Structural Change and Development in India

Ajit K. Ghose

Indian Journal of Human Development, 2021, vol. 15, issue 1, 7-29

Abstract: Structural change—reallocation of labour from lower-productivity economic activities to higher-productivity ones—is not just an important contributor to growth but is also the principal route to improvement in employment conditions in developing economies. In history, remote and recent, structural change associated with successful development has involved labour reallocation from agriculture to manufacturing and services at early stages and from agriculture and manufacturing to services at later stages. Structural change in India, however, has been and continues to be very different; even at an early stage of development, labour reallocation has occurred from agriculture to services but not to manufacturing. While this kind of structural change has contributed to growth, its effect on employment has been very weak. The pace of improvement in employment conditions has been very slow. Economic growth, consequently, has not been accompanied by commensurate development. The challenge for the future is one of enhancing the role of manufacturing in the growth process.

Keywords: Structural transformation; economic growth; development; de-industrialisation; employment; India (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:sae:inddev:v:15:y:2021:i:1:p:7-29

DOI: 10.1177/09737030211005496

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