Sources of Growth in the Indian Economy

65 Pages Posted: 1 Mar 2007 Last revised: 3 Apr 2022

See all articles by Barry Bosworth

Barry Bosworth

Brookings Institution - Economic Studies Program

Susan M. Collins

Brookings Institution - Economic Studies Program; Georgetown University - Department of Economics; National Bureau of Economic Research (NBER)

Arvind Virmani

Indian Council for Research on International Economic Relations (ICRIER)

Date Written: February 2007

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.

Suggested Citation

Bosworth, Barry and Collins, Susan Margaret1 and Virmani, Arvind, Sources of Growth in the Indian Economy (February 2007). NBER Working Paper No. w12901, Available at SSRN: https://ssrn.com/abstract=966115

Barry Bosworth

Brookings Institution - Economic Studies Program ( email )

1775 Massachusetts Avenue, NW
Washington, DC 20036
United States
202-797-6000 (Phone)
202-797-6181 (Fax)

Susan Margaret1 Collins (Contact Author)

Brookings Institution - Economic Studies Program ( email )

1775 Massachusetts Ave. NW
Washington, DC 20036-2188
United States

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Arvind Virmani

Indian Council for Research on International Economic Relations (ICRIER) ( email )

Core 6A, Fourth Floor Lodhi Road
New Delhi, 110003
India
+24698862 (Phone)
+24620180 (Fax)

HOME PAGE: http://www.gdnet.org/pdf2/gdn_library/annual_conferences/fifth_annual_conference/virmani_bio.pdf

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