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(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%.
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The sectoral composition of a country’s economy refers to the relative importance of different sectors in the production of goods and services. The three main sectors are agriculture, industry, and services. Agriculture is the sector that produces food and other agricultural products. Industry is the sector that produces manufactured goods. Services is the sector that provides non-physical goods and services, such as education, healthcare, and tourism.
The sectoral composition of an economy can change over time. For example, in the early 1900s, the United States was a largely agricultural country. However, over time, the service sector has become increasingly important, while the agricultural sector has declined in importance. This trend is common to many developed countries.
There are a number of factors that can affect the sectoral composition of an economy. One factor is the level of technology. As technology advances, it can lead to productivity gains in certain sectors. For example, the development of new agricultural technologies has led to increased productivity in the agricultural sector. This has allowed farmers to produce more food with less labor, which has led to a decline in the number of people employed in agriculture.
Another factor that can affect the sectoral composition of an economy is the level of education. As the level of education in a country increases, people are more likely to be employed in the service sector. This is because the service sector often requires higher levels of education and skills than the agricultural or industrial sectors.
The sectoral composition of an economy can also be affected by government policies. For example, governments can provide subsidies to certain sectors, such as agriculture or manufacturing. This can lead to an increase in the size of these sectors. Governments can also regulate certain sectors, such as the financial sector. This can affect the level of activity in these sectors.
The sectoral composition of an economy can have a number of implications. One implication is the level of employment. The agricultural sector is typically a low-wage sector, while the service sector is typically a high-wage sector. Therefore, a shift from agriculture to services can lead to an increase in the average wage level.
Another implication of the sectoral composition of an economy is the level of economic growth. The service sector is typically more dynamic than the agricultural or industrial sectors. This means that the service sector is more likely to generate new jobs and new businesses. Therefore, a shift from agriculture to services can lead to an increase in economic growth.
The sectoral composition of an economy can also have implications for the Environment. The agricultural sector is a major source of greenhouse gas emissions. The industrial sector is also a major source of pollution. Therefore, a shift from agriculture and industry to services can lead to a decrease in environmental pollution.
In conclusion, the sectoral composition of an economy is an important factor that can affect a country’s economic growth, employment, and environmental performance. The sectoral composition of an economy can change over time, and it is affected by a number of factors, including technology, education, and government policies.
What is the sectoral composition of the economy?
The sectoral composition of the economy refers to the relative size of different sectors of the economy, such as agriculture, manufacturing, and services.
What are the different sectors of the economy?
The different sectors of the economy can be classified into three main categories: primary, secondary, and tertiary.
- The Primary Sector is involved in the extraction of natural Resources, such as agriculture, mining, and forestry.
- The Secondary Sector is involved in the processing of raw materials into finished goods, such as manufacturing and construction.
- The Tertiary Sector is involved in the provision of services, such as transportation, finance, and healthcare.
What is the importance of the sectoral composition of the economy?
The sectoral composition of the economy is important because it can provide insights into the structure of the economy and the level of economic development. For example, an economy with a large primary sector is likely to be less developed than an economy with a large secondary or tertiary sector.
What are the trends in the sectoral composition of the economy?
In general, the sectoral composition of the economy has been shifting towards the tertiary sector over time. This is due to a number of factors, such as Technological Progress, Globalization/”>Globalization-3/”>Globalization, and the rise of the service economy.
What are the challenges facing the sectoral composition of the economy?
One of the challenges facing the sectoral composition of the economy is the decline of the manufacturing sector in some countries. This is due to a number of factors, such as the rise of automation and the outsourcing of manufacturing jobs to other countries.
Another challenge facing the sectoral composition of the economy is the growth of the informal sector. The informal sector is the part of the economy that is not regulated by the government. It is often characterized by low wages, poor working conditions, and lack of social protection.
What are the opportunities facing the sectoral composition of the economy?
One of the opportunities facing the sectoral composition of the economy is the growth of the service sector. The service sector is the fastest growing sector of the economy in many countries. It offers a number of opportunities for employment and economic growth.
Another opportunity facing the sectoral composition of the economy is the rise of the Green Economy. The green economy is an economy that is focused on Sustainable Development and environmental protection. It offers a number of opportunities for businesses and investors.
The primary sector of the economy is responsible for:
(A) Manufacturing goods.
(B) Extracting raw materials.
(C) Providing services.
(D) Selling goods and services.The secondary sector of the economy is responsible for:
(A) Manufacturing goods.
(B) Extracting raw materials.
(C) Providing services.
(D) Selling goods and services.The tertiary sector of the economy is responsible for:
(A) Manufacturing goods.
(B) Extracting raw materials.
(C) Providing services.
(D) Selling goods and services.Which of the following is an example of a primary sector industry?
(A) Agriculture
(B) Manufacturing
(C) Retail
(D) FinanceWhich of the following is an example of a secondary sector industry?
(A) Agriculture
(B) Manufacturing
(C) Retail
(D) FinanceWhich of the following is an example of a tertiary sector industry?
(A) Agriculture
(B) Manufacturing
(C) Retail
(D) FinanceThe service sector is the largest sector of the economy in most developed countries. This is because:
(A) Services are essential for the functioning of the economy.
(B) Services are more profitable than other sectors.
(C) Services are less labor-intensive than other sectors.
(D) Services are more easily traded than other sectors.The service sector is growing rapidly in developing countries. This is because:
(A) Developing countries are becoming more industrialized.
(B) Developing countries are becoming more urbanized.
(C) Developing countries are becoming more affluent.
(D) Developing countries are becoming more globalized.The service sector is more labor-intensive than other sectors of the economy. This means that:
(A) It employs more people per unit of output.
(B) It produces more output per unit of labor.
(C) It is more capital-intensive than other sectors.
(D) It is less capital-intensive than other sectors.The service sector is more difficult to trade than other sectors of the economy. This is because:
(A) Services are often intangible.
(B) Services are often customized.
(C) Services are often location-specific.
(D) Services are often regulated.