Industrial Development in the Northeastern States of India: The Case of Service Industries

Abstract

This paper analyzes the sectoral composition of the Net Domestic Product (NSDP) of the Northeastern (NE) states of India for the period 1980-1996. It is revealed that there is a growing trend of ‘tertiarization’ of the structure of production. Intra service sector analysis shows that the major contribution towards the growth of service industries in due to the increase in public administration expenditure. The important service sectors like transport, banking insurance, storage and communication service sectors are yet to develop to their full potential. It is emphasisied that, while in short run, growth of service sector may provide the required impetus to generate additional employment but in the long run, the simultaneous growth agriculture and industries along with service sector is desirable in order to take full advantage of inter sectoral linkages effect. Therefore, for more balanced and sustainable economic development, NE state have to adopt and implement a more focused growth oriented policy measures.

Keywords: Industrial developmnet, Structural change, Serivce sector, Northeastern states, India

JEL Classification: L80, L90