Structural Shifts, Productivity Gap and Income Inequality: Challenges to Inclusive Growth in India
Published: 2025
Author(s) Name: Kajal Gupta and Suman Makkar |
Author(s) Affiliation: Assistant Professor at the GGDSD College, Chandigarh.
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Abstract
India, one of the rapidly growing economies, aspires to become a developed nation by 2047. To realize this objective, India must tackle numerous challenges spanning from growth to inequalities necessitating careful attention. Thus, current research investigates the relationship of structural change and related productivity gaps with inequality, utilizing
time series data. A notable shift toward services since mid-1980s, while fostering growth, has also led to increased disparities. Findings indicate that the top 20% have been able to sustain
a growing share of income, whereas the bottom 40% experienced a reduction. Further, output and employment imbalance between non-agriculture and agriculture sectors have exacerbated productivity gaps, expanding inequalities. Thus, unequal effects of sectoral transitions pose significant challenges to achieving inclusive growth, hindering the path to a developed economy.
Keywords: N.A.
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