Sunday, 19 April 2015

Chhattisgarh - Poised for Growth in Service Sector

Fisher-Clark Theory of stages of development suggest that as industrialization takes place in an economy, the share of primary or agriculture sector in total output and employment gradually diminishes, while that of the secondary or manufacturing sector increases. This popular theory has been re-interpreted and extended by many economists to explain empirical observations related to increase in contribution from service sector during post-industrialization phase in advanced economies and also in under developed economies.

In reference to the above theory, following diagram represents the change in employment landscape as economies develop.



Clark’s Sector Model 
Reference - http://commons.wikimedia.org/wiki/File:Clark%27s_Sector_Model.png


Data for Sector Wise Distribution of Employment in Chhattisgarh during the period 2004 - 2010 suggests decrease in Primary Sector Employment, a marginal increase in Manufacturing Sector Employment and significant increase in Tertiary Sector Employment (Non-Manufacturing and Service Sector). It can be assumed that the same trend is continuing from 2010 onward to 2014/15



Reference http://mla.prsindia.org/sites/default/files/policy_guide/sector%20wise%20emp%20%281%29.pdf


It can be observed from the above table that change in service sector employment in some of the relatively advanced states like AP and Maharashtra are negative. There is hardly any change for TN. Delhi and Karnataka have registered 2% and 3% change respectively.

Sector Wise Distribution of GSDP (Gross State Domestic Produce) for the state of Chhattisgarh during the period 2004 - 2014 indicates that Production of Service Sector has recently taken over Production of Industrial Sector.



Reference - http://santoshbehar.blogspot.in/2014/09/illustration-on-gsdp-of-some-of-indian.html


In the light of above mentioned points, drawing the Clark's Sector Model from the perspective of Chhattisgarh:-


Clark's Model Redrawn by the author in reference to Chhattisgarh
Reference - http://commons.wikimedia.org/wiki/File:Clark%27s_Sector_Model.png


Thus, it is apparent that Chhattisgarh is slowly getting positioned for the phase of economic development, in which Primary Activities will decrease, Secondary Activities will have a tendency to stagnate and Tertiary Activities will surge ahead.



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1 comment:

  1. Great job and a critical analysis done. It is really helpful for the planners.

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