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Structural Change and Development in India

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  • Ajit K. Ghose

Abstract

Structural change—reallocation of labour from lower-productivity economic activities to higher-productivity ones—is not just an important contributor to growth but is also the principal route to improvement in employment conditions in developing economies. In history, remote and recent, structural change associated with successful development has involved labour reallocation from agriculture to manufacturing and services at early stages and from agriculture and manufacturing to services at later stages. Structural change in India, however, has been and continues to be very different; even at an early stage of development, labour reallocation has occurred from agriculture to services but not to manufacturing. While this kind of structural change has contributed to growth, its effect on employment has been very weak. The pace of improvement in employment conditions has been very slow. Economic growth, consequently, has not been accompanied by commensurate development. The challenge for the future is one of enhancing the role of manufacturing in the growth process.

Suggested Citation

  • Ajit K. Ghose, 2021. "Structural Change and Development in India," Indian Journal of Human Development, , vol. 15(1), pages 7-29, April.
    • Handle: RePEc:sae:inddev:v:15:y:2021:i:1:p:7-29
    DOI: 10.1177/09737030211005496
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    Cited by:

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    2. Balwant Singh Mehta & Ishwar Chandra Awasthi, 2022. "Dynamics of Urban Labour Market and Informality," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 65(1), pages 19-37, March.
    3. Balwant Singh Mehta & Siddharth Dhote & Ravi Srivastava, 2023. "Decomposition of Inequality of Opportunity in India: An Application of Data-Driven Machine Learning Approach," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 66(2), pages 439-469, June.

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