India GDP Composition Sector Wise

The Gross Domestic Product or GDP is the indicator of the performance of an economy. According to the
estimates of 2008, India's GDP is $.20! tri""ion and this is s"ated to ma#e impro$ement in the coming times. It is
estimated that India's GDP %i"" gro% &y '.() in the year 200!. In 2008 the country's GDP %as !)* the s"o%do%n
that has &een %itnessed this year in the estimates is "arge"y due to the s"o%do%n %itnessed &y the agricu"ture
and the industria" sectors. A "oo# at the India GDP composition sector %ise thro%s up some interesting figures.
The agricu"ture sector contri&uted +.2)* industry contri&uted 2!.) %hi"e the ser$ice sector had a contri&ution
of (2.+) according to 2008 estimates.
Sectors contributing to India's GDP
India is a $ast country, so the sectors contri&uting to the country's GDP is a"so &ig in num&ers. ,arious sectors
fa""ing under the India GDP composition inc"udes food processing, transportation e-uipment, petro"eum, te.ti"es,
soft%are, agricu"ture, mining, machinery, chemica"s, stee", cement and many others. Agricu"ture is the pre
dominant occupation in India, emp"oying more than (0) of the popu"ation. The ser$ice sector accounts for
emp"oying more than 2() %hi"e the industria" sector accounts for more than 0).
India's GDP Statistics
GDP/ $.20! tri""ion 02008 1stimate2
GDP Gro%th/ '.+) 0200!2
GDP per capita/ $0'
GDP &y sector 02008 1stimate2/
Agricu"ture/ +.2)
Industry/ 2!.)
3er$ices/ (4.+)
Inf"ation/ +.8) 02008 1stimate2
5a&or force/ (24.( mi""ion 02008 1stimate
Agriculture contri to gdp
Agriculture Growth Rate in India GDP had been growing earlier but in the last few years it is
constantly declining. Still, the Growth Rate of Agriculture in India GDP in the share of the country's GDP
remains the biggest economic sector in the country.
India GDP means the total value of all the services and goods that are roduced within the territory of
the nation within the secified time eriod. !he country has the GDP of around "S# $.%&
trillion in '%%( and this ma)es the Indian economy the twelfth biggest in the whole world.
!he growth rate of India GDP is &.*+ in '%%,- '%%(. !he agricultural sector has always been an
imortant contributor to the India GDP. !his is due to the fact that the country is mainly based on the
agriculture sector and emloys around ,%+ of the total wor)force in India. !he agricultural sector
contributed around $..,+ to India GDP in '%%/.
Agriculture Growth Rate in India GDP in site of its decline in the share of the country's GDP lays a
very imortant role in the all round economic and social develoment of the country. !he Growth Rate of
the Agriculture Sector in India GDP grew after indeendence for the government of India laced secial
emhasis on the sector in its five-year lans. 0urther the Green revolution too) lace in India and this
gave a ma1or boost to the agricultural sector for irrigation facilities, rovision of agriculture subsidies and
credits, and imroved technology. !his in turn heled to increase the Agriculture Growth Rate in India
GDP.
!he agricultural yield increased in India after indeendence but in the last few years it has decreased.
!his in its turn has declined the Growth Rate of the Agricultural Sector in India GDP. !he total roduction
of food grain was '$' million tonnes in '%%$- '%%' and the ne2t year it declined to $(*.' million tonnes.
Agriculture Growth Rate in India GDP declined by /.'+ in '%%'- '%%3. !he Growth Rate of the
Agriculture Sector in India GDP grew at the rate of $.(+ each year between '%%$- '%%' and '%%3-
'%%*. !his shows that Agriculture Growth Rate in India GDP has grown very slowly in the last few years.
Agriculture Growth Rate in India GDP has slowed down for the roduction in this sector has reduced over
the years. !he agricultural sector has had low roduction due to a number of factors such as illiteracy,
insufficient finance, and inade4uate mar)eting of agricultural roducts. 0urther the reasons for the
decline in Agriculture Growth Rate in India GDP are that in the sector the average si5e of the farms is
very small which in turn has resulted in low roductivity. Also the Growth Rate of the Agricultural Sector
in India GDP has declined due to the fact that the sector has not adoted modern technology and
agricultural ractices. Agriculture Growth Rate in India GDP has also decreased due to the fact that the
sector has insufficient irrigation facilities. As a result of this the farmers are deendent on rainfall, which
is however very unredictable.
Agriculture Growth Rate in India GDP has declined over the years. !he Indian government must ta)e
stes to boost the agricultural sector for this in its turn will lead to the growth of Agriculture Growth
Rate in India GDP.
Services
Services Sector Growth Rate in India GDP has been very raid in the last few years. !he Services Sector contributes the
most to the Indian GDP. !he Growth Rate of the Services Sector in India GDP has risen due to several reasons and it has also
given a ma1or boost to the Indian economy.
Indian Economy
India gross domestic roduct 6GDP7 means the total value of all the services and goods that are manufactured
within the territory of the nation during the secified eriod of time.
!he Indian economy is the second fastest ma1or growing economy in the whole world with the growing rate of the GDP at &.*+
in '%%,- '%%(. !he economy of India is the twelfth biggest in the world for it has the GDP of "S# $.%& trillion in '%%(.
Services Sector in India
India ran)s fifteenth in the services outut and it rovides emloyment to around '3+ of the total wor)force in the country.
!he various sectors under the Services Sector in India are construction, trade, hotels, transort, restaurant, communication
and storage, social and ersonal services, community, insurance, financing, business services, and real estate.
Services Sector contribution to the Indian Economy
!he Services Sector contributes the most to the Indian GDP. !he Sector of Services in India has the biggest share in the
country's GDP for it accounts for around /3..+ in '%%/. !he contribution of the Services Sector in India GDP has increased a
lot in the last few years. !he Services Sector contributed only $/+ to the Indian GDP in $&/%. 0urther the Indian Services
Sector's share in the country's GDP has increased from *3.,&/ in $&&%- $&&$ to around /$.$,+ in $&&.- $&&&. !his shows
that the Services Sector in India accounts for over half of the country's GDP.
The Reasons for the growth of the Services Sector contribution to the India GDP
!he contribution of the Services Sector has increased very raidly in the India GDP for many foreign consumers have shown
interest in the country's service e2orts. !his is due to the fact that India has a large ool of highly s)illed, low cost, and
educated wor)ers in the country. !his has made sure that the services that are available in the country are of the best 4uality.
!he foreign comanies seeing this have started outsourcing their wor) to India secially in the area of business services which
includes business rocess outsourcing and information technology services. !his has given a ma1or boost to the Services Sector
in India, which in its turn has made the sector contribute more to the India GDP.
The Services Sector in India must be given boost
Services Sector Growth Rate in India GDP registered a significant growth over the ast few years. !he Indian government must
ta)e stes in order to ensure that Services Sector Growth Rate in India GDP continues to rise. 0or this will ensure the growth
and roserity of the country's economy.
infrastructure
Infrastructure Sector Growth Rate in India GDP has been on the rise in the last few years. !he
Growth Rate of the Infrastructure Sector in India GDP has grown due to several reasons and this in its
turn has given a ma1or boost to the country's economy.
Economy of India
India gross domestic roduct 6GDP7 means the total value of all the services and goods
that are manufactured within the borders of the country within the secified eriod of
time.
!he Indian economy is the twelfth biggest in the whole world for it has the GDP of "S# $.%& trillion in
'%%(. !he economy of India is the second ma1or growing economy in the whole world for it has the GDP
growing at the rate of &.*+ in '%%,- '%%(.
The Infrastructure Sector in India
!he Infrastructure Sector in India was after indeendence comletely in the hands of the ublic sector
and this hamered the growth of this sector. India's less sending on real estate, ower,
telecommunications, construction, and transortation revented the country from sustaining very high
rates of growth. !he amount that India was sending on the Infrastructure Sector was ,+ of GDP or
"S# 3$ billion in '%%'.
The contribution of the Infrastructure Sector in the India GDP
Infrastructure Sector Growth Rate in India GDP came to 3./+ in $&&,- $&&( and the ne2t year, this
figure was *.,+. !he Growth Rate of the Infrastructure Sector in India GDP increased after the Indian
government oened the sector to $%%+ foreign direct investment 60DI7. !his was done in order to boost
the Infrastructure Sector in the country. !he result of oening the sector to the rivate sector has been
that Infrastructure Sector Growth Rate in India GDP has increased at the rate of &+. It is estimated that
the Growth Rate of the Infrastructure Sector in India GDP will grow at the rate of ../+ between '%%,
and '%$%. !he biggest ongoing ro1ect in the Infrastructure Sector in India is the Golden 8uadrilateral,
which is imroving the main roads that connect the four cities of 9hennai, :umbai, Delhi, and ;ol)ata.
The Government of India must boost the Infrastructure Sector
Infrastructure Sector Growth Rate in India GDP thus has increased over the last few years due to the
efforts that have been made by the Indian government. !he government of India must continue to ta)e
stes to imrove the Infrastructure Sector in the country. 0or this in its turn will hel to boost the Indian
economy in future.
Highlights
!he service sector now accounts for more than half of India's GDP< /$.$, er
cent in $&&.-&&. !his sector has gained at the e2ense of both the agricultural
and industrial sectors through the $&&%s. !he rise in the service sector's share
in GDP mar)s a structural shift in the Indian economy and ta)es it closer to the
fundamentals of a develoed economy 6in the develoed economies, the
industrial and service sectors contribute a ma1or share in GDP while agriculture
accounts for a relatively lower share7.
!he service sector's share has grown from *3.,& er cent in $&&%-&$ to /$.$,
er cent in $&&.-&&. In contrast, the industrial sector's share in GDP has
declined from '/.3. er cent to ''.%$ er cent in $&&%-&$ and $&&.-&&
resectively. !he agricultural sector's share has fallen from 3%.&3 er cent to
',..3 er cent in the resective years.
Some economists caution that if the service sector byasses the industrial
sector, economic growth can be distorted. !hey say that service sector growth
must be suorted by roortionate growth of the industrial sector, otherwise
the service sector grown will not be sustainable. It is true that, in India, the
service sector's contribution in GDP has sharly risen and that of industry has
fallen 6as shown above7. =ut, it is e4ually true that the industrial sector too has
grown, and grown 4uite imressively through the $&&%s 6e2cet in $&&.-&&7.
!hree times between $&&3-&* and $&&.-&&, industry surassed the growth rate
of GDP. !hus, the service sector has grown at a higher rate than industry which
too has grown more or less in tandem. !he rise of the service sector therefore
does not distort the economy.
>ithin the services sector, the share of trade, hotels and restaurants increased
from $'./' er cent in $&&%-&$ to $/.,. er cent in $&&.-&&. !he share of
transort, storage and communications has grown from /.', er cent to (.,$
er cent in the years under reference. !he share of construction has remained
nearly the same during the eriod while that of financing, insurance, real estate
and business services has risen from $%.'' er cent to $$.** er cent.
!he fact that the service sector now accounts for more than half the GDP
robably mar)s a watershed in the evolution of the Indian economy.
!abulation
!o of this age
?conomy Inde2
@ome
Share of the service sector in Indias GDP !in Rs" crore#"
0igures in brac)ets indicate ercentage share of different sectors and subsectors.
0igures for $&&*-&/ onwards are on a changed base 6$&&3-&*A$%%7, so they show huge
increases comared to the receding eriod.
$ear
%&&'(
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means
iii7 Storage ....
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6%.%,7
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6%.%,7
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ation
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of which
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7
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7
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7
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6/.',7
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63.('7
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6'.(.7
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estate,
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business
....
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/'*.$
6/.'/7
/$%&/
6/./'7
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6*..,7
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9ommunity,
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ersonal
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/
6$%.&.
7
$%'.*
'
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7
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7
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7
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7
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6$%.*.
7
of which
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admin. B
defence
....
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services
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6/.,'7
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Total GDP1
%%%//
0*
%0,&%
&%
&&'&
)'
&/*,
%/
'*%0
*,
/.''
*,
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/%.&
'.
/%//
+.
%+*+
**
%//,
/)
D 0igures for $&&*-&/ onwards are on a changed base 6$&&3-&*A$%%7, so they show
huge increases comared to the receding eriod.
Source: Studies by Reserve Bank of India

It sector
The information techno"ogy 0IT2 industry has increased its contri&ution to the country's GDP from .2 per cent in
!!+6!8 to (.2 per cent in 200'60+, according to a 7asscom6De"oitte study.
The report, tit"ed Indian IT Industry/ Impacting the 1conomy and 3ociety, further says that e.port earnings in
200+608 %i"" hit $80 &i""ion, a gro%th of 4' per cent. 9ean%hi"e, direct emp"oyment is e.pected to &e 2 mi""ion in
200+608, gro%ing at a :AG; of 2' per cent in the "ast decade.
The report, %hi"e &ringing forth the contri&ution of the IT<ITe3 sector, points out that the industry has &een the
trigger for many 'firsts' and has contri&uted not on"y to un"eashing the hitherto untapped entrepreneuria" potentia"
of the midd"e c"ass &ut a"so ta#ing Indian e.ce""ence to the g"o&a" mar#et.
Gro%th
India's Economic Growth since 1980
India ?conomy Growth <!he rate of growth
imroved in the $&.%s. 0rom 0E $&.% to 0E
$&.&, the economy grew at an annual rate of
/./ ercent, or 3.3 ercent on a er caita
basis. Industry grew at an annual rate of ,.,
ercent and agriculture at a rate of 3., ercent.
A high rate of investment was a ma1or factor in
imroved economic growth. Investment went
from about $& ercent of GDP in the early
$&(%s to nearly '/ ercent in the early $&.%s.
India, however, re4uired a higher rate of
investment to attain comarable economic
growth than did most other low-income
develoing countries, indicating a lower rate of
return on investments.
Part of the adverse Indian e2erience was
e2lained by investment in large, long-
gestating, caital-intensive ro1ects, such as
electric ower, irrigation, and infrastructure.
@owever, delayed comletions, cost overruns,
and under-use of caacity were contributing
factors.
Private savings financed most of India's investment, but by the mid-$&.%s further
growth in rivate savings was difficult because they were already at 4uite a high level.
As a result, during the late $&.%s India relied increasingly on borrowing from foreign
sources 6see Aid, this ch.7. !his trend led to a balance of ayments crisis in $&&%F in
order to receive new loans, the government had no choice but to agree to further
measures of economic liberali5ation. !his commitment to economic reform was
reaffirmed by the government that came to ower in Gune $&&$.
India's rimary sector, including agriculture, forestry, fishing, mining, and 4uarrying,
accounted for 3'.. ercent of GDP in 0E $&&$ 6see table $(, Aendi27. !he si5e of the
agricultural sector and its vulnerability to the vagaries of the monsoon cause relatively
large fluctuations in the sector's contribution to GDP from one year to another 6see 9ro
Cutut, ch. (7.

In 0E $&&$, the contribution to GDP of industry, including manufacturing, construction,
and utilities, was '(.* ercentF services, including trade, transortation,
communications, real estate and finance, and ublic- and rivate-sector services,
contributed 3&.. ercent. !he steady increase in the roortion of services in the
national economy reflects increased mar)et-determined rocesses, such as the sread of
rural ban)ing, and government activities, such as defense sending 6see Agricultural
9redit, ch. (F Defense Sending, ch. $%7.
Desite a sometimes disaointing rate of growth, the Indian economy was transformed
between $&*( and the early $&&%s. !he number of )ilowatt-hours of electricity
generated, for e2amle, increased more than fiftyfold. Steel roduction rose from $./
million tons a year to $*.( million tons a year. !he country roduced sace satellites and
nuclear-ower lants, and its scientists and engineers roduced an atomic e2losive
device 6see :a1or Research Crgani5ations, this ch.F Sace and Huclear Programs, ch.
$%7. Iife e2ectancy increased from twenty-seven years to fifty-nine years. Although the
oulation increased by *./ million between $&/$ and $&&$, the availability of food
grains er caita rose from 3&/ grams er day in 0E $&/% to *,, grams in 0E $&&' 6see
Structure and Dynamics, ch. '7.
@owever, considerable dualism remains in the Indian economy. Cfficials and economists
ma)e an imortant distinction between the formal and informal sectors of the economy.
!he informal, or unorgani5ed, economy is largely rural and encomasses farming,
fishing, forestry, and cottage industries. It also includes etty vendors and some small-
scale mechani5ed industry in both rural and urban areas. !he bul) of the oulation is
emloyed in the informal economy, which contributes more than /% ercent of GDP. !he
formal economy consists of large units in the modern sector for which statistical data are
relatively good. !he modern sector includes large-scale manufacturing and mining,
ma1or financial and commercial businesses, and such ublic-sector enterrises as
railroads, telecommunications, utilities, and government itself.
!he greatest disaointment of economic develoment is the failure to reduce more
substantially India's widesread overty. Studies have suggested that income
distribution changed little between indeendence and the early $&&%s, although it is
ossible that the oorer half of the oulation imroved its osition slightly. Cfficial
estimates of the roortion of the oulation that lives below the overty line tend to
vary sharly from year to year because adverse economic conditions, esecially rises in
food rices, are caable of lowering the standard of living of many families who normally
live 1ust above the subsistence level. !he Indian government's overty line is based on
an income sufficient to ensure access to minimum nutritional standards, and even most
ersons above the overty line have low levels of consumtion comared with much of
the world.
?stimates in the late $&(%s ut the number of eole who lived in overty at 3%%
million, or nearly /% ercent of the oulation at the time. Poverty was reduced during
the $&.%s, and in 0E $&.& it was estimated that about ', ercent of the oulation, or
''% million eole, lived below the overty line. Slower economic growth and higher
inflation in 0E $&&% and 0E $&&$ reversed this trend. In 0E $&&$, it was estimated that
33' million eole, or 3. ercent of the oulation, lived below the overty line.
India ?conomy Growth - 0armers and other rural residents ma)e u the large ma1ority of
India's oor. Some own very small amounts of land while others are field hands,
seminomadic sheherds, or migrant wor)ers. !he urban oor include many construction
wor)ers and etty vendors. !he bul) of the oor wor), but low roductivity and
intermittent emloyment )ee incomes low. Poverty is most revalent in the states of
Crissa, =ihar, "ttar Pradesh, and :adhya Pradesh, and least revalent in @aryana,
Pun1ab, @imachal Pradesh, and Gammu and ;ashmir.
=y the early $&&%s, economic changes led to the growth in the number of Indians with
significant economic resources. About $% million Indians are considered uer class, and
roughly 3%% million are art of the raidly increasing middle class. !yical middle-class
occuations include owning a small business or being a cororate e2ecutive, lawyer,
hysician, white-collar wor)er, or land-owning farmer. In the $&.%s, the growth of the
middle class was reflected in the increased consumtion of consumer durables, such as
televisions, refrigerators, motorcycles, and automobiles. In the early $&&%s, domestic
and foreign businesses hoed to ta)e advantage of India's economic liberali5ation to
increase the range of consumer roducts offered to this mar)et.
@ousing and the ancillary utilities of sewer and water systems lag considerably behind
the oulation's needs. India's cities have large shantytowns built of scra or readily
available natural materials erected on whatever sace is available, including sidewal)s.
Such dwellings lac) ied water, sewerage, and electricity. !he government has
attemted to build housing facilities and utilities for urban develoment, but the efforts
have fallen far short of demand. Administrative controls and other asects of
government olicy have discouraged many rivate investors from constructing housing
units.
2iberali3ation in the Early %&&0s
Increased borrowing from foreign sources in the late $&.%s, which heled fuel economic
growth, led to ressure on the balance of ayments. !he roblem came to a head in
August $&&% when Ira4 invaded ;uwait, and the rice of oil soon doubled. In addition,
many Indian wor)ers resident in Persian Gulf states either lost their 1obs or returned
home out of fear for their safety, thus reducing the flow of remittances 6see Si5e and
9omosition of the >or) 0orce, this ch.7. !he direct economic imact of the Persian Gulf
conflict was e2acerbated by domestic social and olitical develoments. In the early
$&&%s, there was violence over two domestic issues< the reservation of a roortion of
ublic-sector 1obs for members of Scheduled 9astes 6see Glossary7 and the @indu-
:uslim conflict at Ayodhya 6see Public >orshi, ch. 3F Political Issues, ch. .7. !he
central government fell in Hovember $&&% and was succeeded by a minority
government. !he cumulative imact of these events shoo) international confidence in
India's economic viability, and the country found it increasingly difficult to borrow
internationally. As a result, India made various agreements with the International
:onetary 0und 6I:0--see Glossary7 and other organi5ations that included commitments
to seed u liberali5ation 6see "nited Hations, ch. &7.
In the early $&&%s, considerable rogress was made in loosening government
regulations, esecially in the area of foreign trade. :any restrictions on rivate
comanies were lifted, and new areas were oened to rivate caital. @owever, India
remains one of the world's most tightly regulated ma1or economies. :any owerful
vested interests, including rivate firms that have benefited from rotectionism, labor
unions, and much of the bureaucracy, oose liberali5ation. !here is also considerable
concern that liberali5ation will reinforce class and regional economic disarities.
!he balance of ayments crisis of $&&% and subse4uent olicy changes led to a
temorary decline in the GDP growth rate, which fell from ,.& ercent in 0E $&.& to *.&
ercent in 0E $&&% to $.$ ercent in 0E $&&$. In :arch $&&/, the estimated growth rate
for 0E $&&* was /.3 ercent. Inflation ea)ed at $( ercent in 0E $&&$, fell to &./
ercent in 0E $&&3, and then accelerated again, reaching $$ ercent in late 0E $&&*.
!his increase was attributed to a shar increase in rices and a shortfall in such critical
sectors as sugar, cotton, and oilseeds. :any analysts agree that the oor suffer most
from the increased inflation rate and reduced growth rate. India ?conomy Growth Data
1995. 9ourtesy Iibrary of 9ongress.