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Brief of Indian Economy

Brief of Indian Economy

 

India has classified and tracked its economy and GDP as three sectors —1.agriculture(Primary Sector)​​ 

2.industry (secondary sector)

3.services. (Tertiary sector)

 

Services sector is the largest sector of India. Gross Value Added (GVA) at current prices for Services sector is estimated at​​ 73.79 lakh​​ crore INR in 2016-17. Services sector accounts for​​ 53.66%​​ of total India's GVA of 137.51 lakh crore Indian rupees.

%Employment=28.7%

 

With GVA of Rs.​​ 39.90​​ lakh crore, Industry sector contributes​​ 29.02%.

%Employment=21.5%

 

While, Agriculture and allied sector shares​​ 17.32%​​ and GVA is around of​​ 23.82 lakh​​ crore INR.

%Employment=49.7%

 

Agriculture includes crops, horticulture, milk and animal husbandry, aquaculture, fishing, sericulture, 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 operations, education, health care, banking and insurance, and many other economic​​ activities.Service sector is the largest sector of India.

 

Role of Agriculture in Indian Economy

 

Today, India ranks second worldwide in farm output.

As per estimates by the Central Statistics Office (CSO), the share of agriculture and allied sectors (including agriculture, livestock, forestry and fishery) was 15.35 per cent of the Gross Value Added (GVA) during 2015–16 at 2011–12 prices.

India is the largest producer, consumer, and exporter of​​ spices and spice products.

 

Agricultural export constitutes​​ 10 per cent​​ of the country’s exports and is the fourth-largest exported principal commodity.

 

The agro-industry in India is divided into several sub-segments such as canned, dairy,​​ processed, frozen food to fisheries, meat, poultry, and food grains.

The​​ Department​​ of​​ Agriculture​​ and​​ Cooperation​​ under​​ the​​ Ministry​​ of​​ Agriculture​​ is​​ responsible for​​ the​​ development​​ of​​ the​​ agriculture​​ sector​​ in​​ India.​​ It​​ manages​​ several​​ other​​ bodies,​​ such​​ as the​​ National​​ Dairy​​ Development​​ Board​​ (NDDB),​​ to​​ develop​​ other​​ allied​​ agricultural​​ sectors.

 

With an annual output of​​ 146.31 MT, India is the largest producer of milk, accounting for​​ 18.5

percent of the total world production.

It also has the largest bovine population. India, the second-largest producer of sugar, accounts for 14 percent of the global output. It is the sixth-largest exporter of sugar, accounting for 2.76 per cent of the global exports.

 

The​​ Spices​​ Board​​ of​​ India​​ has​​ decided​​ to​​ set​​ up​​ a​​ spice​​ museum​​ at​​ Willingdon​​ Island​​ in​​ Kochi​​ to attract and educate tourists and seafarers about the history and growth of Indian spices​​ industry.

Some major investments and developments in agriculture in the recent past are as follows:

 

  • ITC​​ Ltd,​​ one​​ of​​ India's​​ leading​​ fast-moving​​ consumer​​ goods​​ (FMCG)​​ company,​​ plans​​ to​​ make Andhra Pradesh a hub for its agricultural business​​ operations.

 

  • The​​ Small Farmers’ Agri-Business Consortium (SFAC)​​ plans to organise camps in Madhya​​ Pradesh​​ and​​ Chhattisgarh​​ to​​ promote​​ its​​ venture​​ capital​​ assistance​​ scheme​​ (VCAS), which seeks to provide capital and project development facility (PDF) to agri-business entrepreneurs.

 

  • Mahindra & Mahindra (M&M),​​ India’s leading tractor and utility vehicle manufacturer, announced​​ its​​ entry​​ into​​ pulses​​ retailing​​ under​​ the​​ brand​​ ‘NuPro’.​​ Going​​ forward,​​ the​​ company plans to foray into e-retailing and sale of dairy​​ products.

 

  • Fertiliser​​ cooperative​​ IFFCO​​ launched​​ a​​ joint​​ venture​​ with​​ Japanese​​ firm​​ Mitsubishi​​ Corp​​ for manufacturing agrochemicals in​​ India.

 

Some of the recent major government initiatives in the sector are as follows:

 

  • Prime​​ Minister​​ Mr​​ Narendra​​ Modi​​ has​​ unveiled​​ the​​ operational​​ guidelines​​ for​​ the​​ Pradhan Mantri Fasal Bima Yojana​​ which aims to provide farmers with crop​​ insurance.

  • The Cabinet Committee on Economic Affairs (CCEA) has approved ‘Blue Revolution’, an umbrella​​ scheme​​ for​​ integrated​​ development​​ and​​ management​​ of​​ fisheries​​ by​​ Government​​ of India, with the total financial outlay of Rs 3,000 crore (US$ 440.15 million) for a period of five years.

The new crop insurance scheme for farmers 'Bhartiya Krishi Bima Yojana' aims to cover 50 per cent of the farmers under the scheme in the next two-three years,

 

  • Gujarat Government has planned to connect 26 Agricultural Produce Market​​ Committees

(APMCs) via the electronic market platform, under the​​ National Agriculture Market (NAM)​​ initiative.

 

  • According to the National Institution for Transforming India Aayog (NITI Aayog), India’s agriculture sector is expected to grow 6 percent in FY 2016-17 in case of normal monsoon during​​ the​​ June-September​​ period.​​ The​​ 12th​​ Five-Year​​ Plan​​ estimates​​ the​​ foodgrains​​ storage capacity to expand to 35 MT. Also,​​ a 4 percent growth would help restructure the agriculture sector in India in the next few​​ years.

 

Role of Manufacturing Sector in Indian Economy

Manufacturing has emerged as one of the high growth sectors in India. 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 the inflation adjusted constant 2005 US dollar basis ($197.1 billion).

Prime Minister of India, Mr Narendra Modi, had launched the ‘Make in India’ program to place India on the world map as a manufacturing hub and give global recognition to the Indian economy.

 

Role of Service Sector in Indian Economy

 

The services sector is not only the dominant sector in India’s Gross Domestic Product (GDP) but has also attracted significant foreign investment flows, contributed significantly to exports as well as provided large-scale employment.

Indian service sector​​ grew at approximately 8 per cent per annum and contributed to about​​ 64​​ percent of India's GDP in FY 2015-16.

The services sector is the key driver of India’s economic growth. The sector contributed around

66.1 per cent of its Gross Value Added growth in​​ 2015-16, thereby becoming an​​ important net foreign exchange earner and the most attractive sector for FDI (Foreign Direct Investment) inflows.

India is the eighth largest services exporter in the world.

Out of overall services sector, the sub-sector comprising financial services,​​ realstate and​​ professional services contributed 21.6 per cent to the GDP,​​ and grew the fastest among all sub-segments at 10.3 per cent year-on-year.

The sub-sector of trade, hotels, transport, communication and services related to broadcasting contributed 12.6 percent the GDP. The third-largest sub-segment comprising public administration, defence,and other services contributed nearly​​ 12.6 % to the GDP