economy/”>Structural Changes In The Indian Economy
Change in composition of domestic product or change in NATIONAL INCOME by Industry of origin refers to change in relative significance (share) of different sectors of the economy. Generally, an economy is divided into three major sectors viz. primary, secondary and tertiary sectors.
Primary Sector includes agricultural and allied activities, Secondary Sector includes manufacturing industries and Tertiary Sector includes Services. With the development process, significance of primary sector declines while that of secondary and tertiary sectors increases. After independence, Indian economy has also experienced such changes.
The share of primary sector in GDP at Factor Cost (at 1999-2000 prices) which was 56.5 per cent in 1950-51 declined to 34.6 per cent in 1990 91 and then to 19.7 per cent in 2007-08.
The secondary sector’s share in GDP was 13.6 per cent in 1950-51 increased to 23.2 per cent in 1990-91 and further to 24.7 per cent in 2007-08. Tertiary sector’s share in GDP increased from 29.9 per cent in 1950-51 to 55.6 per cent in 2007-08, and in 2009-10 it was over 7 per cent.
When country attained independence, the share of basic and Capital Goods industries in the total industrial production was roughly one-fourth. Under the second plan, a high priority was accorded to capital goods industries, as their development was considered a pre-requisite to the overall Growth of the economy. Consequently, a large number of basic industries which produce capital equipment and useful raw materials have been set up making the country’s industrial structure pretty strong.
Social overhead capital broadly includes transport facilities, Irrigation systems, energy production, educational system and organisation and Health facilities. Their development creates favourable conditions for growth and also for better human living. The transport system in India has grown both in terms of capacity and modernisation. The railways route length increased by more than 9 thousand kms and the operation fleet practically doubled. The Indian road Network is now one of the largest in the world as a result of spectacular development of roads under various plans. India has also seen growth in Life- lixpectancy and Literacy Rate but Education has not expanded at a desired rate.
Since independence, significant progressive changes have taken place in the Banking and financial structure of India. The growth of Commercial Banks and cooperative credit societies has been really spectacular and as a result of it the importance of indigenous bankers and Money-lenders has declined. Since nationalisation, these banks have radically changed their credit policy. Now more funds are made available to priority sectors such as agriculture, small-scale industries, transportation, etc.
Changing trends in work force in india
- The analysis of recent census data 2011 reveals that overall rate of growth in workforce is 1.8% between 2001 and 2011 and it is observed to be marginally higher than that of the Population. Further, the rate of growth in work force during the 2001-2011 is lower than that of previous two decades (1980s and 1990s) – a deceleration. The rate of growth in the workforce as well as population has decelerated between 2001 and 2011. However, the rate of growth in workforce has always been higher than that of Population Growth during the last three decades. It means that there must be increase in work participation rate (WPR).
- In the context of Economic Reforms and a subsequent high rate of economic growth in the country, during 1990s and 2000s, one would have a reason to expect a high growth in workforce too in this period. But one has to note that there are two constrains in the growth of workforce. One is the growth of population, wherein at a given labour/workforce participation rate (a constant), labourforce or workforce cannot grow more than the rate at which population grow. The other constraint is the labourforce participation rate itself. Given the rate of growth in population, the rate of growth in labourforce depends on the change in the participation rate.
- Census classifies workers into two categories i.e. main and marginal workers. The main workers are those who worked for more than six months in a year and the marginal workers are those who worked for less than six months. The analysis of Census data shows that during the last two decades (1991-2011) the rate of growth in marginal workers is higher than that of main workers . The rate of growth in main workers had decelerated during 1990s when compared with previous decade (1980s), whereas among marginal workers it accelerated during the same period. However, it appears that there is revival of growth in main workers during 2000s but the rate of growth is still less than that of 1980s. On the other hand there is a deceleration in the rate of growth in marginal workers between 2001 and 2011 but the rate is still higher than that of 1980s and higher than that of main workers. The analysis shows that marginal workers growing faster than main workers. Marginal workers have grown to account for one-fourth of the total workforce in India in 2011.
- It is worth mentioning that unlike the NSSO’s recent estimates, Census data shows a marginal increase in the WPR between 2001 and 2011. As the rate of growth in total workforce is higher than that of population, the WPR is increasing, though it is a marginal increase. This marginal rise in overall WPR is, in fact, entirely due to increase in marginal workers’ WPR. Between main and marginal workers, the main workers’ WPR had in fact shown a decline since 1991 whereas there is a corresponding increase in marginal workers’ WPR during the same period. Thus, there is an increase of marginal workers’ share in the total workforce, particularly since 1991.
- It is observed from the census data that the occupational distribution in the total workforce is still tilted towards agricultural activities – more than half of the workforce is concentrated in agriculture. However, a striking feature of the trend is Growth and Structure of Workforce in India – Venkatanarayana and Suresh Naik Page 10 that there is a sharp decline in the size of self-cultivators and at the same there is a bulging agricultural labour category.
- It is observed that during the 2001-11, about 79 million is the net addition to the total workforce. Of the total net addition to the workforce, during 2001-11, one–third of it is absorbed in the agriculture and the rest in the non-agriculture. Thus, a large part of the increasing labour force is getting absorbed in non-agriculture. Relatively higher growth of workforce engaged in non-agriculture when compared with the agriculture is observed during the last three decades.
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The Indian economy has undergone significant structural changes in recent decades. These changes have been driven by a number of factors, including rapid economic growth, Technological Progress, and demographic shifts.
One of the most notable changes has been the decline in the share of agriculture in GDP. In 1991, agriculture accounted for over 40% of GDP. By 2019, this share had fallen to just 15%. This decline is due in part to the rapid growth of other sectors, such as manufacturing and services. However, it is also due to the fact that agriculture is becoming increasingly less productive.
Another major change has been the rise of the services sector. In 1991, the services sector accounted for just 30% of GDP. By 2019, this share had doubled to 60%. The growth of the services sector has been driven by a number of factors, including the rise of information technology, the expansion of the tourism industry, and the growth of the retail sector.
The manufacturing sector has also grown in recent years, but at a slower pace than the services sector. In 1991, the manufacturing sector accounted for 17% of GDP. By 2019, this share had increased to 19%. The growth of the manufacturing sector has been driven by a number of factors, including the government’s focus on manufacturing, the rise of domestic demand, and the expansion of exports.
The structural changes in the Indian economy have had a number of implications. One of the most important is that they have led to a decline in POVERTY. In 1991, over 40% of Indians lived below the Poverty Line. By 2019, this share had fallen to just 10%. This decline is due in part to the rapid economic growth that has occurred over the past few decades. However, it is also due to the fact that the growth has been relatively inclusive, with the benefits being shared by a broad cross-section of the population.
The structural changes have also led to an increase in inequality. In 1991, the Gini coefficient, which measures income inequality, was 32. By 2019, this had increased to 35. This increase is due in part to the fact that the growth of the services sector has been concentrated in a few high-paying occupations. However, it is also due to the fact that the government has not done enough to redistribute income.
The structural changes in the Indian economy are likely to continue in the coming years. The government has set a target of achieving a GDP growth rate of 8% per year. If this target is achieved, it will lead to further structural changes, such as a decline in the share of agriculture in GDP and a further rise in the share of the services sector.
The structural changes in the Indian economy have had a number of positive implications. They have led to a decline in poverty, an increase in economic growth, and a rise in living standards. However, they have also led to an increase in inequality. The government needs to take steps to address this issue, such as investing in education and healthcare, and providing social safety nets for the poor.
What are the structural changes in the Indian economy?
The Indian economy has undergone significant structural changes in recent years. These changes have been driven by a number of factors, including economic reforms, Globalization/”>Globalization-3/”>Globalization, and demographic changes.
One of the most significant structural changes has been the shift from agriculture to industry and services. In the early 1990s, agriculture accounted for more than half of India’s GDP. However, by 2017, this share had fallen to just 16%. The growth of industry and services has been driven by a number of factors, including the opening up of the economy to foreign Investment, the development of Infrastructure-2/”>INFRASTRUCTURE, and the rise of a middle class.
Another significant structural change has been the decline in the share of EMPLOYMENT in agriculture. In the early 1990s, more than half of India’s workforce was employed in agriculture. However, by 2017, this share had fallen to just 46%. The decline in agricultural employment has been driven by a number of factors, including the mechanization of agriculture, the shift to higher-value crops, and the growth of non-agricultural employment opportunities.
The structural changes in the Indian economy have had a number of positive effects. They have led to higher economic growth, more employment opportunities, and a more diversified economy. However, they have also led to some challenges, such as rising inequality and Environmental Degradation.
What are the implications of these structural changes for the Indian workforce?
The structural changes in the Indian economy have had a number of implications for the Indian workforce. One of the most significant implications is the decline in the share of employment in agriculture. This decline has led to a number of challenges, such as Unemployment and underemployment in rural areas.
Another implication of the structural changes is the growth of employment in the informal sector. The informal sector is a large and growing part of the Indian economy, and it is estimated to account for more than half of all employment in India. However, employment in the informal sector is often characterized by low wages, poor working conditions, and lack of social security benefits.
The structural changes in the Indian economy have also led to a change in the occupational structure of the workforce. The share of employment in manufacturing has declined, while the share of employment in services has increased. This change has led to a number of challenges, such as the need for workers to retrain and upskill.
Overall, the structural changes in the Indian economy have had a significant impact on the Indian workforce. These changes have led to a number of challenges, but they have also created new opportunities. The Indian government and businesses need to work together to address the challenges and capitalize on the opportunities created by the structural changes.
What are the challenges and opportunities for the Indian economy in the future?
The Indian economy is facing a number of challenges, including rising inequality, environmental degradation, and a slowdown in economic growth. However, there are also a number of opportunities for the Indian economy, such as the demographic dividend, the rise of the middle class, and the growth of the digital economy.
The demographic dividend refers to the fact that India has a large and young population. This population can be a source of economic growth if it is educated and employed. However, if the population is not educated and employed, it can be a source of social unrest.
The rise of the middle class is another opportunity for the Indian economy. The middle class is a growing market for goods and services, and it can drive economic growth. However, the middle class is also demanding better infrastructure, education, and healthcare.
The growth of the digital economy is another opportunity for the Indian economy. The digital economy is growing rapidly in India, and it can create new jobs and opportunities. However, the digital economy is also creating new challenges, such as cyber security and data privacy.
The Indian government and businesses need to work together to address the challenges and capitalize on the opportunities for the Indian economy.
Question 1
Which of the following is not a structural change in the Indian economy?
(A) The decline in the share of agriculture in GDP
(B) The rise in the share of services in GDP
(C) The decline in the share of manufacturing in GDP
(D) The rise in the share of the informal sector in employment
Question 2
Which of the following is the main reason for the decline in the share of agriculture in GDP?
(A) The rise in productivity in agriculture
(B) The decline in the demand for agricultural products
(C) The shift of labor from agriculture to other sectors
(D) The decline in the government’s support for agriculture
Question 3
Which of the following is the main reason for the rise in the share of services in GDP?
(A) The rise in demand for services
(B) The rise in productivity in services
(C) The shift of labor from agriculture to services
(D) The rise in the government’s support for services
Question 4
Which of the following is the main reason for the decline in the share of manufacturing in GDP?
(A) The rise in productivity in manufacturing
(B) The decline in the demand for manufactured goods
(C) The shift of labor from manufacturing to other sectors
(D) The decline in the government’s support for manufacturing
Question 5
Which of the following is the main reason for the rise in the share of the informal sector in employment?
(A) The decline in the demand for formal sector jobs
(B) The decline in the government’s support for formal sector jobs
(C) The shift of labor from the informal sector to the formal sector
(D) The rise in productivity in the informal sector
Question 6
Which of the following is the main impact of the structural changes in the Indian economy?
(A) The decline in the share of agriculture in GDP has led to a decline in rural incomes.
(B) The rise in the share of services in GDP has led to an increase in urban incomes.
(C) The decline in the share of manufacturing in GDP has led to a decline in industrial output.
(D) The rise in the share of the informal sector in employment has led to an increase in poverty.
Question 7
Which of the following is the main policy challenge facing the Indian government in order to address the impact of the structural changes in the economy?
(A) The government needs to invest in agriculture in order to raise productivity and incomes in rural areas.
(B) The government needs to invest in infrastructure in order to support the growth of the services sector.
(C) The government needs to invest in education and skills training in order to improve the productivity of the workforce.
(D) The government needs to provide social safety nets in order to protect the poor and vulnerable from the negative effects of the structural changes.