Assessment of Sectoral Growth of Indian Economy Using Growth Models

Abstract

Economic reforms have affected all sectors of Indian economy. Before reforms, the pace of economic growth was slow and the growth rate of gross domestic product (GDP) was imperceptibly above the population growth rate. After reforms, Indian economy has transformed relatively from stagnation to a dynamic stage due to growth in primary, secondary, and tertiary or service sectors. However, pattern of growth in agriculture, industry, and service sectors along with developments in the reforms and liberalization process shows that growth in agriculture sector has not increased substantially though other sectors, particularly service sector demonstrate the boost. Therefore, the objective of the paper is to examine the nature of growth and direction of different sectors namely agriculture, industry, and service sectors in India using growth models. Results indicate that contribution of agriculture sector in GDP is declining whereas the share of service sector is increasing. Further, analysis shows that contribution of industrial sector (in terms of share) in GDP seems approaching towards stagnation.