Question

Explain the pattern of structural growth witnessed in India in the past decades.

Answer 1

Instructions:
We will answer this question in two steps. First, we will define structural growth and then, we will explain how the contribution of different sectors changed in the recent decades.

Solution:
Well! Structural growth refers to a dramatic shift in the way an economy operates. It is usually brought about by major economic development or technological changes.

Structural change refers to the transformation in the structure of an economy. It refers to a fundamental shift in the size of primary, secondary and tertiary sectors and their contribution to the GDP and employment.

Let us now understand the pattern of structural growth in India.

As an economy develops, the significance of primary sector and allied activities declines. It is accompanied by an increase in the share of manufacturing and services sector. A similar trend was observed in India post-independence.

From 1950-51 to 2008-09, the share of the primary sector declined from about 56% to almost 17%.

In the same time, the share of manufacturing increased from 16% to 18% while that of services increased from 28% to about 64%.

However, the increase in the share of services sector to India’s GDP has not been accompanied by a proportionate increase in employment. Thus, the lack of labour intensive manufacturing industries in India has led to the failure of services and industries sector to absorb the growing labour force in India.

This has led to a high rate of unemployment and underemployment in India. Thus, despite India’s being one among the fastest growing economies, India’s growth has also been termed as jobless growth.