Sector Wise Contribution to the GDP of India

The economy of India is pretty vast on its own. This is due to the amalgamation of various sectors and industries that build-up up the strength of the economy of our country. India is prominently known to have three different sectors that have a contribution to the economy. Those three sectors are services, industrial, and agriculture sectors. In this article, we are going to learn what is the sectorwise contribution to GDP of India. 

There are many divisions and sub-divisions to these sectors that make the whole thing work. Out of all these sectors, the services sector is the one that holds the largest position in the Indian economy. It is accountable for about 53.66% of the total GVA in India, which amounts to about Rs. 137.51 lakh crore. India’s industrial sector takes second place by contributing about 31% to the entire GDP sector in India. Lastly, agriculture takes about 16% of the GDP in our country. 

An Introduction to GDP (Gross Domestic Product)

GDP or Gross Domestic Product actually refers to the total of all the different services and goods that are produced by the country during a certain period of time. In general cases, the time period is taken to be 1 year. It is expressed in terms of money. GDP is considered to be one of the most important parameters for the identification of the economic capacity of a country as well as its efficiency. That is because GDP coincidently relates to other socio-economic indicators such as unemployment, poverty, living standards, health standards, and the rate of literacy of a county. 

It is seen in several cases that the correlation happens to be incremental or marginal in nature. With the growth in GDP, there can be an increase in the positive impact on health care, poverty, employment, and other factors. Hence, it is really important for people to have an understanding of the GDP of a country. They will be able to understand the economic situation of the country from the GDP. 

Contribution of Sectors Into GDP of India 

At present, the economic condition of India needs a little bit of improvement. However, it is also expected that the economy of our country will have an increase in times coming. According to the World Economic League Table of 2020, India has surpassed the UK and France and become the 5th largest economy in the world. The Indian economy is classified into three major sectors. Mentioned below are some of the details of these three major sectors and the contributions that these sectors have to the GDP of India. 

1. Agriculture Sector & Allied Sector

This particular sector includes fishing and forestry as well. This is a sector that is known to be the primary one in the economy of India. During the time India was gaining independence, the sector of Agriculture had the largest share in the GDP of India. However, with the passage of time, the contribution made by this particular sector keeps on going through a decline. In the current stage, the agriculture sector is responsible for contributing just 16% of the entire GDP of India. It is also important to keep in mind that the agriculture sector is accountable for providing jobs to about 53% of the entire population in India. 

2. Industry Sector

The major divisions that are included in the industry sector are Manufacturing (Unregistered & Registered), Quarrying and Mining, Water Supply, Electricity, Construction, and Gas. This is the sector that is called the Secondary Sector contributing to the Indian economy. In the current stages of time, it holds the second position amongst the contributing sectors to Indian GDP. The industrial sector is responsible for contributing about 31% of the entire GDP to the economy of India. 

3. Services Sector 

The services sector is the third and final instalment to the sectors that contribute to the GDP of India. When it comes to the services sector, there are certain sub-divisions here as well. These sub-divisions are real estate, finance, professional services, public administration, defence. Some of the other services that are included in this particular sector include communication, hotels, transport, trade, and other broadcasting-related activities. The services sector is also called the tertiary sector of the Indian economy. One of the most important things to know about the services sector is that it is considered to be the backbone of our economy in India. This is due to the fact that it has the largest contribution being made to the Indian economy. Currently, the services sector is responsible for about 53.66% of the entire economy in India.   

It can be seen clearly from the table that the sector of services is the one that is making the largest contribution to the economy in India. That is one of the main reasons why the services sector is called the backbone of the economy of our country. The second position is held by the Industry Sector and that is followed by Agriculture sector. There is a decline in the percentage of the allied and agriculture sectors’ contribution to the Indian economy over the years. This can be a cause for concern amongst the people and the policymakers. The reason we say this is that most people depend on the agriculture sector for their income. Currently, the agriculture sector has a 53% share in the contribution to the employment scenario in India. Hence, there is a need for improvement in this particular sector at the earliest. 

GDP Contributing to the Quality of Life 

A very interesting thing about the GDP is that it helps in estimating the economic prosperity of the country. This is done by measuring the outputs of the different goods, products, and services. However, there are certain factors that are intangible such as knowledge and information. These factors tend to enhance the quality of life for people. In a similar manner, housework that is also responsible for contributing to a higher quality of life is seemingly ignored by the GDP of the country. Hence, the entire relationship between GDP as well as the quality of life can be deemed as tenuous.

GDP and Natural Disasters 

According to research, natural disasters tend to have an enhancing effect on the GDP of a country. It is seen that disasters such as earthquakes, floods, droughts, and others tend to affect the GDP in a positive way. How is that possible? Well, these natural disasters tend to temporarily lead to a fall in productivity of a particular place that is affected. Hence, there is a depression in the GDP. However, the expenditure provided by the Government for the recovery of such disasters further enhances the GDP of any country to an even great extent. Hence, there is a particular aspect of misleading in the calculation of the GDP of any country. This aforementioned point doesn’t just pertain to India but to some of the other countries as well. 

We know that the Indian economy is classified into three major sectors and these are the services sector, the industrial sector, and the agriculture sector. With the increase in the GDP of the country, there is no doubt that India will keep on climbing the ladder of success in becoming one of the countries with the largest economy soon. With the help of proper activities in these sectors of the Indian economy, there is still hope for the country in increasing the normal GDP that they have as time passes.