The rise of new economic powers has generally been driven by the rapid structural transformation of their economies, featured by the shift from primary production, such as mining and agriculture to manufacturing; and in manufacturing from natural-resource-based to more sophisticated, skill- and technology-intensive activities.

1. Hearty Welcome
S Prasad
Department of Economics
Sree Sankara College
Kalady, Ernakulam
Changing Structure of Indian Economy
The missing link in Economic Growth

2. What do you mean by Structural Changes?
•Long-term and persistent shifts in the sectoral
composition of economic systems
•Modifications in the relative importance of different
sectors over time, measured by their share of output
or employment.
•Changes in the location of economic activity, such as
the urbanisation process, or in a broader sense,
changes in the institutional environment.

3. What do you mean by Structural Changes?
In most cases, these countries rapidly changed their
industrial structure, moving from low-skilled to
more sophisticated production.
In the last twenty years, the rise of China as one of
the largest manufacturing producers in the world,
currently making up for around 10 per cent of
world value added, represents the most striking
phenomenon in the region.
In contrast, most African countries still remain on
the margins of the industrialisation processes.

4. Objectives of the Study
To evaluate the growth pattern of India over several
Five Year Plan periods
To analyse the sectoral contribution to economic
growth
To analyse the qualitative changes in the economy
over the period of analysis.

5. Methodology
The period of analysis for the study starts from 1950-51 to
2013-14
The study used only secondary sources of data for the
analysis and employed tools like simple growth rate,
percentage and appropriate graphical presentations.

6. National Accounts Statistics
Data Sources
International Food Policy Research Institute
UNDP
WHO
FAO
Economic Survey Various issues

7. India’s Shining Face
India has entered a very excellent phase of long-
term economic growth
…with strong support from service sector
…and a booming young population

8. Sectoral Growth Rate (%)
Source: Economic Survey, Various issues
Five Year Plan
Five Year
Plan Agriculture Industry Service GDP
1st Five Year Plan 1951 to 1956 2.88 5.67 4.10 3.61
2nd Five Year Plan 1956 to 1961 3.35 6.57 4.91 4.27
3rd Five Year Plan 1961 to 1966 -0.28 6.88 5.40 2.84
Annual Plans 1966 to 1969 4.43 2.78 4.30 3.92
4th Five Year Plan 1969 to 1974 2.77 4.50 3.22 3.35
5th Five Year Plan 1974 to 1979 3.59 6.49 5.43 4.88
Annual Plans 1979 to 1980 -12.77 -2.33 0.95 -5.20
6th Five Year Plan 1980 to 1985 5.78 5.84 5.47 5.51
7th Five Year Plan 1985 to 1990 3.03 6.98 7.22 5.66
Annual Plans 1990 to 1992 1.03 2.82 5.20 3.36
8th Five Year Plan 1992 to 1997 4.78 8.29 6.80 6.54
9th Five Year Plan 1997 to 2002 2.49 3.82 8.00 5.68
10th Five Year Plan 2002 to 2007 2.38 8.29 9.20 7.61
11th Five Year Plan 2007 to 2012 4.06 7.69 9.20 8.05
12th Five Year Plan* 2012 to 2017 3.07 0.38 6.22 4.60
* Data available only till 2013-14

9. The Trend: Agri/Ind./Service

10. The Trend: GDP

11. Structure of the Economy
Source: Economic Survey
Year Agriculture Industry Service
1950-51 51.88 11.10 34.63
1951-52 51.45 11.37 34.96
1952-53 51.61 11.42 34.51
1953-54 52.39 11.48 33.47
1954-55 51.73 11.74 33.96
1955-56 50.01 12.24 35.44

12. Changing Structure

13. Changing Structure
Source: Economic Survey 2014
Year Agriculture Industry Service
2008-09 15.77 20.14 64.10
2009-10 14.64 20.43 64.94
2010-11 14.59 20.30 65.10
2011-12 14.37 20.30 65.33
2012-13 13.95 19.61 66.44
2013-14 13.94 18.70 67.36

14. The Dark Side of India
India ranked 55 in the Global Hunger Index
All Indian states have only at least a “serious” level of hunger
Every fifth woman died in child birth is an Indian.
India is the leading nation in the number of women dying in
childbirth
India has the largest number of undernourished people in the
globe
India adds more people to the “newly hungry” in the planet than
the rest of the world together
According to Human Development Index, India’s rank is only
135

15. Human Development Index Trend
Year HDI Rank HDI Value
1990 123 0.308
1991 121 0.297
1992 134 0.439
1993 135 0.436
1994 138 0.446
1995 139 0.451
1998 128 0.563
1999 115 0.571
2000 124 0.577
2001 127 0.590
2002 127 0.595
2003 127 0.602
2004 126 0.611
2005 128 0.619
2007 134 0.612
2010 119 0.519
2011 134 0.547
2012 136 0.554
2013 135 0.586

16. Human Development Index Trend

17. Strive towards inclusive growth
A major chunk of population is based in rural side
There should be sufficient increase in demand for manufacturing
and service sectors from the rural population
There should be significant effort to tackle the underdevelopment
problems which exist in the urban side as a result of the increased
growth pace.
Health and education are areas of paramount importance for
improvement
Productive Sectors should be strengthened

18. Share of total outlay in Edn. and Health
Five Year Plan Year Education Health
Third Plan 1961-66 6.9 2.6
Annual Plan 1966-69 4.6 2.1
Fourth Plan 1969-74 4.9 2.1
Fifth Plan 1974-79 4.3 1.9
Annual Plan 1979-80 2.2 1.8
Sixth Plan 1980-85 2.7 3.1
Seventh Plan 1985-90 3.5 1.7
Annual Plan 1990-91 4.0 1.8
Annual Plan 1991-92 4.0 1.4
Eighth Plan 1992-97 4.5 1.7
Ninth Plan 1997-02 6.2 2.5
Tenth Plan 2002-07 5.5 2.1
Source: Economic Survey, 2007-08

19. Providing essential education and health services to those
large parts of our population who are still excluded from
these.
Increasing manufacturing competitiveness
Materialise large investments in public sector institutions
of higher learning.
Strategy has to be sensitive to environmental related
issues and climatic changes.
Strive towards inclusive growth

20. Good governance and transparency in the
implementation of public programmes
India needs to make its tremendous economic growth
more equitable
Government should lessen its discretionary power,
ensure greater transparency and accountability, and
create awareness among citizens
Strive towards inclusive growth