Trend Break in India's GDP Growth Rate

Looking at India's growth performance since independence, it is clear that long-term trend growth appears to break upward around 1980-81. This paper attempts to analyse the various possible causes of this growth and conjectures about the factors that could explain the break in the trend rate in 1980-81. Data strongly suggest that the 1980s were a predominantly productivity led or 'vertical' growth story, as labour productivity increased steadily during the period. One of the factors that may have led to an increase in labour productivity is the employment of better quality machines by firms, which were imported despite high tariffs.