<p>During the post-economic reform period, India experienced rapid economic growth alongside a structural transformation in terms of sectors for both gross value added and labour allocation. The structural changes in labour allocation require a careful scrutiny, as in many cases, the reallocation of labour has been found to move in the wrong direction, leading to a dampening of overall productivity growth. With this question in mind, our study examines the reallocation of labour across industries in India vis-à-vis the labour productivity growth. For the analysis of growth in labour productivity, we adopt the decomposition method proposed by McMillan and Rodrik (NBER, Cambridge, 2011) and De Vries et al. (2015). This method enables us to demonstrate that during the post-economic reform structural transformation, labour allocation in India has been moving in the right direction. The study finds that the most dynamic industries during the post-economic reform period primarily belong to the service sector. Construction, however, despite being in the secondary sector, has ranked among the top industries contributing to employment generation with modest productivity growth.</p>