Inter-Sectoral Linkages in Jammu & Kashmir Economy — An Econometric Analysis

Abstract

The study has explored econometrically the linkages between different sectors of the economy of Jammu & Kashmir state through co-integration approach and state space model on the net state domestic product (NSDP) data collected from the designated published sources for the period 1970-71 through 2013- 14.The study has revealed that primary sector registered a sustained decline in NSDP share, from 40.6 to 25.2 per cent, followed by the secondary sector which too has registered a decline after 1990 from 23.7 per cent to 9.2 per cent. However, the services sector has shown an upward trend from 38.5 per cent to 65.6 per cent during the study period. Some of the ECM equations have revealed even more than 90 per cent of the adjustments every year. The results of the state space model have suggested that over time, the dependence of primary sector on secondary and tertiary sectors (excluding CSPS) has decreased, while the dependence of primary sector on tertiary sector has increased.