ABSTRACT
The paper attempts to analyze the source of growth of the Indian economy in the period since 1991 when major economic reforms were introduced. This period is divided into two parts: the period up to 2003 and the period after 2003. The analysis is primarily based on the India-KLEMS database. However, the sectoral classification chosen for the study is that adopted in the National Accounts Statistics (NAS). Thus, the India-KLEMS data have been aggregated where necessary or disaggregated to match the sectoral classification of NAS. The contribution of different NAS sectors to overall total factor productivity growth is assessed (by applying a decomposition analysis), along with the part that is attributable to inter-sectoral resource reallocation. A particular focus of the paper is on the role that informal manufacturing and informal services have played in constraining the rate of growth in labor productivity attained at the aggregate level.
