Chapter

India’s and China’s Recent Experience with Reform and Growth

Part of the series Procyclicality of Financial Systems in Asia pp 229-263

Understanding India’s Services Revolution

  • James Gordon
  • , Poonam Gupta

Abstract

A striking feature of India’s growth performance over the past decade has been the strength of the services sector. Table 10.1 shows that on average services grew more slowly than industry between 1951 and 1990.2 Growth of services picked up in the 1980s and further accelerated in the 1990s, when it averaged 7.5 percent per annum, thus providing a valuable prop to industry and agriculture, which grew on average by 5.8 percent and 3.1 percent, respectively.3 Most forecasters expect that services will grow at similar if not higher rates over the next few years. Growth in the services sector has also been less cyclical and more stable than the growth of industry and agriculture (in the sense of having the smallest coefficient of variation).