Sectoral Composition with respect to contribution to Gross Domestic Product (GDP) and Employment

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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%.

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The sectoral composition of an economy refers to the relative importance of different sectors in terms of their contribution to GDP and employment. The three main sectors are agriculture, industry, and services.

Agriculture is the sector that produces food and other agricultural products. It is the oldest sector of the economy and still accounts for a significant share of GDP in many developing countries. However, its share of GDP has been declining in recent decades, as other sectors have grown more rapidly.

Industry is the sector that produces manufactured goods. It includes a wide range of activities, such as manufacturing, mining, and construction. Industry is a major source of employment in many countries, and it accounts for a significant share of GDP.

Services is the sector that provides non-physical goods and services. It includes a wide range of activities, such as retail trade, finance, and tourism. Services is the fastest-growing sector of the economy in most countries, and it now accounts for the largest share of GDP in many countries.

The sectoral composition of an economy can have a significant impact on its economic growth and development. Agriculture is a labor-intensive sector, and it tends to have a low productivity growth rate. Industry is a capital-intensive sector, and it tends to have a higher productivity growth rate. Services is a knowledge-intensive sector, and it tends to have the highest productivity growth rate.

The sectoral composition of an economy can also have a significant impact on its income distribution. Agriculture is a low-wage sector, and it tends to have a high level of income inequality. Industry is a medium-wage sector, and it tends to have a lower level of income inequality. Services is a high-wage sector, and it tends to have the lowest level of income inequality.

The sectoral composition of an economy can also have a significant impact on its environmental impact. Agriculture is a major source of greenhouse gas emissions, and it also contributes to deforestation and Water Pollution. Industry is a major source of Air Pollution and water pollution. Services is a relatively clean sector, but it can still contribute to environmental problems, such as traffic congestion and waste generation.

The sectoral composition of an economy is constantly changing. In the past, agriculture was the dominant sector in most economies. However, as economies have developed, the share of agriculture in GDP has declined, while the Shares of industry and services have increased. This trend is likely to continue in the future, as economies become more knowledge-based and service-oriented.

The sectoral composition of an economy is an important factor in determining its economic growth, development, income distribution, and environmental impact. Governments can use a variety of policies to influence the sectoral composition of their economies, such as subsidies, taxes, and regulations.

What is the sectoral composition of the economy?

The sectoral composition of the economy refers to the relative importance of different sectors of the economy in terms of their contribution to GDP and employment.

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.

What is the contribution of each sector to GDP?

In the United States, the primary sector accounts for about 1% of GDP, the secondary sector accounts for about 20% of GDP, and the tertiary sector accounts for about 79% of GDP.

What is the contribution of each sector to employment?

In the United States, the primary sector accounts for about 2% of employment, the secondary sector accounts for about 20% of employment, and the tertiary sector accounts for about 78% of employment.

What are the trends in the sectoral composition of the economy?

Over time, the sectoral composition of the economy has changed, with the tertiary sector becoming increasingly important. This is due to a number of factors, including technological advances, Globalization/”>Globalization-3/”>Globalization, and the rise of the service economy.

What are the implications of the changing sectoral composition of the economy?

The changing sectoral composition of the economy has a number of implications, including changes in the types of jobs that are available, the skills that are in demand, and the distribution of income.

What are some of the challenges facing the economy in the future?

One of the biggest challenges facing the economy in the future is the need to adapt to the changing sectoral composition of the economy. This will require workers to be able to learn new skills and employers to be able to adapt to new technologies.

What are some of the opportunities facing the economy in the future?

The changing sectoral composition of the economy also creates a number of opportunities. For example, the rise of the service economy creates new opportunities for businesses that provide services.

Question 1

The primary sector of the economy is responsible for:

(A) Manufacturing goods.
(B) Providing services.
(C) Extracting natural Resources.
(D) Selling goods and services.

Answer (C)

The primary sector of the economy is responsible for extracting Natural Resources, such as Minerals, oil, and timber.

Question 2

The secondary sector of the economy is responsible for:

(A) Manufacturing goods.
(B) Providing services.
(C) Extracting natural resources.
(D) Selling goods and services.

Answer (A)

The secondary sector of the economy is responsible for manufacturing goods, such as cars, computers, and clothing.

Question 3

The tertiary sector of the economy is responsible for:

(A) Manufacturing goods.
(B) Providing services.
(C) Extracting natural resources.
(D) Selling goods and services.

Answer (B)

The tertiary sector of the economy is responsible for providing services, such as banking, education, and healthcare.

Question 4

Which of the following is a primary sector industry?

(A) Agriculture
(B) Mining
(C) Manufacturing
(D) Retail

Answer (A)

Agriculture is a primary sector industry because it is involved in the extraction of natural resources.

Question 5

Which of the following is a secondary sector industry?

(A) Agriculture
(B) Mining
(C) Manufacturing
(D) Retail

Answer (C)

Manufacturing is a secondary sector industry because it is involved in the transformation of raw materials into finished goods.

Question 6

Which of the following is a tertiary sector industry?

(A) Agriculture
(B) Mining
(C) Manufacturing
(D) Retail

Answer (D)

Retail is a tertiary sector industry because it is involved in the sale of goods and services.

Question 7

In the United States, the primary sector of the economy accounts for approximately:

(A) 1% of GDP and 1% of employment.
(B) 2% of GDP and 2% of employment.
(C) 3% of GDP and 3% of employment.
(D) 4% of GDP and 4% of employment.

Answer (A)

In the United States, the primary sector of the economy accounts for approximately 1% of GDP and 1% of employment.

Question 8

In the United States, the secondary sector of the economy accounts for approximately:

(A) 1% of GDP and 1% of employment.
(B) 2% of GDP and 2% of employment.
(C) 3% of GDP and 3% of employment.
(D) 4% of GDP and 4% of employment.

Answer (B)

In the United States, the secondary sector of the economy accounts for approximately 2% of GDP and 2% of employment.

Question 9

In the United States, the tertiary sector of the economy accounts for approximately:

(A) 1% of GDP and 1% of employment.
(B) 2% of GDP and 2% of employment.
(C) 3% of GDP and 3% of employment.
(D) 4% of GDP and 4% of employment.

Answer (D)

In the United States, the tertiary sector of the economy accounts for approximately 4% of GDP and 4% of employment.

Question 10

Over time, the share of the economy that is accounted for by the primary sector has:

(A) Increased.
(B) Decreased.
(C) Stayed the same.

Answer (B)

Over time, the share of the economy that is accounted for by the primary sector has decreased. This is because as economies develop, they tend to move away from agriculture and towards more service-based industries.