Chapter 3: Economic Growth in India: An Industry Perspective

3.1 Introduction
During the first 30 years after Independence, the Indian economy was able to transition from
being virtually stagnant into one growing at a sustained, albeit modest pace of growth (3.5 per
cent per annum) [(Acharya et al. (2003)]. Subsequently, in the decade of the 1980s, its annual
average GDP growth rate surged to 5 per cent and subsequently to 6 per cent in the 1990s
[(Kotwal et al. (2011)]. The growth rate picked up further in 2000. However, after an impressive
average annual growth rate of 7.8 per cent during 2001-08, the global financial crisis and the
Great Recession led to India’s economic slowdown starting 2009 and the growth rate declined
to 6.8 per cent during 2009-16 [Nayyar (2019)].

The disappointing growth between 1955 and 1978, often marked as a failure of Nehru-
Mahalanobis growth strategy, was due to the deepening of import substitution and industrial
regulation, a reduced role of the market and some exogenous
Past analyses on shocks such as oil prices and wars with neighbouring countries.
economic growth in India The subsequent gradual acceleration in growth, especially
are confined to the since the early 1980s, has attracted a lot of attention from
aggregate economy or economists and policy analysts and a significant amount of
three sectors (agriculture, research has been carried out on this theme. India’s economic
growth since the 1980s has been attributed to different sets
industry, and services) of factors by different authors. For instance, Subramanian
and hardly trace roles of (2008) emphasises that the skilled human capital created in
various industries in the pre-1980s contributed to faster growth of both industry
driving growth. These and services in the 1980s when pro-business policies were
also fail to acknowledge implemented. On the other hand, Bhattacharjea (2008)
properly the role of argues that the recovery of public investment in the 1980s
could have influenced private investment favourably, leading
intermediate inputs, while to faster growth. Acharya et al. (2003) provides a more
analysing industry-level demand-side perspective, arguing that strong domestic
growth dynamics demand, significant export growth along with liberal supply-
side policies led to a high growth in the 1980s.

Growth performance in the decades of 1990s and 2000s attracted even greater attention
because of the series of economic reforms carried out by India in the early 1990s. These reforms
led to deregulation and liberalisation of the Indian economy, which is argued to have increased
the growth rate (Basu and Maertens, 2007; Panagariya, 2008; Virmani, 2004, 2006). Nayyar
(2019) pointed out that rapid investment growth coincided with rapid export growth since 1991,
leading to rapid GDP growth. However, the Indian economy lost this growth momentum in the
latter half of the 1990s due to setbacks to the fiscal correction process and some slackening in
the pace of structural reforms, which coincided with the onset of the East Asian financial crisis
[Mohan (2008)]. With a recovery in its industrial sector and a sustained growth in services, India,
however, regained its growth momentum during 2003-07 and became the world’s second
fastest growing economy after China (Nagaraj, 2008; Balakrishnan and Parameswaran, 2007).
Ghose (2019) emphasised that surging exports of information-technology related services and
growing inflow of foreign investment and remittances fuelled the growth acceleration and a
decline in foreign finance and remittances in the post-2012 period led to growth deceleration.

However, the euphoria about the impressive growth performance for most part of the period
from 1980 to 2017 is somewhat dampened by the fact that the sector-wise contributions to this

50
performance do not present a very impressive picture. Mohan (2008) highlights that India’s
agricultural growth has been subject to large variation over the decades. A marked recovery
of the agriculture sector in the 1980s has been followed by a slowdown in the subsequent
decades. On the other hand, he adds that, it is the continuing and consistent acceleration in
growth in services over the decades that really accounts for the continuous acceleration in overall
GDP growth of the country since the 1980s. Nagaraj (2008) observes that while the services-
sector boom since 1991-92 has been dominated by communications and business services; the
communications boom seems largely domestic-demand-led growth and business services seem
entirely export-driven. Balakrishnan and Parameswaran (2007) too, infer that the acceleration
in the growth of the Indian economy over the last quarter century has consistently been led by
services. On the other hand, they highlight that, the contribution of manufacturing to these
transitions has been relatively small, despite most of the policy changes being targeted towards
the manufacturing sector. Ghosh (2019) pointed out that manufacturing had led the growth
process during the first 30 years after independence and only in the early 1990s, services
become the lead sector. Through the subsequent reforms and growth accelerations since 1980s,
the position of services in the growth process only got strengthened. Basu (2019) said that a
boost from information technology sector triggered the overall services sector growth in 2000s.
He highlighted that a policy shift in the computing sector in the late 1970s, shrinking government
bureaucracy after 1991 and tax exemption for IT products played a significant role in the
success of India’s IT sector. Nayyar (2019) found that India has followed the non-traditional
pattern of structural change, where unskilled agriculture labour was drawn to the urban informal
services sector and contributed to economic growth through this labour transfer between sectors.

Two distinct features of the past analyses on economic growth in India are: 1) they are confined
mainly to the aggregate economy or three sectors (agriculture, industry, and services) and
hardly trace the differing roles of various industries within the economy in driving growth. 2)
Economic growth is analysed using value added, which is indeed appropriate for the aggregate
economy, but fails to acknowledge properly the role of intermediate inputs in the production
process, while analysing industry-level growth dynamics. The
India KLEMS database facilitates industry-level analysis of The India KLEMS
trends in and proximate sources of economic growth using gross- database facilitates
output and value-added functions. The data on gross output, industry-level analysis
gross value added, and intermediate input, along with primary of trends in and
inputs labour and capital (see Chapter 2) are available for 27 proximate sources of
industries that constitute the aggregate Indian economy. Such
detailed analysis will help one understand the impact of various
economic growth using
policies on economic growth in general and specific industries gross-output and
within the economy. The remainder of this chapter is organised value-added functions.
as follows. Section 3.2 presents the structure of the Indian
economy during the 1980-2017 period. We discuss the trends in
value added growth of the aggregate economy, and contribution of 27 KLEMS industries and
broad sectors to aggregate growth in Section 3.3. The growth rates of gross output and
intermediate inputs for the 27 industries are discussed in Section 3.4. Conclusions are presented
in Section 3.5.

3.2 Changes in the structure of the economy

In this section, we document industry shares of value added in Indian economy since 1980. In
Figure 3.1, we depict the time-series of the changing structure of Indian economy in terms of
value-added shares since 1980 for select industry aggregates. In addition, shares of value
added for 27 industries are provided in Table 3.1. We have divided the whole period 1980-
2017 into four sub-periods, 1980-93; 1994-2002; 2003-07 and 2008-17.

51
Figure 3. 1: Gross Value-Added share (%): Broad Sectors

60

50

40

30

20

10

0
1995

2014
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994

1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013

2015
2016
2017
Agriculture & allied Manufacturing Mining & quarrying Utilities
Construction Services Market services Non-market services
Source: Authors’ calculations based on India KLEMS data 2019.

We observe that the value-added share of agriculture & allied activities has declined steadily
over the past four decades. It has declined from 36 per cent in 1980 to 18 per cent in 2017.
On the contrary, the share of services sector increased from 37 per cent in 1980 to 53 per cent
in 2017. The share of non-market services, which consists of public administration, education and
health services, remained stagnant around 20 per cent over the entire period whereas the share
of market services, which constitute trade, transportation, business and financial services, has
increased from 15 per cent to 32 per cent. The increase in share of market services mirrored in
an increase in the overall services share. Except for a slight increase during the mid-1990s, the
share of manufacturing sector in the total GDP has remained stagnant since 1980. There is an
improvement in the share of construction — it increased from 5 per cent in 1980 to 10 per cent
in 2008 and then fell to 8 per cent in 2017. The share of utilities sector (electricity, gas & water
supply) and mining sector remained stable over the entire period.

In terms of the percentage distribution of value-added shares across 27 India KLEMS industries,
agriculture and allied activities had the highest share of more than 17 per cent of GDP in 2017,
followed by trade (10.8 per cent), other services (9.4 per cent), business services (8.4 per cent),
and construction (7.8 per cent). However, the share of agriculture and allied activities has been
declining sharply since 1980 — it fell by 19 percentage points in close to 4 decades. Within
manufacturing industries, chemicals & chemical products, petroleum & nuclear fuel, non-metallic
mineral products, electrical & optical equipment, and transport equipment have shown an
increasing share. However, increases in the share of these industries were not sufficient to offset
the decline in the share of other sectors, resulting in no improvement in the share of manufacturing
in the overall economy. Chemicals & chemical products observed highest increase, from 1.2 per
cent in 1980 to 2.5 per cent in 2017, whereas textiles & leather has witnessed the highest
decline, from 3.7 per cent in 1980 to 2.1 per cent in 2017.

52
Table 3. 1: Industry share in aggregate nominal gross value added (%)
KLEMS Industry Description 1980 1994 2003 2008 2017
Agriculture & allied 36.3 28.8 21.4 17.9 17.2
Industry 26.9 30.4 29.9 33.1 29.3
Manufacturing 17.5 18.5 16.9 18.2 16.4
Food beverages & tobacco 1.7 2.2 2.0 2.1 1.8
Textiles & leather 3.7 3.1 2.0 1.9 2.1
Wood & wood pdts. 1.3 0.7 0.3 0.2 0.3
Pulp & paper pdts. 0.6 0.6 0.4 0.5 0.4
Petroleum & nuclear fuel 0.5 1.0 1.6 1.9 1.2
Chemicals & chemical pdts. 1.2 1.8 2.1 2.2 2.5
Rubber & plastic pdts. 0.6 0.8 0.7 0.8 0.6
Non-metallic mineral pdts. 0.8 1.0 1.0 1.2 1.0
Basic metals & metal pdts. 2.7 2.9 2.9 3.0 2.0
Machinery, n.e.c. 1.6 1.5 1.2 1.6 1.2
Electrical & optical eqpt. 0.7 1.0 0.8 1.1 1.0
Transport eqpt. 1.4 1.3 1.5 1.2 1.8
Other manufacturing 0.9 0.5 0.4 0.4 0.5
Non-manufacturing industries 9.4 11.9 13.0 15.0 12.8
Mining & quarrying 1.9 2.7 2.8 3.2 2.3
Utilities 2.1 3.5 2.9 2.1 2.7
Construction 5.4 5.7 7.3 9.7 7.8
Services 36.8 40.8 48.8 48.9 53.5
Market services 15.2 20.9 28.5 29.5 32.1
Trade 6.9 7.8 9.1 9.3 10.8
Hotels & restaurants 0.6 0.7 1.0 1.1 1.0
Transport & Storage 3.3 4.7 5.5 5.0 4.8
Post & telecom 0.7 1.7 2.1 2.1 1.6
Financial services 2.7 4.2 5.6 6.1 5.4
Business services 1.0 1.9 5.2 5.9 8.4
Non-market services 21.6 19.9 20.3 19.4 21.4
Public administration 5.2 5.5 6.1 5.9 6.2
Education 2.0 2.3 3.0 3.0 4.1
Health 0.8 1.0 1.5 1.4 1.7
Other services 13.6 11.1 9.6 9.2 9.4
Total economy 100.0 100.0 100.0 100.0 100.0
Source: Authors’ calculations based on India KLEMS data 2019.

Clearly, services sector has been the single largest contributor to value added in the post-1980
period. In terms of value-added share in 2017, out of the top 10 industries, 7 industries are
from services sector. The steep increase in share of services between 1994 and 2003 is due to
expansion of the market services, of which trade, business services, financial services and
transport & storage had high value-added shares in all five years. The share of business services
had risen sharply from 1 per cent in 1980 to 8.4 per cent in 2017, followed by trade (increased
from 6.9 per cent to 10.8 per cent) and financial services (increased from 2.7 per cent to 5.4
per cent). Value added share of non-market services remained constant. Within non-market

53
services, education, health, and public administration observed an increase in value-added
shares between 1980 and 2017, while other services recorded a decline.

3.3 Aggregate value-added growth and industry and broad sector contributions
to aggregate growth
This section presents the growth rate of value added in the
aggregate economy, broad sectors of the economy, and The aggregate
detailed 27 KLEMS industries. The first two—the aggregate economy and broad
economy and broad sector growth rates for this chapter—are sector growth rates
obtained as Tornqvist aggregates of industry value-added have been obtained as
growth rates. In a Tornqvist aggregation approach, the growth
rate of each industry value added is weighted by the nominal Tornqvist aggregates
value-added share of that industry while calculating the of industry value-
aggregate value-added growth rate. Another commonly used added growth rates.
approach is to simply sum the real value added across
industries to obtain aggregate value added and compute the
growth rate—an approach often called the aggregate production function approach (see
Jorgenson et al., 2007). The Tornquvist approach, which is consistent with the aggregate
production possibility frontier approach described in Jorgenson et al. (2007), relaxes several
assumptions in the aggregate production function approach, such as a common production
function across all industries.

Figure 3. 2: Growth Rate of Aggregate Economy (% per annum), 1981-2017

12.0

10.0

8.0

6.0

4.0

2.0

0.0
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017

Source: Authors’ calculations based on India KLEMS data 2019.

Figure 3.2 provides the annual growth rate of aggregate value added during 1980-2017, and
Table 3.2 provides the average growth rates for the aggregate economy and broad sectors
for the four sub-periods and the entire period. On average, the Indian economy grew at 6 per
cent per annum during 1981 to 2017. The annual economic growth rate fell sharply in 1991
due to a balance of payment crisis. It subsequently recovered and it grew steadily till 1996 at
the time of the East Asian financial crisis—when it slowed until 2002. After that, India witnessed
a high growth phase until the global financial crisis in 2007-08.

54
Table 3. 2: Value-added growth rate, Broad Sectors (%)
Aggregate sectors 1981-93 1994-2002 2003-07 2008-17 1981-2017
Agriculture & allied 3.2 2.1 4.4 3.2 3.1
Industry 6.0 6.0 9.3 6.2 6.5
Manufacturing 6.1 6.1 9.2 7.2 6.8
Mining & quarrying 6.7 4.8 5.1 3.0 5.0
Utilities 8.1 5.4 6.8 6.2 6.8
Construction 3.9 6.1 12.0 5.2 5.9
Services 6.6 7.5 7.8 7.8 7.3
Market services 6.7 9.8 9.8 8.2 8.2
Non-market services 6.6 4.9 4.9 7.2 6.1
Total economy 5.3 5.7 7.7 6.4 6.0
Source: Authors’ calculations based on India KLEMS data 2019.

The average annual value-added growth rate of the Indian economy was 5.3 per cent during
1981-93. The average annual growth rate in Gross Value Added (GVA) for manufacturing,
mining & quarrying, utility, market services and non-market services was between 6.1 and 8.1
per cent, whereas it was 3.2 per cent for agriculture & allied activities and 3.9 per cent for
construction. During 1994-2003, GVA growth improved slightly, with construction and market
services seeing a rapid rise, even though agriculture & allied activities, mining & quarrying,
utilities, and non-market services registered a fall. During the 2003-07 period, when the
aggregate economy witnessed a growth acceleration (7.7 per cent per annum), two sectors that
registered very impressive growth were manufacturing and construction. The most marked
growth acceleration occurred in construction with a trend growth of 12 per cent during 2002-
07, while manufacturing observed a jump in growth rate from 6.1 per cent to 9.2 per cent. The
growth rate of agriculture & allied activities also accelerated during this period. The overall
growth rate declined to 6.4 per cent in the post-financial crisis period and the growth
performance of all the broad sectors except non-market services appears similar to the
aggregate economy trend.

Figure 3.4 shows value added growth rates for 27 industries during
During 1981-2017, 1981-2017. We observe that 19 out of 27 India KLEMS industries
19 out of 27 India grew at a faster rate than the economy (6 per cent per annum).
Business services grew the fastest at 11.9 per cent per annum. The
KLEMS industries other well-performing industries are post & telecommunications,
grew in terms of electrical & optical equipment, rubber & plastic, coke & petroleum
gross value added products, transport equipment, financial services, health & social
work, chemicals and chemical products—each growing at more than
at a faster rate than 8 per cent per annum. At the other end, GVA growth has been quite
the economy (6 per slow in industries such as, wood & wood products, agriculture &
cent per annum). allied activities, mining & quarrying, and other services. The
performance of agriculture & allied activities, which is essential for
India’s economic growth, was relatively very poor. It is also evident
(Annexure Table 3A.1) that there is wide variation in value-added growth rates across the 27
KLEMS industries and across the four sub periods. More industries (10 of 13 that slowed)
recorded slower growth in the 1994-2002 sub-period compared to 1981-93, while in the
subsequent phase of 2003-07 the slowing was more on account of services—five were services
of the seven industries that slowed their pace of growth.

55
Figure 3. 3: Value Added Growth Rate, 1981 to 2017 (% per annum)

Business services
Post & telecom
Electrical & optical eqpt.
Rubber & plastic pdts.
Petroleum & nuclear fuel
Transport eqpt.
Financial services
Health
Chemicals & chemical pdts.
Education
Other manufacturing
Non-metallic mineral pdts.
Hotels & restaurants
Trade
Machinery, nec.
Utilities
Transport & Storage
Food beverages & tobacco
Textiles & leather
Total Economy
Public administration
Construction
Basic metals & metal pdts.
Pulp & paper pdts.
Other services
Mining & quarrying
Agriculture & allied
Wood & wood pdts.
0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00

Source: Authors’ calculations based on India KLEMS data 2019.

A further comparison between the periods 2003-07 and The improved growth
2008-16 (Figure 3.5) allows us to identify the industries
primarily responsible for the growth slowdown in the 2010s. performance of the
The industries have been ranked by growth in the 2003-07 Indian economy during
period—the highest growth took place in manufacturing 2003-07 and economic
industries such as, electrical & optical equipment, pulp & slowdown after the 2008
paper products, and machinery n.e.c. Service industries such
as, business services, post & telecommunications, hotels & global financial crisis are
restaurants, health, and construction, witnessed more than 10 largely on account of the
per cent per annum growth. At the other end, there are manufacturing sector.
industries such as, wood & wood products, rubber & plastic
products, other services, agriculture and allied activities and
public administration, which registered less than 5 per cent per annum growth rate during this
phase. Value-added growth rates declined over these two sub-periods in most industries. Out
of 27 KLEMS industries, only nine recorded increased growth. The decline in growth rate is much
more for the industrial sector. So, the improved growth performance of the Indian economy
during 2003-07 and economic slowdown after the 2008 financial crisis are largely on account
of the manufacturing sector.

56
Figure 3. 4: Comparison in GVA growth rates between 2003-2007 and 2008-2017 (% per
annum)
Pulp & paper pdts.
Business services
Machinery, nec.
Construction
Post & telecom
Hotels & restaurants
Health
Food beverages & tobacco
Transport eqpt.
Transport & Storage
Basic metals & metal pdts.
Other manufacturing
Chemicals & chemical pdts.
Financial services
Trade
Textiles & leather
Total Economy
Petroleum & nuclear fuel
Utilities
Education
Non-metallic mineral pdts.
Mining & quarrying
Public administration
Agriculture & allied
Other services
Rubber & plastic pdts.
Wood & wood pdts.
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0

2008-2017 2003-2007

Source: Authors’ calculations based on India KLEMS data 2019

The extent to which an industry can explain differences in aggregate growth does not only
depend on its growth rate, but also on its share in value added. Another way to observe this
divergence between value-added share and growth in individual industries is to calculate the
contribution of each industry to total economic growth. This is done by multiplying individual
industry growth with gross value-added share of that industry. In Figures 3.6 and 3.7, we have
plotted the contribution of broad sectors and the 27 industries to the aggregate economy GVA
growth. As we have seen, services have been the best performing sector in the Indian economy,
both in terms of its value-added share and its growth rate. The sector’s contribution to aggregate
economic growth more than doubled from 2.1 per cent in 1981 to 4.2 per cent in 2017. The
contribution of market services increased significantly from less than 1 per cent in 1981 to 2.4
per cent in 2017. The contribution of manufacturing sector for the entire period has been around
1.2 per cent. Agriculture has contributed less than 0.8 per cent. It is evident from Figure 3.6 that
the Indian economy had crossed the barrier of growth of 9.5 per cent in 1988 when agriculture
contributed almost 4.4 per cent of the share. Clearly, for the economy to grow at such a rapid
pace, such substantive contribution of the agriculture sector was vital.

57
Figure 3. 5: Broad Sectors Contribution to Aggregate Economy GVA Growth (% points)

12.0

10.0

8.0

6.0

4.0

2.0

0.0

-2.0

-4.0

2008

2014
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007

2009
2010
2011
2012
2013

2015
2016
2017
Agriculture & allied Mining & quarrying Manufacturing Utilities
Construction Market services Non-market services Total economy

Source: Authors’ calculations based on India KLEMS data 2019.

Table 3.3 depicts the sectoral contributions to aggregate value-added growth of the economy.
During 1981-93, the service sector contributed about 2.63 percentage points towards the
aggregate value-added growth rate of 5.4 per cent. Market and non-market services
contributed 1.19 and 1.44 percentage points, respectively and agriculture contributed 1
percentage point. The contribution of industry was 1.72 percentage points, with 1 percentage
point coming from the manufacturing sector. The picture changed during the period 1994-2002,
when contribution of agriculture and non-market services declined significantly, whereas
industry’s contribution remained stagnant. The market services sector did see a significant
improvement in its value-added growth contribution—from 1.13 percentage point in the
previous period to 2.3 percentage point. Indian economy achieved impressive growth during
the 2003-2007 period with improvement from 5.7 per cent to 7.7 per cent. This improvement
in GVA growth was reflected in almost all segments of the economy, except in the non-market
services. Contribution of manufacturing and construction sector to aggregate value-added
growth improved significantly. During 2008-2017, aggregate value-added growth rate
declined. In absolute term, the contribution to aggregate GVA growth of all broad sectors
except non-market services also declined.

Table 3. 3: Contribution to GVA Growth, Broad Sectors (% points)

1981-
Sector 1994 -2002 2003-2007 2008-2017 1981-2017
1993
Agriculture & allied 1.00 0.57 0.87 0.57 0.76
Industry 1.72 1.81 2.99 1.93 1.97
Manufacturing 1.08 1.11 1.63 1.25 1.21
Mining & quarrying 0.19 0.13 0.16 0.07 0.14
Utilities 0.21 0.18 0.18 0.15 0.18
Construction 0.23 0.39 1.02 0.46 0.44
Services 2.63 3.28 3.80 3.92 3.29
Market services 1.19 2.30 2.86 2.47 2.03
Non-market services 1.44 0.98 0.94 1.45 1.26
Total economy 5.35 5.66 7.65 6.43 6.03
Source: Authors’ calculations based on India KLEMS data 2019.

58
Figure 3.6: Contribution to GVA Growth, Industries, 1981- 2017 (% points)

Agriculture & allied

Trade

Other services

Business services

Construction

Financial services

Public administration

Transport & Storage

Education

Utilities

Post & telecom

Basic metals & metal pdts.

Chemicals & chemical pdts.

Textiles & leather

Mining & quarrying

Transport eqpt.

Food beverages & tobacco

Health

Petroleum & nuclear fuel

Machinery, nec.

Electrical & optical eqpt.

Non-metallic mineral pdts.

Rubber & plastic pdts.

Hotels & restaurants

Other manufacturing

Pulp & paper pdts.

Wood & wood pdts.

-0.10 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90

Source: Authors’ calculations based on India KLEMS data 2019.

Even though we have observed that Indian agriculture sector grew at 3.1 per cent per annum
during the period 1981-2017, in terms of contribution to total value-added growth it has made
highest contribution (Figure 3.7), followed by trade. Five important service industries that made
substantive contributions are trade, other services, business services, financial intermediation,
public administration, and defence—their combined share in value-added was around 40 per
cent in 2017. Business services grew at the fastest pace (11.86 per cent per annum) during
1980-2017, while trade and financial services grew at a moderate rate of 7 per cent during
the same period.

59
We have seen that service sector contributed around half of the India’s economic growth. But
the rise in the overall growth rate during 2003-07 or the fall in the post-financial crisis period
stemmed mainly from the industrial sector—specifically from construction and manufacturing.
The contribution of agriculture & allied activities and market services to the rise in economic
growth rate was much lower. In the post-financial crisis period, all the broad sectors except non-
market services observed a decline in the contribution to aggregate economic growth. A further
analysis of select industries from the manufacturing and services sectors will help us to identify
the industries with substantive potential for growth as well as examine their performance and
contribution in terms of economic growth.

Veeramani and Dhir (2017) have emphasised that traditional labour-intensive products such as,
food products, beverages and tobacco, wood & wood products, pulp & paper products etc.,
and assembly-related network products such as, electronics and
Based on their shares electrical machinery have strong potential for growth. However,
we found that the labour-intensive industries such as, wood &
in value-added, their
wood product and pulp & paper products were the least
rates of growth and contributing industries over the last four decades. Based on their
the potential for shares in value-added, their rates of growth and the potential
growth, we identified for growth, we have chosen eight key industries—agriculture;
food products, beverages and tobacco; chemicals & chemical
eight key industries— products; basic metals & metal products; electrical & optical
their combined share equipment; business services; financial services and trade. The
in value-added is combined share in value-added of these 8 industries is around
50 per cent. It is to be noted that the decline in value-added
around 50 per cent. share for agriculture & allied activities during the last four
decades has been compensated by the other key industries,
particularly by the three services industries – trade, financial
services & business services. Except for agriculture & allied activities, all other key industries’
growth rate is higher than the aggregate economic growth rate. However, all these industries
experienced a slowdown in value-added growth—more so in the manufacturing sector than
services in the post-financial crisis period. Electrical & optical equipment recorded the biggest
fall in growth rate. Between 1981-93 and 2008-17, the contribution of services increased
significantly, albeit not that of manufacturing, even as it decreased for agriculture & allied
activities.

Table 3. 4: Average Annual GVA Growth, Value Added Share and Industry Contribution to
Aggregate GVA growth
1981- 1994- 2003-2007 2008-2017
1993 2002
Average share in value added (percentage)
Agriculture & allied 31.5 26.0 19.7 18.1
Food beverages & tobacco 1.9 2.0 2.1 1.9
Chemicals & chemical pdts. 1.4 2.0 2.1 2.3
Basic metals & metal pdts. 2.8 2.8 3.1 2.6
Electrical & optical eqpt. 0.9 0.8 0.9 1.0
Trade 7.4 8.3 9.4 10.0
Financial services 3.2 4.8 5.5 5.8
Business services 1.4 3.0 5.6 6.5

60
 1981- 1994- 2003-2007 2008-2017
1993 2002
Aggregate of above-mentioned 50.4 49.7 48.4 48.2
industries
Growth in value added (annual growth)
Agriculture & allied 3.2 2.1 4.4 3.2
Food beverages & tobacco 7.7 6.2 9.7 3.6
Chemicals & chemical pdts. 9.7 7.8 9.1 6.5
Basic metals & metal pdts. 4.1 7.3 9.5 4.0
Electrical & optical eqpt. 7.3 8.7 19.3 7.4
Trade 5.4 8.1 8.3 8.2
Financial services 10.1 8.6 8.6 6.3
Business services 8.8 16.1 13.5 11.3
Total economy 5.3 5.7 7.7 6.4
Contribution to aggregate value-added growth (per centage points)
Agriculture & allied 1.0 0.6 0.9 0.6
Food beverages & tobacco 0.1 0.1 0.2 0.1
Chemicals & chemical pdts. 0.1 0.2 0.2 0.2
Basic metals & metal pdts. 0.1 0.2 0.3 0.1
Electrical & optical eqpt. 0.1 0.1 0.2 0.1
Trade 0.4 0.7 0.8 0.8
Financial services 0.3 0.4 0.5 0.4
Business services 0.1 0.5 0.7 0.8
Source: Authors’ calculations based on India KLEMS data 2019.

The above data analysis establishes that while agriculture & allied activities and the industrial
sector contributed significantly towards high economic growth during 2003-07, it is the market
services sector which grew steadily over the last four decades. Within the market services,
business services and trade contributed the most.

3.4 Growth of industry output and intermediate inputs

This section presents an analysis of gross output and intermediate input series for the 27 KLEMS
industries, in terms of growth of gross output and intermediate input and contribution of
intermediate input to gross output growth.

Figure 3.7 and Table 3.5 present the average annual growth rates of gross output of the 27
KLEMS industries. For all 27 industries, the average growth rate of output was 7.39 per cent
per annum and of these, 12 industries grew faster than the industry average.

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Figure 3. 7: Average Annual Growth Rate in Gross Output: 1981 to 2017 (% per annum)

Business services
Electrical & optical eqpt.
Other manufacturing
Rubber & plastic pdts.
Post & telecom
Transport eqpt.
Financial services
Non-metallic mineral pdts.
Education
Machinery, nec.
Chemicals & chemical pdts.
Food beverages & tobacco
Industry Mean
Utilities
Textiles & leather
Basic metals & metal pdts.
Transport & Storage
Trade
Health
Pulp & paper pdts.
Petroleum & nuclear fuel
Hotels & restaurants
Construction
Public administration
Other services
Mining & quarrying
Agriculture & allied
Wood & wood pdts.

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00

Source: Authors’ calculations based on India KLEMS data 2019.

Output growth is found to be most rapid in business services (12.40 per cent). Of the five fastest
growing industries, two are producers of services (business services and post &
telecommunication) and three are in manufacturing (electrical & optical equipment,
manufacturing n.e.c., rubber and plastic products). All five posted growth rates of over 9.97 per
cent during the period 1981-2017. At the other end, output growth has been quite slow for
wood & wood products and agriculture and allied activities.

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Table 3. 5: Average Annual Growth Rates in Gross Output (% per annum)
KLEMS Industry Description 1981-1993 1994-2002 2003-2007 2008-2017
Agriculture & allied 2.64 2.13 3.83 3.14
Mining & quarrying 7.31 3.97 5.63 4.46
Food beverages & tobacco 7.35 7.89 11.66 5.60
Textiles & leather 6.36 4.89 9.78 9.55
Wood & wood pdts. -3.14 -0.15 3.01 7.01
Pulp & paper pdts. 6.67 2.24 14.88 5.63
Petroleum & nuclear fuel 6.92 7.90 4.35 4.25
Chemicals & chemical pdts. 8.78 7.71 9.30 5.29
Rubber & plastic pdts. 12.04 7.63 5.60 12.67
Non-metallic mineral pdts. 8.80 8.10 6.18 8.56
Basic metals & metal pdts. 6.08 6.58 13.08 6.31
Machinery, n.e.c. 6.11 5.46 11.75 9.78
Electrical & optical eqpt. 9.04 8.86 20.63 10.92
Transport eqpt. 7.81 9.33 4.99 12.25
Other manufacturing 9.04 9.15 16.85 12.47
Utilities 9.79 6.59 1.98 7.47
Construction 3.72 7.42 12.11 4.75
Trade 4.71 7.12 8.18 9.17
Hotels & restaurants 4.57 10.36 10.99 1.73
Transport & Storage 6.53 7.59 9.20 6.27
Post & telecom 7.09 18.08 11.69 5.54
Financial services 9.86 9.62 7.33 7.13
Business services 10.26 16.39 12.35 11.60
Public administration 5.67 5.79 5.34 6.72
Education 5.39 8.29 5.73 11.76
Health 3.95 5.39 10.80 9.11
Other services 7.13 3.19 3.60 6.64
Industry Mean 6.68 7.32 8.92 7.62
Source: Authors’ calculations based on India KLEMS data 2019.

Table 3.5 depicts annual average growth rates of output for the four sub periods under
consideration. During 1981-93, the best performing industry was rubber and plastic products,
growing at the average annual rate of approximately 12 per cent per annum. Five other
industries, two of which were from manufacturing—electrical & optical equipment and other
manufacturing—grew at the average annual rate of more than 9 per cent per annum. Business
services was the only service sector industry which grew at more than 10 per cent per annum,
followed by financial services (9.9 per cent per annum). During 1994-2002, all the services
except other services and financial services registered higher growth rates compared with the
previous sub-period. However, within manufacturing, output growth of six industries improved,
while that of seven industries declined. During 2003-07, as many as half the industries achieved
their highest output growth, reinforcing the rapid growth achieved by the Indian economy during
this period. Among these, electrical & optical equipment, manufacturing n.e.c., pulp, paper &
paper products, basic metal & fabricated metal products, construction, machinery, n.e.c., food
products, beverages & tobacco, hotels & restaurants, and health & social work registered above
10 per cent growth rates. During 2008-17, growth in gross output accelerated for transport
equipment, rubber & plastic product, education, wood & wood products, public administration,

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and trade. At the other end, the lowest growth rates were observed for hotels & restaurants,
coke & petroleum products, chemicals & chemicals products, post & telecommunication, food
products, beverages & tobacco, and transport & storage.

Table 3.6 shows the annual average growth of gross output, intermediate inputs and three
categories of intermediate inputs—material, energy, and service—for all 27 industries. There
was wide variation across industries with the growth rate of input ranging from 15.7 per cent in
business services to 2.1 per cent in agriculture and allied sector. The growth in intermediate input
was relatively faster in business services, manufacturing n.e.c., post & telecommunications,
financial services, electrical & optical equipment and relatively very slow in agriculture and
allied, wood & wood products, health & social work, coke & petroleum products, and hotels &
restaurants. Comparing output growth with input growth, we observe a strong positive
correlation between gross output and intermediate input growth (Figure 3.8)—the fastest-
growing industries in terms of input growth were also among the fastest in gross output growth.

Table 3. 6: Average Annual Growth Rates of Gross Output & Intermediate Inputs, 1981-2017
(% per annum)
Output Intermediate Material Energy Services
KLEMS Industry Description
Growth Input Input Input Input
Agriculture & allied 2.8 2.1 1.0 4.0 4.2
Mining & quarrying 5.5 8.6 10.1 4.9 8.9
Food beverages & tobacco 7.6 7.4 7.3 5.7 8.2
Textiles & leather 7.3 7.3 8.3 5.1 5.7
Wood & wood pdts. 1.2 2.3 2.9 -0.8 1.3
Pulp & paper pdts. 6.4 7.1 7.6 5.9 5.9
Petroleum & nuclear fuel 6.1 5.8 5.9 7.9 5.3
Chemicals & chemical pdts. 7.7 8.2 9.8 3.4 4.8
Rubber & plastic pdts. 10.3 9.2 10.1 7.0 7.2
Non-metallic mineral pdts. 8.2 8.4 10.3 7.5 6.2
Basic metals & metal pdts. 7.2 7.1 7.4 6.2 6.4
Machinery, n.e.c. 7.7 6.6 7.1 4.2 5.4
Electrical & optical eqpt. 11.1 9.6 10.1 8.2 8.7
Transport eqpt. 9.0 8.5 8.8 9.0 7.7
Other manufacturing 11.1 10.5 11.0 8.1 9.4
Utilities 7.3 6.7 4.6 7.7 8.8
Construction 6.0 7.5 7.2 7.5 7.9
Trade 7.0 6.6 8.7 9.7 6.0
Hotels & restaurants 6.1 5.9 5.9 3.8 6.3
Transport & Storage 7.1 8.2 7.2 8.8 8.6
Post & telecom 10.0 10.4 12.6 10.5 6.9
Financial services 8.7 9.6 10.6 11.4 9.2
Business services 12.4 15.7 13.6 17.3 15.8
Public administration 5.9 6.1 7.1 5.0 6.0
Education 7.9 8.3 5.4 11.8 10.0
Health 6.6 5.6 6.5 4.1 2.2
Other services 5.6 7.5 5.9 8.0 11.2
Industry Mean 7.4 7.7 7.9 7.1 7.2
Source: Authors’ calculations based on India KLEMS data 2019.

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The growth rates of material, energy and service inputs show considerable variation across
industries. The fastest-growing industries in terms of material input were business services, post
& telecommunications, manufacturing, n.e.c., financial services, other non-metallic mineral
products, mining & quarrying, rubber & plastic products, and electrical & optical equipment. At
the other end, material input growth was slow in agriculture and allied, wood and wood
products, electricity, gas & water supply, education, and hotels & restaurants. The growth in
energy input was highest in business services, education, financial services, post and
telecommunications, and trade, was negative in wood & wood products, and almost stagnant in
chemicals & chemicals products, hotels & restaurants, and agriculture. The growth rate of services
input was high in business services, other services, education, manufacturing n.e.c. and financial
services, and very low for wood & wood products, health and social work, agriculture, and
chemicals & chemicals products.

Figure 3. 8: Growth Rate of Gross Output vs. Intermediate Input: 1981 to 2017 (% per
annum)

18.00

16.00

14.00

12.00
Gross Output Growth

10.00

8.00

6.00

4.00

2.00

0.00
0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00
Intermediate Input Growth

Source: Authors’ calculations based on India KLEMS data 2019.

The contribution of an input is measured as the product of an input’s share in value-added and
its growth rate. Thus, each input contributes to output in proportion to its value-added share. The
estimated factor income shares in gross output for 27 industries are presented in Table 3.7.
While estimates have been made for all the years from 1981 to 2017, the table reflects only
the period averages.

We find that the share of intermediate inputs in gross output is relatively high in all
manufacturing industries, electricity, gas & water supply, construction and two services industries
viz., hotels & restaurants and post & telecommunication. Among intermediate inputs, material
input share is high for all these industries including health & social work, followed by services
input share and energy input share.

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Table 3. 7: Factor Income Shares in Gross Output: 1981 to 2017
Value Added Material Energy Services
KLEMS Industry Description
Share Input Input Input
Agriculture & allied 0.73 0.20 0.02 0.06
Mining & quarrying 0.63 0.17 0.08 0.12
Food beverages & tobacco 0.22 0.58 0.02 0.18
Textiles & leather 0.33 0.44 0.05 0.19
Wood & wood pdts. 0.41 0.43 0.01 0.14
Pulp & paper pdts. 0.34 0.43 0.07 0.16
Petroleum & nuclear fuel 0.12 0.83 0.02 0.03
Chemicals & chemical pdts. 0.30 0.49 0.07 0.15
Rubber & plastic pdts. 0.30 0.50 0.04 0.16
Non-metallic mineral pdts. 0.39 0.28 0.15 0.18
Basic metals & metal pdts. 0.28 0.43 0.11 0.17
Machinery, n.e.c. 0.36 0.46 0.03 0.15
Electrical & optical eqpt. 0.31 0.48 0.03 0.19
Transport eqpt. 0.26 0.49 0.05 0.19
Other manufacturing 0.39 0.43 0.02 0.16
Utilities 0.35 0.29 0.17 0.19
Construction 0.36 0.42 0.02 0.21
Trade 0.76 0.04 0.02 0.18
Hotels & restaurants 0.26 0.54 0.04 0.16
Transport & Storage 0.46 0.15 0.18 0.21
Post & telecom 0.39 0.34 0.08 0.19
Financial services 0.76 0.04 0.02 0.18
Business services 0.66 0.10 0.02 0.22
Public administration 0.73 0.04 0.00 0.22
Education 0.84 0.06 0.00 0.09
Health 0.52 0.34 0.01 0.13
Other services 0.84 0.10 0.00 0.05
Source: Authors’ calculations based on India KLEMS data 2019.

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Figures 3.9, 3.10 and 3.11 rank the industries in terms of the contributions of material, energy
and services input. The mean contributions of these inputs are 2.63, 0.35 and 1.18 percentage
points respectively for the period 1981 to 2017. While comparing the contribution of factor
inputs—material, energy, services, labour and capital, we found that material input is the
dominant source of growth for a majority of the industries. The contribution of energy and
services input to output growth has been relatively low as compared to that of material input.
Except for agriculture and allied sector and some services (trade, financial services, business
services, public administration, education, health, and other services) more than 50 per cent
output growth was achieved because of growth in intermediate inputs

Material input contributed significantly to gross output growth in certain industries such as,
manufacturing n.e.c., coke & petroleum products, rubber & plastic products, electrical & optical
products, chemical products. The industries where the contribution of material input to output
growth was less than 0.5 percentage points are agriculture, education, trade, public
administration, and financial services. The contribution of energy input was the highest in
transport & storage, electricity, gas & water supply and other non-metallic mineral products
and services input contribution to output growth was the highest in business services, transport &
storage, manufacturing n.e.c., electricity, gas & water supply, and financial services.

67
Figure 3. 9: Material Input Contribution to Growth in Gross Output,1981 to 2017 (% per annum)

Other manufacturing

Petroleum & nuclear fuel

Rubber & plastic pdts.

Electrical & optical eqpt.

Chemicals & chemical pdts.

Transport eqpt.

Food beverages & tobacco

Post & telecom

Textiles & leather

Pulp & paper pdts.

Machinery, nec.

Hotels & restaurants

Basic metals & metal pdts.

Construction

Non-metallic mineral pdts.

Industry Mean

Health

Mining & quarrying

Business services

Utilities

Wood & wood pdts.

Transport & Storage

Other services

Financial services

Public administration

Trade

Education

Agriculture & allied

0.00 1.00 2.00 3.00 4.00 5.00 6.00

Source: Authors’ calculations based on India KLEMS data 2019.

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Figure 3. 9: Energy Input Contribution to Growth in Gross Output,1981 to 2017 (% per annum)

Transport & Storage

Utilities

Non-metallic mineral pdts.

Basic metals & metal pdts.

Post & telecom

Transport eqpt.

Business services

Pulp & paper pdts.

Mining & quarrying

Industry Mean

Rubber & plastic pdts.

Electrical & optical eqpt.

Textiles & leather

Financial services

Chemicals & chemical pdts.

Trade

Hotels & restaurants

Construction

Other manufacturing

Petroleum & nuclear fuel

Food beverages & tobacco

Machinery, nec.

Agriculture & allied

Education

Health

Public administration

Other services

Wood & wood pdts.

-0.20 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60

Source: Authors’ calculations based on India KLEMS data 2019.

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Figure 3. 10: Services Input Contribution to Growth in Gross Output, 1981 to 2017 (% per
annum)

Business services

Transport & Storage

Other manufacturing

Utilities

Financial services

Electrical & optical eqpt.

Construction

Food beverages & tobacco

Post & telecom

Transport eqpt.

Public administration

Industry Mean

Rubber & plastic pdts.

Textiles & leather

Non-metallic mineral pdts.

Basic metals & metal pdts.

Education

Hotels & restaurants

Mining & quarrying

Trade

Pulp & paper pdts.

Chemicals & chemical pdts.

Machinery, nec.

Other services

Health

Agriculture & allied

Wood & wood pdts.

Petroleum & nuclear fuel

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00

Source: Authors’ calculations based on India KLEMS data 2019.

3.5 Summary and Conclusion

The main objective of the India KLEMS project was to construct gross value-added, gross output,
labour input, capital service input, intermediate inputs (energy, material, and services) and total
factor productivity series of 27 India KLEMS industries from 1980 to 2017. Chapter 2 presented
the basic data sources and methodology for building a time series of gross value added, gross
output, material, energy, and services input from 1980 to 2017 for 27 industries comprising the
Indian economy by using NAS and Input Output Transactions Table (IOTT) data. Based on the

70
constructed time series, this chapter has analysed the trend growth of GVA, GVO and
intermediate inputs—materials, energy and services input for 27 industries of the Indian
economy for the period 1980-2017. We have done this in two parts—first, we analyse the
structure and trends at the level of disaggregated 27 industries as well as at the level of the
broad sectors of the economy. In the second part, we have examined the growth rate of gross
output and intermediate inputs—materials, energy and services inputs, and analysed the
contribution of intermediate inputs in output growth.

One of the most interesting features of the Indian economy since 1980s is the emergence of
services as the dominant sector and as the main driver of GDP growth. Among fast-growing
developing countries, India is distinctive for the role played by the service sector. Whereas
earlier developers grew on the basis of exports of labour-intensive manufactures, India has
concentrated on services. Although there are other emerging markets where the share of services
in GDP exceeds the share of manufacturing, India stands out for the size and dynamism of its
service sector. India’s service sector observed an increase in its share in aggregate GVA from
nearly 37 percent to more than 53 percent between 1980 and 2017. The share of agriculture
in aggregate GVA declined by 19 percentage points and that of manufacturing remained at
around 17 per cent during the period. In terms of GVA shares of 27 industries in 2017, although
agriculture and allied activities share declined by 19.1 percentage points, it was still the largest
sector with 17.2 per cent share in 2017. Further, seven of the top 10 industries in terms of GVA
share were from the service sector.

We observe that the Indian economy grew at 6.03 per cent per
annum during 1981 to 2017 and the growth improved over Although there are
different sub-periods until the 2008 global financial crisis. While other emerging
growth in aggregate value-added the Indian economy was markets where the
between 5 to 6 per cent during 1981-2002, it improved to 7.65 share of services in
per cent during 2003-07, and then declined slightly to 6.43 per GDP exceeds the
cent in the subsequent sub-period. In terms of broad sectors,
share of
services grew at a faster rate (7.31 per cent per annum) than
others, while agriculture grew at a much slower rate (3.06 per manufacturing, India
cent per annum). Market services such as business services, post stands out for the size
& telecommunication, and financial services registered much and dynamism of its
faster growth than non-market services industries such as, health service sector
& social work and education & public administration. Within the
manufacturing sector, electrical & optical equipment, rubber &
plastic products, coke & petroleum products, and transport equipment grew faster than other
industries. Of the average growth of 6.03 per cent per annum for the aggregate economy
during 1981-2017, 2.03 percentage points came from market services, 1.21 and 1.26
percentage points from manufacturing and non-market services respectively, and less than 0.8
percentage points from agriculture and allied sector. Within the market services, business
services and trade contributed most.

Our analysis reveals a more prominent effect of the global financial crisis at the disaggregate
industry level. For as many as 19 of the 27 KLEMS industries, growth rates declined after 2007-
08.

The annual growth rate of gross output varied across industries ranging from 1.16 per cent in
wood & wood products to 12.4 per cent in business services. Out of 27 industries, 12 observed
higher growth rates compared with the industry mean— among them, eight industries are from
the manufacturing sector. Agriculture and mining grew at much slower rates than the industry
mean of 7.39 per cent per annum, respectively 2.81 and 5.50 per cent. Positive correlation
between gross output and intermediate input growth is also observed.

71
 In context of the contributions of intermediate inputs to growth
Intermediate inputs play in gross output, we observe that, in general, contribution of
a crucial role in materials input is higher than the other factors of production. It
explaining economic is as high as 40 to 50 per cent in the case of manufacturing
growth at the industry industries. Except for transportation & storage, electricity, gas
level, which is why, we & water supply, non-metallic mineral and metal products, the
contribution of energy input is negligible (less than 3 per cent),
have argued for the use while the contribution of service inputs to gross output lies
of gross output instead between 10 to 20 per cent. Evidently, the contribution of
of value-added in intermediate input, particularly material input, remained the
productivity analysis. dominant source of output growth for most industries. Therefore,
intermediate inputs play a crucial role in explaining economic
growth at the industry level, which is why, we have argued for
the use of gross output instead of value-added in productivity analysis.

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Annexure 3A: Additional Table

Table 3A.1: Average Growth Rates of Gross Value Added (% per annum)
KLEMS Industry Description 1981-1993 1994-2002 2003-2007 2008-2017
Agriculture & allied 3.2 2.1 4.4 3.2
Mining & quarrying 6.7 4.8 5.1 3.0
Food beverages & tobacco 7.7 6.2 9.7 3.6
Textiles & leather 5.2 3.8 7.8 8.6
Wood & wood pdts. -2.7 -2.7 2.5 6.7
Pulp & paper pdts. 6.0 1.0 14.0 3.9
Petroleum & nuclear fuel 12.5 5.8 6.9 6.8
Chemicals & chemical pdts. 9.7 7.8 9.1 6.5
Rubber & plastic pdts. 10.9 7.1 2.8 11.5
Non-metallic mineral pdts. 7.5 8.2 5.4 7.9
Basic metals & metal pdts. 4.1 7.3 9.5 4.0
Machinery, n.e.c. 5.0 4.9 12.1 8.4
Electrical & optical eqpt. 7.3 8.7 19.3 7.4
Transport eqpt. 5.3 9.0 9.6 11.7
Other manufacturing 6.4 4.4 9.2 11.0
Utilities 8.1 5.4 6.8 6.2
Construction 3.9 6.1 12.0 5.2
Trade 5.4 8.1 8.3 8.2
Hotels & restaurants 5.9 9.9 10.7 5.2
Transport & Storage 5.6 6.8 9.6 6.7
Post & telecom 6.8 17.4 10.9 7.1
Financial services 10.1 8.6 8.6 6.3
Business services 8.8 16.1 13.5 11.3
Public administration 5.7 6.0 4.5 7.0
Education 6.1 8.4 5.8 10.8
Health 7.0 8.5 10.6 8.9
Other services 7.1 2.8 3.9 5.8
Source: Authors’ calculations based on India KLEMS data 2019.

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