Lecture by Prof. Deepak Nayyar
India’s Path to Structural Transformation: An Exception and the Rule
The first Inaugural Lecture titled “India’s Path to Structural Transformation: An Exception and the Rule,” was delivered by Professor Deepak Nayyar, at the Baker Auditorium, CDS on 2 August, 2018. Professor Sunil Mani, Director introduced and welcomed him to the CDS. He said Professor Nayyar is presently Emeritus Professor, JNU, and was formerly a distinguished University Professor of Economics at the New School of Social Research, New York. He was also a Former Vice Chancellor of the University of Delhi. Prof Mani pointed out that this lecture was part of the Inaugural Lecture Series initiated this year at the beginning of the academic year 2018-19.
The object of the lecture is to analyzes the process of structural change in India since 1950 and discuss the path to structural transformation which has turned out to be different from most countries. It sets the stage by developing an analytical framework to examine the relationship between economic growth and structural change, in theory and history, to explore directions of causation. It then examines the broad contours of the significant changes in the composition of output an employment. This reveals two discernible phases. During 1950-1980, structural change was slow and modest, which was more visible in output than in employment. The pattern of change was conventional. The primary sector, essentially agriculture, declined in relative importance, to be replaced by the secondary sector, led by manufacturing, while the services sector accounted for the residual. During 1980-2010, structural change was faster, more significant and rather unconventional, as the reduced share of agriculture in output and employment was captured mostly by the services sector, and in part by construction, but not by manufacturing. In both phases, economic growth drove structural change and structural change drove economic growth, as the causation ran in both directions. The discussion suggests that such services led growth, by itself, might not be sustainable in future, so that it is necessary to stress manufacturing and revive industrialization but not quite as an alternative. Manufacturing and services are complements rather than substitutes, with potential synergies to be exploited. This strategy would be the equivalent of walking on two legs.
The lecture was well attended by the faculty, students and invited guests from other institutions in Trivandrum.