ABSTRACT
This chapter develops an empirical framework based on the methodological critique in Chapter 2. We use the case study of post-independence India. This chapter begins by outlining the definition of an episode of growth or stagnation used in this book. This book looks beyond simple averages of GDP growth and rigorous statistical definitions of episodes of growth or stagnation. Several criteria, both quantitative and qualitative, are used here in defining episodes. The quantitative measures relate to changes in average growth of GDP or its components: agriculture, industry or services, or even more disaggregated indices such as heavy industry. The qualitative measures relate to issues relevant for the sustainability of growth/stagnation; these include changes in productivity and the diversification of output. Episodes of growth or stagnation are here defined as ‘a significant change in both the quantitative and qualitative nature of growth relative to India’s own history’. A number of other potential methods are introduced and contrasted to the method used here. The second part of this chapter presents the quantitative and qualitative data that are used to define and illustrate the three episodes of growth and one episode of stagnation analysed in this book. The third section outlines the broad characteristics of the episode of growth between 1951 and 1965. In quantitative terms, there was a sharp upward break in growth of GDP and industry compared to the pre-independence period. In qualitative terms diversification increased rapidly. The fourth section outlines the episode of stagnation between 1965 and 1980. In quantitative terms, the rate of GDP growth showed no statistically significant change relative to 1951-65. The rate of industrial growth slowed particularly in heavy industry. In qualitative terms, growth of productivity and diversification of industrial output slowed sharply. The fifth section outlines the episode of stagnation between 1980/81 and 1991. In quantitative terms, GDP growth and industrial growth increased sharply. In qualitative terms, productivity growth showed a sharp increase. The economy as a whole grew by about 3.5-4 per cent from Independence to 1980 and by over 5 per cent until 1991. The final section outlines the episode of growth between 1991 and 2007. In quantitative terms, there was no change in the rate of GDP growth but there was a slowdown of
sustainable than 1979/80-1991, in purely financial terms there are qualitative doubts about the sustainability of growth after 1991 due to questions of learning and diversification.
