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How Real are the Changes in Sectoral GDP Shares in the Indian Economy?

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  • Madhusudan Datta

Abstract

Based on input-output transactions tables, our study decomposes the cause for change in sectoral shares in GDP into three components - the final-demand effect, input-structure effect and reallocation effect - and makes an empirical assessment of these components. It is observed that apart from final-demand effect, input-structure and reallocation effects played very important roles in determining sectoral shares of all major sectors of the Indian economy during the three decades - 1974-2004. In the absence of these two effects, tertiary sector's share in GDP of India over the three decades would be smaller by more than six percentage points compared to what it was in 2003-04. Distinctive behaviour of Community, Social and Personal Services vis-a-vis the rest of the tertiary sector is an important finding of the study.

Suggested Citation

  • Madhusudan Datta, 2011. "How Real are the Changes in Sectoral GDP Shares in the Indian Economy?," Journal of Quantitative Economics, The Indian Econometric Society, vol. 9(1), pages 169-182.
    • Handle: RePEc:jqe:jqenew:v:9:y:2011:i:1:p:169-182
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    File URL: http://www.jqe.co.in/journals/JQE_v9_n1_2011_p11.pdf
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    References listed on IDEAS

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    5. Mansur Masih & Ali Al-Elg & Haider Madani, 2009. "Causality between financial development and economic growth: an application of vector error correction and variance decomposition methods to Saudi Arabia," Applied Economics, Taylor & Francis Journals, vol. 41(13), pages 1691-1699.
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    1. Shahbaz, Muhammad & Farhani, Sahbi & Ozturk, Ilhan, 2013. "Coal Consumption, Industrial Production and CO2 Emissions in China and India," MPRA Paper 50618, University Library of Munich, Germany, revised 12 Oct 2013.

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