ECONOMIC ECONOMIC GROWTH IN GROWTH IN INDIA 1950-INDIA 1950-

19901990

Distinguishing Three Phases of Growth

How do we divide these 40years into a small number of sub-periods (phases) for orderly discussion? Table 1Chart (a few slides later)

GDP GROWTH ANUALLY

Observation:Observation:Inconsistent Inconsistent

growthgrowth

TABLE -1

How to Divide into Sub-How to Divide into Sub-periodsperiods

According to:According to: Five Year PlansFive Year Plans DecadesDecades The Global Economic EnvironmentThe Global Economic Environment Differences in the Growth Differences in the Growth

PerformancePerformance

??

Our Preferred Division

According to the sharpness of differences in the growth rates

We distinguish three phases.

Phase I: 1950-65

Phase II: 1965-81

Phase III: 1981-88

Figure 2:Average growth rate

0

1

2

3

4

5

Phase

1

Phase

2

Phase

3

GROWTH RATE

Sectoral GrowthSectoral Growth

Figure 2: Growth Rates of Sectoral GDP

0%

20%

40%

60%

80%

100%

Phase

1

Phase

2

Phase

3

SERVICE

INDUSTRIAL

AGRICULTURAL

5 YEAR PLAN PERFORMANCE

0

1

2

3

4

5

6

1st PLAN 2nd PLAN 3rd PLAN 4th PLAN 5th PLAN 6th PLAN 7th PLAN

Table 2: The Composition of the GDP

1950-511950-51

52%14%

8%

26%AGRICULTURE &ALLIED

INDUSTRY

MANUFACTURING

SERVICES

1964-65

43%

19%

11%

27%AGRICULTURE &ALLIED

INDUSTRY

MANUFACTURING

SERVICES

1980-81

35%

21%

12%

32%

AGRICULTURE &ALLIED

INDUSTRY

MANUFACTURING

SERVICES

30%

16%

32%

22%

AGRICULTURE &ALLIED

INDUSTRY

MANUFACTURING

SERVICES

1987-90

THE THE COMPOSITION OF COMPOSITION OF

THE GDPTHE GDP

AS OTHER SECTORS DEVELOPING AGRICULTURAL & ALLIED ARE LACKING BEHIND

SERVICE SECTOR, MANUFACTURING & INDUSTRIES ARE GROWING AT TREMENDOUS PACE

ALTHOUGH INDIAN ECONOMY GROWING BUT IT HAS PEAKS AND VALLEYS UNDER ITS PROGRESS

ECONOMY ALTHOUGH DEVELOPING BUT NOT BALANCING ITS COMPOSITIONS