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India GDP Composition Sector Wise
India GDP Composition Sector Wise
The Gross Domestic Product or GDP is the indicator of the performance of an economy. According to the
estimates of 2008, India's GDP is $1.209 trillion and this is slated to make improvement in the coming times. It is
estimated that India's GDP will grow by 6.5% in the year 2009. In 2008 the country's GDP was 9%; the slowdown
that has been witnessed this year in the estimates is largely due to the slowdown witnessed by the agriculture
and the industrial sectors. A look at the India GDP composition sector wise throws up some interesting figures.
The agriculture sector contributed 17.2%; industry contributed 29.1% while the service sector had a contribution
of 52.7% according to 2008 estimates.
India is a vast country, so the sectors contributing to the country's GDP is also big in numbers. Various sectors
falling under the India GDP composition includes food processing, transportation equipment, petroleum, textiles,
software, agriculture, mining, machinery, chemicals, steel, cement and many others. Agriculture is the pre
dominant occupation in India, employing more than 50% of the population. The service sector accounts for
employing more than 25% while the industrial sector accounts for more than 10%.
India GDP means the total value of all the services and goods that are produced within the territory of
the nation within the specified time period. The country has the GDP of around US$ 1.09
trillion in 2007 and this makes the Indian economy the twelfth biggest in the whole world.
The growth rate of India GDP is 9.4% in 2006- 2007. The agricultural sector has always been an
important contributor to the India GDP. This is due to the fact that the country is mainly based on the
agriculture sector and employs around 60% of the total workforce in India. The agricultural sector
contributed around 18.6% to India GDP in 2005.
Agriculture Growth Rate in India GDP in spite of its decline in the share of the country's GDP plays a
very important role in the all round economic and social development of the country. The Growth Rate of
the Agriculture Sector in India GDP grew after independence for the government of India placed special
emphasis on the sector in its five-year plans. Further the Green revolution took place in India and this
gave a major boost to the agricultural sector for irrigation facilities, provision of agriculture subsidies and
credits, and improved technology. This in turn helped to increase the Agriculture Growth Rate in India
GDP.
The agricultural yield increased in India after independence but in the last few years it has decreased.
This in its turn has declined the Growth Rate of the Agricultural Sector in India GDP. The total production
of food grain was 212 million tonnes in 2001- 2002 and the next year it declined to 174.2 million tonnes.
Agriculture Growth Rate in India GDP declined by 5.2% in 2002- 2003. The Growth Rate of the
Agriculture Sector in India GDP grew at the rate of 1.7% each year between 2001- 2002 and 2003-
2004. This shows that Agriculture Growth Rate in India GDP has grown very slowly in the last few years.
Agriculture Growth Rate in India GDP has slowed down for the production in this sector has reduced over
the years. The agricultural sector has had low production due to a number of factors such as illiteracy,
insufficient finance, and inadequate marketing of agricultural products. Further the reasons for the
decline in Agriculture Growth Rate in India GDP are that in the sector the average size of the farms is
very small which in turn has resulted in low productivity. Also the Growth Rate of the Agricultural Sector
in India GDP has declined due to the fact that the sector has not adopted modern technology and
agricultural practices. Agriculture Growth Rate in India GDP has also decreased due to the fact that the
sector has insufficient irrigation facilities. As a result of this the farmers are dependent on rainfall, which
is however very unpredictable.
Agriculture Growth Rate in India GDP has declined over the years. The Indian government must take
steps to boost the agricultural sector for this in its turn will lead to the growth of Agriculture Growth
Rate in India GDP.
Services
Services Sector Growth Rate in India GDP has been very rapid in the last few years. The Services Sector contributes the
most to the Indian GDP. The Growth Rate of the Services Sector in India GDP has risen due to several reasons and it has also
given a major boost to the Indian economy.
Indian Economy
India gross domestic product (GDP) means the total value of all the services and goods that are manufactured
within the territory of the nation during the specified period of time.
The Indian economy is the second fastest major growing economy in the whole world with the growing rate of the GDP at 9.4%
in 2006- 2007. The economy of India is the twelfth biggest in the world for it has the GDP of US$ 1.09 trillion in 2007.
Services Sector in India
India ranks fifteenth in the services output and it provides employment to around 23% of the total workforce in the country.
The various sectors under the Services Sector in India are construction, trade, hotels, transport, restaurant, communication
and storage, social and personal services, community, insurance, financing, business services, and real estate.
Services Sector contribution to the Indian Economy
The Services Sector contributes the most to the Indian GDP. The Sector of Services in India has the biggest share in the
country's GDP for it accounts for around 53.8% in 2005. The contribution of the Services Sector in India GDP has increased a
lot in the last few years. The Services Sector contributed only 15% to the Indian GDP in 1950. Further the Indian Services
Sector's share in the country's GDP has increased from 43.695 in 1990- 1991 to around 51.16% in 1998- 1999. This shows
that the Services Sector in India accounts for over half of the country's GDP.
The Reasons for the growth of the Services Sector contribution to the India GDP
The contribution of the Services Sector has increased very rapidly in the India GDP for many foreign consumers have shown
interest in the country's service exports. This is due to the fact that India has a large pool of highly skilled, low cost, and
educated workers in the country. This has made sure that the services that are available in the country are of the best quality.
The foreign companies seeing this have started outsourcing their work to India specially in the area of business services which
includes business process outsourcing and information technology services. This has given a major boost to the Services Sector
in India, which in its turn has made the sector contribute more to the India GDP.
The Services Sector in India must be given boost
Services Sector Growth Rate in India GDP registered a significant growth over the past few years. The Indian government must
take steps in order to ensure that Services Sector Growth Rate in India GDP continues to rise. For this will ensure the growth
and prosperity of the country's economy.
infrastructure
Infrastructure Sector Growth Rate in India GDP has been on the rise in the last few years. The
Growth Rate of the Infrastructure Sector in India GDP has grown due to several reasons and this in its
turn has given a major boost to the country's economy.
Economy of India
India gross domestic product (GDP) means the total value of all the services and goods
that are manufactured within the borders of the country within the specified period of
time.
The Indian economy is the twelfth biggest in the whole world for it has the GDP of US$ 1.09 trillion in
2007. The economy of India is the second major growing economy in the whole world for it has the GDP
growing at the rate of 9.4% in 2006- 2007.
The Infrastructure Sector in India
The Infrastructure Sector in India was after independence completely in the hands of the public sector
and this hampered the growth of this sector. India's less spending on real estate, power,
telecommunications, construction, and transportation prevented the country from sustaining very high
rates of growth. The amount that India was spending on the Infrastructure Sector was 6% of GDP or
US$ 31 billion in 2002.
The contribution of the Infrastructure Sector in the India GDP
Infrastructure Sector Growth Rate in India GDP came to 3.5% in 1996- 1997 and the next year, this
figure was 4.6%. The Growth Rate of the Infrastructure Sector in India GDP increased after the Indian
government opened the sector to 100% foreign direct investment (FDI). This was done in order to boost
the Infrastructure Sector in the country. The result of opening the sector to the private sector has been
that Infrastructure Sector Growth Rate in India GDP has increased at the rate of 9%. It is estimated that
the Growth Rate of the Infrastructure Sector in India GDP will grow at the rate of 8.5% between 2006
and 2010. The biggest ongoing project in the Infrastructure Sector in India is the Golden Quadrilateral,
which is improving the main roads that connect the four cities of Chennai, Mumbai, Delhi, and Kolkata.
The Government of India must boost the Infrastructure Sector
Infrastructure Sector Growth Rate in India GDP thus has increased over the last few years due to the
efforts that have been made by the Indian government. The government of India must continue to take
steps to improve the Infrastructure Sector in the country. For this in its turn will help to boost the Indian
economy in future.
Highlights
• The service sector now accounts for more than half of India's GDP: 51.16 per
cent in 1998-99. This sector has gained at the expense of both the agricultural
and industrial sectors through the 1990s. The rise in the service sector's share
in GDP marks a structural shift in the Indian economy and takes it closer to the
fundamentals of a developed economy (in the developed economies, the
industrial and service sectors contribute a major share in GDP while agriculture
accounts for a relatively lower share).
• The service sector's share has grown from 43.69 per cent in 1990-91 to 51.16
per cent in 1998-99. In contrast, the industrial sector's share in GDP has
declined from 25.38 per cent to 22.01 per cent in 1990-91 and 1998-99
respectively. The agricultural sector's share has fallen from 30.93 per cent to
26.83 per cent in the respective years.
• Some economists caution that if the service sector bypasses the industrial
sector, economic growth can be distorted. They say that service sector growth
must be supported by proportionate growth of the industrial sector, otherwise
the service sector grown will not be sustainable. It is true that, in India, the
service sector's contribution in GDP has sharply risen and that of industry has
fallen (as shown above). But, it is equally true that the industrial sector too has
grown, and grown quite impressively through the 1990s (except in 1998-99).
Three times between 1993-94 and 1998-99, industry surpassed the growth rate
of GDP. Thus, the service sector has grown at a higher rate than industry which
too has grown more or less in tandem. The rise of the service sector therefore
does not distort the economy.
• Within the services sector, the share of trade, hotels and restaurants increased
from 12.52 per cent in 1990-91 to 15.68 per cent in 1998-99. The share of
transport, storage and communications has grown from 5.26 per cent to 7.61
per cent in the years under reference. The share of construction has remained
nearly the same during the period while that of financing, insurance, real estate
and business services has risen from 10.22 per cent to 11.44 per cent.
• The fact that the service sector now accounts for more than half the GDP
probably marks a watershed in the evolution of the Indian economy.
Tabulation
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Economy Index
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Share of the service sector in India's GDP (in Rs. crore).
Figures in brackets indicate percentage share of different sectors and subsectors.
Figures for 1994-95 onwards are on a changed base (1993-94=100), so they show huge
increases compared to the preceding period.
1998- 1997- 1996- 1995- 1994- 1993- 1992- 1991- 1990- 1985- 1980-
Year
99 98 97 96 95* 94 93 92 91 86 81
56900 53764 4985 4639 4232 1089 1021 9704 9273 6630 5017
Services 5 2 72 80 00 74 42 5 3 6 7
of which (51.16 (51.24 (49.9 (50.0 (49.1 (45.6 (45.3 (45.3 (43.6 (42.2 (40.9
) ) 1) 8) 5) 2) 4) 5) 9) 5) 9)
50328 49313 47382 46054 42560 10517 10386 10047 9833 7183 6114
Construction
(4.53) (4.70) (4.74) (4.97) (4.94) (4.40) (4.61) (4.70) (4.63) (4.59) (4.99)
15595 14385 12753
Trade, hotels 31057 28650 26827 26580 19649 14713
164355 4 8 2
& restaurants .... (13.00(12.72(12.54(12.52(12.55(12.02
(15.68) (15.61(15.53(14.81
of which ) ) ) ) ) )
) ) )
14730 13608 12154
29082 26866 25147 24933 18498 13839
155120 5 7 6
i) Trade .... (12.18(11.93(11.75(11.75(11.81(11.30
(14.78) (14.75(14.69(14.12
) ) ) ) ) )
) ) )
ii) Hotels & 9235 8649 7771 5986 1975 1784 1680 1647 1151 874
....
restaurants (0.88) (0.87) (0.84) (0.70) (0.83) (0.79) (0.79) (0.78) (0.74) (0.71)
Transport,
storage &
79819 74956 68788 63118 13057 12398 11785 11164 7951 5724
communicatio ....
(7.61) (7.50) (7.43) (7.33) (5.47) (5.50) (5.51) (5.26) (5.08) (4.68)
ns
of which
11521 11189 10647 9846 1746 1758 1778 1677 1404 1124
i) Railways ....
(1.10) (1.12) (1.15) (1.14) (0.73) (0.78) (0.83) (0.79) (0.90) (0.92)
ii) Transport .... 50144 47895 44513 41706 9209 8735 8275 7853 5309 3680
by other (4.78) (4.79) (4.80) (4.84) (3.86) (3.88) (3.87) (3.70) (3.39) (3.01)
means
655 646 652 621 188 180 175 177 163 122
iii) Storage ....
(0.06) (0.06) (0.07) (0.07) (0.08) (0.08) (0.08) (0.08) (0.10) (0.10)
iv)Communic 17499 15226 12976 10945 1914 1725 1557 1457 1075 798
....
ation (1.67) (1.52) (1.40) (1.27) (0.80) (0.77) (0.73) (0.69) (0.69) (0.65)
Financing, 11057 10243
94609 27711 25084 23972 21700
insurance, 127205 119814 5 8 14708 10791
(10.99(11.06(11.14(11.20(10.22
real estate (11.44) (11.42) (11.07(11.06 (9.39) (8.81)
) ) ) ) )
of which ) )
i) Banking & 65814 58034 51343 45190 16111 13861 13107 11169 5828 3408
....
insurance (6.27) (5.81) (5.54) (5.25) (6.74) (6.15) (6.13) (5.26) (3.72) (2.78)
ii) Real
estate, 54000 52481 51095 49419 11600 11223 10865 10531 8880 7383
....
dwelling (5.15) (5.25) (5.52) (5.74) (4.86) (4.98) (5.08) (4.96) (5.67) (6.03)
business
Community, 10970 10284
95381 26632 25624 24414 23456 16815 12835
social, 131047 124341 5 2
(11.08(11.15(11.37(11.41(11.05(10.74(10.48
personal (11.78) (11.85) (10.98(11.10
) ) ) ) ) ) )
of which ) )
i) Public
58631 48736 46635 43620 12483 12170 11570 11328 8016 5794
admin. & ....
(5.59) (4.88) (5.03) (5.07) (5.23) (5.40) (5.41) (5.34) (5.12) (4.73)
defence
ii) Other 65710 60969 56207 51761 14149 13454 12844 12128 8799 7041
....
services (6.26) (6.10) (6.07) (6.01) (5.92) (5.97) (6.00) (5.71) (5.62) (5.75)
11122 10491 9989 9264 8610 2388 2252 2139 2122 1565 1224
Total GDP:
06 91 78 12 64 64 68 83 53 66 27
* Figures for 1994-95 onwards are on a changed base (1993-94=100), so they show
huge increases compared to the preceding period.
Source: Studies by Reserve Bank of India
It sector
The information technology (IT) industry has increased its contribution to the country's GDP from 1.2 per cent in
1997-98 to 5.2 per cent in 2006-07, according to a Nasscom-Deloitte study.
The report, titled Indian IT Industry: Impacting the Economy and Society, further says that export earnings in
2007-08 will hit $40 billion, a growth of 36 per cent. Meanwhile, direct employment is expected to be 2 million in
2007-08, growing at a CAGR of 26 per cent in the last decade.
The report, while bringing forth the contribution of the IT/ITeS sector, points out that the industry has been the
trigger for many 'firsts' and has contributed not only to unleashing the hitherto untapped entrepreneurial potential
of the middle class but also taking Indian excellence to the global market.
Growth
India's Economic Growth since 1980
India Economy Growth :The rate of growth
improved in the 1980s. From FY 1980 to FY
1989, the economy grew at an annual rate of
5.5 percent, or 3.3 percent on a per capita
basis. Industry grew at an annual rate of 6.6
percent and agriculture at a rate of 3.6 percent.
A high rate of investment was a major factor in
improved economic growth. Investment went
from about 19 percent of GDP in the early
1970s to nearly 25 percent in the early 1980s.
India, however, required a higher rate of
investment to attain comparable economic
growth than did most other low-income
developing countries, indicating a lower rate of
return on investments.
Private savings financed most of India's investment, but by the mid-1980s further
growth in private savings was difficult because they were already at quite a high level.
As a result, during the late 1980s India relied increasingly on borrowing from foreign
sources (see Aid, this ch.). This trend led to a balance of payments crisis in 1990; in
order to receive new loans, the government had no choice but to agree to further
measures of economic liberalization. This commitment to economic reform was
reaffirmed by the government that came to power in June 1991.
India's primary sector, including agriculture, forestry, fishing, mining, and quarrying,
accounted for 32.8 percent of GDP in FY 1991 (see table 17, Appendix). The size of the
agricultural sector and its vulnerability to the vagaries of the monsoon cause relatively
large fluctuations in the sector's contribution to GDP from one year to another (see Crop
Output, ch. 7).