Professional Documents
Culture Documents
2010
Rahul Sharma
Vivek Barolia
Yogesh Jindal
Punit Sant
Section A
6th December 2010
AUTHORISATION
Indian Economy:
A Comparative Analysis Of The Performance Of Different Sectors
ACKNOWLEDGEMENT
With immense pleasure and deep sense of gratitude, we wish to express our
sincere thanks to our Macroeconomics class lecturer and project guide Mrs.
pursue our work with vigor and keen interest. Our sincere thanks to all our
At last, we express our sincere gratitude to our peers for their moral support
and the love rendered during the course of our dissertation work.
SECTORS
Primary Sector
The economic activity depends mainly on exploitation of natural resources to
make goods.
E.g.: Agriculture and agriculture related activities, fishing, forestry, etc.
Secondary Sector
The economic activity involves manufacturing consumables from natural
products after a certain amount of value addition.
.E.g.: Transporting, manufacturing
Tertiary Sector
The economic activity involves providing intangible products like services.
E.g.: Financial services, management consultancy, telephony and IT.
The three main sectors contributing to the country’s economy are discussed
below:
1) Agriculture
The Primary sector of the economy is the change of natural resources into
primary products. Most products from this sector provides raw materials for
other industries. The share of primary sector has decreased from the past
four decades. In 1970 the share of the sector was 50% which has reduced to
29% in 1995 and is now further reduced to 25%. Major businesses in this
sector are agriculture, agribusiness, fishing, forestry, all mining and
quarrying industries.
Agriculture
Today, India is the major producer of milk, cashew nuts, coconuts, tea,
ginger, turmeric and black pepper in the whole world. It is the second largest
producer of wheat, sugar, groundnut and inland fish. It is the third largest
producer of tobacco and rice. India accounts for 10 per cent of the world fruit
production with first rank in the production of banana and sapota
(Sapodilla).
Agriculture in India is the responsibility of the states rather than the central
government. The central government formulates policy and provides
financial assistance to the states. States like Punjab, Haryana, Uttar Pradesh,
Andhra Pradesh, Tamil Nadu, Karnataka and West Bengal are major
producers of food grains in India. Himachal Pradesh and Jammu and Kashmir
are famous for fruit production. Tea is produced in the high altitudes of
Assam, Darjeeling in West Bengal, Tripura, Ooty in Tamil Nadu, Himachal
Pradesh and Kerala. Kerala is also the largest producer of natural rubber and
spices in India. Rajasthan is among the major producers of edible oils in India
and second largest producer of oil seeds. Production of non-conventional
items like moong (a type of lentil), soyabeans and peanuts are gradually
gaining importance.
Even though there has been a steady decline in its share in the
GDP, agriculturestill remains the largest economic sector and plays a crucial
role in the socio-economic development of the country.
There is an urgent need for second green revolution in Indian agriculture and
taking it to a higher trajectory of 4 per cent annual growth. Following steps
need to be taken to achieve this objective:
Fishing
Fish breeding has increased almost five times since India got
independence and is a prime industry in coastal regions.
The economic zone of India runs up to Indian ocean (370 Km) covering an
area more than 2 million square kilometers. Approximately 4.5 million ton
catches are expected from that area. India has about 14000 Km2
brackish water for aquaculture, out of which 600 Km2 were being farmed
in early 1990s; about 16,000 Km2 of freshwater lakes, ponds and
swamps; and nearly 64,000 kilometers of rivers and streams.
Mining
Mining is the term used for the extraction of useful material from the
treatment of ore, vein or coal seam. Materials obtained from extraction
may be base metals, precious metals, iron, uranium, coal, diamonds,
limestone, oil shale, rock salt and potash. Any material obtained
from agriculture or cultured in laboratory requires to be mined.
More than 52% of country's population depends on agriculture, a sector
contributing only 17.5% of the GDP. Food grain production in 2009/10 is
expected at 216.9mt, which is 17.6mt lower than the output in 2008/09. The
Kharif season is the largest contributor to this shortfall, with total production
of only 99.9mt, a decline in production of nearly 18mt. The rice output in the
kharif season amounted to 12mt less than that in 2008. However, this
shortfall is expected to be compensated to an extent by the rabi harvest.
Wheat production in the rabi season is expected to be almost flat with the
previous year’s levels and rice production, currently at 14.7mt, may
eventually turn out to be higher than 2008 production. Taking this into
consideration, the shortfall in rice production for the year as a whole may be
restricted to 11mt.
While looking at some of the agricultural products, one finds that India is the
largest producer of tea, jute and jute like fiber. India is not only the largest
producer but also the largest consumer of tea in the world. India accounts for
more than 15% of the global tea trade. Indian tea is exported in various
forms, such as tea bags and instant tea, to more than 80 countries of the
world. The total milk production in India is the highest in the world. India also
has the largest irrigated land area in the world. India is placed third in the
world in cereal production, with the second largest production capacity for
wheat and rice, and the largest production capacity for pulses.
1) Industry
Index of industrial production, which measures the overall industrial growth
rate, stood at 5.2% in 2009 and is expected at 7.5% in 2010.
• The reasons for the rise of Industry Growth Rate in India GDP
The reasons for the increase of Industry Growth Rate in India GDP are that
huge amounts of investments are being made in this sector and this has
helped the industries to grow. Further the reasons for the rise of the Growth
Rate of the Industrial Sector in India are that the consumption of the
industrial goods has increased a great deal in the country, which in its turn
has boosted the industrial sector. Also the reasons for the increase of
Industry Growth Rate in India GDP are that the industrial goods are being
exported in huge quantities from the country.
1) Services
The services sector has maintained a steady growth pattern since 1996-97,
except for the fall in 2000-01. Trade hotels, transport & communications
have witnessed growth, followed by financial services. The services sector
accounted for 62.6% of India’s total GDP in 2009.
While in most parts of the developed world, the services sector's share of
employment rose faster than its share of output, India witnessed a relatively
slow growth of jobs in the service sector. This is primarily because of the rise
in labor productivity in sectors such as information technology, which is
dependent on skilled labor. Growth in tourism and tourism-related services,
such as hotels, holds a large potential for employment generation. IT
enabled services, such as Business Process Outsourcing, have grown rapidly
in the recent past and will continue to rise. India's large English speaking
skilled work force has made the nation a major exporter of software services
and skilled manpower.
GDP $1.367 trillion (nominal: 11th; 2010)
Industry 28%
Agriculture 15%
http://www.imf.org
During early civilization all economic activities were in primary sector. When
the food production became surplus people’s need for other products
increased. This led to the development of secondary sector. The growth of
secondary sector spread its influence during industrial revolution in
nineteenth century.
After growth of economic activity a support system was needed to facilitate
the industrial activity. Certain sectors like transport and finance played an
important role in supporting the industrial activity. Moreover, more shops
were needed to provide goods in people’s neighborhood. Ultimately, other
services like tuition, administrative support developed.
• Seeing the figures, I can conclude that Indian economy is on par with
others in terms of industrialization and is aiming to reach the service
level catered by other economies.
• A comparatively high level of agricultural activity indicates that we are
capable of exporting our excess produce to countries which are
dependent on others.
http://india.gov.in/citizen/agriculture/import_export.php