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Trends in Sectoral Composition of Income in both countries

National Income
National income is the total value a country’s final output of all new goods
and services produced in one year.
 To study the sector wise composition of National Income in India
 To compare the trends in India national Income in comparison to China
 To understand the factors affecting the sectoral changes in these two
 To understand if the growth achieved is a balanced growth.
Composition of National Income in India
This group assignment is focused on understanding the macroeconomic
indicators of Indian economy and comparing them with any other country to
assess its strengths and weaknesses.
This analysis gives us the deeper insights on how the composition of a
country’s national income impacts its economic growth. We have used the
secondary data available on various websites from RBI, WorldBank, IMF etc
to prepare this report.
Indian economy is classified in three sectors — Agriculture and allied,
Industry and Services.
Agriculture sector includes
1) Agriculture (Agriculture proper & Livestock)
2) Forestry & Logging
3) Fishing and related activities
Industry includes
1) Manufacturing (Registered & Unregistered)
2) Electricity
3) Gas
4) Water supply
5) Construction.
Services sector includes
1) Trade
2) Repair
3) Hotels and restaurants
4) Transport

5) Storage
6) Communication & services related to broadcasting
7) Financial
8) Real estate services
9) Community
10) Social & Pers. Services
Services sector is the largest sector of India. Gross Value Added (GVA) at
current prices for Services sector is estimated at 61.18 lakh crore INR in
2014-15. Services sector accounts for 52.97% of total India's GVA of 115.50
lakh crore INR. With GVA of Rs. 34.67 lakh crore, Industry sector contributes
30.02%. While, Agriculture and allied sector shares 17.01% and GVA is
around of 19.65 lakh crore INR. At 2011-12 prices, composition of Agriculture
& allied, Industry, and Services sector are 16.11%, 31.37%, and 52.52%,
respectively.India is 2nd larger producer of agriculture product. India
accounts for 7.68 percent of total global agricultural output. GDP of Industry
sector is $495.62 billion and world rank is 12.In Services sector, India world
rank is 11 and GDP is $1185.79 billion. Contribution of Agriculture sector in
Indian economy is much higher than world's average (6.1%). Contribution of
Industry and Services sector is lower than world's average 30.5% for Industry
sector and 63.5% for Services sector.At previous methodology, composition
of Agriculture & allied, Industry, and Services sector was 51.81%, 14.16%,
and 33.25%, respectively at current prices in 1950-51. Share of Agriculture &
allied sector has declined at 18.20% in 2013-14. Share of Services sector has
improved to 57.03%. Share of Industry sector has also increased to 24.77%

23 INR per Chinese yuan (CNY) on 2 Jan 1996.16% of total global wealth in nominal and PPP terms.38% in 2014. India crossed 2 trillion mark and China crossed 10 trillion.20% in year 1984 and minimum 3. Industry (43. respectively. During period 1980-2014. respectively. GDP of China is 5. India's growth rate is estimated at 7.08% and 23.627. Sector wise GDP composition of China in 2014 are : Agriculture (9.20 times richer in ppp method.39 times more than India at nominal and ppp terms. Average GDP growth of China was 9. Value of Indian rupees has fallen to 10.18 INR per 1 CNY in 1 Jan 2015. China crossed $1 trillion mark in 1998 while India in 2007 at exchange rate basis. GDP of China at ppp terms is 1. China is at 1st and India is at 3rd place in 2014. respectively.a)Trends in sectoral composition of income in India and China China and India is the two emerging economy of the world. According to sector wise GDP composition of India in 2014 are as follows : Agriculture (17.06% in 1991. On PPP basis. .80% in 1990. Indian rupee was at 4.06 and 2. India's growth rate was 9-10% in 4 years. Both countries together share 16. China and India together account for 52. while China in 7 years. China grew by more than 10% in 16 years while India in only one. On PPP basis.23% in same period. gdp per capita of China is $12.26% in 2010 and a record low of 1.66 times richer than India in nominal method and 2.7 times more than compare to nominal basis.17% in 2014. This ratio of India is 3.4%). respectively. Out of 35 years from 1980 to 2014. Now in 2014.9%).60.77% (PPP) and 48.9%). Industry (24. In 1980. Among Asian countries.7%). India reached an all time high of 10. China is 4. India's gdp per capita is around $1.589. per capita gdp of China is $7.855. China and India is 2nd and 9thlargest country of the world.2%) and Services (57. In nominal terms. China attains maximum growth of 15. India's rank in world and Asia is 145 and 33.9%) and Services (46. respectively in nominal basis. 80th position in world and 19th in Asia.880 and of India is $5. size of economy of China and India was $309 and $181. Growth rate of China is estimated at 7.99% (Nominal) of total Asia's GDP.8% compare to India's 6.

33 201 8 3.944.224.686.308.53 2 20.51 1 5.850 1.258 748.096 4.311.229.75 201 2 1.308.157 9.495. $) Nominal GDP capita ($) PPP GDP capita (Int.510.58 4 4.508.30 201 0 1.Yea r Nominal GDP (billions $) PPP GDP (billions Int.653.095.922.55 6.821 8.600.105.484 9.776 6.769 4.639.148.813.864.01 .219 839.64 9.06 0 7.57 7 7.976 7.36 201 3 1.94 10.10 200 3 618.277.12 6 4.674 2.48 9.75 6.158.544.456.36 3 28.804 16.193.847 1.590 11.747 14.85 10.375.125 6.55 9 18.32 1 1.46 6.514 2.818 5.745.619.90 1 3.826.722.105 12.96 5 10.652.273.89 9.826.908 5.650.808.402.789.62 4 2.941.270 8.386.473.327.173.599 11.50 0 11.77 1 7.804 572.835.63 5 13.30 3 8.655 16.085.565.012.659.73 5 26.99 5 7.81 4 1.16 4 6.259.95 2 6.080.36 8 6.006.47 6.691 7.053.15 7 9.644.648 5.59 3 4.975.93 7 9.671.220 2.623 18.400 9.958.589 1.875.98 2 7.927 2.482 5.968.10 201 7 2.30 201 5 2.87 1 1.996.790.783.252.154.85 3 7.92 2 5.76 201 1 1.788.626.369 1.076 10.433 3. $) Growth (%) India China India China India China India China Indi a Chin a 202 0 3.287.218 2.588.424.77 5 24.412 8.90 7.211.70 6.960 657.708.430.482.049.188.916 3.50 4 1.812.928 7.501 10.428.456.65 6.885.855.258 3.662.619 12.898 17.968.879.00 201 6 2.084.57 7 9.323.449.80 14.05 8 7.749.51 7 1.45 1 1.43 9 3.380 7.076 8.496.00 5 11.75 8 4.373 5.256 2.27 2 1.17 7.06 5 7.103.700 3.423.69 5 10.018 7.58 8 2.59 9 8.118 2.844.793.365.246 7.638 9.876.708.93 2 7.902.30 200 4 721.550 22.76 201 4 2.08 0 1.830 12.671 14.269.460 5.156.546 20.896 13.361 13.822 1.605 4.81 9 6.678 6.324 9.617.41 3 8.111 10.412 3.623 3.504.843.08 7.023 4.89 0 2.574.10 1 10.462.825.626.66 2 9.50 0 8.238.873 10.43 4 15.932.262.935.941.159 3.33 201 9 3.033.018 11.26 12.716 4.71 4 2.041 2.547.979 4.388 6.801.938.967.755.495.469.30 6 12.314.124.67 6 14.528.265.41 200 9 1.812.14 4 2.370.437.68 200 5 834.21 200 8 1.399.025 4.384 6.265 5.003.299 1.380.619.20 200 6 949.2 6 10.521.949.445 7.845.29 11.498.71 2 7.522 1.937.81 1 5.64 200 7 1.45 4 17.996 5.212 9.704.

45 199 5 366.205.124.841 1.317.455.767 1.116 1.93 199 3 284.23 199 0 326.560 2.608 404.09 .189 985.135 2.495 997.670 3.600 756.636 1.100.777 3.841 1.579.849 4.967 2.010 1.064 1.828 2.67 199 2 293.791 892.313.041.793.013 1.673 1.97 199 7 423.050 1.60 199 9 466.254.42 200 1 493.73 199 6 399.100.19 199 4 333.192.934 1.262 499.737 1.200 2 523.194 641.045.236 2.854 2.768 1.044 1.414 3.859 1.99 200 0 476.014 582.975.842 424.378.43 199 1 274.775 1.25 199 8 428.671.441.964 1.200 1.218 2.418 1.


began in the early 1990s and served to accelerate the country's growth. including industrial deregulation. yet traces of its past autarkic policies remain. and reduced controls on foreign trade and investment. privatization of state-owned enterprises. fiscal 2010 China became the world's largest exporter. centrally planned system to a more market-oriented one that plays a major global role . Reforms began with the phasing out of collectivized agriculture. increased autonomy for state India is developing into an open-market economy. which averaged .Observation s Economy overview China India Since the late 1970s China has moved from a closed. and expanded to include the gradual liberalization of prices. Economic liberalization measures.

and a multitude of services." explicitly looking to foster globally competitive industries. Measured on a under 7% per year from 1997 to 2011. business outsourcing services. accounting for nearly twothirds of India's output with less than one-third of its labor force. India's economic growth began slowing in 2011 because of a decline in investment. modern agriculture. growth of the private sector. In recent years. and software workers. China has implemented reforms in a gradualist fashion. handicrafts. but. India's diverse economy encompasses traditional village farming. and opening to foreign trade and investment. and investor pessimism about the government's commitment to further economic reforms and about the global situation. services are the major source of economic growth. rising inflation. Slightly less than half of the work force is in agriculture. . in July 2005 China moved to an exchange rate system that references a basket of currencies. From mid 2005 to late 2008 cumulative appreciation of the renminbi against the US dollar was more than 20%. the Indian Government announced additional reforms and deficit reduction measures. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. China has renewed its support for state-owned enterprises in sectors considered important to "economic security. development of stock markets and a modern banking system. when Beijing allowed resumption of a gradual appreciation and expanded the daily trading band within which the RMB is permitted to fluctuate. In late 2012. a wide range of modern industries. After keeping its currency tightly linked to the US dollar for years. including allowing higher levels of foreign participation in direct investment in the but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010. caused by high interest rates.

Economic development has progressed further in coastal provinces than in the interior. (b) facilitating higher-wage job opportunities for the aspiring middle class. India has many challenges that it has yet to fully address. corruption. Growth in 2013 fell to a decade low. inadequate transport and agricultural infrastructure. The dollar values of China's agricultural and industrial output each exceed those of the US.purchasing power parity (PPP) basis that adjusts for price differences. However. high spending and poorly-targeted subsidies. China is second to the US in the value of services it produces. Rising macroeconomic imbalances in India and improving economic conditions in Western countries. and (d) containing environmental damage and social strife related to the economy's rapid transformation. decades-long civil litigation dockets. per capita income is below the world average. including poverty. (c) reducing corruption and other economic crimes. an inefficient power generation and distribution system. including rural migrants and increasing numbers of college graduates. Still. The outlook for India's longterm growth is moderately positive due to a young population and corresponding low dependency ratio. and increasing integration into the global economy. led investors to . including: (a) reducing its high domestic savings rate and correspondingly low domestic consumption. and by 2011 more than 250 million migrant workers and their dependents had relocated to urban areas to find work. healthy savings and investment rates. having surpassed Japan in 2001. violence and discrimination against women and girls. and accommodating rural-tourban migration. inadequate availability of quality basic and higher education. limited nonagricultural employment opportunities. as India's economic leaders struggled to improve the country's wide fiscal and current account deficits. The Chinese government faces numerous economic challenges. China in 2013 stood as the secondlargest economy in the world after the US. ineffective enforcement of intellectual property rights.

including debt overhang from its creditfueled stimulus program. Deterioration in the environment . prompting a sharp depreciation of the rupee. especially in the North . However. The government's 12th Five-Year Plan. Several factors are converging to slow China's growth. emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent in the future on shift capital away from India. soil erosion. China continues to lose arable land because of erosion and economic development. . industrial overcapacity.notably air pollution. resulting in a surge of inbound capital flows and stabilization of the rupee. inefficient allocation of capital by state-owned banks. The Chinese government is seeking to add energy production capacity from sources other than coal and oil. adopted in March 2011 and reiterated at the Communist Party's "Third Plenum" meeting in November another long-term problem. due to a reduction of the current account deficit and expectations of post-election economic reform. and the steady fall of the water table. and the slow recovery of China's trading partners. investors' perceptions of India improved in early 2014.One consequence of population control policy is that China is now one of the most rapidly aging countries in the world. focusing on nuclear and alternative energy development.

) note: data are in 2013 US dollars 7.54 trillion (2011 est.39 trillion (2013 est. $13. However.630) (2013) lowest 10%: 1.5% (2011 est.) $4.63 trillion (2011 est.1% (2012 est.) 7.) 6.7% highest 10%: 30% note: data are for urban households only (2009) $4.) $12.8% (2010 est.8% services: 56.1% note: in 2011.) $4.100 (2012 est. China set a new poverty line at RMB 2300 (approximately US $3.9% services: 46. China has made only marginal progress toward these rebalancing goals.300 (2011 est.800 (2013 est.4% industry: 25. exports.real growth rate GDP .7% (2013 est.43 trillion (2012 est.7% (2012 est.3% (2011 est. and heavy industry.) $9.2% (2013 est.) 5.1% (2013 est.) $11.900 (2012 est. including giving the market a more decisive role in allocating resources.) $9.) note: data are in 2013 US dollars agriculture: 17.800 (2011 est.) lowest 10%: 3.) $3.) 7.833 trillion (2012 est.) $3.) $8.1% (2005) .6% highest 10%: 31.) 9.) $4.) note: data are in 2013 US dollars 3.99 trillion (2013 est.GDP (purchasing power parity) GDP .per capita (PPP) GDP composition by sector Population below poverty line Household income or consumption by percentage share fixed investments.9% (2013 est. The new government of President XI Jinping has signaled a greater willingness to undertake reforms that focus on China's long-term economic health.000 (2013 est.) 29.) note: data are in 2013 US dollars agriculture: 10% industry: 43.

transportation equipment. mining. toys.6 million note: by the end of 2012. textiles and apparel.118 trillion expenditures: $2.5% (2012 est. chemicals. rail cars and locomotives.8% (2013 est.) 9. steel.7% (2012 est.292 trillion (2013 est.3 (2013) 47. coal.0040 billion (2013 est.6 billion (2013 est.) 36. and other metals. cement. cement.3 million (2013 est. petroleum. including automobiles. machinery. petroleum.) note: data are for registered urban unemployment.) textiles. ships.6% (2012 est. consumer products (including footwear. machine building.) world leader in gross value of industrial output. and electronics).6% industry: 30. armaments. aircraft. transportation equipment. fertilizers. pharmaceuticals agriculture: 49% industry: 20% services: 31% (2012 est. which excludes private enterprises and migrants 47.6% (2013 est.) 797.) 4. telecommunications revenues: $181.Inflation rate (consumer prices) Labor force Labor force by occupation Unemployme nt rate Distribution of family income . food processing.) 8. steel.4 (2012) 487.1% (2013 est.8 (1997) .6% (2013 est. aluminum. chemicals.) 2.Gini index Budget Industries 2. software. iron.3% services: 36. China's population at working age (15-64 years) was 1.1% (2012 est.3 billion expenditures: $281.) 9.) revenues: $2. mining and ore processing.1% (2012 est.8 (2004) 37.) agriculture: 33.) 8. food processing.) 4.

radio telephone handsets.) $378. cotton.2 (2013 est.7%. Switzerland 6. South Korea 4.2 billion (2013 est. onions.9%.) $863. sheep.6% (2013 est. motor vehicles.8%.2%. peanuts. including data processing equipment. oilseed. machinery.9 billion (2012 est. chemicals. millet.5 billion (2013 est. wheat. vehicles. apples. United States 7. precious stones.049 trillion (2012 est.3%. wheat. US 12. sugarcane.) rice.) Renminbiyuan (RMB) per US dollar 6. satellites 7. jute.95 trillion (2013 est. potatoes.8%. poultry.4%.9 billion (31 December 2012 est.2 billion (31 December 2013 est. Japan 8. Japan 6. US 5. Saudi Arabia 6. China 5%.) $2. nuclear reactor.9% (2013 est. chemicals China 10.2%.) world leader in gross value of agricultural output.) Indian rupees (INR) per US dollar 58.2 billion (31 December 2013 est. optical and medical equipment. and machinery components. metal ores. precious stones.1% (2012) $467.8% (2013 est. pork.7%.1% (2012) $412. oil and mineral fuels. Hong Kong 4.) $737 billion (31 December 2012 est. Singapore 4. apparel UAE 12.) $488.3%.) .) 0. tea. integrated circuits Hong Kong 17.) crude oil.8 billion (2012 est.4%. lentils.1% (2013 est. soybeans South Korea 9. goats. cotton. Australia 5%. Germany 4.) $1. iron and steel. apparel.8%. fish $313. potatoes. tea.8%. machinery. Taiwan 8%.) electrical and other machinery. boiler. barley. rice.21 trillion (2013 est. textiles. dairy products.Industrial production growth rate Agriculture products Exports Exports commodities Exports partners Imports Imports commodities Imports partners Debt external Exchange rates equipment. fertilizer. iron and steel.) $1. UAE 7. corn. oilseed.68 (2013 est.818 trillion (2012 est.) petroleum products.) $296.) electrical and other machinery. fish $2. commercial space launch vehicles. US 16.

GDP at the official exchange 53. the data include treasury debt held by foreign entities.47 billion (2012 est. data cover both central government debt and local government debt.67 trillion (2013 est.4% of GDP (2013 est. such as for retirement.4 billion (2012 est.) note: data cover central government debt.7703 (2010 est.) $3.) -$91.319 (2008) 1 April . and unemployment.79 billion (2013 est.) $1.8 billion (2013 est. the official exchange rate measure of GDP is not an accurate measure of China's output.) 6.9385 (2008) calendar year 22. China Asset Management Company debt.) 26. Ministry of Railway debt. the data exclude debt issued by subnational entities. data exclude policy bank bonds.) $296 billion (28 December 2012 est.) $9.) 45. as well as intra-governmental debt.) 51.388 trillion (31 December 2012 est. debt instruments for the social funds are not sold at public auctions $295 billion (31 December 2013 est.405 (2009) 43.) $215.) . intra-governmental debt consists of treasury borrowings from surpluses in the social funds.72 trillion (approximately US$1.726 (2010 est. which China's National Audit Office estimated at RMB 10.33 trillion note: because China's exchange rate is determine by fiat.821 trillion (31 December 2013 est.66 trillion) in 2011.8% of GDP (2013 est. and exclude debt instruments issued (or owned) by government entities other than the treasury. and non-performing loans $3.437 (2012 est.1% of GDP (2012) note: official data.) $182.) -$74. rather than by market forces.31 March 51.7% of GDP (2012 est.3123 (2012 est.) 6.) 48.Fiscal year Public debt Reserves of foreign exchange and gold Current Account Balance GDP (official exchange rate) 6.8314 (2009) 6. medical care.

) Commercial bank prime lending rate 5.) 7.1 billion (31 December 2013 est.263 trillion (31 December 2012 est. GDP at purchasing power parity provides the best measure for comparing output across countries (2013 est.) $6.401 trillion (31 December 2012 est.) $1.4 billion (31 December 2012 est.) Stock of domestic credit $11.) $317.) 2.) $1.344 trillion (31 December 2012 est.015 trillion (31 December 2011) $1.753 trillion (31 December 2012) $3.) 2.) $531.1 billion (31 December 2013 est.) $1.) $1.63% (31 December 2012 est.616 trillion (31 December 2010 est.6% (31 December 2013 est.) note: this is the Indian central bank's policy rate the repurchase rate 10.) 8% (31 December 2010 est.) $1.9 billion (31 December 2012 est.) $5.) 6% (31 December 2012 est.) $303.1 billion (31 December 2012 est.376 trillion (31 December .Stock of direct foreign investment at home Stock of direct foreign investment abroad Market value of publicly traded shares Central bank discount rate rate substantially understates the actual level of China's output vis-a-vis the rest of the world.25% (31 December 2012 est. in China's situation.) $4.) $1.) $5.532 trillion 2013 est.) 10.389 trillion (31 December 2011 est.) $120.911 trillion 2012 est.25% (31 December 2013 est.232 trillion (31 December 2011 est.1 billion (31 December 2012 est.) $10.02 trillion 2012 est.) $225.) $118.73% (31 December 2013 est.499 trillion (31 December 2013 est.15 trillion Stock of narrow money Stock of (31 December (31 December (31 December (31 December (31 December $310 billion (30 November 2013 est.379 trillion (31 December 2013 est.75% (31 December 2013 est.) $18.) $1.) $541 billion (31 December 2013 est.79 trillion 2013 est.

by end use Gross national saving 2013 est.) 19.) 30.) $15.1% imports of goods and services: -22.2% exports of goods and services: 25.3% of GDP (2013 est.2% imports of goods and services: -31.5 trillion (31 December 2012 est.) -5.2% of GDP (2012 est.) 2013 est.) $1.7% of GDP (2013 est.6% investment in inventories: 8.7% investment in fixed capital: 46% investment in inventories: 1.) 28.4% government consumption: 12.2% (2013 est.) household consumption: 56.) -2.3% of GDP (2011 est.) 33.7% of GDP (2013 est.) 10.) 50.396 trillion (31 December 2012 est.1% of GDP (2011 est.8% (2013 est.2% exports of goods and services: 25.8% of GDP (2012 est.) 50% of GDP (2013 est.3% government consumption: 13.broad money Taxes and other revenues Budget surplus (+) or deficit (-) GDP composition.) household consumption: 36.1% of GDP (2013 est.4% investment in fixed capital: 29.4% of GDP (2013 est.) 51.) .

b. Factors affecting sectoral changes in these two countries .

has been one of the singular features of the process of structural change in India since independence. About 43% of the country’s total geographical area is used for agricultural purposes. practices and techniques of irrigation and farming were introduced by the government. Amongst the three broad sectors of the economy. Production of non-conventional items like moong (a type of lentil). Comment on overall tends in changing composition –Is it a balanced growth? Agriculture Agriculture in India is the major sector of its economy. Darjeeling in West Bengal. Even though there has been a steady decline in its share in the GDP. Tea is produced in the high altitudes of Assam. Karnataka and West Bengal are major producers of food grains in India. the government also tried to decrease the dependence on monsoons. Among other things. Uttar Pradesh. Kerala is also the largest producer of natural rubber and spices in India. as a result of its much slower growth. Better seeds. The central government formulates policy and provides financial assistance to the states. These sectors provide employment to 60% of the country’s total population. soyabeans and peanuts are gradually gaining importance. States like Punjab. Tamil Nadu. Himachal Pradesh and Kerala. Almost two-thirds of the total work-force earns their livelihood though farming and other allied sectors like forestry.c. Himachal Pradesh and Jammu and Kashmir are famous for fruit production. Haryana. Agriculture in India is the responsibility of the states rather than the central government. logging and fishing which account 18% of the GDP. education of farmers and provision of agricultural credit and subsidies are reasons for increase in agricultural productivity. After independence additional areas were brought under cultivation and new methods. By now however it is by far the smallest. Rajasthan is among the major producers of edible oils in India and second largest producer of oil seeds. The “Green Revolution” and “Operation Flood” in the country have made India self-sufficient in producing food grains and milk. Ooty in Tamil Nadu. use of fertilizer. agriculture still remains the largest economic sector and plays a crucial role in the socio-economic development of the country. . The steady and significant decline in the share of agriculture in total output. Tripura. Andhra Pradesh. agriculture was the largest contributor to India’s GDP at the beginning.

Though agriculture is the foremost occupation of the majority of the people. The Growth Rate of the Industry in the India GDP has grown due to sustained manufacturing activity over the years.6% of the GDP and gives employment to 17% of the total workforce. engineering and machine tools. The government has liberalized its industrial policy thereby attracting huge foreign direct investment.Industry and Manufacturing The larger process of growth and structural change of the Indian economy after independence was not a steady process of industrialization. textiles and software. Industrial sector. Importance has also been given to improve the infrastructure of the country. Today India holds some key industries in the sectors like steel. If on one hand several multinational companies opened their offices in India. Industry Growth Rate in India GDP has been impressive in the last few years.PROBLEMS o Failure to achieve targets o Under-utilization of capacity o Absence of proper infrastructure o Increasing capital-output ratio o High cost industrial economy o Inadequate employment generation o Poor performance of public sector . Thus policies and strategies were framed to give a boost to India’s industry. This has given a major boost to the Indian economy. electronics. which in its turn has boosted the industrial sector. the government had always laid stress on the industrial development of the country. on the other hand many Indian companies started their operations in foreign countries. India’s industrial sector accounts for 27. India is marching ahead to become a diverse industrial base. The reasons for the increase of Industry Growth Rate in India GDP are that huge amounts of investments are being made in this sector and this has helped the industries to grow. Since independence. The government aims at achieving self-sufficiency in production and protection from foreign competition. petrochemicals. Also the reasons for the increase of Industry Growth Rate in India GDP are that the industrial goods are being exported in huge quantities from the country. Further the reasons for the rise of the Growth Rate of the Industrial Sector in India are that the consumption of the industrial goods has increased a great deal in the country.

social and personal services. more training. The contribution of the Services Sector has increased very rapidly in the India GDP for many foreign consumers have shown interest in the country's service exports. Tertiary sector which mainly comprise of services depends on scientific research and innovative developments to increases productivity and it provides engineering and construction consultancy support services for all projects in all sectors. hotels. Developed countries employ more than 80% the services sector. communication and storage. technical facilities. This is due to the fact that India has a large pool of highly skilled. automobiles. and real estate. banking facilities etc. more medical facilities. transport. rubber and plastics. and educated workers in the country. financing.o Sectoral imbalances o Regional imbalances o Industrial sickness (small scale and cottage industries) Services People need more and more services for leading qualitatively better lifestyle. community. India ranks fifteenth in the services output and it provides employment to around 23% of the total workforce in the country. restaurant. The various sectors under the Services Sector in India are construction. They need more means of transport. During 2009-10 and 2010-11. entertainment. The Services Sector contributes the most to the Indian GDP. more communication and educational facilities. The Sector of Services in India has the biggest share in the country's GDP for it accounts for around 53.8% in 2005. business services. The . low cost. machinery and equipment and radio. fabricated metal products. The contribution of the Services Sector in India GDP has increased a lot in the last few years. This has made sure that the services that are available in the country are of the best quality. TV and communication equipment segments had witnessed double digit growth. trade. insurance.

in/scripts/ This has given a major boost to the Services Sector in companies seeing this have started outsourcing their work to India especially in the area of business services which includes business process outsourcing and information technology services.india/economy   http://www.aspx?Id=13046#  CIA World Factbook . power plants etc o Service sector cannot grow in isolation References:  http://statisticstimes. Service sector – PROBLEMS in general o Inadequate infrastructure facilities ( power shortage.indexmundi. improper skill development) o High growth but low share in providing employment o Inadequacy in finance o Improper maintenance in airports.php  https://www. railways. which in its turn has made the sector contribute more to the India