A study on key determinants of economic growth during pre and post reform periods in india

Abstract

Schumpeter says that economic life is a process of growth and change, meaning newlinedevelopment . The process involves interplay of forces or factors of production, viz. land, labour and capital. The understanding of economic growth has improved enormously in recent years. There has been a much greater understanding of the interrelated laws governing the growth of population, the pace of capital accumulation, the rate of technological innovation in an environment characterised by relative scarcity of natural newlineresources. The major determinants of Indian economic growth, identified in this study in terms of their influence on productivity of different sectors are physical capital formation, technological progress, human capital formation, increase in labour force, foreign investment and trade openness. newlineThere are some notable features associated with economic growth in India. One, it is found that the structural adjustments leading to foreign capital inflow and trade openness have fuelled the economic growth in India after economic reforms in 1991. Two, it is observed that exports and imports play a significant role in determining economic growth in India in the post reform period. Three, despite the new growth there are issues like imbalances with regard to employment, manufacturing base, social newlineindicators etc., even as India strives to enhance competitiveness, competence and global relevance. newlineIt is in this context that the present study looks into the major issues and challenges related to the changes in the sectoral composition of economic growth in India over time. It also attempts to identify and discuss the influence of key determinants of economic growth in the pre and post reform periods in India. In this context, it is very crucial to study how different sectors influence the overall growth of a country at various points of its growth trajectory. newlineInterestingly, the analysis shows that the services sector growth has become the highlight of India s changing growth pattern in the post reform era.