Sources of Growth in the Indian Economy

Barry Bosworth, Susan M. Collins, Arvind Virmani

NBER Working Paper No. 12901
Issued in February 2007
NBER Program(s):   IFM

This paper empirically examines India's economic growth experience during 1960-2004, focusing on the post 1973 acceleration. Careful attention is paid to data quality. The analysis focuses on two unusual dimensions of India's experience -- the concentration of growth in services production, and the modest levels of human and physical capital accumulation. A growth accounting analysis disaggregates by major sector, and highlights implications for aggregate productivity growth of the reallocation of resources out of agriculture to more productive activities in industry and services. But concerns are raised that growth in services may be overstated. India will need to broaden its current expansion to provide manufactured goods for the world market and jobs for its large pool of low-skilled workers. Increased public saving, as well as a rise in foreign saving -- particularly FDI -- could augment the rising household saving and support the increased investment necessary to sustain rapid growth.

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Document Object Identifier (DOI): 10.3386/w12901


  • Bery, Suman, Barry Bosworth, and Arvind Panagariya. India Policy Forum 2006/07. Los Angeles and London: Sage Publications, 2007.
  • Barry Bosworth & Susan M. Collins & Arvind Virmani, 2006. "Sources of Growth in the Indian Economy," India Policy Forum, Global Economy and Development Program, The Brookings Institution, vol. 3(1), pages 1-69. citation courtesy of

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