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Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 1 Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework i
Policy Perspectives for a Developed Haryana:
A Three-Dimensional Framework
December, 2025
NITI Working Paper No.5/2025
* Professor, Department of Economics, GJUST Hisar
@ Member, NITI Aayog, Government of India, New Delhi
# Assistant Professor, Department of Economics, GJUST Hisar
Narendra Kumar Bishnoi
*
| Ramesh Chand
@
| Gargi Boora
#
Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework i Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework ii
Disclaimer
Views expressed in the paper are personal. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework iii
Table of Contents
Abstract��1
1. Introduction: Journey Towards Developed Status��2
1.1 Structural Transformation Driving Productivity��3
2. Developed Economy: Conceptual Context��4
3. Analytical Framework��5
3.1 Assessing Potential to Achieve High-Income Economy Status��5
3.2 Achievable Scenarios 1 and 2 (Solow Growth Accounting)��6
4. Results and Discussion��8
4.1 Haryana’s Economic Trajectory: 1999-00 to 2023-24��8
4.2 Sectoral Trends in Marginal Product of Labour (MPL)��8
4.3 Marginal Product of Capital and Incremental Capital Output Ratios��9
4.4 SDG and HDI Score of Haryana��10
5. Future Projections��11
5.1 Projected Economic Trajectory��11
5.2 Projecting SDG and HDI Score of Haryana��12
6. Policy Challenges��13
6.1 Research and Innovation Ecosystem��13
6.2 Regionally Balanced Growth��14
6.3 Women Empowerment Policy Strategy for Haryana��14
6.4 Sector Specific Policy Measures��14
6.5 Modernisation and Scaling up of MSMEs��15
7. Major Takeaways��17
References��18
Appendix 1��34 Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework iv
Tables
Table-1: Average Growth and Period of Miracle Economies��23
Table-2: Annual growth rates in Haryana and National Economy,
in various decades since 1980s (In Percent)��23
Table-3: Growth Accounting of Haryana for period 1999-00 to 2010-11:
Estimated Coefficients Case��24
Table-4: Growth Accounting of Haryana for period 2011-12 to 2023-24:
Estimated Coefficients Case��24
Table-5: Growth Accounting of Haryana for period 1999-00 to 2023-24:
Estimated Coefficients Case��25
Table-6: Growth Accounting of Haryana for period 1999-00 to 2010-11:
Fixed Coefficients Case��25
Table-7: Growth Accounting of Haryana for period 2011-12 to 2023-24:
Fixed Coefficients Case��26
Table-8: Growth Accounting of Haryana for period 1999-00 to 2023-24:
Fixed Coefficients Case��26
Table-9: Haryana: Marginal Product of Labour (INR Lakh)��27
Table-10: Haryana: Marginal Product of Capital��27
Table-11: Haryana: ICOR��28 Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework v
Figures
Figure-1: Per Capita Income of Selected States and India (R2011-12 prices)��29
Figure-2: The 10-year Moving Average of growth of Per Capita
Income of Selected States and India (R2011-12 prices)��29
Figure-3: Structural Transformation in Haryana: Composition of NSVA (% of total)��30
Figure-4: Structural Transformation in Haryana: Sectoral Share of
Employment (% of total)��30
Figure-5: Haryana Projected Growth Rates (%) in NSVA (at constant prices)
and Per Capita NSVA (in nominal $US)��31
Figure-6: Haryana: High Income Economy Status ��31
Figure-7: Haryana: Timeline to Achieving a One-Trillion-Dollar Economy��32
Figure-8: Haryana: SDG Projected Score��32
Figure-9: Haryana: HDI Projected Score��33 Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 1
Policy Perspectives for a Developed Haryana:
A Three-Dimensional Framework
Abstract
Haryana, one of India’s economically most advanced states, holds high prospects to attain
the status of developed and high-income economy well before 2047, the year set for
realising the vision of Viksit Bharat. This paper presents a three-dimensional framework to
assess Haryana’s readiness for this transition, based on: (1) per capita income exceeding
the projected global high-income threshold; (2) an SDG score of 90 or higher; and (3) an
HDI value above 0.85.
However, realising this goal requires inclusive and proactive policies—especially in
healthcare, education (with a strong focus on world-class university education), fostering
a competitive and vibrant MSME sector, and ensuring that the benefits of growth are more
evenly distributed geographically and across socio economic groups. With sustained
reforms in these areas, Haryana could credibly attain developed economy status during
the late 2030s—well ahead of India’s national target of 2047. The paper uses the Solow
Growth Accounting Framework, to estimate Haryana’s sectoral growth potential and
simulate workforce shifts across sectors to evaluate likely per capita income trajectories.
Keywords: Total Factor Productivity, Solow Model, Perpetual Inventory Method, Economic
Development
JEL Classification: D24, O10, O15, O47, R11 Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 2
1. Introduction: Journey Towards Developed Status
Haryana was among the pioneer states to usher in the Green Revolution in the late 1960s
and 70s, focusing on high yielding seeds, irrigation infrastructure, chemical fertilisers, farm
credit and agri- markets. Agricultural productivity responded strongly to these initiatives
(Chand and Srivastava, 2014; Gautam, 2022), with food grain output rising over eightfold
over 57 years—from 25.92 lakh tonnes in 1966–67 to 208.8 lakh tonnes in 2023–24. The
livestock sector also flourished as milk production grew from 19.5 lakh tonnes in 1979–80
to 122.2 lakh tonnes in 2023–24, with impressive annual growth rate of 9.3%. To move
marketable surplus from rural areas, regulated markets and warehouses were established
state-wide (Bhalla and Singh, 1997; NCAER, 2021), while all-weather roads and electricity
connected villages, integrating rural Haryana into the economic mainstream (Haryana
State Development Report, 2004).
Rural infrastructure catalysed agro-processing industries in the 1970s and 1980s, including
flour and rice mills, vegetable oil units, cotton ginning, guar gum processing, and milk
chilling plants (Bishnoi et al., 2021). While rural and agro industries took early leads,
towns developed manufacturing specific niches—Faridabad (multiple industries), Panipat
(textiles), Ambala (scientific instruments), Yamunanagar (plywood, paper), and Hisar
(steel, PVC products). The late-1970s establishment of Maruti Udyog Ltd. in Gurgaon
(now Gurugram) spurred an automotive and ancillary ecosystem, while GE’s entry in
1996–97 transformed the city into a national BPO hub, advancing Haryana’s shift towards
a service-led economy.
Haryana has emerged as a leading hub of automobile manufacturing in India, anchored
by global giants like Maruti Suzuki, Hero MotoCorp, and Honda. The Gurugram–Manesar–
Bawal belt forms the state’s automobile epicenter, supported by a vast network of
auxiliary and component manufacturers. Within the state, Gurugram has emerged as a
premier corporate powerhouse, hosting the Indian and South Asian headquarters of global
giants such as Google, IBM, and Microsoft. The city is home to more than 250 Fortune
500 companies, making it one of India’s most prominent destinations for multinational
corporations (Built In, September 2024).
Haryana averaged close to 7% annual growth between 1990–91 and 2024–25, earning
“miracle economy” status (Table 1 and 2). This growth drove sustained PCI gains and
Haryana emerged among the top five states in per capita income since 1981. Initially, green
revolution helped the state to raise its per capita income relative to national average
from 106.9 percent in 1960-61 to 138.5 percent in 1970-71, maintaining comparable levels
until 1990-91. Following economic liberalisation, Haryana’s per capita income increased
substantially, attaining 176.8 percent level in 2023-24. Currently, Haryana ranks fourth in
per capita income among major states, trailing behind Delhi, Telangana, and Karnataka
(Sanyal and Arora, 2024) (Figure 1 and Figure 2). Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 3
1.1 Structural Transformation Driving Productivity
Consistent with economic theory and global experience, Haryana’s development has
driven structural transformation—shifting labour from low-productivity agriculture to
higher-productivity manufacturing and services, boosting growth and productivity
(Fisher, 1939; Clark, 1957; Kuznets, 1971; Chenery and Syrquin, 1975). Over the past
two and a half decades, the primary sector’s share in Gross State Value Added
(GSVA) has fallen sharply—from over 41% in 1999–2000 to around 17% in 2023–24—
reflecting a reduced economic dependence on agriculture. During this period, the
secondary sector’s share has remained relatively stable at 31–32%, while the tertiary
sector has expanded rapidly, increasing from 28% to 51–52% (see Figure-3).
Similarly, the share of the workforce engaged in the primary sector declined from
53.6% in 1999–2000 to around 27.5% in 2023–24, indicating substantial labour
movement out of agriculture. The tertiary sector overtook the primary sector in
employment around 2016–17 and has continued to rise since 2020, while the share of
secondary sector—though recording modest gains—remains below 30% (Figure-4).
Quantitatively, this shift is captured by the Michaely Index, a standard measure of
structural change (Michaely, 1962; Stoikov, 1966), which is estimated at 0.30 for
Haryana—signalling a significant reconfiguration of the state’s economic structure
(Bishnoi and Boora, 2023). Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 4
2. Developed Economy: Conceptual Context
As per the World Bank’s 2025 Atlas Method various economies are classified in four
income categories based on the level of PCI, as under:
Low-incomePCI ≤ $1,145
Lower-middle-income$1,146–$4,515
Upper-middle-income$4,516–$14,005
High-incomePCI ≥ $14,006
These thresholds are updated periodically (e.g., for High income the threshold changed
from $6,000 in 1989 to $14,006 in 2025). However, being a high-income country alone
does not guarantee developed economy status as real progress also requires expanding
human freedoms and capabilities (Sen, 1999), ensuring environmental sustainability
(Sachs, 2005), and fostering inclusive, resilient institutions (Stiglitz, 2012).
Therefore, a broader indicator like the HDI (UNDP) that measures: Health: Life expectancy
at birth, Education: Mean and expected years of schooling and Standard of living: GNI
per capita is used. Further, there is a need to develop a Comprehensive Development
Index (CDI) to systematically track shared prosperity across all communities and regions,
structural transformation to shift workers from low productivity to high productivity
activities, competitiveness and innovation in different sectors, skilled workforce, clean
water and air, citizen-centric governance. The CDI should be monitored to avoid the
middle-income trap—where economies often stagnate at ~11% of U.S. per capita income
(ie $8,000–$9,000) (WDR, 2024). Sustained growth depends not only on past trends but
also on structural shifts, strategic policy choices, and external factors.
A nuanced understanding of transition process helps policy makers to take timely steps
to steer the economy. Few issues are crucial to take note of. For example, Lewis (1954),
Leibenstein (1960), Kuznets (1966) and Stiglitz (2017), argue that higher agricultural
productivity frees labour for non-farm sectors and boosts demand for manufacturing
and services, accelerating transformation. Another dimension is that while initial growth
often stems from investment and infrastructure expansion, but at middle-income levels,
competitiveness demands efficiency, innovation, and entrepreneurship (Porter, 1990;
Schwab, 2019), underpinned by human capital and R&D. Innovation flourishes via talent
agglomeration (Romer, 1990; Lucas, 1988; Glaeser et al., 1992; Florida, 2002).
Equally important is spatially distributed growth that is economically, socially, and
politically more inclusive while regional disparities erode cohesion and potential (WDR,
2009; Barca et al., 2012; OECD, 2016; Kanbur and Venables, 2005; Rodríguez-Pose, 2018).
Therefore, transition to a developed economy needs altogether different policy set to
address the evolving issues. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 5
3. Analytical Framework
Within the conceptual framework of a developed economy, achieving a high per capita
income—alongside ensuring inclusive welfare across all regions and social groups—is
considered a fundamental benchmark. In this context, the following steps have been
outlined to guide the present study:
• Assessing the potential for Haryana to attain High-Income Economy status;
• Assessing the possibility of attaining HDI > 0.85;
• Assessing the possibility of all citizens enjoying minimum standard of living.
3.1 Assessing Potential to Achieve High-Income Economy Status
Using the Solow Growth Accounting Framework (Appendix 1), per capita income of
Haryana is projected for next 22 years ie from 2024–25 to 2046–47. Given its < 4%
share in India’s GDP, Haryana faces minimal demand-side constraints. Econometric
estimates indicate that the elasticity of Haryana’s GSDP growth with respect to
India’s GDP growth stands at 1.2 for the period 1999–2000 to 2023–24, and at 1.5
for the longer period 1980–81 to 2023–24. This suggests that Haryana’s economy
has historically been more responsive to national growth dynamics than the
average state. Notably, the 15th Finance Commission also employed the concept
of elasticity—albeit at a more granular level—to assess the relationship between
state GSDP growth and overall GDP growth, thereby reinforcing the relevance of
this analytical approach. Historically, Haryana’s growth (6.84%) has exceeded India’s
(5.93%), reflecting strong fundamentals.
Haryana’s future trajectory thus hinges on India’s growth. Multiple forecasts—Ray
(2022); Sahasranaman et al. (2024); PwC (2022); EY (2022, 2023); S&P Global
(2024); OECD (2025); Deloitte Insights (2024)—project India to grow at 7.0–8.0%
annually over the next 25 years. Conservatively, India is expected to grow above
7.0% per year over this period.
However, the paper projects Haryana’s future growth trajectory independently by
constructing three alternative scenarios, while maintaining the envelope condition
that India’s economy will continue to follow its normal expected growth path. These
are: Business-as-Usual Scenario (BAUS) and Achievable Scenarios 1 and 2 (Solow
Growth Accounting).
The BAU scenario extrapolates the real sectoral growth rates observed between
1999–2000 to 2023–24 through to 2046–47. For nominal projections, inflation is
assumed to moderate in line with the evolving inflation-targeting framework under
the Monetary Policy Committee (MPC), constituted in 2016. Accordingly, average
inflation is set at (a) 5.0% (2024–25 to 2029–30); (b) 4.0% (2030–31 to 2039–40) and
(c) 3.0% (2040–41 to 2046–47). These assumptions reflect India’s experience, where
average inflation is showing deceleration with expectations of further moderation. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 6
3.2 Achievable Scenarios 1 and 2 (Solow Growth Accounting)
These scenarios use the Solow Growth Accounting Model (SGAM) (Tables 3 to 8) to
project GSDP at the sectoral level. Scenario-1 estimates output elasticities empirically
using restricted least squares, in line with Bosworth and Collins (2003), Caselli (2005),
and Hall and Jones (1999), to account for distortions in factor markets prevalent in
developing economies. The elasticity of output with respect to capital and labour
was estimated using sector-wise time series data. To ensure the econometric
validity of the estimations, preliminary stationarity tests were conducted for each
sector using the Augmented Dickey-Fuller (ADF) test on both output per worker
(Y/L) and capital per worker (K/L) series. The results indicated that most variables
were non-stationary, which could otherwise lead to spurious regression results if
used in their levels. Consequently, cointegration tests were performed to check for
the possibility of a long-run equilibrium relationship between the variables. Except
for a few sectors, cointegration was not observed, confirming the absence of a
stable long-run relationship in most cases. Therefore, first differences of the log-
transformed Y/L and K/L series were taken to achieve stationarity, and elasticity
coefficients were estimated by regressing the first-differenced (log) output on first-
differenced (log) capital and labour for each sector. This approach provides robust
and credible short-run elasticity estimates while addressing the problems posed by
non-stationarity and ensuring the reliability of the econometric results.
Achievable Scenario 2 applies fixed output elasticities derived from neoclassical
theory, assuming perfect competition and constant returns to scale—consistent with
Solow (1957), Gollin (2002), and Barro and Sala-i-Martin (2004).
While the methodological approach differs, both Achievable scenarios (1 and 2) yield
broadly similar growth trajectories. In Scenario-1, sectoral output elasticities were
estimated using restricted least squares on time-series data from Period 1 (1999–00
to 2010–11), Period 2 (2011–12 to 2023–24) and overall Period (1999–00 to 2023–24).
All the data is used at 2011-12 prices and sourced from the Statistical Abstracts
of Haryana for various years. The capital stock was estimated via the Perpetual
Inventory Method (PIM) following Sethi and Kaur (2013). Given discrepancies in base
years and data consistency, a harmonised time series was constructed at constant
2011–12 prices by linking overlapping years. NSVA was divided into 10 sectors as per
national accounts classification.
Sector-wise workforce data (15+ age) was compiled using unit-level records from
NSSO’s Employment and Unemployment Surveys (1999–00 to 2011–12) and Periodic
Labour Force Surveys (2017–18 to 2023–24). Since worker counts by age are not
readily published, they were derived by multiplying Worker Population Ratios
(WPRs) with the respective 15+ age population estimates for Haryana. Workforce
projections are based on targeted sector-wise employment growth, aligned with
each sector’s relative importance and calibrated against official population forecasts
from the Technical Group on Population Projections, 2011–2036 (MoHFW, 2011). For
2036–2047, a 0.5% annual population growth rate is assumed. Worker growth is Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 7
estimated by projecting annual changes in Work Participation Rates (WPR, 15+ age)
by gender and adjusting the sectoral employment distribution accordingly.
Achievable Scenario–2 uses fixed output elasticities derived directly from Statement
7.1 of the National Accounts Statistics 2024, which provides the composition of
GVA by Consumption of Fixed Capital (CFC), Compensation to Employees (CE),
and Operating Surplus/Mixed Income (OS/MI). Assuming 70% of OS/MI accrues to
labour and 30% to capital, sectoral labour and capital shares were estimated from
2011–12 and 2022–23 averages. With no state-level Input–Output Table, Haryana’s
projections use national capital–labour shares.
To project future scenarios, forecast period was divided into three phases: F-1
(2024–25 to 2029–30); F-2 (2030–31 to 2039–40); and F-3 (2040–41 to 2046–47).
In F-1, sectoral growth rates for capital and Total Factor Productivity (TFP) were
based on the best observed values from historical periods P-1 (1999-00 to 2010-11)
and P-2 (2011-12 to 2023-24), ensuring a minimum TFP growth of 2% in every sector.
Recent research shows India’s total factor productivity (TFP) growth has averaged
1.5–2.2% annually over the past decade, as confirmed by India KLEMS and sectoral
datasets (Saha, 2014; Goldar et al., 2023; Kotera & Xu, 2023; Goldar, 2024; Dutta
et al., 2025). Estimates vary, with some studies reporting 2.2% TFP growth during
2010–2019 driven by technology and ICT, reflecting gains across both industry and
services. Collectively, these analyses show TFP contributes about 30% of income/
output growth. Therefore, for sustaining 7–8% output growth requires TFP growth
of 2.1–2.4%. Accordingly, adopting 2% TFP growth as the baseline assumption is a
reasonable assumption. In F-2, both capital and TFP growth rates were assumed
to increase by 20% over their respective F-1 levels, reflecting the expected impact
of policy interventions. In F-3, these growth rates were assumed to decline by 20%
from their F-2 levels, as the catch-up effect begins to taper off.
Long-term INR/USD projections using PPP adjusted for the Balassa–Samuelson
effect (Subramanian, 2024) suggest: Pessimistic 1.31%, Realistic 0.83%, Optimistic
0.40% annual depreciation (2023–2050). This study adopts the realistic 0.83% rate.
The World Bank’s High-Income Country (HIC) threshold, set at $6,000 in 1990,
has risen to $14,005 in 2025—an average annual increase of ~2.38%. This trend is
extrapolated to 2046–47 for long-term benchmarking and scenario analysis.
Using SDG-2030 as a proxy for Comprehensive Development Index (CDI) the paper
captures indicators of widely shared prosperity, quality of life, workforce skills,
economic competitiveness, and technological inclusion. However, due to the lack of
detailed and consistent annual data, we adopt the Sustainable Development Goals
(SDG)-2030 Index as a proxy for the Comprehensive Development Index (CDI) in
Haryana. The SDG Index, developed by the UN measures a country or state’s progress
toward the 17 SDGs The SDG Index tracks sustainability, equity, and inclusiveness,
ensuring progress is not just economic but also environmental and social. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 8
4. Results and Discussion
4.1 Haryana’s Economic Trajectory: 1999-00 to 2023-24
As discussed under Analytical Framework, the paper is based on three scenarios
namely Business as Usual, Achievable-1 and Achievable-2. The Business-as-Usual
Scenario (BAUS) is simply based on historical trends (1999–2000 to 2023–24) that
shows 6.96% average annual growth in Haryana’s Net State Value Added (NSVA)
with sectoral real growth rates as under:
Agriculture, Forestry & Fishing3.12%
Manufacturing7.23%
Electricity, Gas & Water Supply6.39%
Construction7.61%
Transport, Storage & Communication8.86%
Trade, Hotels & Restaurants10.88%
Real Estate & Financial Services10.93%
In sum, almost all the sectors in the state have been doing reasonably well. This
growth has been predominantly labour-driven, with labour elasticity at 0.51 and
capital elasticity at 0.49, and TFP growth of 2.57%. Agriculture, is also found to
be capital-intensive (elasticity 0.71), but experienced modest output growth (3.12%)
and low TFP gains. Manufacturing shows capital-heavy, almost jobless growth
(capital elasticity 0.95, labour 0.05) and poor productivity gains, concentrated in
capital-intensive industries like automobiles and petrochemicals. Labour-intensive
sectors such as MSME-based textiles and food processing remain stagnant due to
outdated technology, poor credit access, and weak global integration. Infrastructure
sectors like electricity, water, and construction are relatively capital-intensive and
show poor TFP gains. Transport, storage, and communications are shifting rapidly
towards capital- and technology-intensity, with lower labour elasticity due to skills
mismatches. Trade, hotels, and restaurants have TFP gains, while finance and
real estate have improved efficiency through digitisation and inclusion reforms.
Public administration remains a persistent productivity laggard. Overall, Haryana’s
capital-deepening growth model has generated limited employment and uneven
productivity gains, underscoring the need for labour market reforms, skilling, and
targeted sectoral policies to enhance TFP and ensure inclusive, sustainable growth.
4.2 Sectoral Trends in Marginal Product of Labour (MPL)
The estimates of Marginal Productivity of Labor (MPL) in Haryana (table 9) reveal
wide fluctuations across sectors and over time, with several instances of negative
values that carry important implications (Goldar, 2011; Basu and Maertens, 2007). A
negative MPL implies that adding more workers reduces overall output, reflecting
disguised unemployment, Labour surplus, or inefficiencies. This is especially evident
in agriculture, where MPL was –₹7.51 lakh in 2019–20, consistent with the persistence
of disguised unemployment (Bhalla, 2005). Although MPL turned positive again by Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 9
2023–24 as labour began shifting out of the sector, the persistently low productivity
in agriculture is also linked to structural bottlenecks such as fragmented holdings, low
mechanisation, and excess labour supply (NITI Aayog, 2019; Kalamkar et al., 2021).
Similar volatility is seen in mining and manufacturing, where labour contributions
often fluctuate due to capital intensity, technological shifts, and sensitivity to external
shocks; within manufacturing, modern firms tend to boost MPL while smaller units
drag it down (Hasan and Lamba, 2020). Construction, typically a labour-absorbing
sector, showed positive MPLs earlier but recorded a sharp fall to –25.60 in 2023–
24, likely reflecting the real estate slowdown and oversupply of unskilled workers.
Trade, hotels, and restaurants displayed extreme volatility, with a high of +49.27
in 2009–10 but collapsing to –208.46 in 2019–20, reflecting the combined impact
of GST disruptions and COVID-19 (Mehrotra et al., 2020). In contrast, finance, real
estate, and business services exhibit sustained and rising productivity, culminating
in an exceptionally high +368.16 in 2023–24, underscoring the growing returns to
skilled labour, digitisation, and capital deepening (Chanda and Kabir, 2021). Public
administration also showed negative MPL in some years, pointing to inefficiencies
when employment expanded without corresponding output (Mohanty, 2017).
Overall, the evidence suggests that Haryana’s growth path is marked by significant
labour misallocation, with surplus labour in low-productivity sectors and rising gains
in skill- and technology-intensive services, making structural transformation and skill
upgrading critical (Economic Survey of India, 2018–19; ILO, 2019).
4.3 Marginal Product of Capital and Incremental Capital Output Ratios
Five-year averages of MPK and ICOR were used to smooth out short-term
fluctuations and capture underlying structural trends more accurately (Table 10 and
11). Between 1999-00 and 2023–24, Haryana’s MPK and ICOR trends reveal stark
sectoral disparities in capital productivity and efficiency. At the aggregate level,
the marginal productivity of capital (MPK) remained broadly stable at ₹0.37–₹0.52
crore, implying that an additional ₹1 crore of investment generated ₹0.37–₹0.52
crore of output. The incremental capital–output ratio (ICOR) was moderate at 1.9–
2.7, meaning that, on average, 1.9 to 2.7 units of capital investment were required to
produce one unit of output. However, sector-specific patterns point to significant
misallocation. Services such as Trade, Hotels, and Restaurants (MPK: ₹29.25–₹8.99
crore; ICOR: 0.034–0.111) and Finance, Real Estate, and Business Services (rising
MPK; ICOR <1.3) show exceptional capital efficiency, echoing Ghani et al. (2013)
and Chanda and Kabir (2021). In contrast, Agriculture saw falling MPK (₹0.483-0.139
crore) and rising ICOR (2.07-7.18), reflecting inefficient capital deepening (Chand et
al., 2011), while Mining posted persistently negative MPK and ICOR, indicating over-
capitalisation and regulatory constraints (Das and Maiti, 2006). Manufacturing’s
stagnant MPK and high ICOR mirror structural dualism (Hasan and Lamba, 2020),
and utilities (Electricity, Gas, Water) remain plagued by lumpy investments and
inefficiencies (Mukherjee and Sahoo, 2020). Construction shows cyclical but
generally high productivity, and Transport follows an S-curve pattern (Aghion et
al., 2015). Public Administration’s high ICOR and low MPK underline weak capital
responsiveness (Mohanty, 2017). Overall, the inverse MPK–ICOR relationship holds, Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 10
with capital-light services outperforming traditional sectors. The findings call for
targeted capital allocation, regulatory reform, and sector-specific productivity
strategies to drive sustainable, high-return growth.
4.4 SDG and HDI Score of Haryana
Haryana has improved its SDG score from 55 (2018) to 72 (2023–24), yet ranks 17
th
nationally, reflecting slower progress than peers (Figure-8). Strengths include clean
energy, water, sanitation, and reduced inequalities. However, gender equality (45),
climate action (51), and life on land (48) remain weak. Decent work and economic
growth (50) has declined despite high income levels, mirroring severe educated
youth unemployment.
Haryana’s Human Development Index (HDI) has shown steady progress, rising from
0.471 in 1990 to 0.696 in 2022, reflecting an average annual growth rate of 1.23%. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 11
5. Future Projections
5.1 Projected Economic Trajectory
The sectoral growth rates mentioned in the previous section under BAUS were
extrapolated forward to 2046–47, with inflation adjustments applied as follows:
5.0% annually for the period 2024–25 to 2029–30, 4.0% for 2030–31 to 2039–40,
and 3.0% for 2040–41 to 2046–47.
Key Projections (2024–47) from Figure 5 to 7:
• Nominal NSVA growth: 12.52% p.a.
• Real NSVA growth: 8.61% p.a.
• Nominal per capita income growth: 11.39% p.a.
• Per capita income in nominal USD: 10.48% p.a.
Growth is driven by a declining share of the low-growth agriculture sector and a rising
share of higher-growth sectors like manufacturing and trade. Haryana is expected to
benefit from this structural shift for the next 25–30 years. The state’s high per capita
NSVA growth in USD reflects India’s faster productivity gains relative to the US, a
narrowing inflation gap, and slower rupee depreciation—factors that boost income
in international terms. According to the calculations of Business As Usual Scenario
(BAUS), Haryana, with a per capita income of USD 22,704, is projected to surpass
the World Bank’s High-Income threshold by 2042–43, and reach a USD 1.0 trillion
economy by 2044–45, underscoring its emerging global economic significance.
Using the Solow Growth Accounting Method (SGAM), we projected Haryana’s growth
path based on output elasticities of capital and labour estimated for 1999–2000 to
2023–24 (Scenario 1). Capital growth for each sector was taken as the maximum rate
achieved in either Phase 1 (1999–2000 to 2010–11) or Phase 2 (2011–12 to 2023–24),
assuming it can be replicated under supportive policies. For TFP, a minimum 2.0%
growth was set where estimates fell below this threshold.
For 2030–31 to 2039–40 (F-2), both capital and TFP growth are assumed at 120%
of F-1 levels, moderating to 80% in 2040–41 to 2046–47 (F-3) to reflect maturing
growth.
Projections suggest that Haryana’s Net State Value Added (NSVA) will grow at an
average annual rate of 13.3% in nominal terms, while per capita NSVA is expected to
increase by 12.25% per year. In real terms, the growth rates moderate to 9.39% for
overall NSVA and 8.34% for per capita NSVA. In US dollar terms, per capita NSVA
is projected to rise at an average annual rate of 11.33% (Figure 5 to 7). Therefore,
according to Achievable 1 Scenario, Haryana could reach High-Income Country
status by 2039–40 and a $1.0 trillion economy by 2041-42. However, sustaining this
pace of growth over the next 20-25 years will require concerted and strategic action
by the state government, as outlined in the subsequent section.
Scenario 2 applies factor-share-based output elasticities, grounded in neoclassical
theory, where each factor earns its marginal product. Unlike Scenario-1’s regression- Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 12
based elasticities—estimated from Haryana’s own data to reflect state-specific
conditions—this approach offers a normative benchmark for cross-regional
comparisons. Since, in Haryana, labour and capital markets are affected by labour
and land market rigidities, skill mismatches, credit constraints, and other distortions,
therefore, theory based fixed elasticity estimates provide an alternate path for policy
guidance.
In fact, such frictions suggest the regression-based model is more suitable for policy
guidance in short to medium term (say for next 10-12 years), the fixed factor-share
model remains valuable for long-term benchmarking once market distortions ease.
Projections using Achievable 2 Scenario show Haryana’s NSVA growing annually at
13.87% (current prices), 9.96% (constant prices) and PCNSVA rising 12.79 (current
prices), 8.88% (at constant prices) and 11.89% (US$), achieving High-Income Country
status by 2038–39 and a $1.0 trillion economy by 2040–41 (Figure 5 to 7).
That both models yield nearly identical long-term NSVA projections reflects:
(i) identical input growth rates, (ii) common, policy-anchored TFP assumptions
(minimum 2%, scaling up then moderating), (iii) elasticities mainly redistributing
growth between inputs and TFP without altering output levels, (iv) aggregation
smoothing sectoral variations, and (v) broadly similar elasticities for many sectors.
This convergence underscores the robustness of Haryana’s growth potential and the
value of using complementary modelling approaches for policy and benchmarking.
5.2 Projecting SDG and HDI Score of Haryana
At the current pace of 2 points increase per year in SDG index score, the state could
cross the 90-point benchmark by 2032–33, signalling readiness for a sustainable
high-income trajectory (Figure-8). In case of HDI improvement, under the normal
case, Haryana is projected to achieve the HDI threshold of 0.85 by the year 2039
(Figure-9). However, under the optimistic scenario, this milestone could be attained
as early as 2031, indicating that with concerted policy action, Haryana could align
human development outcomes with its economic ambitions well before reaching
high-income status.
While Haryana is nearing upper-middle-income status, advancing to high-income
will require new strategies beyond those that drove past growth. This paper identifies
the emerging challenges and proposes a policy framework for the state’s transition
to a developed economy. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 13
6. Policy Challenges
WDR 2024 notes that low-income economies rely on investment (“1i”), middle-income on
investment plus infusion (“2i”), and high-income on investment, infusion, and innovation
(“3i”). As Haryana approaches upper-middle-income status, it must urgently prioritise “2i”
through superior technology infusion. This is critical given its low or negative TFP growth
(2011–12 to 2023–24) in Agriculture, Forestry & Fishing (-0.01%), Trade, Hotel & Restaurant
(-0.60%), and Public Administration (-0.55%), indicating structural inefficiencies, weak
technology adoption, and poor human capital (Solow, 1956; Jorgenson and Griliches, 1967).
However, moderate to impressive gains are visible in Transport (0.14%), Manufacturing
(0.68%), Construction (1.49%), and Finance & Business Services (3.34%).
Haryana’s economy reflects the classic features of a dual-sector structure, evident across
almost all industries. On the one hand, there is a strong presence of highly efficient,
technologically advanced, and globally competitive firms in manufacturing, trade, and
services. On the other hand, a large proportion of enterprises remain trapped in outdated
technologies, weak management practices, and stagnant operations.
In the informal sector, the problems are more pronounced, with low technology adoption
and poor managerial capabilities being common. Like India as a whole, Haryana also faces
significant distortions in factor markets: land and labour are relatively expensive, while
access to capital remains limited, especially for enterprises outside the organised sector.
An inconsistent regulatory framework further compounds these challenges. Together,
these factors explain the heterogeneity in economic performance across sectors.
Projected to exceed US$ 9,000, per capita by 2031–32, Haryana risks slower growth
without timely reforms. A comprehensive approach to raise TFP in key sectors to at
least 2.00–2.50, is essential for Haryana to become a globally competitive high-income
economy. To ensure a smooth transition to high-income status, major policy measures are
outlined below
6.1 Research and Innovation Ecosystem
Haryana should build a forward-looking research and innovation ecosystem by
creating regional innovation hubs with local universities, NIT Kurukshetra, IIT Delhi,
and technical institutes to drive knowledge transfer, industry–academia collaboration,
and applied research in priority areas like agriculture, health, manufacturing, and
climate resilience. Fiscal incentives—tax exemptions, R&D rebates, and matching
grants—along with sector-specific incubators in agri-tech, clean energy, med-tech,
and digital services can catalyse private participation. Technology Parks, integrated
with business incubators and located in Tier-2 cities—preferably alongside world-
class universities—can unlock local talent, diversify the industrial base, and strengthen
Haryana’s position as an emerging hub that transforms innovative ideas into impactful
products, services, and policy solutions. These parks should offer ready-to-use office
space, shared laboratories, prototyping facilities, expert mentoring, and access to
venture capital, fostering a vibrant environment for start-ups and scale-ups alike. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 14
6.2 Regionally Balanced Growth
While big cities offer agglomeration benefits and higher productivity, Haryana’s next
development phase demands alternate regional growth centres for balanced and
inclusive progress. The Hisar Aviation Hub and the Ambala–Kurukshetra–Karnal–
Panipat (AKKP) - corridor, with strong transport links, educational and industrial
bases, and scope for sectoral clusters, can generate ripple effects across the state.
Coupling world-class universities with technology parks can make these hubs globally
competitive, while large-scale cultural and sports events can boost visibility and
attract investors, tourists, and talent. This integrated approach can drive inclusive,
innovation-led, and geographically balanced growth.
6.3 Women Empowerment Policy Strategy for Haryana
Women’s empowerment must be a central pillar of Haryana’s growth strategy,
anchored in a comprehensive approach that combines infrastructure, economic
opportunity, education, healthcare, safety, and governance reforms. Targeted
investments in women-friendly workplaces, skill centres, crèches, and safe transport
must be coupled with robust access to Central Government schemes such as PM
Employment Generation Programme (PMEGP), Stand-Up India Scheme, Pradhan
Mantri Rozgar Protsahan Yojana (PMRPY), and Skill India – Women-Specific Modules.
Existing state programmes—including specialised training at Haryana Vishwakarma
Skill University, HSIIDC incentives for women-led enterprises, livelihood support
under Mukhya Mantri Antyodaya Parivar Utthan Yojana (MMAPUY), the Haryana
Rural Livelihood Mission (HRLM) and mobilisation of self-help groups—provide a
strong foundation.
Haryana can boost women’s empowerment by extending some incentives, particularly
in non-NCR districts), like return-to-work grants, and subsidies for employer-run
crèches and safe transport. High-Growth Sector Job Vouchers for training in logistics,
EVs, AI/tech, and food processing, plus performance rewards for gender diversity,
can drive inclusion. Priorities include women-led clusters, start-up incubators, easier
credit with state top-ups, and co-ownership in housing.
6.4 Sector Specific Policy Measures
There should be a high-level Task Force and a real-time Economic Modernisation
Observatory to monitor transformation across all major sectors, including agriculture,
industry, construction, retail, services, health, and education. This framework must
be supported by outcome-based budgeting and real-time performance dashboards
across government departments to enhance accountability and efficiency.
In agriculture, Haryana should promote high-value crops through targeted subsidies
for poly-house farming, drip irrigation, and on-farm value addition. Cluster-based
horticulture zones with sorting, grading, and packaging facilities should focus on
fruits (Kinnow, Guava, Ber), vegetables (Tomato, Capsicum, Cucumber), medicinal
plants (Ashwagandha, Aloe vera, Tulsi, Stevia, Lemongrass, Citronella), and Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 15
floriculture (Roses, Gerbera, Carnations). Crop insurance and working-capital loans
must be expanded. There is huge scope for diversification from dominant wheat and
rice crops towards high value enterprises to take advantage of big market of NCR
Delhi in its vicinity.
Horticulture-based FPOs and private producer initiatives should be integrated with
e-NAM and contract farming, with genuine farmers prioritised for subsidies. Private
investment in logistics, quality certification, and processing should be incentivised.
In the long-term, Haryana should position itself as a premier high-value crop hub for
domestic and global markets by building advisory services, storage, and processing
infrastructure, encouraging agri-graduates to enter these ventures. Adoption of
AI, IoT, drones, land consolidation, digitised land records, cooperative farming,
and digitally integrated Kisan Resource Centres will enhance efficiency and farmer
incomes.
6.5 Modernisation and Scaling up of MSMEs
Enterprises in manufacturing, construction, trade, retail, transport, and finance in
the state urgently require modernisation and scaling up to remain competitive with
global peers. At present, the state hosts about 2.83 lakh MSMEs (2.63 lakh micro, 17.9
thousand small, and 1.76 thousand medium), employing nearly 24.9 lakh workers—
of which 15.41 lakh are in micro enterprises, 6.28 lakh in small, and 3.23 lakh in
medium (Udyam Registration Publication, Registration of Micro, Small and Medium
Enterprises (MSMEs) in India, 2022). On average, a micro enterprise employs close
to 6 workers, a small enterprise 35 workers, and a medium enterprise 183 workers.
If, through supportive policies, robust infrastructure, and professional handholding
by venture capital–like entities, Haryana succeeds in modernising and scaling up
even a small fraction of its enterprises—just 1% of micro, 2% of small, and 5% of
medium enterprises—the results would be transformative. This would translate into
2,632 micro enterprises, 357 small enterprises, and 88 medium enterprises, bringing
the total to an impressive 3,078 scalable enterprises.
Imagine, at the heart of Haryana, nearly 3,000 technologically advanced and
managerially efficient modern enterprises thriving—generating sustainable
employment for educated youth, fostering innovation, and positioning themselves
to compete on a global stage. Such a surge in enterprise vitality would not only uplift
the state’s economy but also reshape its development trajectory, turning Haryana
into a hub of modern industry and entrepreneurship.
Encouraging these MSMEs to invest at least 3% of output in R&D and adopt ERP
systems, Industry 4.0 practices, and e-commerce integration, a targeted wage
subsidy for youth, women, and semi-skilled workers could generate around one lakh
local jobs annually. Such incentives within reasonable limit are well within Haryana’s
fiscal capacity. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 16
Ease of doing business should be enhanced through digital single-window clearance,
credit guarantees, district-level MSME facilitation cells, and rapid “e-commerce on-
boarding” for platforms like ONDC and Amazon. Establishment of Plug-and-play
MSME parks in Ambala, Panipat, Karnal, and Hisar, coupled with VC Funding and
advisory services can really transform the industrial landscape in the hinterland of
Haryana.
In substance, Haryana must reorient its policy to a high-productivity, inclusive,
innovation-led model across all sectors and regions by focusing on education,
health, R&D and innovation, financial inclusion and citizen friendly governance to
make Haryana a developed economy well before 2047. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 17
7. Major Takeaways
Haryana has grown at an average annual rate of 6.84% since 1980, outperforming most
other states, albeit with uneven sectoral progress. This growth has enabled the state to
achieve a significantly higher per capita income than the national average. Haryana is now
well positioned to transition from an upper-middle-income to a developed-state status
by adopting a three-dimensional framework: (1) meeting the World Bank high-income
threshold, (2) achieving an SDG score of 90+, and (3) attaining an HDI of 0.85 or higher.
To avoid the middle-income trap, the state must enhance Total Factor Productivity across
sectors, strengthen human capital, deepen decentralisation, and accelerate technology
adoption. In agriculture, the focus should shift from the traditional rice–wheat system
toward high value crops, smart farming, direct marketing, and improved post-harvest
infrastructure. Balanced development of different regions within the state is essential
and can be advanced through IT parks, skill hubs, and industrial clusters in Tier-2 cities.
Education and skilling must be better aligned with market needs, with greater emphasis
on quality, STEM, and research and development supported by universities, PPPs, and
incubators.
Institutional innovations such as a Productivity Task Force, a Human Development
Observatory, and a Comprehensive Development Index will enable better monitoring,
strategic planning, and course correction. With proactive and well-coordinated policies,
Haryana could achieve high-income status by 2038–39 and an HDI of 0.85 by 2039, paving
the way for inclusive, broad-based, and sustainable development. Overall, the state is on
a strong trajectory to attain developed-state and high-income status well ahead of the
national target year of 2047 for Viksit Bharat. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 18
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Tables
Table-1: Average Growth and Period of Miracle Economies
Name of CountryAverage Growth(%)Period
Japan7.401945–75#
Taiwan7.201946–76#
Hongkong6.001958–88#
Singapore6.701964–95 #
Republic of Korea7.301965–95#
China10.01979–2017*
Haryana6.841981-2025@
Haryana6.981991-2025@
Haryana7.662001-2025@
Source: #Rodrik Dani “The Past, Present, and Future of Economic Growth” WP 1, Global Citizen
Foundation, June 2013
*Morrison, Wayne M. “China’s Economic Rise: History, Trends, Challenges, and Implications for the
United States” Congressional Research Service
@- Estimated
Table-2: Annual growth rates in Haryana and National Economy, in various
decades since 1980s (in Percent)
Period
Haryana
India GDP
Primary Secondary Tertiary GSDP
1980-81/1989-904.66 6.24 6.64 6.32 5.41
1990-91/1999-002.93 5.73 6.35 5.27 5.80
2000-01/2090-103.11 8.65 12.72 8.95 6.29
2010-11/2019-204.57 6.93 8.57 7.86 6.59
2020-21/2024-251.83 5.85 5.63 4.67 4.97
1980-81/1999-003.75 5.97 6.48 5.77 5.63
2000-01/2024-253.44 7.40 9.64 7.66 6.15
1990-91/2024-253.29 6.92 8.70 6.98 6.05
1980-81/2024-253.57 6.78 8.28 6.84 5.93
Source: EPWRF and MOSPI.gov.in/GSVA-NSVA Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 24
Table-3: Growth Accounting of Haryana for period 1999-00 to 2010-11:
Estimated Coefficients Case
No.Industry
ElasticityGrowth rate %
wrt K* wrt L Y K L A
1Agriculture, Forestry and Fishing 1.19 -0.19 3.052.44 1.080.36
2Mining and Quarrying0.35 0.65 -1.0540.01-12.51-6.77
3Manufacturing0.55 0.45 7.018.885.52-0.35
4Electricity, Gas and Water Supply 0.48 0.52 7.2613.910.370.40
5Construction0.39 0.61 9.9912.168.94 -0.19
6
Transport, Storage and
Communication
3.37 -2.37 13.122.900.37 4.24
7Trade, Hotel and Restaurant 1.65 -0.65 13.848.074.73 3.58
8
Finance, Real Estate and Business
Services
-0.26 1.26 13.423.6810.810.75
9
Public Administration and other
services
0.99 0.01 8.419.06 4.01-0.60
10Total1.11 -0.11 7.787.412.77-0.14
Source: Based on authors’ calculations.
* K, L,Y and A denote capital, labour, output and total factor productivity respectively.
Table-4: Growth Accounting of Haryana for period 2011-12 to 2023-24:
Estimated Coefficients Case
No.Industry
Elasticity Growth rate %
wrt K* wrt L Y K L A
1Agriculture, Forestry and Fishing 0.75 0.25 3.204.93-1.91-0.01
2Mining and Quarrying1.27 -0.27 31.41-2.8715.8539.41
3Manufacturing0.98 0.02 7.466.853.800.68
4Electricity, Gas and Water Supply 1.84 -0.84 5.525.465.840.38
5Construction0.39 0.61 5.238.720.60 1.49
6Transport, Storage and Communication 0.20 0.81 4.604.694.40 0.14
7Trade, Hotel and Restaurant0.49 0.51 7.9210.966.17-0.60
8
Finance, Real Estate and Business
Services
0.44 0.56 8.442.986.763.34
9
Public Administration and other
services
0.67 0.33 5.696.835.05-0.55
10Total0.83 0.17 6.146.071.510.86
Source: Based on authors’ calculations. *As in table-3. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 25
Table-5: Growth Accounting of Haryana for Period 1999-00 to 2023-24:
Estimated Coefficients Case
No.Industry
Elasticity Growth rate %
wrt K* wrt L Y K L A
1Agriculture, Forestry and Fishing 0.71 0.29 3.123.68 -0.420.62
2Mining and Quarrying0.71 0.2915.1818.57 1.67 1.43
3Manufacturing0.95 0.05 7.23 7.86 4.66-0.47
4Electricity, Gas and Water Supply 1.17 -0.176.39 9.69 3.11-4.42
5Construction0.53 0.47 7.6110.44 4.77 -0.15
6Transport, Storage and Communication 0.54 0.468.86 3.79 2.39 5.72
7Trade, Hotel and Restaurant0.27 0.7310.889.52 5.45 4.35
8
Finance, Real Estate and Business
Services
0.79 0.2110.933.33 8.78 6.48
9
Public Administration and other
services
0.72 0.28 7.05 7.94 4.53 0.07
10Total0.49 0.516.96 6.74 2.14 2.57
Source: Based on authors’ calculations. *As in table-3.
Table-6: Growth Accounting of Haryana for Period 1999-00 to 2010-11:
Fixed Coefficients Case
No.Industry
ElasticityGrowth rate %
wrt K* wrt L Y K L A
1Agriculture, Forestry and Fishing 0.70 0.303.05 2.44 1.08 1.02
2Mining and Quarrying0.68 0.32-1.0540.01-12.51-24.04
3Manufacturing0.64 0.36 7.018.88 5.52 -0.67
4Electricity, Gas and Water Supply 0.57 0.43 7.2613.910.37 -0.79
5Construction0.85 0.159.99 12.168.94 -1.68
6
Transport, Storage and
Communication
0.70 0.30 13.122.90 0.37 10.98
7Trade, Hotel and Restaurant 0.66 0.3413.848.07 4.73 6.90
8
Finance, Real Estate and Business
Services
0.73 0.2713.423.68 10.81 7.83
9
Public Administration and other
services
0.84 0.168.419.06 4.01 0.18
10Total0.72 0.28 7.78 7.41 2.77 1.67
Source: Based on authors’ calculations. *As in table-3. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 26
Table-7: Growth Accounting of Haryana for Period 2011-12 to 2023-24:
Fixed Coefficients Case
No.Industry
Elasticity Growth rate %
wrt K* wrt L Y K L A
1Agriculture, Forestry and Fishing 0.70 0.303.20 4.93 -1.910.32
2Mining and Quarrying0.68 0.3231.41-2.8715.8528.22
3Manufacturing0.64 0.367.46 6.85 3.80 1.70
4Electricity, Gas and Water Supply 0.57 0.435.525.46 5.84 -0.11
5Construction0.85 0.155.23 8.72 0.60 -2.29
6
Transport, Storage and
Communication
0.70 0.304.60 4.69 4.40 0.00
7Trade, Hotel and Restaurant0.66 0.34 7.9210.96 6.17 -1.42
8
Finance, Real Estate and Business
Services
0.73 0.278.44 2.98 6.76 4.45
9
Public Administration and other
services
0.84 0.165.69 6.83 5.05 -0.85
10Total0.72 0.28 6.146.07 1.51 1.35
Source: Based on authors’ calculations. *As in table-3.
Table-8: Growth Accounting of Haryana for Period 1999-00 to 2023-24:
Fixed Coefficients Case
No.Industry
Elasticity Growth rate %
wrt K* wrt L Y K L A
1Agriculture, Forestry and Fishing 0.70 0.30 3.123.68-0.42 0.67
2Mining and Quarrying0.68 0.3215.1818.57 1.67 2.09
3Manufacturing0.64 0.36 7.23 7.86 4.66 0.51
4Electricity, Gas and Water Supply 0.57 0.436.39 9.69 3.11-0.45
5Construction0.85 0.157.6110.44 4.77 -1.99
6
Transport, Storage and
Communication
0.70 0.308.86 3.79 2.39 5.49
7Trade, Hotel and Restaurant0.66 0.3410.889.52 5.45 2.74
8
Finance, Real Estate and Business
Services
0.73 0.2710.933.33 8.78 6.14
9
Public Administration and other
services
0.84 0.167.05 7.94 4.53 -0.33
10Total0.72 0.286.96 6.74 2.14 1.51
Source: Based on authors’ calculations. *As in table-3. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 27
Table-9: Haryana: Marginal Product of Labour (INR Lakh)
No.Industry2004-05 2009-102014-152019-202023-24
1Agriculture, Forestry and Fishing 0.48 -1.62 -0.41 -7.51 0.94
2Mining and Quarrying-0.10 15.48 4.92 -9.64 -6.07
3Manufacturing1.97 3.96 -27.51 21.60 1.39
4Electricity, Gas and Water Supply -3.49 4.96 -11.16 3.54 -5.30
5Construction3.17 2.25 2.89 1.86 -25.60
6
Transport, Storage and
Communication
4.55 46.80 -10.66 0.41 0.80
7Trade, Hotel and Restaurant 4.07 49.27 7.92 -208.46 3.56
8
Finance, Real Estate and Business
Services
18.14 19.35 29.98 -104.95 368.16
9
Public Administration and other
services
1.04 4.18 -51.86 3.73 1.07
10Total0.48 -1.62 -0.41 -7.51 0.94
Source: Based on authors’ calculations.
Table-10: Haryana: Marginal Product of Capital
No.Industry2004-05 2009-10 2014-15 2019-20 2023-24
1
Agriculture, Forestry and
Fishing
0.483 0.452 0.156 0.361 0.139
2Mining and Quarrying0.249 -0.233 -1.434 -16.547 -3.894
3Manufacturing0.202 0.175 0.186 0.235 0.077
4
Electricity, Gas and Water
Supply
0.005 0.045 -0.017 0.038 0.087
5Construction2.940 1.540 0.281 0.448 1.613
6
Transport, Storage and
Communication
3.964 1.237 0.972 0.098 0.639
7Trade, Hotel and Restaurant 29.245 25.248 11.065 11.882 8.992
8
Finance, Real Estate and
Business Services
0.773 1.010 1.066 0.807 2.692
9
Public Administration and other
services
0.155 0.458 0.233 0.265 0.208
10Total0.522 0.508 0.371 0.437 0.454
Source: Based on authors’ calculations. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 28
Table-11: Haryana: ICOR
No.Industry2004-05 2009-10 2014-152019-202023-24
1Agriculture, Forestry and Fishing 2.072 2.212 6.393 2.767 7.175
2Mining and Quarrying4.024 -4.299 -0.697 -0.060 -0.257
3Manufacturing4.944 5.716 5.380 4.247 12.955
4Electricity, Gas and Water Supply 198.12122.307 -57.17926.255 11.451
5Construction0.340 0.649 3.557 2.231 0.620
6
Transport, Storage and
Communication
0.252 0.808 1.029 10.199 1.565
7Trade, Hotel and Restaurant 0.034 0.040 0.090 0.084 0.111
8
Finance, Real Estate and Business
Services
1.294 0.990 0.938 1.240 0.371
9
Public Administration and other
services
6.456 2.186 4.295 3.774 4.803
10Total1.917 1.969 2.695 2.287 2.202
Source: Based on authors’ calculations. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 29
Figures
Figure-1: Per Capita Income of Selected States and India (~2011-12 prices)
Source: Authors’ calculations based on MOSPI.gov.in
Figure-2: The 10-year Moving Average of growth of Per Capita Income
of Selected States and India(R2011-12 prices)
Source: Authors’ calculations based on MOSPI.gov.in Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 30
Figure-3: Structural Transformation in Haryana: Composition of NSVA (% of total)
Source: Based on NSVA (constant) sectoral data from MOSPI from 1980-81 to 2023-24 at 2011-12
prices.
Figure-4: Structural Transformation in Haryana: Sectoral Share of Employment (% of total)
Source: Based on sectoral workforce data from National Sample Survey Office’s (NSSO)
Employment and Unemployment Survey (EUS) of 1999-00, 2004-05, 2007-08, 2009-10 and 2011-
12 and Periodic Labour Force Survey (PLFS) from 2017-18 to 2023-24. Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 31
Figure-5: Haryana: Projected Growth Rates (%) in NSVA (at constant prices) and Per Capita
NSVA (in nominal US $)
Source: Authors’ calculations based on MOSPI.gov.in
Figure-6: Haryana: High Income Economy Status
Source: Authors’ calculations based on MOSPI.gov.in Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 32
Figure-7: Haryana: Timeline to Achieving a One-Trillion-Dollar Economy
Source: Authors’ calculations.
Figure-8: Haryana: SDG Projected Score
Source: Authors’ calculations based on United Nations, Department of Economic and Social Affairs,
Sustainable Development Reports Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 33
Figure-9: Haryana: HDI Projected Score
Source: Authors’ calculations based on UNDP Human Development Reports Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 34
Appendix 1
Solow Growth Accounting Model
In present study, we have projected the GSDP of Haryana by employing the growth
accounting framework of Solow at sectoral level.
The Solow (1957) index is derived from a restricted variant of the Cobb-Douglas production
function, as opposed to an linear production function.
Yt, Kt, and Lt represent output, capital, and labour time series, respectively; x is the
capital elasticity of output, calculated by a limited least squares model. Assumed to
be disembodied and Hicks-neutral, At measures the aggregate effect of technological
advancement. This index also presumes constant returns to scale, perfect competition
in factor markets, and factor payments determined by marginal products. Subsequently,
Solow’s measure of productivity growth is expressed as
A time series for the Solow index of TFP is generated by selecting A
0
= 1; Notes Policy Perspectives for a Developed Haryana: A Three-Dimensional Framework 37