Service boom in the Indian economy: an analysis of causal influences

Abstract

The article decomposes the influence behind the growth of service activities in the Indian economy over the last three decades into three componentsthe final demand effect, input structure effect and reallocation effect -and makes empirical assessments thereof. In terms of the influences, the behaviour of the group of services used basically as intermediate inputs, designated as category-I services, was distinct from the rest of heterogeneous services combined as 'community, social and personal services'. The study finds that apart from the final demand effect, the other two influences too played very important but different roles in different phases of growth.