58% of the population). The article's model shows that sector-specific total factor productivity (TFP) growth rates were important drivers of resource reallocation across the three principal sectors of Indian economy from 1970 to 2007.

Keywords: general equilibrium model; structural transformation; Indian Economy; emerging economies; workforce; total factor productivity

Article.  10869 words. 

Subjects: Economics ; Economic Development and Growth ; Econometric and Statistical Methods and Methodology: General

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