Gayathri

Different sectors of economy

Primary sector/ Agriculture and allied activities -
Agriculture (Agriculture proper & Livestock),
Forestry & Logging, Fishing and related activities.
Secondary sector-Mining & quarrying,
Manufacturing, Electricity, Gas, Water supply, and
Construction.
Service/Tertiary sector-Trade, hotels, transport,
communication and services related to broadcasting,
Financial, real estate , Public Administration, defence
and other services.
 Brief History

Pre-Industrial Revolution era, economy was
predominantly agrarian.
China and India contributed 50% towards GDP.
The Industrial Revolution, colonialism and
emergence of US as a global power- transformed the
economy.
Countries which missed Industrial Revolution were
pushed back in the situation for economic
development
 Brief History

The 20th century witnessed many changes.
Japan-2 largest economy (after Hiroshima and
Nagasaki incident)
Germany-3rd largest economy and largest exporter
(After Second World War)
On the contrast, the Soviet Union collapsed.
 Brief History: India

After independence, there was GDP growth But was lower
License Raj restricted new initiatives.
In 1991, economy faced a Balance of Payment crisis.
Loan had to be taken from IMF, which in return demanded
de-regulation.
The Narasimha Rao government, with Manmohan Singh as
finance minister, initiated economic reforms
 Economic Reforms

economic reforms-
Industrial reforms,
Trade reforms,
Infrastructure reforms,
Taxation reforms, etc).
The reform policies introduced after 1991 removed many of
these restrictions. It reduced licensing regulations, lowered
tariffs, duties and taxes, and opened up to international
trade and investment.
Liberalisation resulted in substantial growth in the Indian
economy
 Feature of Growth

Normally an economy grow moves from
Agriculture dominated growth
agriculture , to industry dominated growth and
then to service sector dominated growth.

But India is an exception to this. In India, service sector is the

fastest growing sector with a GDP of more than 50% before
the expansion of Industry
 Indias Primary sector

India is 2nd larger producer of agriculture product after
China.
India accounts for 7.68 percent of total global agricultural
output.
Is the largest employer in Indian economy, but contributes to
a declining share in GDP.
17% share in GDP, employed 49% of total workforce in
2014.
GDP declined from 1950-2015.
Yet contributes to largest employment source.
 Secondary Sector

GDP of Industry sector is $495.62 billion and world rank is
12.
26% share in GDP, employed 22% of total workforce.
Underwent significant changes after the economic reforms,
but eventually the development stopped.
 Service Sector

In Services sector, India world rank is 11 and GDP is
$1185.79 billion.
57% share in GDP, employed 27% of total workforce in
2012.
Dominant sector in Indias GDP,
Largest exporter of service in the world, and World Bank
calls this a Service revolution
Major exporter of IT services, BPO services and software
services.
Attract foreign investment flows,
Provide large-scale employment
Service sector dominated
growth

India's services sector, while generating high income,
is still low on generating employment.
In India service sector accounts more than 50 percent
of Indias Gross Domestic Product (GDP).

Economic growth with Employment-less economy

 Growth of India

Period 1950-51 1990-91 2007 2008
Primary sector 56.5 % 34 % 18 % 15.7 %
Secondary sector 13.6 23.2 29 28%
Service sector 29.9 42.8 53 56.4 %

In 2015-16, GDP grew to 7.6 %.

But declined to 7.1% in 2016-17 due to demonetisation
(where the expectation rate was 9-9.5%).
 Dear friends

Without a proper background, will this growth in
service sector sustain?
Who are the real beneficiaries to this growth?
Is this equally distributed among people?