Examining the Impact of Sectoral Dynamics on Economic Growth: A Comparative Study of the Manufacturing and Services Sector for India

Gross domestic product is crucial for precisely measuring economic growth and includes gross private investment, net exports, government purchases, and total personal consumption spending. In this research, we utilised the Cobb-Douglas production function, a widely accepted economic model, to determine how different macroeconomic factors affect the components of the GDP. The study examined secondary data from RBI bulletins and the Economic Survey of India between 2012-13 and 2022-23. The study’s dependent variable was GDP components, which were calculated using some macroeconomic growth indices, including FDI, import, export, NET FII Equity, and NET FII Debt. The correlation was established using multiple regression analysis and shown to significantly influence the GDP components of FDI, Net FII equity, and import. However, it failed to detect Net FII debt’s significant influence on GDP sub-components. While exports had little impact on the Manufacturing and Industrial sectors of GDP, services had a huge impact.