Growth of Services Sector in the Indian Economy: An Input-Output Structural Decomposition Analysis

Abstract

The sectoral composition of the Indian economy has undergone a significant structural shift over the years. From a primary agro-based economy during the early years of planning, the Indian economy has emerged as predominant in the services sector during the last couple of decades. The shift in the composition is likely to cause substantial changes in production and demand, and the linkages among various sectors of the economy. This paper seeks to address the reasons for this growth and consequent 'structural change' in the economy during the period 1983-1984 to 2003-2004, using I-O Structural Decomposition Analysis.