The Inter sectoral Linkage in the Economic Development of India
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The main objective of this paper is to describe the appropriate path of the economic growth and development in India through examining inter sectoral linkages among the agriculture, industry, service, and external sectors. This paper, observing inter sectoral linkages, identifies the role of each sector in the economic growth and development. VAR model based on Johansen co-integration method is employed along with the IRF and variance decomposition analysis in order to examine the data from year 1961 to year 2017. VAR estimates indicates that there are three significant links between the sectors in the Indian economy. First, the previous year agriculture value-added makes links to the current year agriculture sector in a negative way, but to the current year service sector in a positive way. Secondly, the previous year service sector value-added has a positive link to its own current year service sector. Finally, export sector makes the positive links to agriculture sector and the negative links to service sectors. Another notable result is that the India’s industry sector does not make any significant spillover on the other sectors but also it is not benefited from the growth of the other sectors. Hence, the agriculture and service sectors are the most significantly influencing sectors in India making positive links to the growth of other sectors. Inter sectoral linkages of India have not been properly developed by keeping them heterogeneous. Specially, the essential linkage level of industry sector has not been displayed in India. Therefore supplementary inter-sectoral linkage analysis and suitable development strategies are timely important for India to reach to the higher economic development level.
Abstract
The main objective of this paper is to describe the appropriate path of the economic growth and development in India through examining inter sectoral linkages among the agriculture, industry, service, and external sectors. This paper, observing inter sectoral linkages, identifies the role of each sector in the economic growth and development. VAR model based on Johansen co-integration method is employed along with the IRF and variance decomposition analysis in order to examine the data from year 1961 to year 2017. VAR estimates indicates that there are three significant links between the sectors in the Indian economy. First, the previous year agriculture value-added makes links to the current year agriculture sector in a negative way, but to the current year service sector in a positive way. Secondly, the previous year service sector value-added has a positive link to its own current year service sector. Finally, export sector makes the positive links to agriculture sector and the negative links to service sectors. Another notable result is that the India’s industry sector does not make any significant spillover on the other sectors but also it is not benefited from the growth of the other sectors. Hence, the agriculture and service sectors are the most significantly influencing sectors in India making positive links to the growth of other sectors. Inter sectoral linkages of India have not been properly developed by keeping them heterogeneous. Specially, the essential linkage level of industry sector has not been displayed in India. Therefore supplementary inter-sectoral linkage analysis and suitable development strategies are timely important for India to reach to the higher economic development level.
참고문헌 (27)
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