ABSTRACT
In India, the rupture of the interconnectedness between changes in income and structural transformation is explicit in her growth cycle over a long historical period in relation to Western Europe and the US (Table 4.1). During 1873-1913, when per capita income in Western Europe and the US grew at a rate higher than 1 per cent, it was 0.54 per cent in India. Between 1913 and 1950 India even had a negative growth rate, while the developed countries with a positive growth rate in per capita income headed for another transition in the economy subsequent to industrialization. During the “golden age” of capitalism India trailed far behind the developed countries so far as growth in per capita income was concerned. It is only during the post-1973 period that India has shown a growth – obviously on a low base – the rate of which is higher than the EDCs’. India’s per capita GDP was 1,957 (1990 international Geary-Khamis dollars) in 2001, the level which an average Western European country had reached 130 years ago, i.e. in 1870 (Maddison 2003). However, this did not put the Indian economy on hold from replicating the later stage of the EDCs’ economic growth.
