Growth Decomposition of Indian Economy, 1981-2007

Abstract

The present paper attempts to evaluate the economic performance of India for the period of 1981-2007, using the conventional growth accounting technique, also known as “Solow growth model”. In particular, it examines the relative contributions of factor accumulation and productivity growth in the economic growth of the economy. The main objective is to check if the growth is sustainable. Also, an attempt is made to find the proximate explanation of any major ups and downs that happened in the economy during this period. The paper concludes by arguing that the recent spectacular performance of the Indian economy is mainly fuelled by improvement in TFP.

Sources of output growth in the countries of the Common Monetary Area and provinces of South Africa

“…Dumagan and Ball (2009) used Fisher and Törnqvist to study growth decomposition in the agricultural sector of the USA, and concluded that output growth was mainly due to the growth of TFP in the sector. Navin (2014) and Kumar and Shekhar (2017) ascertained than the growth performance of the Indian economy was due to TFP growth. Applying the Shapley decomposition method, Ajakaiye et al (2015) argued that growth in Nigeria was accompanied by unemployment and revealed the migration of labour from the primary and secondary sectors to the tertiary sector.…”