Labour Productivity, Structural Change and Economic Growth: State Level Analysis of Indian Economy

By : Sanjeev Kumar , Kavita Baliyan , Simran

Page No: 408-420

Abstract
The economic reforms of 1991, Liberalisation, Privatisation, and Globalisation (LPG) changed the composition and structure of the emerging Indian economy significantly, which reallocated factors of economic activities in India transversely. It is in this context that the present paper examines the emerging trends in labour productivity, structural changes, and economic growth in India at an aggregate as well as disaggregate level during the period 1980-81 to 2017-18. The study analyses the contribution of productivity growth and structural change to the overall economic growth at the country as well as the state level. The McMillan and Rodrik growth accounting approach was employed which decomposes labour productivity growth into ‘within’ sector and ‘structural change’ components. The progress is diverse across the state level in India, indicating that labour has not been exiting agriculture as fast as the share of value added by agriculture has been declining. The results also reveal that changing final demand is the most crucial factor in labour reallocation in India. Due to its existing structure, India is capable of leading global economic growth in the future. There is a great need for policies on human capital development, and outwardoriented, economic reform measures.

Authors :
Sanjeev Kumar
Associate Professor, Department of Economics, Chaudhary Charan Singh University, Meerut.

Kavita Baliyan
Assistant Professor, Giri Institute of Development Studies (GIDS), Lucknow.

Simran
Research Scholar, Department of Economics, University of Lucknow, Lucknow.
 

DOI: https://doi.org/10.32381/PROD.2022.62.04.7