A major backward feature of India’s development experience is that the country has failed to achieve structural change especially with regard to the occupational structure. Share of agriculture in GDP has decreased from nearly 50 per cent at the time of independence to 16%. But this has occurred without a corresponding employment expansion in industrial and services sectors. The primary sector contributes nearly half of the employment by holding 54% of the population. This situation is described as structural retrogression in India’s occupational structure.
The nature of structural retrogression is that though the agriculture sectors’ share in GDP has declined, it still holds the majority of the population. Decline in the share of agriculture in GDP is a development phenomenon. At the same time, the matching occupational trend is the expansion of employment opportunities in other sectors, especially in the industrial sector. Lack of pace in industrialization is the main reason for the country’s structural retrogression.
Structural retrogression thus illustrates the most backward feature of Indian economy. Slow pace of industrialization is the main reason for this phenomenon. In economies like US and China, the industrial sector transformed through expanding production and adapting better technology. In the process, the sector has absorbed more labour from the agricultural sector. Such a development process has not happened in India. Hence, the structural retrogression in the economy can be corrected only by accelerating the industrialization process.