Sectoral composition (output and employment) - Primary, Secondary and Tertiary

EMPLOYMENT/”>Sectoral Composition With Respect To Contribution To Gross Domestic Product (GDP) and Employment

Historically, India has classified and tracked its economy and GDP in three sectors: agriculture, Industry and Services. Agriculture includes crops, Horticulture-2/”>Horticulture, milk and Animal Husbandry, aquaculture, fishing, sericulture, aviculture, Forestry and related activities. Industry includes various manufacturing sub-sectors. India’s definition of services sector includes its construction, retail, Software, IT, communications, hospitality, Infrastructure-2/”>INFRASTRUCTURE operations, Education, Health care, Banking and insurance, and many other economic activities.

Agriculture

India ranks second worldwide in farm output. Agriculture and allied sectors like forestry, logging and fishing accounted for 17% of the GDP and employed 49% of its total workforce in 2014. Agriculture accounted for 23% of GDP, and employed 59% of the country’s total workforce in 2016. As the Indian economy has diversified and grown, agriculture’s contribution to GDP has steadily declined from 1951 to 2011, yet it is still the country’s largest employment source and a significant piece of its overall socio-Economic Development. Crop-yield-per-unit-area of all crops has grown since 1950, due to the special emphasis placed on agriculture in the five-year plans and steady improvements in Irrigation, technology, application of modern agricultural practices and provision of Agricultural credit and subsidies since the Green Revolution in India. However, international comparisons reveal the Average yield in India is generally 30% to 50% of the highest average yield in the world. The states of Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, Andhra Pradesh, Telangana, Bihar, West Bengal, Gujarat and Maharashtra are key contributors to Indian Agriculture.

India is the largest producer of milk, jute and pulses, and has the world’s second-largest cattle Population with 170 million animals in 2011. It is the second-largest producer of rice, wheat, sugarcane, Cotton and groundnuts, as well as the second-largest fruit and vegetable producer, accounting for 10.9% and 8.6% of the world fruit and vegetable production, respectively. India is also the second-largest producer and the largest consumer of silk, producing 77,000 tons in 2005. India is the largest exporter of cashew kernels and cashew nut shell liquid (CNSL). Foreign Exchange earned by the country through the export of cashew kernels during 2011–12 reached ₹4,390 crore (₹ 43.9 billion) based on statistics from the Cashew Export Promotion Council of India (CEPCI). 131,000 tonnes of kernels were exported during 2011–12. There are about 600 cashew processing units in Kollam, Kerala. India’s foodgrain production remained stagnant at approximately 252 million tonnes (MT) during both the 2015–16 and 2014–15 crop years (July–June). India exports several agriculture products, such as Basmati rice, wheat, Cereals, spices, fresh fruits, dry fruits, buffalo beef meat, cotton, tea, coffee and other Cash Crops particularly to the Middle East, Southeast and East Asian countries. About 10 percent of its export earnings come from this trade.

Manufacturing

Industry accounts for 26% of GDP and employs 22% of the total workforce. According to the World Bank, India’s industrial manufacturing GDP output in 2015 was 6th largest in the world on current US dollar basis ($559 billion), and 9th largest on Inflation-adjusted constant 2005 US dollar basis ($197.1 billion). The Industrial Sector underwent significant changes due to the 1991 Economic Reforms, which removed import restrictions, brought in foreign competition, led to the privatisation of certain government-owned public-sector industries, liberalised the Investment/”>Foreign Direct Investment (FDI) regime, improved infrastructure and led to an expansion in the production of fast-moving consumer goods. Post-liberalisation, the Indian private sector was faced with increasing domestic and foreign competition, including the threat of cheaper Chinese imports. It has since handled the change by squeezing costs, revamping management, and relying on cheap labour and new technology. However, this has also reduced employment generation, even among smaller manufacturers who previously relied on labour-intensive processes.

Services

The services sector has the largest share of India’s GDP, accounting for 57% in 2012, up from 15% in 1950. It is the seventh-largest services sector by Nominal GDP, and third largest when purchasing power is taken into account. The services sector provides employment to 27% of the work force. Information technology and business process Outsourcing are among the fastest-growing sectors, having a cumulative Growth rate of revenue 33.6% between fiscal years 1997–98 and 2002–03, and contributing to 25% of the country’s total exports in 2007–08.

India is the fourth-largest civil aviation market in the world recording an air traffic of 131 million passengers in 2016. The market is estimated to have 800 aircraft by 2020. which would account for 4.3 per cent of global volumes. Civil aviation in India traces its beginnings to 18 February 1911, when Henri Pequet, a French aviator, carried 6,500 pieces of mail on a Humber biplane from Allahabad to Naini. Later on 15 October 1932, J.R.D. Tata flew a consignment of mail from Karachi to Juhu Airport. His airline later became Air India and was the first Aiasn airline to cross Atlantic Ocean as well as first Asian airline to fly jets.

The financial services industry contributed $809 billion (37% of GDP) and employed 14.17 million people (3% of the workforce) in 2016, and the banking sector contributed $407 billion (19% of GDP) and employed 5.5 million people (1% of the workforce) in 2016. The Indian Money-market/”>Money Market is classified into the organised sector, comprising private, public and foreign-owned Commercial Banks and Cooperative banks, together known as ‘scheduled banks’; and the unorganised sector, which includes individual or family-owned indigenous bankers or money lenders and non-banking financial companies. The unorganised sector and microcredit are preferred over traditional banks in rural and sub-urban areas, especially for non-productive purposes such as short-term loans for ceremonies.

The information technology (IT) industry in India consists of two major components: IT services and business process outsourcing (BPO). The sector has increased its contribution to India’s GDP from 1.2% in 1998 to 7.5% in 2012. According to NASSCOM, the sector aggregated revenues of US$147 billion in 2015, where export revenue stood at US$99 billion and domestic at US$48 billion, growing by over 13%.

The sectoral composition of an economy refers to the relative importance of different sectors of economic activity in terms of output and employment. The three main sectors of economic activity are primary, secondary, and tertiary.

The Primary Sector is concerned with the extraction and production of raw materials, such as agriculture, mining, and forestry. The Secondary Sector is concerned with the processing of raw materials into finished goods, such as manufacturing and construction. The Tertiary Sector is concerned with the provision of services, such as transportation, finance, and education.

The sectoral composition of an economy can vary significantly from country to country. In developing countries, the primary sector typically accounts for a large share of output and employment, while the secondary and tertiary sectors are relatively small. In developed countries, the secondary and tertiary sectors typically account for a large share of output and employment, while the primary sector is relatively small.

The sectoral composition of an economy can also change over time. In the past, the primary sector was the most important sector in most economies. However, as economies have developed, the secondary and tertiary sectors have become increasingly important. This shift is known as the structural transformation of the economy.

The structural transformation of the economy is driven by a number of factors, including Technological Progress, rising incomes, and Globalization/”>Globalization-3/”>Globalization. Technological progress leads to the development of new products and processes, which can create new opportunities in the secondary and tertiary sectors. Rising incomes lead to increased demand for services, which also boosts the growth of the secondary and tertiary sectors. Globalization allows countries to specialize in the production of goods and services in which they have a comparative advantage, which can also lead to changes in the sectoral composition of the economy.

The structural transformation of the economy has a number of implications for economic growth and development. First, it can lead to higher productivity and economic growth. The secondary and tertiary sectors are typically more productive than the primary sector, so the shift from the primary sector to the secondary and tertiary sectors can lead to higher overall productivity and economic growth. Second, the structural transformation of the economy can lead to increased employment opportunities. The secondary and tertiary sectors typically create more jobs than the primary sector, so the shift from the primary sector to the secondary and tertiary sectors can lead to increased employment opportunities. Third, the structural transformation of the economy can lead to improved living standards. The secondary and tertiary sectors typically pay higher wages than the primary sector, so the shift from the primary sector to the secondary and tertiary sectors can lead to improved living standards.

The sectoral composition of an economy is an important factor in determining the level of economic development of a country. The structural transformation of the economy is a key driver of economic growth and development.

What is the sectoral composition of output and employment?

The sectoral composition of output and employment refers to the distribution of economic activity across different sectors of the economy. The three main sectors are primary, secondary, and tertiary.

The primary sector is the sector of the economy that extracts natural Resources from the Environment. This includes agriculture, forestry, fishing, and mining.
The secondary sector is the sector of the economy that transforms raw materials into finished goods. This includes manufacturing, construction, and utilities.
The tertiary sector is the sector of the economy that provides services to consumers and businesses. This includes retail, finance, insurance, real estate, and government.

The sectoral composition of output and employment can vary significantly from country to country. In developing countries, the primary sector typically accounts for a large share of both output and employment. In developed countries, the tertiary sector typically accounts for a large share of both output and employment.

What are the factors that affect the sectoral composition of output and employment?

The sectoral composition of output and employment is affected by a number of factors, including:

The level of economic development: In developing countries, the primary sector typically accounts for a large share of both output and employment. In developed countries, the tertiary sector typically accounts for a large share of both output and employment.
The Natural Resources of a country: Countries with abundant natural resources tend to have a larger primary sector.
The level of technology: Countries with advanced technology tend to have a larger secondary sector.
The level of education: Countries with a highly educated workforce tend to have a larger tertiary sector.
The government policies: Government policies can affect the sectoral composition of output and employment through subsidies, taxes, and regulations.

What are the implications of the sectoral composition of output and employment?

The sectoral composition of output and employment has a number of implications for a country’s economy. For example, a country with a large primary sector is likely to be more dependent on exports of raw materials. A country with a large secondary sector is likely to be more dependent on exports of manufactured goods. A country with a large tertiary sector is likely to be more dependent on domestic demand.

The sectoral composition of output and employment also has implications for a country’s social and environmental conditions. For example, a country with a large primary sector is likely to have more rural POVERTY and Environmental Degradation. A country with a large secondary sector is likely to have more urban pollution and occupational hazards. A country with a large tertiary sector is likely to have more social inequality and traffic congestion.

What are the trends in the sectoral composition of output and employment?

The sectoral composition of output and employment has been changing over time. In the past, the primary sector accounted for the largest share of both output and employment. However, in recent decades, the secondary and tertiary sectors have grown faster than the primary sector. As a result, the primary sector now accounts for a smaller share of both output and employment.

This trend is expected to continue in the future. The secondary and tertiary sectors are expected to continue to grow faster than the primary sector. As a result, the primary sector is expected to account for an even smaller share of both output and employment in the future.

Question 1

Which of the following is not a sector of the economy?

(A) Primary
(B) Secondary
(C) Tertiary
(D) Quaternary

Answer

(D) Quaternary is not a sector of the economy. The three main sectors of the economy are primary, secondary, and tertiary. The primary sector is concerned with the extraction of natural resources, such as agriculture, mining, and forestry. The secondary sector is concerned with the processing of raw materials into finished goods, such as manufacturing and construction. The tertiary sector is concerned with the provision of services, such as retail, finance, and healthcare.

Question 2

Which of the following is an example of a primary sector activity?

(A) Farming
(B) Manufacturing
(C) Retail
(D) Education

Answer

(A) Farming is an example of a primary sector activity. Farming is the cultivation of land for the production of crops and Livestock. It is one of the oldest human activities and is still a major source of food and employment in many parts of the world.

Question 3

Which of the following is an example of a secondary sector activity?

(A) Farming
(B) Manufacturing
(C) Retail
(D) Education

Answer

(B) Manufacturing is an example of a secondary sector activity. Manufacturing is the process of converting raw materials into finished goods. It is a major source of employment and economic activity in many countries.

Question 4

Which of the following is an example of a tertiary sector activity?

(A) Farming
(B) Manufacturing
(C) Retail
(D) Healthcare

Answer

(D) Healthcare is an example of a tertiary sector activity. Healthcare is the provision of medical services to individuals and the public. It is a major source of employment and economic activity in many countries.

Question 5

Which of the following sectors of the economy is growing the fastest?