IMF Working Papers

India's Pattern of Development: What Happened, What Follows?

By Arvind Subramanian, Raghuram Rajan, Ioannis Tokatlidis, Kalpana Kochhar, Utsav Kumar

January 1, 2006

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Arvind Subramanian, Raghuram Rajan, Ioannis Tokatlidis, Kalpana Kochhar, and Utsav Kumar. "India's Pattern of Development: What Happened, What Follows?", IMF Working Papers 2006, 022 (2006), accessed June 17, 2025, https://doi.org/10.5089/9781451862829.001

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

India has followed an idiosyncratic pattern of development, certainly compared with other fast-growing Asian economies. While the importance of services rather than manufacturing is widely noted, within manufacturing India has emphasized skill-intensive rather than laborintensive manufacturing, and industries with higher-than-average scale. Some of these distinctive patterns existed prior to the beginning of economic reforms in the 1980s, and stem from the idiosyncratic policies adopted after India's independence. Using the growth of fastmoving Indian states as a guide, we conclude that India may not revert to the pattern followed by other countries, despite reforms that have removed some policy impediments that contributed to India's distinctive path.

Subject: Economic sectors, Employment, Income, Labor, Manufacturing, National accounts, Public sector

Keywords: Decentralization, Diversification, East Asia, Employment, Income, India indicator, Industry effect, Labor intensity, Labor-intensive industry, Liberalization, Manufacturing, NSDP growth, Private sector, Public sector, Scale, Services, Skill Intensity, WP

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