Indian Economy, in terms of nominal GDP, is 7th largest in world and in terms of Purchasing Power Parity terms it is 3rd largest economy. It is one of G-20 major economies. The Indian economy is the fastest growing surpassing the China. The prospects of growth of Indian Economy are positive on account of its young population, low dependency ratio, healthy savings and investment ratio, increasing integration into global and infrastructural changes like GST.
India has one of the fastest growing Service Sector in the world growing at 9% since 2001 and now contributes around 54% to Indian Economy.
CONTRIBUTION OF SECTORS TO INDIAN ECONOMY
The economy is classified in three sectors — i) Agriculture and allied, ii) Industry and iii) Services.
The agriculture sector includes Agriculture and Livestock, Forestry & Logging, Fishing and related activities. India ranks second worldwide in farm output. Agriculture and allied sectors like forestry, logging and fishing accounted for 17% of the GDP and employed 49% of the total workforce in 2014. The Agriculture sector currently on the basis of 2011-12 prices contributes 15.11% to Indian economy.
The industry includes ‘Mining & quarrying’, Manufacturing (Registered & Unregistered), Electricity, Gas, Water supply, and Construction. Services sector includes ‘Trade, hotels, transport, communication and services related to broadcasting’, ‘Financial, real estate & prof servs’, ‘Public Administration, Defence and other services’.
Industry 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). The Industry contribution of Indian Economy at 211-12 prices, is 31.12%.
The service sector has shown tremendous growth during the past years and has been instrumental in establishing India’s name among the fastest growing economies of the world. The contribution of Service Sector to Indian Economy in 1950 was around 15% which increased to around 54% as of now. It provides employment to around 27% of the work force.
The 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. With GVA of Rs. 39.90 lakh crore, Industry sector contributes 29.02%. While, Agriculture and allied sector shares 17.32% and GVA is around of 23.82 lakh crore INR.
At 2011-12 prices, composition of Agriculture & allied, Industry, and Services sector are 15.11%, 31.12%, and 53.77%, respectively