Question

Analyse the changes taking place in the sectors of the Indian economy in context of ‘Gross Domestic Product’.

Answer 1

The Indian economy has seen major structural changes in its basic, secondary, and tertiary sectors, as evidenced by the shifting contributions to GDP. These shifts underscore India’s shift from an agrarian to a service-based economy, which was fuelled by industrialisation, globalisation, and policy reforms.

1. The primary sector, which includes agriculture, forestry, and mining, has a diminishing GDP proportion. It used to contribute more than 50% of GDP in the mid-twentieth century, but today accounts for only 15-18% (according to forecasts for 2023-24). This drop reflects low productivity as a result of Monsoon rainfall and fragmented landholdings. However, programs such as the Green Revolution and MGNREGA have maintained rural employment, even as their GDP contribution has decreased as resources transfer to other sectors.
2. The secondary sector, which includes manufacturing, construction, and utilities, has grown somewhat. Its GDP contribution hovers between 25 and 30 percent, with initiatives like Make in India promoting manufacturing, particularly in automobiles and electronics. The construction boom, fuelled by infrastructure projects such as highways and smart cities, has increased its impact. However, difficulties such as outmoded technology and environmental issues limit its expansion, preventing it from keeping up with the tertiary sector’s growth.
3. The tertiary sector, which includes services such as IT, banking, tourism, and retail, has emerged as the greatest contributor, accounting for more than half of GDP. The IT boom in Bengaluru and Hyderabad, combined with the rise of e-commerce and banking, has propelled this spike. Globalisation and digitalisation, aided by policies such as Digital India, have accelerated this trend, transforming India into a worldwide service hub. The sector’s resiliency during the COVID-19 pandemic, which included remote employment and internet services, reinforces its supremacy.
4. These alterations point to a systemic restructuring. The diminishing primary sector share shows urbanisation and mechanisation, whereas the expanding tertiary sector demonstrates India’s service-led growth. The secondary sector’s consistent contribution boosts industrial growth, but it lags due to policy and infrastructure shortages. With this transformation, per capita income has risen, although regional inequities remain, with rural areas still relying on agriculture.