Book Description

Growth is an important aspect of the process of economic development. However, analyzing the issue of economic growth is a fairly complex phenomenon. The issue addresses as to why certain economies grow faster while others do so at a slower pace. In fact, growth of an economy is governed by a multiplicity of dimensions, divisible broadly into two constituent parts: factor inputs, measuring quantity of factors, and total factor productivity (TFP), measuring quality of factors. A study of growth accounting (specifically in respect of the role played by TFP) becomes imperative in view of the limited availability of factors of production, particularly in developing economies like India. After the process of liberalization, initiated during mid-eighties, there has been a significant acceleration in the growth rate of the Indian economy. The long-standing barrier of the so-called Hindu Rate of Growth of around 3.5 percent has been comprehensively broken, and the Indian economy has been cruising along at the rate of around 8 percent per annum. However, the state of Punjab, which at certain point in time happened to be the most progressive state of India, has lately been termed as one of the sluggishly growing Indian state. On the other hand, Haryana, which was carved out of the Punjab state and used to be known as its poor cousin, has edged past the Punjab state on most of the economic parameters of growth. Having even crossed national growth rate, the Haryana state has left behind its big brother Punjab. Thus, in order to bring out the constraining factors in the growth process, the present in-depth study was carried out, which concentrated on the quantitative analysis of different sources of economic growth in Punjab vis-à-vis the Indian economy, in general, and Haryana, in particular. Making use of regular time series information on various macro-economic variables (at aggregated and disaggregated levels) for 30 years' study period from 1980-81 to 2009-10, single factor productivities and employment elasticities of output were estimated for different sectors of each of the three economies. Growth accounting analysis was carried out broadly through three alternative streams: Factor Share Approach, Production Functions Approach and the DEA-based Malmquist Productivity Index Approach. An attempt was also made to study the nature of functional relationships between TFP and developmental expenditure of each major sector among the three economies. Based upon the findings from the analysis, certain growth-promoting policy suggestions have been made. During the course of the study, a number of institutions/ organizations, like Central Statistical Organisation, New Delhi; National Council of Applied Economic Research, New Delhi; Reserve Bank of India, New Delhi; Economic and Statistical Organisation, Punjab, Chandigarh; Economic and Statistical Organisation, Haryana, Panchkula; etc. were visited. We gratefully acknowledge the academic input provided through fruitful discussions with subject-matter experts in these organisations. We also wish to acknowledge the help rendered by librarians of these institutions for extending access to the literature and other research material available in the libraries. The vocabulary falls short to acknowledge the cooperation and moral support extended by members of our families. Above all, we express our gratefulness to the Almighty God for bestowing upon us the much needed physical and mental stamina to accomplish this task smoothly. 3 Our special thanks are due to the Editor, SARA Books Private Limited, for reshaping our manuscript in an impressive format into this book. We, however, are solely responsible for errors and omissions, if any, in the publication.