Structural change, Employment and Economic growth in Bihar, India: A disaggregated sector-wise analysis

International Journal of Economics and Management Studies
© 2020 by SSRG - IJEMS Journal
Volume 7 Issue 8
Year of Publication : 2020
Authors : Dhananjay Kumar
How to Cite?

Dhananjay Kumar, "Structural change, Employment and Economic growth in Bihar, India: A disaggregated sector-wise analysis," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 8, pp. 179-187, 2020. Crossref,


Bihar's economy has been growing at a phenomenal rate since the last decade compared to the subdued growth rate in the90s. Such economic growth leads to structural changes in the economy in the form ofthe reallocation of economic factors within the different sectors of the economy. The increase of output with a reallocation of labor and employment composition is the silent feature of structural changes in the economy, and hence economic growth occurs as a result. Bihar, the most underprivileged state in India, drew attention due to rapid growth in late 2010. In this paper, a disaggregated sector-wise analysis is done to perceive the growth trend of the income and Employment in Bihar and the process of structural changes. This paper utilizes various development indicators data, income, and employment data from several rounds of employment surveys for more than two decades (i.e., 1993-94 to 2018-19). The analysis result shows that Bihar is in the phase of structural transformation, as is evident with a significant decline of income and workforce share of the primary sector and a continued positive growth rate of income. The sub-period analysis shows that Bihar has witnessed a golden period of growth during 2004-05 to 2011-12. Agriculture, construction, communication, and other services are the driving force toward the growth and structural change in the economy. Rural laborers are moving towards non-farm activity within rural areas and are much dynamic than the urban area.


Bihar, Structural change, Growth, Economic sectors, workforce.


[1] Aggarwal, A., & Kumar, N.,Structural change, industrialization, and poverty reduction, In Naudé, W., Szirmai, A., &Haraguchi, N. (Eds.). (2015). Structural change and industrial development in the BRICS. OUP Oxford.(2015).
[2] Aggarwal, A.,Growth, Employment and Structural Change: Punjab Versus 16 Major States of India. In Economic Transformation of a Developing EconomySpringer, Singapore. (2016) 229-249.
[3] Ahsan, R. N., &Mitra, D., Can The Whole Actually Be Greater Than The Sum Of Its Parts ?(2017).
[4] Lessons From India’s Growing Economy And Its Evolving Structure”, in McMillan, M.,Rodrik, D., & Sepulveda, C. (ed.) Structural Change, Fundamentals and Growth: A Framework and Case Studies. Cambridge, MA, (2017) 39-79.
[5] Binswanger-Mkhize, H. P., The stunted structural transformation of the Indian economy: Agriculture, manufacturing and the rural non-farm sector. Economic and Political Weekly,(2013) 5-13.
[6] Chenery, H., Structural change and development policyThe World Bank (11911) (1979)1-548
[7] Gupta, C. D., Unraveling Bihar's Growth Miracle'. Economic and Political Weekly, (2010)50-62.
[8] Hasan, R., Lamba, S., & Gupta, A. S., Growth, structural change, and poverty reduction: Evidence from India, South Asia Working Paper Series(2013).
[9] Herrendorf, B., Rogerson, R., &Valentinyi, A., Growth and structural transformation. In Handbook of economic growth Elsevier.2(2014)855-941
[10] Lewis, W.Economic development with unlimited supplies of labor. The Manchester School, 22(2)(1954)139-191.
[11] McMillan, M. S., &Rodrik, D..Globalization, structural change, and productivity growth (No. w17143). National Bureau of Economic Research.(2011)
[12] McMillan, M., Rodrik, D., & Sepulveda, C., Structural change, fundamentals, and growth: A framework and case studies. The World Bank.(2017)
[13] Dr. Sanjeev Kumar, Provider Kumar, Agricultural Credit in India: A Study of Public and Private Sector Banks SSRG International Journal of Economics and Management Studies 3(12) (2016) 11-17.
[14] Mukherji, A., &Mukherji, A.,Bihar: What went wrong? And what changed? 12(107)(2012).
[15] NSSO., Employment and Unemployment Situation in India, (July 2011- June 2012). New Delhi: Ministry of Statistics and Programme Implementation, Government of India.(2014)
[16] PLFS.,Annual Report: Periodic labor force Survey (PLFS), (July 2017- June 2018). New Delhi: Ministry of Statistics and Programme Implementation, Government of India.(2019).
[17] Ranis, G., &Fei, J. C.,A theory of economic developmentThe American economic review, 533-565(1961).
[18] Santra, S., Kumar, R., &Bagaria, N.,Structural change of Bihar economy during 1999 to 2010: a district-level analysis.The International Journal of Humanities and Social Studies, 2(1)(2014).
[19] Datta, A., Mishra, S. K., Rodgers, G., Rodgers, J., & Sharma, A. N.,Social and Economic Change in Rural Bihar and the Emerging Policy Framework. Summary of the Main Findings. New Delhi: Institute for Human Development (IHD)(2012).
[20] Sharma, A. N., & Rodgers, G., Structural change in Bihar’s rural economy: Findings from a longitudinal study. Economic and Political Weekly, 50(52)(2015)45-53.
[21] Singh, N. K., & Stern, N.,The New Bihar-rekindling governance and development. Harper Collins India.(2014).
[22] Syrquin, M.,Patterns of structural change.Handbook of development economics, 1(1988) 203-273.
[23] Tendulkar, S. D., Expert Group on Methodology for Estimation of Poverty,Planning Commission, Government of India.(2013).
[24] Planning Commission. “xpert Group on Methodology for Estimation of Poverty. New Delhi: YojanaBhavan.(2007).