India's Services Revolution Amidst Worldwide Structural Change
Posted: 12 May 2020
Date Written: November 03, 2015
Abstract
Abstract In the historical development experience of the world as a whole, there is an obvious kink around 1970s, i.e., the brief period around which the capitalist development has changed its course from industrialization to ‘tertiarisation’. The problem with India (and several other developing countries) is that in its historical development, share of industrial sector in Value Added has never reached 30 percent mark, but fall in the share of agricultural sector has almost solely been compensated by the rise in the service sector share; since the mid 1990s, the growth of India has been by the service sector alone. World Bank (Sustaining India’s Services Revolution, Report on the South Asia Region: India 2004) calls this scenario ‘India’s Services Revolution’. It seems that India has skipped the phase of industrialization to enter into the phase of ‘tertiarisation’. Naturally this ‘ahistorical’ development process followed by India has drawn the attention of the economists worldwide and many of them have identified India to be the ‘outlier’ in this regard. Here, in the context of ‘Globalisation’, we will try to evaluate critically, whether the course of development of India is an ‘outlier’ or ‘ahistorical’ path. Further, the obvious task that follows is the analysis of this ‘ahistorical’ development of India following the basic Input-Output framework for the explanation of the structural change of Indian economy.
Keywords: Structural Change, Long Term Trends Analysis of Major Industry Wise Share in Value Added, Chow Test, Unit Root Test, Endogenous Structural Break Analysis Following Zivot and Andrews and Amit Sen, Structural Change in Input-Output Framework
JEL Classification: C22, C67, O14, O50
Suggested Citation: Suggested Citation