The structural change in North-East India since 1980—An application of causality test

Eight states in the northeast India viz. Arunachal, Assam, Manipur, Meghalya, Mizoram, Nagaland, Sikkim and Tripura considered as Special Category States. Due to ecological constraints both agriculture and manufacturing sector have not flourished properly. “Jump” of the economy from primary to tertiary sector is the common phenomena of almost all NE states. This paper examines the validity of fundamental concepts on the structural transformation within primary, secondary and tertiary sectors in the context of development experience of northeast India. Growth of different sectors in terms of income and employment shares can not be independent of each other. There must exist cause and effect relationship within the sectors. This paper attempts to identify the direction of the relationship using the approach of causality test and some other tools.