Sectoral Dynamics of Economic Growth Evidence from Bihar, India
This paper brings together recent evidence on the high growth-sustainability paradox in Bihar. The main aim to understand the drivers of the economic growth in Bihar during 1990-91 to 2019-20. The most defining evidence of this transformation has been the dominance of service sector with a decline in the share of agriculture sector. In the long run, public investment and service sector growth have significant and positive elasticities. This paper also finds evidence for substantial output gaps, especially in the case of industrial and agricultural sectors. A point of concern is the slow progress of industrial output in Bihar's economy. Closing the output gap and minimizing the volatility of the productive sectors is a key to sustaining the high growth rate in Bihar which necessitates proper utilization of resources, investments in technology and infrastructure