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India's Pattern of Development: What Happened, What Follows?

70 Pages Posted: 3 Mar 2006  

Kalpana Kochhar

International Monetary Fund (IMF)

Raghuram G. Rajan

University of Chicago - Booth School of Business; International Monetary Fund (IMF); National Bureau of Economic Research (NBER)

Arvind Subramanian

International Monetary Fund (IMF); Center for Global Development

Ioannis Tokatlidis

International Monetary Fund (IMF)

Date Written: January 2006

Abstract

India has followed an idiosyncratic pattern of development, certainly compared with other fast-growing Asian economies. While the importance of services rather than manufacturing is widely noted, within manufacturing India has emphasized skill-intensive rather than labor-intensive manufacturing, and industries with higher-than-average scale. Some of these distinctive patterns existed prior to the beginning of economic reforms in the 1980s, and stem from the idiosyncratic policies adopted after India's independence. Using the growth of fast-moving Indian states as a guide, we conclude that India may not revert to the pattern followed by other countries, despite reforms that have removed some policy impediments that contributed to India's distinctive path.

Keywords: Manufacturing, Services, Diversification, Decentralization, Liberalization, Labor Intensity, Skill Intensity, Scale

JEL Classification: E23, E24, L80, O11, O14, O40, O47

Suggested Citation

Kochhar, Kalpana and Rajan, Raghuram G. and Subramanian, Arvind and Tokatlidis, Ioannis, India's Pattern of Development: What Happened, What Follows? (January 2006). IMF Working Paper, Vol. , pp. 1-70, 2006. Available at SSRN: https://ssrn.com/abstract=888167

Kalpana Kochhar (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Raghuram Rajan

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-4437 (Phone)
773-702-0458 (Fax)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
773-702-9299 (Phone)
773-702-0458 (Fax)

Arvind Subramanian

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Center for Global Development

2055 L St. NW
5th floor
Washington, DC 20036
United States

Ioannis Tokatlidis

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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