Sources of Growth in the Indian Economy

Barry Bosworth, Susan M. Collins and Arvind Virmani

No 12901, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper empirically examines India's economic growth experience during 1960-2004, focusing on the post 1973 acceleration. Careful attention is paid to data quality. The analysis focuses on two unusual dimensions of India's experience -- the concentration of growth in services production, and the modest levels of human and physical capital accumulation. A growth accounting analysis disaggregates by major sector, and highlights implications for aggregate productivity growth of the reallocation of resources out of agriculture to more productive activities in industry and services. But concerns are raised that growth in services may be overstated. India will need to broaden its current expansion to provide manufactured goods for the world market and jobs for its large pool of low-skilled workers. Increased public saving, as well as a rise in foreign saving -- particularly FDI -- could augment the rising household saving and support the increased investment necessary to sustain rapid growth.

JEL-codes: F43 O4 (search for similar items in EconPapers)
Date: 2007-02
New Economics Papers: this item is included in nep-cwa and nep-dev
Note: IFM
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Citations: View citations in EconPapers (93)

Published as Bery, Suman, Barry Bosworth, and Arvind Panagariya. India Policy Forum 2006/07. Los Angeles and London: Sage Publications, 2007.
Published as Barry Bosworth & Susan M. Collins & Arvind Virmani, 2006. "Sources of Growth in the Indian Economy," India Policy Forum, Global Economy and Development Program, The Brookings Institution, vol. 3(1), pages 1-69.

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