Understanding India’s Services Revolution

  • James Gordon
  • Poonam Gupta
Chapter
Part of the Procyclicality of Financial Systems in Asia book series

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).

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Acharya, Shankar, 2003, “What’s Happening in Services,” Business Standard (Mumbai) (December 23).Google Scholar
  2. Acharya, Shankar, 2002, “India’s Medium-Term Growth Prospects,” Economic and Political Weekly (July 13), pp. 2897–906.Google Scholar
  3. Bhagwati, Jagdish, 1984, “Splintering and Disembodiment of Services and Developing Nations,” World Economy, Vol. 7, No. 2, pp. 133–43.CrossRefGoogle Scholar
  4. Bhattacharya, B.B. and Arup Mitra, 1990, “Excess Growth of Tertiary Sector in Indian Economy, Issues and Implications,” Economic and Political Weekly (November 3), pp. 2445–50.Google Scholar
  5. CEIC Economic Database (India), CEIC Data Company Ltd. (Hong Kong).Google Scholar
  6. Chenery, Hollis B. and L.J. Taylor, 1968, “Development Patterns: Among Countries and Over Time,” Review of Economics and Statistics, Vol. 50, pp. 391–416.CrossRefGoogle Scholar
  7. Francois, Joseph, F. and Kenneth A. Reinhart, 1996, “The Role of Services in the Structure of Production and Trade: Some Stylized Facts from a Cross-Country Analysis,” Asia-Pacific Economic Review, Vol. 1, No. 2 (May).Google Scholar
  8. Hansda, Sanjay Kumar, 2002a, “Services Sector in the Indian Economy: A Status Report,” RBI Staff Studies (Mumbai: Reserve Bank of India, Department of Economic Analysis and Policy).Google Scholar
  9. Hansda, Sanjay Kumar, 2002b, Sustainability of Services and Services-Led Growth: An Input Output Exploration of the Indian Economy (Mumbai: Reserve Bank of India).Google Scholar
  10. Inman, Robert, P. (ed.) 1985, “Introduction and Overview,” in Managing the Service Economy: Prospects and Problems (Cambridge: Cambridge University Press).Google Scholar
  11. International Monetary Fund, 1999, World Economic Outlook (Washington, DC).Google Scholar
  12. Joshi, Dharmakirti, 2002, “The Public Private Balance: A Macro View,” Discussion Paper Series (Mumbai: CRISIL Center for Economic Research).Google Scholar
  13. Kongsamut, Piyabha, Sergio Rebelo, and Danyang Xie, 2001, “Beyond Balanced Growth,” IMF Working Paper 01/85 (Washington, DC: International Monetary Fund).Google Scholar
  14. Kravis, Irving, B., 1985, “Services in World Transactions,” in Managing the Service Economy: Prospects and Problems, ed. by Robert P. Inman (Cambridge: Cambridge University Press).Google Scholar
  15. Ministry of Statistics and Programme Implementation (various years) National Accounts Statistics (New Delhi: Central Statistical Organization).Google Scholar
  16. Reserve Bank of India, 2002, Report on Currency and Finance 2000–01 (Mumbai).Google Scholar
  17. Salgado, Ranil, 2003, “India’s Global Integration and The Role of the IT Sector,” in India: Selected Issues and Statistical Appendix, IMF Staff Country Report No. 03/261 (Washington, DC: International Monetary Fund).Google Scholar
  18. Sastry, D.V.S., Balwant Singh, Kaushik Bhattacharya, and N.K. Unnikrishnan, 2003, “Sectoral Linkages and Growth Prospects: Some Reflections on the Indian Economy,” in Economic and Political Weekly, Vol. 38, No. 24, pp. 2390–97.Google Scholar
  19. Slifman, L. and C. Corrado, 1996, “Decomposition of Productivity and Unit Costs,” mimeo (Washington, DC: Board of Governors of the Federal Reserve System).Google Scholar
  20. Srinivasan, T.N., 2002, “China and India: Growth and Poverty, 1980–2000,” mimeo (New Haven, CT: Yale University).Google Scholar
  21. World Bank (various years), World Development Indicators (Washington, DC).Google Scholar

Copyright information

© International Monetary Fund 2005

Authors and Affiliations

  • James Gordon
  • Poonam Gupta

There are no affiliations available

Personalised recommendations