Chapter-I

Introduction & objectives

Indian economy is termed as the developing economy of the world. Some features like low

per capita income, higher population below poverty line, poor infrastructure, agriculture

based economy and lower rate of capital formation, tagged it as a developing economy in the

world.

The economy of India is characterised as a developing market economy. It is the world's

fifth-largest economy by nominal GDP and the third-largest by purchasing power parity

(PPP). According to the IMF, on a per capita income basis, India ranked 142nd by GDP

(nominal) and 119th by GDP (PPP) per capita in 2018. From independence in 1947 until

1991, successive governments promoted protectionist economic policies with extensive state

intervention and regulation; the end of the Cold War and an acute balance of payments crisis

in 1991 led to the adoption of a broad program of economic liberalisation. Since the start of

the 21st century, annual average GDP growth has been 6% to 7%, and from 2014 to 2018,

India was the world's fastest growing major economy, surpassing China. Historically India

was one of the largest economies in the world for most of the two millennia from 1st until

19th century.

The long-term growth perspective of the Indian economy remains positive due to its young

population and corresponding low dependency ratio, healthy savings and investment rates,

and is increasing integration into the global economy. The economy slowed in 2017, due to

shocks of "demonetisation" in 2016 and introduction of Goods and Services Tax in 2017.

Nearly 60% of India's GDP is driven by domestic private consumption  and continues to

remain the world's sixth-largest consumer market.  Apart from private consumption, India's

1
GDP is also fueled by government spending, investment, and exports. In 2018, India was the

world's tenth-largest importer and the nineteenth-largest exporter. India has been a member

of World Trade Organization since 1 January 1995. It ranks 63rd on Ease of doing business

index and 68th on Global Competitiveness Report. With 520-million-workers, the Indian

labour force is the world's second-largest as of 2019. India has one of the world's highest

number of billionaires and extreme income inequality. Since India has a vast informal

economy, barely 2% of Indians pay income taxes. During the 2008 global financial crisis the

economy faced mild slowdown, India undertook stimulus

measures (both fiscal and monetary) to boost growth and generate demand; in subsequent

years economic growth revived. According to 2017 PricewaterhouseCoopers (PwC) report,

India's GDP at purchasing power parity could overtake that of the United States by

2050. According to World Bank, to achieve sustainable economic development India must

focus on public sector reform, infrastructure, agricultural and rural development, removal

of land and labour regulations, financial inclusion, spur private investment and

exports, education and public health.

In 2019, India's ten largest trading partners were USA, China, UAE, Saudi Arabia, Hong

Kong, Iraq, Singapore, Germany, South Korea and Switzerland. In 2018–19, the foreign

direct investment (FDI) in India was $64.4 billion with service sector, computer, and telecom

industry remains leading sectors for FDI inflows.  India has free trade agreements with

several nations, including ASEAN, SAFTA, Mercosur, South Korea, Japan and few others

which are in effect or under negotiating stage. The service sector makes up 55.6% of GDP

and remains the fastest growing sector, while the industrial sector and the agricultural

sector employs majority of the labour force. The Bombay Stock Exchange and National

Stock Exchange are one of the world's largest stock exchanges by market capitalization. India

is the world's sixth-largest manufacturer, representing 3% of global manufacturing output and

2
employs over 57 million people.  Nearly 70% of India's population is rural whose primary

source of livelihood is agriculture, and contributes about 50% of India's GDP. It has the

world's seventh-largest foreign-exchange reserves worth $476 billion.[41] India has a

high national debt with 68% of GDP, while its fiscal deficit remained at 3.4% of

GDP. However, as per 2019 CAG report, the actual fiscal deficit is 5.85% of

GDP. India's government-owned banks faced mounting bad debt, resulting in low credit

growth, simultaneously the NBFC sector has been engulfed in a liquidity crisis. India faces

high unemployment, rising income inequality, and major slump in aggregate demand.  In

recent years, independent economists and financial institutions have accused the government

of fudging various economic data especially GDP growth.

India ranks second globally in food and agricultural production, while agricultural exports

were $38.5 billion. The construction and real estate sector is the second largest employer after

agriculture, and a vital sector to gauge economic activity. The Indian textiles industry is

estimated at $150 billion and contributes 7% of industrial output and 2% of India's GDP

while employs over 45 million people directly. The Indian IT industry is a major exporter

of IT services with $180 billion in revenue and employs over four million

people. India's telecommunication industry is the world's second largest by number of mobile

phone, smart phone, and internet users. It is the world's tenth-largest oil producer and

the third-largest oil consumer. The Indian automobile industry is the world's fourth largest by

production.  It has $672 billion worth of retail market which contributes over 10% of India's

GDP and has one of world's fastest growing e-commerce markets. India has the world's

fourth-largest natural resources, with mining sector contributes 11% of the country's

industrial GDP and 2.5% of total GDP. It is also the world's second-largest coal producer,

the second-largest cement producer, the second-largest steel producer, and the third-

largest electricity producer.

3
Indian Economy at a Glance:

Mumbai, the financial centre of India

Currency Indian rupee (INR, ₹)

Fiscal year. 1 April – 31 March

Trade organisations WTO, WCO, WFTU, BRICS, G-20, BIS, AIIB, ADB and others

Country group 1.Developing/Emerging

2. Lower-middle income economy

INDIAN ECONOMY STATISTICS

Population1. 353 billion (2018)

GDP 2.Increase $2.936 trillion (nominal; 2019 est.)

3. Increase $11.326 trillion (PPP; 2019 est.)

GDP rank 1. 5th (nominal; 2019)

2. 3rd (PPP; 2019)

GDP growth 1. Decrease 4.5% (Q2, FY 2019-20)

2. 8.2% (2016) 7.2% (2017)

3. 6.8% (2018) 6.0% (2019f)

GDP per capita

1. Increase $2,172 (nominal; 2019 est.)

4
 2. Increase $8,378 (PPP; 2019 est.)

GDP per capita rank1.

1. 42nd (nominal; 2018)

2. 119th (PPP; 2018)

GDP by sector

1. Agriculture: 15.4%

2. Industry : 23%

3. Services: 61.5%

4. (2017 est.)

GDP by component

1. Household consumption: 59.1%

2. Government consumption: 11.5%

3. Investment in fixed capital: 28.5%

4. Investment in inventories: 3.9%

5. Exports of goods and services: 19.1%

6. Imports of goods and services: −22%

7. (2017 est.)

Inflation (CPI)

5
 1. Negative increase 5.54% (November 2019)

Base borrowing rate

1. Steady 6.0% (as on 12 July 2019)

Population below poverty line

1. 60.4% on less than $3.20/day (2011,

2. 3.7% in extreme poverty (December 2018)

Labour force

1. Increase 519,469,299 (2019)

2. 45.4% employment rate (2018)

Labour force by occupation.

1. Agriculture: 44%

2. Industry: 25%

3. Services: 31%

Unemployment 1. Negative increase 6.1% (FY 2018)

Main industries

1. Textiles,

2. Chemicals,

3. Food processing,

6
4. Agribusiness,

5. Handicrafts,

6. Petroleum,

7. Petrochemicals,

8. Gems and jewellery

9. Leather,

10. Iron ore,

11. Steele,

12. Aluminium,

13. Cement,

14. Mining,

15. Metal,

16. Retail,

17. Machinery,

18. Information technology,

19. Constructions financial services,

20. Electric power,

21. Consumer goods,

7
 22. Pharmaceuticals,

23. automotive,

24. Telecommunication,

25. Real estate,

26. Paper transportation equipment.

Need and Significance of the Study:

The Indian economy after a two-year slowdown in the wake of global crisis, recorded a

robust growth of nearly 9 per cent in the first half of 2010-11. This is equal to the average

growth rate during the pre-crisis period, 2003-08. The critical question at this juncture is

whether the Indian economy is getting back to the pre-crisis high growth trajectory. To

examine this question we need analytical tools.

The potential rate of growth of an economy is the maximum sustainable rate at which an

economy can grow without causing a rise in the rate of inflation. The potential growth rate is

determined by the growth in the economy’s productive capacity which, in turn, depends on

the growth in inputs (labour, capital, land, etc.) and technology. An economy can grow above

the potential rate for some time but that will trigger rising inflationary pressures. Growing

below the potential rate will imply a rise in the rate of unemployment.

The economy grew by 8.9 per cent in the first half of the current financial year and this

growth is way above the potential rate. This is also borne out by the persistence of

inflationary pressures in the Indian economy.

8
OBJECTIVES OF THE STUDY

The main objectives of the study will be

 To know importance of primary, secondary and tertiary sectors with respect to Indian

Economy.

 To figure out the problems and issues related with primary and secondary sectors.

 To find out how this industry is helping other Sectors of the Economy? 

METHODOLOGY

Research in common man’s language refers to “search for knowledge” it is an art of scientific

investigation. And Research methodology is a method to solve the research problem

systematically. It involves gathering data, interpretations, and drawing conclusions about the

research data. It is a blue print, which is followed, to complete the study.

 Indian economy reports.

 Indian economic and planning reports.

 Ministry of finance

 NITI aayog.

 CMIE database.

LIMITATIONS OF THE STUDY

1. Future is uncertain.

2. Changes in government policies.

3. Sectorial differences

9
FRAME WORK OF THE STUDY

Chapter-1 deals with the introduction, need and significance of the study, research

methodology of the study limitations and frame work of the study.

Chapter-2 is all about introduction and company profile.

Chapter-3 deals with two sections.

Section-1 conceptual review.

Section-2 Journal Review.

Chapter-4 deals with the data analysis and interpretation..

Chapter-5 deals with the summary and finding suggestions.

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 Chapter - II

INDUSTRY PROFILE

INDIAN ECONOMY

Indian economy as the fastest growing major economy in the world and is expected to be one

of the top three economic power of the world over the next 10-15 years, backed by it’s strong

democracy and partnerships.

SECTORS OF INDIAN ECONOMY

They are three sectors in the Indian economy, they are; primary economy, secondary

economy, and tertiary economy. In terms of operations, the Indian economy is divided into

organized and unorganized. While for ownership, it is divided into the public sector and the

private sector. But today, we are only going to talk about the sectors of Indian economy and

what consists of these sectors.

PRIMARY SECTOR

The primary sector in India is the sector which is largely dependent on the availability of

natural resources in order to manufacture the goods and also to execute various processes. The

services in this sector are entirely dependent on the availability of the natural resources in

order to keep the day-to-day operations running.

As we have the clear idea of this sector is, the best example to discuss in this sector is the

agriculture sector. The other examples in this sector include fishing and forestry, but

agriculture accounts for the largest in this sector.

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One of the major problem that this sector faces is the underemployment and the disguised

employment. Underemployment accounts for the workers not working to the best of their

capabilities while the latter accounts for the workers not working to their true potential.

As a solution to the problems, the state, as well as the national government, can increase the

funds for the irrigation facilities and provide loans for buying high-quality seeds and

fertilizers.

Agriculture in India: Information About Indian Agriculture & Its

Importance

INTRODUCTION

Agriculture is the primary source of livelihood for about 58 per cent of India’s population.

Gross Value Added by agriculture, forestry and fishing is estimated at Rs 18.55 lakh crore

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(US$ 265.51 billion) in FY19(PE). Growth in Gross Value Added (GVA) by agriculture and

allied sectors stood at 2.1 per cent in H1 2019-20.

The Indian food industry is poised for huge growth, increasing its contribution to world food

trade every year due to its immense potential for value addition, particularly within the food

processing industry. The Indian food and grocery market are the world’s sixth largest, with

retail contributing 70 per cent of the sales. The Indian food processing industry accounts for

32 per cent of the country’s total food market, one of the largest industries in India and is

ranked fifth in terms of production, consumption, export and expected growth. It contributes

around 8.80 and 8.39 per cent of Gross Value Added (GVA) in Manufacturing and

Agriculture respectively, 13 per cent of India’s exports and six per cent of total industrial

investment.

MARKET SIZE

During 2018-19* crop year, food grain production is estimated at record 283.37 million

tonnes. In 2019-20, Government of India is targeting foodgrain production of 291.1 million

tonnes. As of November 2019, total area sown with rabi crops in India reached 95.35 million

hectares.

India is the second largest fruit producer in the world. Production of horticulture crops is

estimated at record 313.9 million metric tonne (MMT) in 2018-19 as per third advance

estimates. Milk production in the country stood at 187.7 million tonnes in 2018-19,

registering a growth of 6.5 per cent. Milk processing capacity is expected to double from 53.5

million MT to 108 million MT by 2025.

Total agricultural exports from India grew at a CAGR of 14.61 per cent over FY10-19 to

reach US$ 38.54 billion in FY19. In FY20 (till November 2019) agriculture exports were

US$ 22.69 billion.

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The organic food segment in India is expected to grow at a CAGR of 10 per cent during the

period 2016-21 and reach Rs 75,000 crore (US$ 10.73 billion) mark by 2025 from Rs 2,700

crore (US$ 386.32 million) in 2015.

INVESTMENTS

According to the Department for Promotion of Industry and Internal Trade (DPIIT), the

Indian food processing industry has cumulatively attracted Foreign Direct Investment (FDI)

equity inflow of about US$ 9.78 billion between April 2000 and December 2019.

Some major investments and developments in agriculture are as follows:

 In March 2020, Fact, the oldest large-scale fertiliser manufacturer in the country,

crossed one million production and sales mark.

 Nestle India to invest Rs 700 crore (US$ 100.16 million) in construction of its ninth

factory in Gujarat.

 In November 2019, Haldiram entered into an agreement for Amazon's global selling

program to e-tail its delicacies in the United States.

 In November 2019, Coca-Cola launched ‘Rani Float’, fruit juices to step out of its

trademark fizzy drinks.

 Two diagnostic kits developed by Indian Council of Agricultural Research (ICAR) -

Indian Veterinary Research Institute (IVRI) and the Japanese Encephalitis lgM

ELISA launched in October 2019.

 Investments worth Rs 8,500 crore (US$ 1.19 billion) have been announced in India

for ethanol production.

 The first mega food park in Rajasthan was inaugurated in March 2018.

 Agrifood start-ups in India received funding of US$ 1.66 billion between 2013-17 in

558 deals.

14
GOVERNMENT INITIATIVES

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

 In September 2019, Prime Minister, Mr Narendra Modi launched the National Animal

Disease Control Programme (NADCP), expected to eradicate foot and mouth disease

(FMD) and brucellosis in livestock.

 In May 2019, NABARD announced an investment of Rs 700 crore (US$ 100 million)

venture capital fund for equity investments in agriculture and rural-focused start-ups

 As per the Ministry of Agriculture, during 2019-20, Rs 1.50 crore (0.21 million) has

been allocated to state of Andaman and Nicobar as a central share for implementation

of per drop more crop component of Pradhan Mantri Krishi Sinchai Yojana

(PMKSY).

 Under Budget 2019-20, Pradhan Mantri Samman Nidhi Yojana was introduced under

which a minimum fixed pension of Rs 3000 (US$ 42.92) to be provided to the eligible

small and marginal farmers, subject to certain exclusion clauses, on attaining the age

of 60 years.

 The Government of India has come out with the Transport and Marketing Assistance

(TMA) scheme to provide financial assistance for transport and marketing of

agriculture products in order to boost agriculture exports.

 The Agriculture Export Policy, 2018 was approved by Government of India in

December 2018. The new policy aims to increase India’s agricultural exports to US$

60 billion by 2022 and US$ 100 billion in the next few years with a stable trade policy

regime.

15
  The Government of India is going to provide Rs 2,000 crore (US$ 306.29 million) for

computerization of Primary Agricultural Credit Society (PACS) to ensure

cooperatives are benefitted through digital technology.

 With an aim to boost innovation and entrepreneurship in agriculture, the Government

of India is introducing a new AGRI-UDAAN programme to mentor start-ups and to

enable them to connect with potential investors.

 The Government of India has launched the Pradhan Mantri Krishi Sinchai Yojana

(PMKSY) with an investment of Rs 50,000 crore (US$ 7.7 billion) aimed at

development of irrigation sources for providing a permanent solution from drought.

 The Government of India plans to triple the capacity of food processing sector in

India from the current 10 per cent of agriculture produce and has also committed Rs

6,000 crore (US$ 936.38 billion) as investments for mega food parks in the country,

as a part of the Scheme for Agro-Marine Processing and Development of Agro-

Processing Clusters (SAMPADA).

 The Government of India has allowed 100 per cent FDI in marketing of food products

and in food product e-commerce under the automatic route.

ACHIEVEMENTS IN THE SECTOR

 India’s sugar exports are estimated to cross 5 million tonne (MT) in the current

marketing year ending September 2020.

 Foreign direct investments (FDI) in India's food processing sector is stood at US$

628.24 million in 2018-19.

16
  Sugar production in India has reached 33.16 million tonnes (MT) in 2018-19 sugar

season and is expected to produce 26.85 MT in 2019-20, according to the Indian

Sugar Mills Association (ISMA).

 The Electronic National Agriculture Market (eNAM) was launched in April 2016 to

create a unified national market for agricultural commodities by networking existing

APMCs. Up to May 2018, 9.87 million farmers, 109,725 traders were registered on

the e-NAM platform. 585 mandis in India have been linked while 415 additional

mandis will be linked in 2018-19 and 2019-20.

 Agriculture storage capacity in India increased at 4 per cent CAGR between 2014-17

to reach 131.8 million metric tonnes.

 Coffee exports stood at 286.95 million tonnes in FY20 (April-September’19).

 Between 2014-18, 10,000 clusters were approved under the Paramparagat Krishi

Vikas Yojana (PKVY).

 
ROAD AHEAD

India is expected to achieve the ambitious goal of doubling farm income by 2022. The

agriculture sector in India is expected to generate better momentum in the next few years due

to increased investments in agricultural infrastructure such as irrigation facilities,

warehousing and cold storage. Furthermore, the growing use of genetically modified crops

will likely improve the yield for Indian farmers. India is expected to be self-sufficient in

pulses in the coming few years due to concerted efforts of scientists to get early-maturing

varieties of pulses and the increase in minimum support price.

Going forward, the adoption of food safety and quality assurance mechanisms such as Total

Quality Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical

Control Points (HACCP), Good Manufacturing Practices (GMP) and Good Hygienic

17
Practices (GHP) by the food processing industry will offer several benefits. The agri exports

from India are likely to reach the target of US$ 60 billion by the year 2022.

SECONDARY SECTOR

The economy in the sector is dependent on the natural ingredients which are used to create the

services and products offered and which at the end are used for consumption. In terms of value

added to the products and services, this sector is the best sector. The major examples that fall

under this category are transportation and manufacturing.

Both these sectors end product is the consumption by the people. This sector is responsible for

the employment of almost 14 percent of the entire workforce currently working in India. The

secondary sector also contributes to almost 28 percent of the share of GDP. This sector is the

backbone of Indian economy and there are more development and growth in the near future.

MANUFACTURING SECTOR IN INDIA

18
INTRODUCTION

Manufacturing has emerged as one of the high growth sectors in India. 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. India

is expected to become the fifth largest manufacturing country in the world by the end of year

2020*. Government aims to achieve 25 per cent GDP share and 100 million new jobs in the

sector by 2022.

MARKET SIZE

The Gross Value Added (GVA) at basic current prices from the manufacturing sector in India

grew at a CAGR of 4.29 per cent during FY12 and FY19 as per the annual national income

published by the Government of India. The sector’s Gross Value Added (GVA) at basic

prices based at current prices is estimated at US$ 403.47 billion in FY19PE. Quarterly GVA

at Basic Prices for H1 2019-20 grew by 0.4 percent as compared to growth of 13.9 percent in

H1 2018-19.

Under the Make in India initiative, the Government of India aims to increase the share of the

manufacturing sector to the gross domestic product (GDP) to 25 per cent by 2022, from 16

per cent, and to create 100 million new jobs by 2022. Business conditions in the Indian

manufacturing sector continue to remain positive. The manufacturing component of the IIP

stood at 130.8 during April-January 2019-20 and grew 0.3 per cent year-on-year. India’s

merchandise exports in April-January 2019-20 is estimated to be US$ 265.26 billion.

INVESTMENTS

With the help of Make in India drive, India is on the path of becoming the hub for hi-tech

manufacturing as global giants such as GE, Siemens, HTC, Toshiba, and Boeing have either

19
set up or are in process of setting up manufacturing plants in India, attracted by India's market

of more than a billion consumers and increasing purchasing power.

Cumulative Foreign Direct Investment (FDI) in India’s manufacturing sector reached US$

89.15 billion during April 2000-December 2019.

India has become one of the most attractive destinations for investments in the manufacturing

sector. Some of the major investments and developments in this sector in the recent past are:

 In March 2020, Oricon Enterprises has entered into a joint venture agreement with

Italy-headquartered Tecnocap Group to set up a new company, Tecnocap Oriental, for

manufacturing lug caps.

 In September 2019, Mumbai got its first metro coach manufactured by state-run

Bharat Earth Movers (BEML) under 'Make-in-India' initiative.

 In September 2019, Mumbai has now got its first metro coach manufactured by state-

run Bharat Earth Movers (BEML) under 'Make-in-India' initiative.

 In October 2019, Berger Paints India Ltd, a Kolkata-based company, acquired 95.53

per cent stake of STP Ltd (STPL), which is mainly into waterproofing and protective

coatings.

 In September 2019, OnePlus launched its smart TVs in the Indian market.

 In August 2019, Vivo planned to invest around Rs 3,500 crore (US$ 480 million) in

India into capacity expansion. 

 India’s manufacturing PMI stood at 54.50 in February 2020. Also, companies start to

spend more on hiring and anticipate good growth in future prospects.

 Capacity utilisation in India’s manufacturing sector stood at 69.1 per cent in the

second quarter of 2019-20.

GOVERNMENT INITIATIVES

20
The Government of India has taken several initiatives to promote a healthy environment for

the growth of manufacturing sector in the country. Some of the notable initiatives and

developments are:

 In March 2020, the Union Cabinet approved financial assistance to the Modified

Electronics Manufacturing Clusters (EMC2.0) Scheme for development of world

class infrastructure along with common facilities and amenities through Electronics

Manufacturing Clusters (EMCs).

 As per MOSPI’s report on Payroll Reporting in India, number of new subscribers*

under Employees’ Provident Fund Scheme reached 7,50,441 in January 2020.

 Under the Pradhan Mantri Kaushal Kendras, 73 lakh people have been trained during

2016-20 while 723 Pradhan Mantri Kaushal Kendras established till Jan 2020.

 As of February 2020, there are 14,602 Industrial Training Institutes (ITI) present in

India. (Accessed on March 06, 2020).

 In August 2019, the government permitted 100 per cent FDI in contract

manufacturing through automatic route.

 Under Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 1.0, 19.85 lakh candidates

were trained, out of which 2.62 lakh (13.23 per cent) got placements. PMKVY 2.0

(2016-2020) which was launched in October 2016 and by June 2019 about 52.12 lakh

candidates have received training and 12.60 lakh (24.18 per cent) have got jobs.

 In February 2019, the Union Cabinet passed the National Policy on Electronics (NPE)

which has envisaged creation of a US$ 400 billion electronics manufacturing industry

in the country by 2025. 32 per cent growth rate has been targeted globally in next five

years.

 In September 2018, the Government of India exempted 35 machine parts from basic

custom duty in order to boost mobile handset production in the country.

21
  Government of India is in the process of coming up with a new industrial policy

which envisions development of a globally competitive Indian industry. As of

December 2018, the policy has been sent to the Union Cabinet for approval.

 In Union Budget 2018-19, the Government of India reduced the income tax rate to 25

per cent for all companies having a turnover of up to Rs 250 crore (US$ 38.75

million).

 Under the Mid-Term Review of Foreign Trade Policy (2015-20), the Government of

India increased export incentives available to labour intensive MSME sectors by 2 per

cent.

 The Government of India has launched a phased manufacturing programme (PMP)

aimed at adding more smartphone components under the Make in India initiative

thereby giving a push to the domestic manufacturing of mobile handsets.

 The Government of India is in talks with stakeholders to further ease foreign direct

investment (FDI) in defence under the automatic route to 51 per cent from the current

49 per cent, in order to give a boost to the Make in India initiative and to generate

employment.

 The Ministry of Defence, Government of India, approved the “Strategic Partnership”

model which will enable private companies to tie up with foreign players for

manufacturing submarines, fighter jets, helicopters and armoured vehicles.

ROAD AHEAD

India is an attractive hub for foreign investments in the manufacturing sector. Several mobile

phone, luxury and automobile brands, among others, have set up or are looking to establish

their manufacturing bases in the country.

22
The manufacturing sector of India has the potential to reach US$ 1 trillion by 2025 and India

is expected to rank amongst the top three growth economies and manufacturing destination of

the world by the year 2020. The implementation of the Goods and Services Tax (GST) will

make India a common market with a GDP of US$ 2.5 trillion along with a population of 1.32

billion people, which will be a big draw for investors.

With impetus on developing industrial corridors and smart cities, the government aims to

ensure holistic development of the nation. The corridors would further assist in integrating,

monitoring and developing a conducive environment for the industrial development and will

promote advance practices in manufacturing.

TERTIARY SECTOR

This sector contributes the largest in terms of share in GDP in India. The sector is also the

service sector and is important when you consider the development of the other two sectors.

Like the previous sector, this sector also adds the value to the products. This sector is

responsible for employing 23 percentage of the workforce out of the total workforce currently

working in India.

The example of this sector is all service sectors which IT services, consulting, etc. This sector

contributes to almost 59 percent of the total share of GDP. The main problem that this sector is

that the jobs which involve lower salaries do not attract much employment. And this remains g

for double-digit growth in the near future.

23
SERVICE SECTOR IN INDIA

INTRODUCTION

The services sector is not only the dominant sector in India’s GDP, but has also attracted

significant foreign investment flows, contributed significantly to exports as well as provided

large-scale employment. India’s services sector covers a wide variety of activities such as

trade, hotel and restaurants, transport, storage and communication, financing, insurance, real

estate, business services, community, social and personal services, and services associated

with construction.

24
As of 2018, 31.45 per cent of India’s employed population is working in the services sector.

MARKET SIZE

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

54.17 per cent of India’s Gross Value Added at current price in 2018-19*. India’s services

sector GVA grew at a CAGR of 6.96 per cent to US$ 1,356.49 billion in FY19* from US$

846.84 billion in FY12. Net export estimate from April 2019 to January 2020 in services is

US$ 181.20 billion and import is US$ 112.09 billion.

Nikkei India Services Purchasing Managers' Index (PMI) stood at 57.5 in February 2020,

indicating an expansion. The expansion in services activity was driven by boost in capacity

and demand along with favourable public policies.

INVESTMENTS

Some of the developments and major investments by companies in the services sector in the

recent past are as follows:

 Services sector is the largest recipient of FDI in India with inflows of US$ 80.67

billion between April 2000 and December 2019.

 Leisure and business travel and tourism spending are expected to increase to US$

234.4 billion and US$ 12.9 billion in 2018, respectively.

 India’s earnings from medical tourism could exceed US$ 9 billion by 2020.

 Indian healthcare companies are entering into merger and acquisitions with domestic

and foreign companies to drive growth and gain new markets.

GOVERNMENT INITIATIVES

The Government of India recognises the importance of promoting growth in services sectors

and provides several incentives in wide variety of sectors such as health care, tourism,

25
education, engineering, communications, transportation, information technology, banking,

finance, management, among others.

The Government of India has adopted a few initiatives in the recent past. Some of these are as

follows:

 Government of India has launched the National Broadband Mission with an aim to

provide Broadband access to all villages by 2022.

 Government of India has launched the National Broadband Mission with an aim to

provide Broadband access to all villages by 2022.

 Under the Mid-Term Review of Foreign Trade Policy (2015-20), the Central

Government increased incentives provided under Services Exports from India Scheme

(SEIS) by two per cent.

 Government of India is working to remove many trade barriers to services and tabled

a draft legal text on Trade Facilitation in Services to the WTO in 2017.

ACHIEVEMENTS

Following are the achievements of the government in the past four years:

 India’s rank jumped to 24 in 2018 from 137 in 2014 on World Bank’s Ease of doing

business - Getting Electricity ranking.

 In FY19, traffic at major ports stood at 699.05 million tonnes growing at a CAGR of

2.74 per cent from FY08-19 and reached 585.72 million tonnes in FY20T (up to

January 2020).

 Six-fold increase in Government spending on telecommunications infrastructure and

services in the country – from Rs 9,900 crores (US$ 1.41 billion) during 2009-14 to

Rs 60,000 crores (US$ 8.55 billion) (actual + planned) during 2014-19.

26
  Ministry of Tourism sanctioned 18 projects covering all the North Eastern States for

Rs 1,456 crore (US$ 211.35 million) for development and promotion of tourism in the

North Eastern Region under the Swadesh Drashan and PRASHAD Schemes.

 A total of 11 projects worth Rs 824.80 crore (US$ 127.98 million) were sanctioned

under the Swadesh Darshan scheme. During 2019-20, an additional fund Rs 1,854.67

crore (US$ 269.22 million) is sanctioned for new projects under the Swadesh Darshan

scheme.

 Statue of Sardar Vallabhbhai Patel, also known as ‘Statue of Unity’, was inaugurated

in October 2018 and the total revenue generated till November 2019 is Rs 82.51 crore

(US$ 11.81 million).

 Highest ever revenue was generated by Indian IT firms at US$ 181 billion in 2018-19.

 
ROAD AHEAD

Services sector growth is governed by both domestic and global factors. The Indian facilities

management market is expected to grow at 17 per cent CAGR between 2015 and 2020 and

surpass the US$19 billion mark supported by booming real estate, retail, and hospitality

sectors.

By 2023, healthcare industry is expected to reach US$ 132 billion. India’s digital economy is

estimated to reach US$ 1 trillion by 2025. By end of 2023, India’s IT and business services

sector is expected to reach US$ 14.3 billion with 8 per cent growth.

The implementation of the Goods and Services Tax (GST) has created a common national

market and reduced the overall tax burden on goods. It is expected to reduce costs in the long

run on account of availability of GST input credit, which will result in the reduction in prices

of services.

27
 COMPANY PROFILE

Established in 1994, AnandRathi is one of India’s leading financial services firm offering

Wealth Management, Investment Banking, Corporate Finance & Advisory, Brokerage &

Distribution services in the areas of equities, commodities, mutual funds, structured products,

insurance, corporate deposits, bonds & loans to institutions, corporations, high-net worth

individuals and families. 

All our offerings are supported by powerful research teams and each unit is clearly

positioned to cater to the most diverse financial needs of our clients.

DEPARTMENTS OF ANANDRATHI

AnandRathi is one of India’s leading financial services firm offering:

 Wealth Management

 Investment Banking

 Corporate Finance

 Advisory & Brokerage

28
  Distribution services

In the areas of equities, commodities, mutual funds, structured products, insurance, corporate

deposits, bonds & loans to institutions, corporations, high-net worth individuals and families.

The firm has a vast footprint across India and also in select international locations such as

Dubai, with presence across 1200 locations through its own branches, sub-brokers and

remises and representative offices/associate companies. The group today employs over 2,500

professionals. All our offerings are supported by powerful research teams and each unit is

clearly positioned to cater to the most diverse financial needs of our clients.

SERVICES PROVIDED BY ANANDRATHI

a. Investment services

b. Wealth management

c. Investment banking

d. Commodities &currency

e. Institutional equities

A. INVESTMENT SERVICES

At Investment Services Group, we cater to financial needs of Individual clients. Keeping

this in mind and to serve our clients with more focused approach, we have categorized our

clients into two distinct categories: Privilege and Preferred.

B. WEALTH MANAGEMENT

29
Wealth management is a high-level professional service that combines financial and

investment advice, accounting and tax services, retirement planning and legal or estate

planning for one set fee.

C. INVESTMENT BANKING

Investment banking Is a special segment of banking operation that helps individuals or

organizations raise capital and provide financial consultancy services

tothem.Theyactasintermediariesbetweensecurityissuersandinvestorsandhelp new firms

to go public. They either buy all the available shares at a price estimated by their

experts and resell them to public or sell shares on behalf of the issuer and take

commission on each share.

D.INSTITUTIONAL EQUITIES

An institutional investor is an entity which pools money to purchase securities, real

property, and other investment assets or originate loans. Institutional investors

include banks, insurance companies, pensions, hedge funds ,REITs ,investmen tadvisors,

endowments, and mutual funds.

PRODUCTS AND SERVICES

 Trading

 Investment

 Financing

 Advisory

30
TRADING:

The action or activity of buying and selling in stock market is Trading, It includes:

 Equity

 Commodity

 Currency

 Derivatives

 Initial public offerings

INVESTMENT:

Investment means to invest money, in the expectation of some benefit in the future.

It includes:

 Mutual funds

 Insurance

 Corporate fixed deposit

 Structured product

 Non convertible debentures/bonds

 Portfolio management services

31
FINANCING:

Financing is the act of providing funds for business activities, making

purchases or investing. Financial institutions and banks are in the business of financing as

they provide capital to businesses, consumers and investors to help them achieve their goals.

It includes:

 Loan against shares

 Promoter funding.

ADVISORY:

Business advisory services are provided with the aim to support undertakings identify

strengths and overcome weaknesses in specific areas. A range of business advisors services

are available and every effort is made to match the right advisor to the specific needs of the

applicant.

It includes:

 Smart basket

 Wills &trusts

 Institutional research

32
  FOREX Advisors.

RESEARCH

 Fundamental - ideas on stocks to be chosen for long term.

 Technical -trading calls and reports for short term.

 FNO -in depth study to form derivative strategy.

 Commodity - research converting the commodity markets.

 Currency -insight to FOREX market trends.

 Economic strategy -reports displaying economic results of the nation.

 Institutional equity -strong research with various options into institutional

equity.

ANAND RATHI IS GROUP THE MEMBERS OF

 Bombay Stock Exchange (BSE)

 National Stock Exchange (NSE)

 Multi-Commodity Exchange (MCX)

 National Commodity Exchange (NCDEX)

 Central Depository Services Ltd. (CDSL)

 National Securities Depository Limited (NSDL)

 ARN holder.

33
VISION

MISSION

The firm's philosophy is entirely client centric, with a clear focus on providing long term

value addition to clients, while maintaining the highest standards of excellence, ethics and

professionalism. The entire firm activities are divided across distinct client groups:

Individuals, Private Clients, Corporate and Institutions.

OBJECTIVES

1. CAPITAL FORMATION: 

The primary function of a stock exchange is to help companies raise money. To accomplish

this task, ownership in a private corporation is sold to the public in the form of shares of

stock. Funds received from the sale of stock contribute to the firm's capital formation.

Companies plan to use the newly-raised funds to invest in productive business assets and

grow revenues and profits. This positive business expansion then may be reflected in a higher

stock trading price.

34
2. SECURITY AND TRANSPARENCY: 

The legitimate sale of stock on any exchange requires reliable and accurate information. By

requiring a high level of transparency from all trading companies, the stock exchange creates

a more secure environment for investors, which helps them to determine the risks of

investing.

3. TRADING OF STOCKS:

 An organized and regulated stock exchange facilitates the efficient trading of stock and other

investment vehicles. Without this highly controlled and coordinated stock exchange, the

global trading of stock would not be possible. Through the stock exchange, any individual or

company may buy or sell shares in another company. In fact at any one time, there are

thousands of company shares being traded through million of individual transactions

4.Buyers gets opportunity of investment with the company, if company grows its share prices

also grow and money of investors will grows.

5.To be a world class exchange and use it as an instrument of change for the industry as a

whole.

FOUNDERS OF ANANDRATHI

35
Mr. AnandRathi, the founder and torch-bearer of the AnandRathi Group, is one of the leading

financial and investment experts in India and South-East Asia. The gold medalist Chartered

Accountant is an esteemed member of the ICAI and has over 40 years diverse experience.

Before establishing his own enterprise ,Mr.Rathi had a long and illustrious career as a

core member of Birla Group — the business group of legendary late Mr. Aditya Birla.

He was the youngest president of Indian Rayon (now known as

AdityaBirlaNuvo).Hewasinstrumentalinshapingthegroup'scementbusiness and

spearheading its foray into diverse businesses in manufacturing and services.

In 1999, Mr. Rathi became the president of BSE (Bombay Stock Exchange). He was the

driving force behind the expansion of BOLT - the BSE Online Trading System. He also set

up the Trade Guarantee Fund and played a vital role in setting up the Central Depository

Services(CDS).

PRADEEP GUPTA – CO-FOUNDER&VICE CHAIRMAN

Mr. Pradeep Gupta has an all-embracing industry experience acquired from running a wide-

range of businesses in the past. He started his professional journey with a family-owned

textiles business. Later, his growing interest and love for financial markets drew him towards

the financial services industry. He stepped into this industry with Navratan Capital &

Securities Pvt. Ltd. and later joined hands with Mr. AnandRathi to establish the AnandRathi

Group.

With over two decades of rich experience in financial markets, he has played a pivotal role

in laying the foundation of the Institutional Broking and Investment Services arm of the

group. His ground-breaking spirit has driven the firm’s rapid growth — successful

expansion into a strong network of franchisees and branches across India. Under his

36
dynamic leadership the group has bagged several prestigious awards and accolades.

An avid investor and trusted advisor, Mr. Gupta is often seen sharing his views and insights

in the media on macroeconomic aspects, domestic and international markets. He is also an

active member of Rotary Club of Bombay.

PROMOTER GROUP

 Pradeep Gupta – Co-founder &Vice Chairman

 Amit Rathi - Managing Director

 Priti Gupta – Managing Director

 Supriya Rathi - Director.

BOARD OF DIRECTOR

 C D Arha –Director

MANAGEMENT GROUP

 Rakesh Rawal - CEO, Private Wealth Management

 Juga lMantri - Executive Director & Group CFO

 Roop Bhootra - Executive Director, Investment Services

 Chetan Bharkhada – Executive Director, Commodities &Currencies

 Vishal Laddha - CEO, Institutional Equities

 K.K.Rao -Executive Director, General

37
Insurance

CULTURE AT ANAND RATHI

Friendly, open and encouraging are a few adjectives that can close to describe work

culture at Anand Rathi. We believe in the abilities and skills of our employees to

transform challenges into success, as a reason they are provided with tasks

which help them in enhancing their learning curve there by pursuing a

successful career ahead as a professional.

Every employee is unique and has a sense of achievement and hence we try to provide each

of them with access to the domain of their interest. We constantly strive to create an

environment which has a work balance approach where in one can accelerate

professionally as well as nurture personal well being .

FUN AT WORK

It has been our constant effort to make the work place fun loving, enjoyable with a

cohesive environment, bringing in the feeling of togetherness.

Events and fun filled activities are organized regularly in order to bring out the sense of

belongingness and employees interaction.

Activities organized are:

 Celebrations of Patriotic Days and Festivals

 Birthdays

 Picnics and Team outings

 Off-sites

38
  Fun activities such as inter-departmental competitions, quiz and games

 Employee and team participation in Bay Decorations and Traditional Days

MILESTONES OF ANANDRATHI

BRANCHES OF ANANDRATHI

 AnandRathi Branches in India

39
 AnandRathi Branches in Kurnool, Vijayawada and Visakhapatnam

 AnandRathi Branches in Chennai, Coimbatore, Erode and Trichy

 AnandRathi Branch in Hyderabad

 AnandRathi Branch in Bangalore

 AnandRathi Branches in Guwahati

 AnandRathi Branches in Mumbai, Pune, Nagpur, Kolhapur, Chandrapur, Aurangabad,

Jalgaon and Nashik

 AnandRathi Branches in Howrah and New Alipore

 AnandRathi Branches in Bhubaneswar and Cuttack

 AnandRathi Branches in Ahmedabad, Surat and Vadodara

 AnandRathi Branches in Ambala, Panipat and Rohtak

 AnandRathi Branch in Delhi

 AnandRathi Branch in Chandigarh

 AnandRathi Branch in Raipur

 AnandRathi Branch in Goa

 AnandRathi Branch in Ranchi

 AnandRathi Branch in Bengaluru

40
ORGANIZATION STRUCTURE

AWARDS

2017

Awarded 'Corporate Broker Of the Year 2016-2017' to Anand

Rathi Commodities by MCX

2016

Zee Market Excellence Award 2016- Best Analyst in Commodities FOREX

Best Wealth Manager India Award by Capital Finance International, London

2015

41
2015 Best Wealth Manager India Award by Capital Finance International, London

2014

Winner of Asia money Poll of Polls (2005-2013) - The Best Domestic Private Bank (India)

Voted “The Best Domestic Private Bank (India)” for 5 Consecutive Years - 2009 | 2010 |

2011 | 2012 | 2013 – Asia money Private Banking Polls

AnandRathi Financial Services Ltd. awarded “Excellence Award” – Institute of Economic

Studies

Rakesh Rawal, CEO - Private Wealth Management awarded Udyog Rattan Award and

Golden Global Achievers Award – Institute of Economic Studies.

2013

Recognized as “One of the Top 10 Performers in Equity Segment (Retail Trading)” - Bombay

Stock Exchange (2012-2013)

Ms. Priti Gupta, Executive Director awarded “Special Contribution to Commodities

Business” — Zee Business at Best Market Analyst Awards (2013)

The Overall Best Private Bank in India – Asia money Private Banking Polls (2013)

2012

The Overall Best Private Bank in India – Asia money Private Banking Polls (2012)

ET Now Star mine Awards – 2012

1st in Stock Picker- IT/ Telecom Category.

42
1st & 3rd Overall Stock Picker.

1st in Stock Picker- Consumer Category

Best Agri Commodities Analyst (Fundamental) Award— Commodity

Participants Association of India (2012)

Mr. Kaitav Shah, Banking Analyst - Institutional Research team rated “Asia’s Best Analyst –

Banking” - Wall Street Journal (2012)

2011

ET Now Starmine Awards – 2011

1st in Stock Picker- Consumer Goods & Services

3rd in Stock Picker- Auto & Auto Ancillary Services

3rd in Best Earnings Estimates

“Best Contribution in Investor Education & Category Enhancement of the year” —

Bloomberg UTV Financial Leadership Award (2011)

Private Wealth Management was awarded for generating the “Highest AUM growth in 2010”

for Kotak MF - Mr. Uday Kotak (2011)

2010

Mr. AnandRathi awarded for his contribution towards India’s Capital Market — Zee

Business - 2010

43
Institutional Research team moved up from the 10th to the 7th rank as the “Best Coverage

Brokerage House” – Asia money (2010)

2006

Ranked amongst “South Asia's top 5 wealth managers for the ultra-rich” - Asia Money poll

(2006)

Ranked 6th in 2006 for “All India Broker Performance in equity distribution in the High Net

worth Individuals (HNI) Category”

COMPITITORS OF ANANDRATHI

44
COMPANY HIERARCHY

45
WHY ANAND RATHI?

 A reputed brand with years of experience & trust

 Ready business model

 Zero infrastructure cost module

 Attractive Revenue sharing

 Support in client acquisition

 Marketing support–News papers ,Leaflets , Umbrella etc

 Strong risk management system

 Strong research support backed by high end technology

 Grooms Business partners with their enterprising skills and potential to develop

clients.

 Multi Product offering like - Equity, Derivatives, Commodity, Currency, DP, IPO,

Mutual Fund & Gold E Lock.

46
 Chapter III

Literature Review

SECTION-A Conceptual review

A. INDIAN ECONOMY

PRIMARY SECTOR

The primary sector of the economy includes any industry involved in the extraction and

production of raw materials, such as farming, forestry, fishing and mining.

The primary sector tends to make up a larger portion of the economy in developing

countries than it does in developed countries. For example, in 2018, agriculture, forestry, and

fishing comprised more than 15% of GDP in sub-Saharan Africa[4] but less than 1% of GDP

in North America.

In developed countries the primary sector has become more technologically advanced,

enabling for example the mechanization of farming, as compared with hand-picking and

-planting in poorer countries. More developed economies may invest additional capital in

primary means of production: for example, in the United States corn belt, combine

harvesters pick the corn, and sprayers spray large amounts

of insecticides, herbicides and fungicides, producing a higher yield than is possible using less

capital-intensive techniques. These technological advances and investment allow the primary

sector to employ a smaller workforce, so developed countries tend to have a smaller

percentage of their workforce involved in primary activities, instead having a higher

percentage involved in the secondary and tertiary sectors.

47
LIST OF COUNTRIES BY AGRICULTURAL OUTPUT

Largest countries by agricultural output (in PPP terms) according to the IMF and CIA World

Fact book, at peak level as of 2018.

Economy Countries by agricultural output (in PPP

terms) at peak level as of 2018 (billions

in USD)
(01)  China 2,101
(02)  India 1,602
(03)  Indonesia 486
(—)  European Union 352
(04)  Pakistan 284
(05)  Nigeria 253
(06)  Brazil 209
(07)  Russia 196
(08)  United States 185
(09)  Iran 162
(10)  Turkey 155
(11)  Egypt 154
(12)  Thailand 109
(13)  Vietnam 108
(14)  Bangladesh 108
(15)  Argentina 101
(16)  Mexico 100
(17)  Philippines 92
(18)  Myanmar 89
(19)  Algeria 87
(20)  Malaysia 84

ROLE AND IMPORTANCE OF PRIMARY SECTOR

Theodore Schultz in his Noble (Economics) acceptance speech in 1979 observed, “Most of

the people in the world are poor... Most of the world’s poor people earn their living from

agriculture, so if we knew the economics of agriculture we would know much of the

economics of being poor” (Shultz, 1979). This throws light on the importance of primary

48
sector in economies of the world. Understanding the structure of the economy is critical for

both the Although, India ranks second in worldwide farm output, it falls short in crop yield

per unit area of farms. States of India that lie on the Indo-Gangetic plain and the ones near to

any river are among the important agricultural regions of the country. India mainly exports

agricultural produce like rice, wheat, spices, and cereals. 10% of her trade income comes

from the export of these products. In the long run sustainable growth and development of a

national or regional economy depends on the volume of output produced by all sectors –

agriculture, industry and the service sectors. Keeping this in mind, it becomes pivotal that the

Indian economy, more so Indian primary sector, needs to be modernised. Modernising

agriculture will lead to increase in more yield of crop per unit area and increase share of its

GDP. This creates a chain of actions where, rural families will have an increased income,

increasing their purchasing power, which in turn expands the existing market for

manufactured Role and Importance of Primary Sector -Vagdevi H. S. & Kiranbabu P.

economic planners and the government of that country to plan, to govern and consistently

take the economy towards a growing path. A steady and reliable economic growth is vital for

any country because it helps its citizens to have a better standard of living and create enough

surpluses that help in facing the adversities. To understand the economy better scholars like

Colin Clark (1940) and Fisher (1935) have divided the economy into three sectors - primary

sector, secondary sector and tertiary sector. The primary sector is an economic description,

concerned with the extraction of raw materials. It includes fishing, farming and mining.

Amongst the primary sector, agriculture is the predominant occupation and has the largest

share in national income. Despite employing 51% of the workforce, agriculture and allied

activities produces just 15% of the national GDP, indicating a poor usage of the available

workforce and a failure of modernisation of agriculture and other activities allied to it.

49
SECONDARY SECTOR

The secondary sector of the economy  including industries that produce a finished,

usable product or are involved in construction.

This sector generally takes the output of the primary sector and manufactures

finished goods or where they are suitable for use by other businesses, for export, or sale to

domestic consumers. This sector is often divided into light industry and heavy industry.

Many of these industries consume large quantities of energy and require factories and

machinery to convert raw materials into goods and products. They also

produce waste materials and waste heat that may cause environmental problems or

cause pollution. The secondary sector supports both the primary and tertiary sector.

Some economists contrast wealth-producing sectors in an economy such as manufacturing

with the service sector which tends to be wealth- consuming. Examples of service may

include retail, insurance, and government. These economists contend that an economy begins

to decline as its wealth-producing sector shrinks .Manufacturing is an important activity to

promote economic growth and development. Nations that export manufactured products tend

to generate higher marginal GDP growth which supports higher incomes and marginal tax

revenue needed to fund the quality of life initiatives such as health care and infrastructure in

the economy. The field is an important source for engineering job opportunities. Among

developed countries, it is an important source of well-paying jobs for the middle class to

facilitate greater social mobility for successive generations on the economy.

LIST OF COUNTRIES BY INDUSTRIAL OUTPUT

20 largest Countries by Industrial Output (in PPP terms) according to the IMF  and  CIA

World Factbook, at peak level as of 2020.

50
 Economy Countries by Industrial Output (in PPP terms)

at peak level as of 2020 (billions in USD)

(01)  China 11,261
(—)  European Union 5,729
(02)  United States 4,093
(03)  India 2,604
(04)  Japan 1,719
(05)  Indonesia 1,549
(06)  Russia 1,422
(07)  Germany 1,364
(08)  South Korea 912
(09)  Saudi Arabia 840
(10)  Mexico 835
(11)  Turkey 763
(12)  Brazil 720
(13)  United Kingdom 639
(14)  France 597
(15)  Italy 587
(16)  Iran 578
(17)  Canada 537
(18)  Poland 517
(19)  Thailand 499
(20)  Egypt 490

ROLE AND IMPORTANCE OF SECONDARY SECTOR

Secondary sector includes all branches of human activities that trans- form raw materials into

finished products. Some of the manufacturing industry that comes under secondary sector are

Automotive industry, Electrical industry, Chemical industry, Energy industry, Metallurgical

industry, Construction industry, Food industry, Glass industry, Textile and Clothing industry

and Consumer goods industry (all consumables). Secondary sector sometimes is also known

as production sector with smallscale units and large scale units. Some of the examples of

small scale units are shoe factory, textile unit, printing, glass making, furniture etc. The large

scale manufacturing industries include steel, automobiles, aluminium, etc., The secondary

sector forms a substantial part of GDP, it creates values (goods) and it is the engine of

economic growth and is crucial for all developed economies, although the trend, in most

developed countries, is the predominant tertiary sector or service sector. The development of

51
secondary sector can be attributed to demand for more goods and food, which leads to

industrialisation. Though primary sector is vital there is a natural limit on how much can be

extracted from primary sector. However, when economy moves into the secondary sector,

new farm techniques are used and industria- lisation becomes dominant as the goods can be

transformed into articles of our need, distributed and sold. The economy of India is the

seventh-largest in the world by nominal GDP and the third largest by Purchasing Power

Parity (PPP). The country is classified as a newly industrialised country, one of the G-20

major economies, a member of BRICS and a developing economy with an average growth

rate of approximately 7% over the last two decades. According to CIA sector wise Indian

GDP composition in 2014 are as follows: Agriculture (17.9%), Industry (24.2%) and Services

(57.9%). The GDP of Industrial sector is $495.62 billion making India 12th in the world

ranking. India ranks 6 th in industrial output according to IMF and CIA World Fact book,

2015 , with output of 559 billion USD where China, United States and Japan occupy first

three positions. It is clearly understood from the graph that , the primary sector which mainly

constitutes Agriculture is declining. However, the growth of secondary sector has been very

slow vis-a-vis the services clearly indicating that there is a lot of scope for the growth of

secondary sector in India.

TERTIARY SECTOR

52
The service sector is the third of the three economic sectors of the three-sector theory. The

others are the secondary sector (approximately the same as manufacturing), and the primary

sector (raw materials).

The service sector consists of the production of services instead of end products. Services

(also known as "intangible goods") include attention, advice, access, experience,

and affective labor. The production of information has long been regarded as a service, but

some economists now attribute it to a fourth sector, the quaternary sector.

The tertiary sector of industry involves the provision of services to other businesses as well as

final consumers. Services may involve the transport, distribution and sale of goods from

producer to a consumer, as may happen in wholesaling and retailing, pest

control or entertainment. The goods may be transformed in the process of providing the

service, as happens in the restaurant industry. However, the focus is on people interacting

with people and serving the customer rather than transforming physical goods.

DIFFICULTY OF DEFINITION

It is sometimes hard to define whether a given company is part and parcel of the secondary or

tertiary sector. And it is not only companies that have been classified as part of that sector in

some schemes; government and its services such as police or military, and non-profit

organizations such as charities or research associations can also be seen as part of that sector.

In order to agapito classify a business as a service, one can use classification systems such as

the United Nations' International Standard Industrial Classification standard, the United

States' Standard Industrial Classification (SIC) code system and its new replacement,

the North American Industrial Classification System (NAICS), the Statistical Classification

53
 of Economic Activities in the European Community (NACE) in the EU and similar systems

elsewhere. These governmental classification systems have a first-level hierarchy that reflects

whether the economic goods are tangible or intangible.

For purposes of finance and market research, market-based classification systems such as

the Global Industry Classification Standard and the Industry Classification Benchmark are

used to classify businesses that participate in the service sector. Unlike governmental

classification systems, the first level of market-based classification systems divides the

economy into functionally related markets or industries. The second or third level of these

hierarchies then reflects whether goods or services are produced.

EXAMPLES OF TERTIARY INDUSTRIES

Examples of tertiary industries may include:

A. Telecommunication

B. Hospitality industry/tourism

C. Mass media

D. Healthcare/hospitals

E. Public health

F. Pharmacy

G. Information technology

H. Waste disposal

54
I. Consulting

J. Gambling

K. Retail sales

a. Fast-moving consumer goods (FMCG)

L. Franchising

M. Real estate

N. Education

O. Financial services

a. Banking

b. Insurance

c. Investment management

P. Professional services

a. Accounting

b. Legal services

c. Management consulting

Q. Transportation

LIST OF COUNTRIES BY TERTIARY OUTPUT

Largest countries by tertiary output in Nominal GDP, according to the IMF  and CIA World

Fact book, at peak level as of 2020.

Economy Countries by tertiary output at peak level as

55
 of 2020 (billions in USD)
(01)  United States 17,142
(—)  European Union 16,183
(02)  China 14,347
(03)  India 6,963
(04)  Japan 3,924
(05)  Germany 3,048
(06)  Russia 2,735
(07)  Brazil 2,530
(08)  United Kingdom 2,505
(09)  France 2,413
(10)  Italy 1,814
(11)  Indonesia 1,715
(12)  Mexico 1,689
(13)  Turkey 1,434
(14)  Spain 1,427
(15)  South Korea 1,353
(16)  Canada 1,337
(17)  Saudi Arabia 1,011
(18)  Australia 970
(19)  Iran 900
(20)  Taiwan 832

ROLE AND IMPORTANCE OF SERVICE SECTOR

In any country economic development depends on the growth and evolution of the three

sectors of the economy. However in recent years the service sector growing at a very faster

rate in the developing countries and is contributing a major share in terms of output, income

and employment. Even the productivity per worker is becoming higher in service sector when

compared to agriculture and industrial sectors. Already the service sector is dominant in the

developed countries. If agriculture sector is stagnant, new service activities are emerging and

adding to the service sector making the economy to grow. Hence service sector is playing a

major role in economic development of any country.

The importance of the services sector can be gauged by its contributions to different aspects

of the economy.

56
Business include both domestic trade as well as foreign trade. Trade as a service sector

activities facilitates the exchange of the goods and services between producers and

consumers. Domestic trade refers to the exchange of goods and services with in the country.

Which provides income and employment to the people who have engaged in this activities.

Foreign trade plays a major role in the development of the country. Imports of machinery and

equipment which cannot be produced in the initial stages at home are essential. Such imports

which either help to create new capacity in some lines of production or enlarge capacity in

the other lines of production are called developmental imports. The imports which are made

in order to make a full use of the productive capacity are called maintenance imports.

Finance as a service sector activity plays an important role in undertaking any economic

activities. Finance refers to funds of monetary resources required by individual, business

houses and the government. People needs funds to meeting their current requirement or day

to day of expenses for buying capital goods. A business house require funds for paying wages

and salaries, for buying raw materials, for purchasing new machinery or replacing an old one

etc. Government needs funds to provide various services to its subject. Finance institutions

provides funds to various groups of people for variety of activities. In this process the service

sector activities provides income and employment to the people of a country.

In the previous days this sector is responsible for distributing the output of the primary and

secondary sectors for the intermediate and final consumption and also for the providing a

variety of services to producers as well as consumers. Trade, transport and storage activities

ensure distribution of goods and services where and when needed by consumers. Business

and financial services facilitate mobilization of resources and their development in the

activities of different sector of the economy.

57
Service sector activities generally require relatively less capital investment than activities in

other sectors. But a majority of these activities also require relatively less space for

operations service sector is a knowledge intensive sector and substantial HRD inputs are the

necessary for developing most of the services sector activities.

GROSS DOMESTIC PRODUCT (GDP)

Gross domestic product (GDP) is the total monetary or market value of all the finished goods

and services produced within a country's borders in a specific time period. As a broad

measure of overall domestic production, it functions as a comprehensive scorecard of a given

country’s economic health.

Though GDP is typically calculated on an annual basis, it is sometimes calculated on

a quarterly basis as well. In the U.S., for example, the government releases

an annualized GDP estimate for each fiscal quarter and also for the calendar year. The

individual data sets included in this report are given in real terms, so the data is adjusted for

price changes and is, therefore, net of inflation. In the U.S., the Bureau of Economic Analysis

(BEA) calculates the GDP using data ascertained through surveys of retailers, manufacturers,

and builders, and by looking at trade flows.

KEY TAKEAWAYS

 Gross Domestic Product (GDP) is the monetary value of all finished goods and

services made within a country during a specific period.

 GDP provides an economic snapshot of a country, used to estimate the size of an

economy and growth rate.

58
  GDP can be calculated in three ways, using expenditures, production, or incomes. It

can be adjusted for inflation and population to provide deeper insights.

 Though it has limitations, GDP is a key tool to guide policymakers, investors, and

businesses in strategic decision making.

Understanding Gross Domestic Product (GDP)

The calculation of a country's GDP encompasses all private and public consumption,

government outlays, investments, additions to private inventories, paid-in construction costs,

and the foreign balance of trade. (Exports are added to the value and imports are subtracted).

Of all the components that make up a country's GDP, the foreign balance of trade is

especially important. The GDP of a country tends to increase when the total value of goods

and services that domestic producers sell to foreign countries exceeds the total value of

foreign goods and services that domestic consumers buy. When this situation occurs, a

country is said to have a trade surplus. If the opposite situation occurs–if the amount that

domestic consumers spend on foreign products is greater than the total sum of what domestic

producers are able to sell to foreign consumers–it is called a trade deficit. In this situation, the

GDP of a country tends to decrease.

In addition, there are several types of GDP measurements:

 Nominal GDP: GDP evaluated at current market prices

 Real GDP: Real GDP is an inflation-adjusted measure that reflects both the value and

the quantity of goods and services produced by an economy in a given year.

 GDP Growth Rate: The GDP growth rate compares one quarter of a country's GDP to

the previous quarter in order to measure how fast an economy is growing.

59
  GDP Per Capita: GDP per capita is a measurement of the GDP per person in a

country's population; it is a useful way to compare GDP data between various

countries.

HOW TO CALUCULATE GDP

 The following equation is used to calculate the GDP: GDP = C + I + G + (X – M) or

GDP = private consumption + gross investment + government investment +

government spending + (exports – imports).

 Nominal value changes due to shifts in quantity and price.

 In economics, real value is not influenced by changes in price, it is only impacted by

changes in quantity. Real values measure the purchasing power net of any price

changes over time.

 Real GDP accounts for inflation and deflation. It transforms the money-value

measure, nominal GDP, into an index for quantity of total output.

Section-B Journal Review

1. Yahya Z. ALSHEHHI, Judit OLÁH. SECTORIAL ANALYSIS: GROWTH

ACCOUNTING OF SECONDARY INDUSTRIES. Network Intelligence Studies

Volume V, Issue 9 (1/2017).

The modern economic system of any nation is divided into three major producer’s sectors

called primary, secondary, and tertiary. These sectors reform a chain of production as a

60
continuum, ultimately in the end provide goods and services. In UAE, economy share divided

by each sector of the current GDP in year 2015 were 1%, 48%, and 51%, for the primary,

secondary, and tertiary sectors, respectively. We observed that the TFP performance

improved positively in line with a declining size of labor.

Four group periods of times were the study’s division, where it can be said that the

diversification strategy by UAE gained its benefits. The study witnessed clearly that the MQ

is not the main player such the MFG and CN. The average annual growth rate for MFG

showed the highest contribution to the secondary sector’s output, even at other period of time.

The study showed that there was a vice versa relationship between the size of labor to TFP

performance.

If the number of workers decreased, the performance of TFP improved. This observation was

presented in the calculation results from 2010-2015. In conclusion, the study illustrated that

the MFG industry was the main contributor to the secondary sector’s output followed by CN.

In addition, the oil industry contributed less to the secondary sector’s output.

2. Geetanjali Pinto and ShaileshRastogi. Sectoral Analysis of Factors Influencing

Dividend Policy: Case of an Emerging Financial Market. Journal of risk and financial

management. 26 June 2019.

This study aims to determine whether a firm’s dividends are influenced by the sector to

which it belongs. The findings on profitability support the free cash flow hypothesis for

India. However, we also found that Indian companies prefer to follow a stable dividend

61
policy. As a result of this, even firms with higher growth opportunities and lower cash flows

continue to pay dividends.

We also find evidence that dividend policies vary significantly across industrial sectors in

India. The results of this study can be used by financial managers and policymakers in order

to make appropriate dividend decisions. They can also help investors make portfolio selection

decisions based on sectoral dividend paying behavior. This study offers fresh evidence on the

key determinants of the dividend policy for an emerging market economy using financial data

for Indian-listed firms.

Our findings suggest that in general, firms with a larger size, higher interest coverage ratio

and profitability, and low business risk and debt are likely to distribute higher dividends in

India. The results on profitability indicate the applicability of the free cash flow hypothesis in

India. However, the findings also reveal that companies with more growth opportunities and

lower cash flows also continue to distribute dividends. We attribute this to the condition that

Indian firms prefer to maintain stability in dividend policy, such that availability of

investment opportunities and the non-availability of cash is insignificant for determining

dividend policy.

The results suggest that the factors influencing dividend policy differ across sectors. The

sector-wise results show that size is found to significantly influence payout policy in all

sectors except AUTO and POWER. Also, either one or more of the debt measures are also

found to be significant in all of the sectors, excluding PHARMA, CONSGDS, M-OTHS, and

S-OTHS. Although a «one-size fits all» technique is unsuitable for evaluating the factors, our

62
finding suggests that the dividend policies of firms across sectors are generally sensitive to

size, debt, and profitability.

Preferences of one variable over another may occur as a result of firm-level and sector-level

effects on dividend policy recognized in past empirical research . Furthermore, these findings

provide unbiassed guidelines to investors regarding the factors that influence the dividend

policies of Indian companies.

4. MadhuSehrawat and A.K. Giri. A Sectoral Analysis of the Role of Stock Market

Development on Economic Growth: Empirical Evidence from Indian Economy.

Global Business Review 18(4) 911–923 © 2017 IMI.

The results of the autoregressive distributed lag approach bounds test confirm the existence

of a cointegrating relationship between sector-specific gross domestic product and sector-

specific stock indices. The empirical results reveal that sector-specific economic growth are

significantly influenced by changes in the respective sector-specific stock price indices in the

long run as well as in the short run. Apart from that, the control variables, such as trade

openness and inflation, act as the instrument variables in explaining the variations in the

sector-specific GDP of the economy. The results of Granger causality test demonstrate

unidirectional long-run as well as short-run causality running from sector specific stock

prices to respective sector GDP.

This article aims to examine the relationship between stock market development and

economic growth from a sector-specific perspective. A group of sectors of stock market

development are hypothesized to be related to respective sector-specific GDP of India. The

63
ARDL bounds test confirms that there exists a long-run cointegrating relationship between

different macroeconomic variables along stock market indices with sector-specific GDP in

India. Further, there is clear evidence that increased trade openness has a positive impact on

sector-specific GDP in the long run.

So, the estimated long-run results are in consistent with the theoretical expectations of the

relationship. The causality test results from VECM confirm unidirectional long-run and short-

run Granger causality running from sector-specific stock indices to sector-specific economic

growth during the study period for all the models.

4.Nonso Fredrick Okoye and Dr. ObiamakaEgbo. DEPOSIT MONEY BANKS’ LOANS

AND GROWTH OF NIGERIAN ECONOMY: A SECTORIAL ANALYSIS. International

Journal of Management Research. Volume 6, Issue 12, December 2018.

The study aimed at ascertaining the relationship between banks sectorial loans and Nigerian

economic growth over the period 1981 to2014.Using commercial banks’ loans to Agriculture,

fishery and forestry, manufacturing, mining and quarrying, and real estate and construction

sectors, the study adopted the Ex-post facto research design and the required data were

sourced from CBN statistical bulletin. Engaging the OLS, ECM, Granger causality and

Johansen co-integration techniques of analysis, the study revealed that there is a short run

positive relationship between loans to manufacturing, mining and quarrying sectors and

economic growth; while loan to agriculture, fishery and forestry and real estate and

construction sectors sustained a negative relationship with gross domestic product. ECM

indicates that over 74% dynamics in short run is been corrected over a year, and as such, the

study recommends among others that: Banks should be compelled to improve their loans to

64
Agriculture, fishery and forestry and also manufacturing sectors in order to improve the

output of these sectors and diversify the economy especially in this dwelling oil price time;

Government should revive the activities of specialized banks such as bank of industry,

Agriculture and likes in order to assist commercial banks in providing loans to these sectors.

Also, the study revealed the existence of equilibrium relationship among our employed

variables and over 74% disequilibrium in economic growth can be corrected over a year

5. KEHINDE JOHN AKOMOLAFE and JONATHAN.D. DANLADI and HAMMED

BASIRAT ADEBIMPE. Foreign Direct Investment and Economic Growth in Nigeria:

A Sectorial Analysis. Journal of Economics and Sustainable Development. Vol.6,

No.20, 2015.

This study was carried out to analyse the effect of sectoral FDI inflows on economic growth

in Nigeria between the period of 1980 and 2012. VECM and co-integration techniques were

employed. The findings show that there is a positive relationship between FDI flow to

manufacturing sector and economic growth, a positive relationship between FDI inflows to

the oil sector and economic growth, and a positive influence between FDI inflows to service

sector economic growth in the long run. The paper therefore concludes that there is a need for

policy makers to formulate policy that will help the economy maximize the growth potentials

of the telecommunication sector. This study has been carried out to analyse the effect of

Sectorial FDI flow on economic growth in Nigeria.

This may be explained that the price of service provided by the telecommunication operators

is too high for an economy that is still growing.

65
 Chapter IV
Data Analysis and Interpretation
Indian economy can be broadly divided into following three sectors, which can be further

subdivided:

 Primary Sector – agriculture, agribusiness, fishing, forestry, all mining

and quarrying industries.

66
  Secondary Sector – industry, manufacturing and construction.

 Tertiary Sector – insurance, banking transport and other social &

personal services.

The Indian economy was in distress at the brink of the country’s independence. Being a

colony, she was fulfilling the development needs not of herself, but of a foreign land. The

state, that should have been responsible for breakthroughs in agriculture and industry, refused

to play even a minor role in this regard. On the other hand, during the half century before

India’s independence, the world was seeing accelerated development and expansion in

agriculture and industry - on the behest of an active role being played by the states.

British rulers never made any significant changes for the benefit of the social sector, and this

hampered the productive capacity of the economy. During independence, India’s literacy was

only 17 percent, with a life expectancy of 32.5 years. Therefore, once India became

independent, systematic organization of the economy was a real challenge for the government

of that time. The need for delivering growth and development was in huge demand in front of

the political leadership - as the country was riding on the promises and vibes of national

fervour. Many important and strategic decisions were taken by 1956, which are still shaping

India’s economic journey.

Today India is ranked the seventh largest economy, and third largest in terms of Purchasing

Power Parity (PPP). The Indian economy’s GDP is pegged at $ 2.9 tn. At a press conference,

Finance Minister ArunJaitleycommented, ‘We keep oscillating between the fifth and the sixth

67
largest economy, depending on the dollar rate. As we look at the years ahead, we will be $ 5

tn by 2024 and $ 10 tn by 2030 or 2031.’

The GDP per capita in India was $ 1963.55 in 2017. The GDP per Capita in India is

equivalent to 16% of the world's average, and averaged $ 693.96 from 1960 until 2017. It

reached an all - time high of $ 1963.55 in 2017.

Indian Economy at a Glance:

 Agricultural Sector:
One of the most important sectors of the Indian economy remains Agriculture. Its share in the

GDP of the country has declined and is currently at 14%. However, more than 50% of the

total population of the country is still dependent on agriculture. Keeping this in mind, the

Union Budget 2017 - 18 gave high priority to the agricultural sector and aimed to double

farmers’ incomes by 2022.

•    Government subsidies to agriculture are at an all - time high.

•    Further, cropping patterns have shifted in favour of cash crops such as sugarcane and

rubber.

•    Introduction of cooperative farming like – e - choupal etc.

•    Rise of SHGs such as LijjatPapad.

•    Agricultural land is being brought under industrial and commercial use, thereby straining

the remaining agricultural land.

•    Many export sectors have been opened for agricultural goods.

•    Food processing is emerging as a ‘Sunrise Industry’

Industry Sector:

68
Another important part of the Indian economy is the Industry sector. Changes such as the end

of the ‘Permit Raj’ and opening up of the economy were welcomed in the country with great

enthusiasm and optimism. As a result of these changes, the industrial potential of the

economy has increased since 1991. 

•    Proliferation of industries, from traditional iron and steel to jute and automobiles.

•    Autonomy in production, marketing and distribution.

•    Reduced red - tapism.

•    Encouragement to private investments, both domestic as well as FDI.

•    Transfer of technology and benefits of research and development to the advantage of the

economy.

•    Arrival of investment models such as joint ventures, public-private partnerships, MNCs.

•    Private players got an opportunity to enter new sectors, which were earlier under

government monopoly.

Services Sector:

The sector that benefited most from the New Economic Policy was the services sector.

Banking, Finance, Business Process Outsourcing - and most importantly Information

Technology services - have seen double - digit growth. 

•    Indian IT giants such as Infosys, WIPRO and TCS have made their mark on the global

platform. 

•    60 percent of the GDP contribution comes from the services sector. 

•    India, with its huge demographic dividend potential, has emerged as the IT hub of the

world.

•    New employment opportunities are being created in this sector.

•    Opening of transportation, tourism and medical sectors have led to the growth of service

69
sector competencies.

•    RBI has transitioned from being a regulator to a facilitator.

•    Product diversity of financial investments.

•    Wider penetration of services such as insurance, banking, stock market etc.

•    Considerable improvement in forex reserves.

 Food Processing:

Food processing has emerged as a high - growth, high - profit sector and is one of the focus

sectors of the ‘Make in India’ initiative. The vast availability of raw materials, resources,

favourable policy measures and numerous incentives have led India to be considered as a key

attractive market for the sector. With a population of 1.3 bn and an average age of 29, as well

as a rapidly growing middle - class population that spends a high proportion of their

disposable income on food, India boasts of a large consumer base. The total consumption of

the food and beverage segment in India is expected to increase from $ 369 bn to $ 1.14 tn by

2025. The output of the food processing sector (at market prices) is expected to increase to $

958 bn during the same period. India is the second largest producer of food grains in the

world, second only to China. This sector has huge potential in India due to increasing

urbanization, income levels and a high preference for packaged and processed food. Visit the

sectors category to read more about the food processing industry.

Manufacturing Sector:

The manufacturing sector is the second largest contributor to India’s GDP after the Services

sector. Various government initiatives like Make in India, MUDRA, Sagarmala, Startup

India, Freight Corridors, along with a whole - hearted contribution from states, will raise the

share of the manufacturing sector in the foreseeable future.

However, if India aims to raise its share of manufacturing in GDP to around 25%, the

70
 industry will have to significantly step up its research and development expenditure. The

quantum of value addition has to be increased at all levels and the government needs to offer

attractive remuneration to motivate people to join the manufacturing sector.

Table 4.1 Sector wise contribution in GDP: Components of gross domestic

product (at factor cost)

mining services(inclu Social &

agriculture and industr and Manufacturi ding Personal
year allied activities y querying ng construction) Services
2005-
06 1450.52 310.26 51.38 250.96 968.42 284.74
2006-
07 1472.16 325.43 57.72 258.89 1000.24 293.29
2007-
08 1879.62 793.13 122.31 625.63 2032.22 539.5
2008-
09 2159.14 804.03 125.19 628.04 2122.94 564.38
2009-
10 3336.16 1943.5 291.67 1474.96 4778.16 1311.84
2010- 2078.2
11 3322.5 8 327.39 1556 5105.22 1410.43
2011-
12 3902.01 2764.9 484.84 1984.19 6975.1 1852.32
2012- 2851.2
13 4161.53 1 489.31 2045.51 7350.75 1963.32
2013- 4846.6
14 5227.55 5 694.72 3631.63 13353.55 3439.63
2014- 8374.0
15 6556.89 7 980.55 6563.02 26655.8 5444.97
2015- 9122.1
16 6625.09 9 1042.25 7197.26 29329.09 6100.96
2016- 9745.2
17 7091.03 7 1094.21 7741.62 32023.24 6376.75
2017- 10000.
18 7286.67 42 1084.69 7934.68 34738.06 6747.03

71
 35000

30000

25000

20000

15000

10000

5000

0
es
v iti y
ac
ti
u str ying g
ied in
d er r in )
all q u
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tion s
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a
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an a n t r v
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g
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ltu in g co al
u m n n
r ic di so
ag clu P er
n
s(i l&
ivc e
o cia
r S
se

On the basis of the observed patterns of growth and structural changes, economic growth in

post‐ Independence India can be divided into the following four phases, each with its

distinguishing features.

72
 Phase 1. Independence to Mid‐1960s:This period saw a significant acceleration in

the growth rate over the past decades marked by a high growth of industry, and a significant

structural change with a large increase in the share of non‐agricultural sector, especially of

the industry in the national output.

Phase 2. Mid‐1960’s to 1980:This period was marked by a slower growth of GDP,

accompanied by a deceleration in the growth of industry, a slower pace of structural shift

from agriculture to non‐agriculture and a very small increase in the share of industry.

Phase 3. 1980 to early 1990s:This period saw a sharp acceleration in growth rate,

mainly contributed by services. Structural changes were also swift, with a large decline in the

share of agriculture, but very little increase in the share of industry‐services picking up the

major share of the shift.

Phase 4. Early 1990’s Onwards:Growth continued at similar rate as 1980’s, but

declined during 2000‐2004. Structural changes continued at an accelerated pace with share of

agriculture sharply declining and services emerging as the major sector and with very small

increase in the share of industry. Within this phase, period 2005‐10 has seen a sharp

acceleration in growth rate, despite a slowdown in 2008‐09. Share of agriculture has declined

from around 20 to 16 per cent, that of services has increased from 54 to 59 per cent and that

of industry has stagnated.

Primary sector

The Primary sector of the economy is the change of natural resources into primary products.

Most products from this sector provide raw materials for other industries. The share of

primary sector has decreased from the past four decades. In 1970 the share of the sector was

73
50% which has reduced to 29% in 1995 and is now further reduced to 25%.  Major

businesses in this sector are agriculture, agribusiness, fishing, and forestry, all mining and

quarrying industries.

Agriculture

Agriculture in India is the major sector of its economy. Almost two-thirds of the total work-

force earns their livelihood though farming and other allied sectors like forestry, logging and

fishing which account 18% of the GDP. These sectors provide employment to 60% of the

country’s total population. About 43% of the country’s total geographical area is used for

agricultural purposes. After independence additional areas were brought under cultivation

and new methods, practices and techniques of irrigation and farming were introduced by the

government. The “Green Revolution” and “Operation Flood” in the country have made India

self sufficient in producing food grains and milk. Among other things, the government also

tried to decrease the dependence on monsoons. Better seeds, use of fertilizer, education of

farmers and provision of agricultural credit and subsidies are reasons for increase in

agricultural productivity.

Today, India is the major producer of milk, cashew nuts, coconuts, tea, ginger, turmeric and

black pepper in the whole world. It is the second largest producer of wheat, sugar, groundnut

and inland fish. It is the third largest producer of tobacco and rice. India accounts for 10 per

cent of the world fruit production with first rank in the production of banana and sapota

74
(Sapodilla).

Agriculture in India is the responsibility of the states rather than the central government. The

central government formulates policy and provides financial assistance to the states. States

like Punjab, Haryana, Uttar Pradesh, Andhra Pradesh, Tamil Nadu, Karnataka and West

Bengal are major producers of food grains in India. Himachal Pradesh and Jammu and

Kashmir are famous for fruit production. Tea is produced in the high altitudes of Assam,

Darjeeling in West Bengal, Tripura, Ooty in Tamil Nadu, Himachal Pradesh and Kerala.

Kerala is also the largest producer of natural rubber and spices in India. Rajasthan is among

the major producers of edible oils in India and second largest producer of oil seeds.

Production of non-conventional items like moong (a type of lentil), soyabeans and peanuts

are gradually gaining importance.

Even though there has been a steady decline in its share in the GDP, agriculture still remains

the largest economic sector and plays a crucial role in the socio-economic development of the

country.

Table 4.2 Agriculture and other allied activities contribution to GDP in recent years

Year 1st quarter 2nd quarter 3rd quarter 4th quarter

75
 (in crores) (in crores) (in crores) (in crores)
135745 108879 172401 148401
2010-11
139404 113023 185750 156309
2011-12
144790 116947 193209 164245
2012-13
151336 122418 211649 169677
2013-14
154307 123389 204748 171675
2014-15
156740 126524 201853 177390
2015-16
161614 132668 224044 190778
2016-17
167548 136806 230359 193955
2017-18

250000

200000

150000
1st quarter (in crores)
2nd quarter (in crores)
GDP

3rd quarter (in crores)

4th quarter (in crores)
100000

50000

The above table and graph shows that during these recent years

agricultural sector’s contribution to GDP has increased but the increase

is insignificant as population has also increased.

Although, the agricultural yield increased in India after

i n d e p e n d e n c e b u t i n t h e l a s t f e w y e a r s i t h a s decreased. This in its turn has

76
declined the Growth Rate of the Agricultural Sector in India GDP.The agricultural sector has

had low production due to a number of factors such as

 Slow and uneven growth

 Use of old and obsolete methods of irrigation and cultivation

 Flaws in land reforms(small sizes of land holdings, exploitation of tenants etc)

 Problems relating to finance (unavailability of formal credit institutions and

subsidies)

 problems relating to storage, marketing, warehousing, communication and

transport

Fishing

Fish breeding has increased almost five times since India got independence and is a prime

industry in coastal regions.

The economic zone of India runs up to Indian ocean (370 Km) covering an area more than 2

million square kilometres. Approximately 4.5 million ton catches are expected from that area.

India has about 14000 Km2 brackish water for aquaculture, out of which 600 Km2 were being

farmed in early 1990s; about 16,000 Km2 of freshwater lakes, ponds and swamps; and nearly

64,000 kilometres of rivers and streams.

Mining and querying contribution to India GDP

Mining is the term used for the extraction of useful material from the treatment of ore, vein or

coal seam. Materials obtained from extraction may be base metals, precious metals, iron,

uranium, coal, diamonds, limestone, oil shale, rock salt and potash.

Table 4.3 Mining and querying contribution to India GDP

77
 Year 1st quarter 2nd quarter 3rd quarter 4th quarter
(in crores) (in crores) (in crores) (in crores)
20275 20067 21744 22943
2010-11
21110 19649 21745 23636
2011-12
22187 20901 23608 25882
2012-13
22391 21837 24620 27149
2013-14
22903 22125 25226 26989
2014-15
24616 23676 26582 29351
2015-16
26304 25398 28200 29520
2016-17
26251 24016 27403 30798
2017-18

35000

30000

25000

20000 1st quarter (in crores)

2nd quarter (in crores)
3rd quarter (in crores)
15000 4th quarter (in crores)

10000

5000

India has initiated several progressive policy measures, putting itself in a good starting

position to undertake the transformation of the mining sector.Unlocking the potential of the

mining sector in India could add around USD

210 billion to USD 250 billion (` 945 to 1,125 thousand crore or 6 to 7 percent) to the GDP

and create 13 to 15 million jobs through direct and indirect contribution by 2025.

78
To achieve this, action is required on key priorities, including enhancing resource and reserve

base through exploration and international acquisition; reducing permit delays; putting in

place core enablers (infrastructure, human capital, technology); ensuring sustainable mining

and sustainable development around mining; creating an information, education and

communication strategy; and undertaking measures to ensure implementation.

To keep pace with the growing demand, India must enhance domestic mineral production and

exploration activity. It is also imperative to reform the Indian mining sector by creating a

favorable policy environment and setting up core enablers such as infrastructure and human

capital.

Secondary Sector of Indian Economy

The secondary sector of the economy includes those economic sectors that create a finished

usable product and hence depend on primary sector industries for the raw materials. This

sector includes industry, manufacturing and construction. The secondary sector contributes

24% of the share in Indian economy.

Industry

India’s industrial sector accounts for 27.6% of the GDP and gives employment to 17% of the

total workforce. Though agriculture is the foremost occupation of the majority of the people,

the government had always laid stress on the industrial development of the country. Thus

policies and strategies were framed to give a boost to India’s industry. The government aims

at achieving self-sufficiency in production and protection from foreign competition. Since

independence, India is marching ahead to become a diverse industrial base.

Today India holds some key industries in the sectors like steel, engineering and machine

tools, electronics, petrochemicals, textiles and software. Importance has also been give to

improve the infrastructure of the country. The government has liberalized its industrial

79
 policy thereby attracting huge foreign direct investment. If on one hand several

multinational companies opened their offices in India, on the other hand many Indian

companies started their operations in foreign countries.

Industry Growth Rate in India GDP has been impressive in the last few years. The

Growth Rate of the Industry in the India GDP has grown due to sustained manufacturing

activity over the years. This has given a major boost to the Indian economy.

The reasons for the increase of Industry Growth Rate in India GDP are that huge

amounts of investments are being made in this sector and this has helped the industries to

grow. Further the reasons for the rise of the Growth Rate of the Industrial Sector in India are

that the consumption of the industrial goods has increased a great deal in the country, which

in its turn has boosted the industrial sector. Also the reasons for the increase of Industry

Growth Rate in India GDP are that the industrial goods are being exported in huge quantities

from the country.

PSdodHRw Oi8vd

Construction and manufacturing

The process of building or assembling of infrastructure is known as a term commonly used in

architecture and civil engineering- “construction”.

Table 4.4 Manufacturing contribution to India GDP

Year 1st quarter 2nd quarter 3rd quarter 4th quarter

(in crores) (in crores) (in crores) (in crores)
104208 116104 115718 122684
2010-11
117187 120670 126161 134992
2011-12
131954 137611 143788 157084
2012-13
148701 152128 158009 170214
2013-14
159042 162174 162114 172445
2014-15
2015-16 167571 176550 180421 195187

80
 182895 187309 194435 209523
2016-17
196170 192790 195509 208999
2017-18

250000

200000

150000 1st quarter (in crores)

2nd quarter (in crores)
3rd quarter (in crores)
100000 4th quarter (in crores)

50000

PSdodHRw Oi8vd

Tertiary Sector of Indian Economy

The Tertiary sector includes service industry and it holds the highest importance among all

sectors. The tertiary sector of economy involves the provision of services to business as well

as final consumers. Services may involve the transport, distribution and sale of goods from

producer to consumers as may happen in wholesaling and retailing, or may involve the

provision of a service, such as in pest control or entertainment. The tertiary sectors account

for 51% of the GDP.

The tertiary sectors may include:

 Insurance, finance, real estate and business services

 Banking

 Trade, hotel, transport and communication

81
  Community, social and personal services

The higher the productivity in primary and secondary sector and lower the employment in

these sectors, the better it is. People need more and more services for leading qualitatively

better lifestyle. They need more means of transport, more communication and educational

facilities, more training, more medical facilities, entertainment, technical facilities, banking

facilities etc.

Tertiary sector depends on scientific research and innovative developments to increases

productivity and it provides engineering and construction consultancy support services for all

projects in all sectors. Developed countries employ more than 80% the services sector.

India ranks fifteenth in the services output and it provides employment to around 23% of the

total workforce in the country. The various sectors under the Services Sector in India are

construction, trade, hotels, transport, restaurant, communication and storage, social and

personal services, community, insurance, financing, business services, and real estate.

The Services Sector contributes the most to the Indian GDP. The Sector of Services in India

has the biggest share in the country's GDP for it accounts for around 53.8% in 2005. The

contribution of the Services Sector in India GDP has increased a lot in the last few years. The

Services Sector contributed only 15% to the Indian GDP in 1950. Further the Indian Services

Sector's share in the country's GDP has increased from 43.695 in 1990- 1991 to around

51.16% in 1998- 1999. This shows that the Services Sector in India accounts for over half of

the country's GDP.

82
During 2009-10 and 2010-11, automobiles, rubber and plastics, fabricated metal products,

machinery and equipment and radio, TV and communication equipment segments had

witnessed double digit growth.

The share of services sector in country’s gross domestic product (GDP) has risen from 50.4

percent in 2000-01 to 59% in 2011-12.

The contribution of the Services Sector has increased very rapidly in the India GDP for many

foreign consumers have shown interest in the country's service exports. This is due to the fact

that India has a large pool of highly skilled, low cost, and educated workers in the country.

This has made sure that the services that are available in the country are of the best quality.

The foreign companies seeing this have started outsourcing their work to India especially in

the area of business services which includes business process outsourcing and information

technology services. This has given a major boost to the Services Sector in India, which in its

turn has made the sector contribute more to the India GDP.

Finance ,insurance, real estate and business services

The concept of Insurance dates long back in 1818. Life Insurance premium accounts for 2.5%

of the nation’s GDP while general insurance contributes 0.65% of India’s GDP. Government

of India opened gate for private insurance companies to enter the arena and FDI of 26% in

the Insurance sector in 1999 until then only LIC was there to provide insurance facilities.

Private Insurance companies like ICICI, Max New York, Bajaj Allianz, Kotak Mahindra, and

Met Life are providing life insurance, general insurance, medical insurance etc.

Table 4.5 Finance ,insurance, real estate and business services

Year 1st quarter 2nd quarter 3rd quarter 4th quarter

(in crores) (in crores) (in crores) (in crores)
2010-11
105870 106130 110428 114744
2011-12

83
 117760 119871 123364 131482
2012-13
133638 136440 141377 149923
2013-14
150540 153509 158429 165897
2014-15
168259 170953 177881 189619
2015-16
187106 189145 192558 201074
2016-17
205861 208815 214205 221114
2017-18
225165 229498 233758 243294
2010-11

Table 4.6 Trade, hotel ,transport and communication

Year 1st quarter 2nd quarter 3rd quarter 4th quarter

(in crores) (in crores) (in crores) (in crores)
166536 173240 186971 200973
2010-11
189062 194038 208192 225403
2011-12
208411 217544 233919 251680
2012-13
234697 239445 258240 279431
2013-14
257700 261944 272156 295776
2014-15
279250 289020 301003 327941
2015-16
314546 319798 330117 365994
2016-17
357883 350263 363101 391527
2017-18

84
450000

400000

350000

300000

250000 1st quarter (in crores)

2nd quarter (in crores)
3rd quarter (in crores)
200000 4th quarter (in crores)

150000

100000

50000

Table 4.7 Community ,social and personal services

Year 1st quarter 2nd quarter 3rd quarter 4th quarter

(in crores) (in crores) (in crores) (in crores)
92414 100785 100215 117947
2010-11
98447 107946 107861 125904
2011-12
104767 111540 109432 126981
2012-13
109294 119536 115429 139569
2013-14
118993 131515 142649 152027
2014-15
134423 156838 154070 164765
2015-16
140384 163941 152857 180493
2016-17
144849 173869 162710 193275
2017-18

85
 250000

200000

150000 1st quarter (in crores)

2nd quarter (in crores)
3rd quarter (in crores)
100000 4th quarter (in crores)

50000

The contribution of the Services Sector has increased very rapidly in the India GDP for many

foreign consumers have shown interest in the country's service exports. This is due to the fact

that India has a large pool of highly skilled, low cost, and educated workers in the country.

This has made sure that the services that are available in the country are of the best quality.

The foreign companies seeing this have started outsourcing their work to India especially in

the area of business services which includes business process outsourcing and information

technology services. This has given a major boost to the Services Sector in India, which in its

turn has made the sector contribute more to the India GDP.

Changes in occupational structure in India

Employment has always featured as an important subject of discussion both in academic and

policy making circles. It has become a matter of intense debate in recent years due

particularly to a rather disappointing employment performance of the post‐reform economic

growth – “jobless growth” of 1990’s and “zero employment growth” with the highest ever

GDP growth during 2004‐05/2009‐10. Increasing in formalization, casualization and

86
contractualization, have also raised the questions about the quality of most of whatever new

jobs are being created.

And a disconnect between unemployment and poverty and between employment generation

and poverty reduction has added another rather intriguing dimension to the employment

debate.

Indian economy has registered a long‐term employment growth of around two per cent per

annum. This rate has been maintained, with some short‐term fluctuations, irrespective of the

rate of GDP growth. If anything, a higher economic growth in the post‐reforms period has

been accompanied by a slower growth in employment.

Employment growth, in fact, has declined with the acceleration of the growth rate of GDP.

Thus employment grew at around 2.4 per cent during 2010, 2.0 per cent during 2011, and

1.84 per cent during 2015 and only at 0.22 per cent during the shorter period of GDP growth

during the first four periods was 4.7, 5.0, 6.27 and 9.8 per cent per annum, during 2014 it

average to 7.5. As a result, employment elasticity has steadily declined over the years.

Economic reforms have not delivered on employment front as they have on the GDP front.

The reason primarily lies in the slower growth of employment intensive sectors.

Among the broad sectors, for example, growth of manufacturing which has consistently

shown high employment elasticity has registered a relatively slower growth than services

which have low and sharply declining elasticity.

Construction, no doubt, has registered high growth in GDP, as also of employment; but

given low productivity of this sector, its high employment elasticity (often higher than one)

needs to be read with caution – a decline in employment elasticity will, in fact, be desirable

here. In services, communication and business services have been the fast‐growing sub‐

sectors, both of which have low and declining employment intensity. As noted earlier, the

87
rapid increase in exports has also not contributed much to employment growth due to a

decline in the share of labour intensive products in India’s merchandise experts.

Changes in the various dimensions of the structure of employment have been rather slow.

Employment has grown much faster in urban than in rural areas throughout the period since

2005-06, yet the dominance of rural areas has continued in the employment structure: they

account for 72 per cent of employment in 2009‐10, though their share has seen some decline

from 80 per cent in 2013. Within rural areas, there have been significant structural changes:

non‐farm sector has grown in importance though not so much in employment as in output.

The non‐farm sector contributed 28 per cent of rural NDP in 2005-06 the share has increased

to almost two‐thirds now. Employment share of non‐farm activities has increased from about

15 per cent in early 2000’s to 32 per cent in 2010-11

Questions have often been asked about the nature of employment diversification in rural

areas – whether it has been demand–induced or distress‐driven. Situation may vary across

regions as also in different years but dominant secular trend is found to be positive. More

workers are attracted to non‐farm activities, as they offer more stable and better paying

employment than agriculture. Larger share in output than in employment, of the non‐farm

sector and consistently higher wages in non‐agricultural than agricultural activities strongly

support this pro‐position. In aggregate, structural changes in employment have not been as

large as in GDP.

Continuation of this pattern of structural changes has serious implications not only for

equity, but also for the sustainability of a high growth rate as well.

Some other changes in the structure of employment are also disconcerting. Organized sector

employment did not grow for most of the post‐reform period: in fact, there was a continuous

88
decline in it during 2000-2014. So practically all the new employment was in the unorganized

sector where productivity and earnings are low.

And even within the formal sector, the proportion of ‘informal’ workers has steadily risen,

due to the most new employment being in the nature of casual or contract employment. The

share of the self‐employed, as expected, has declined over the years from 61 per cent in 2005

to 55 per cent in 2006 and to 51 per cent in 2009‐10, thus raising the share of the wage and

salary earners in total employment. But in that group, the share of casual workers has

increased from about 23 per cent in 2005 to 32 per cent in 2006 and to 33 per cent in 2013-

14. The share of regular employees, considered to be qualitatively better in terms of earnings

and job and social security, has remained constant at around 15 per cent.

These qualitative dimensions, in fact, pose a greater challenge, than just the quantitative

expansion of employment. While in the earlier years, a two per cent employment growth was

insufficient to take care of the growth of labour force at about 2.5 per cent, a decline in the

rate of growth of labour force in recent years to almost 1.6 per cent has apparently reduced

the magnitude of the quantitative challenge. But a high degree of under employment among

several groups of workers and the fact that a large number among the employed is earning

much less than the poverty line income, and therefore, needing alternative employment,

suggest that the number of new jobs required to be generated will be much larger than what is

indicated by the number of unemployed and additions to labour force.

Employment opportunities will need to grow at over 3 per cent per annum during the 12th

Plan to provide work to all by the end of the Plan period. This may be possible with a 9 per

cent GDP growth and employment elasticity of 0.33. To improve productivity, especially in

the informal sector, so as to meet the quality deficit, employment elasticity, could, however,

89
decline further to about 0.25 or even 0.20. In that case, the required rate of GDP growth

would be rather unrealistically high at 12 to 15 per cent.

A restructuring of growth would be necessary to achieve the goal of employment for all and

that too only in a medium term (10‐15 years) perspective. At the same time, it also needs to

be noted that a faster expansion of employment opportunities with higher growth of sectors

and sub sectors with higher employment intensity will contribute to enhancement of the

income dimension of the quality of employment through raising demand for labor and

tightening the labor market; but the other quality dimension of employment, namely,

provision of social protection will need pro‐active initiatives on the part of the state.

90
 SUMMARY, FINDINGS & SUGGESTIONS

SUMMARY

India is the fastest-growing trillion-dollar economy in the world and the fifth-largest overall,

with a nominal GDP of $2.94 trillion. India has become the fifth-largest economy in 2019,

overtaking the United Kingdom and France. The country ranks third when GDP is compared

in terms of purchasing power parity at $11.33 trillion. When it comes to calculating GDP per

capita, India's high population drags its nominal GDP per capita down to $2,170. The Indian

economy was just $189.438 billion in 1980, ranking 13th on the list globally. India's growth

rate is expected to rise from 7.3% in 2018 to 7.5% in 2019 as drags from the currency

exchange initiative and the introduction of the goods and services tax fade, according to the

IMF.

India’s post-independence journey began as an agrarian nation; however, over the years the

manufacturing and services sector has emerged strongly. Today, its service sector is

the fastest-growing sector in the world, contributing to more than 60% to its economy and

accounting for 28% of employment. Manufacturing remains as one of its crucial sectors and

is being given due push via the governments' initiatives, such as "Make in India." Although

the contribution of its agricultural sector has declined to around 17%, it still is way higher in

comparison to the western nations. The economy's strength lies in a limited dependence on

exports, high saving rates, favourable demographics, and a rising middle class. 

In Primary sector of economy, activities are undertaken by directly using natural resources.

Agriculture, Mining, Fishing, Forestry, Dairy etc. are some examples of this sector. It is

called so because it forms the base for all other products. Since most of the natural products

we get are from agriculture, dairy, forestry, fishing, it is also called Agriculture and allied

91
sector .People engaged in primary activities are called red-collar workers due to the outdoor

nature of their work.

Primary sector makes direct use of natural resources. The primary sector is an economic

description, concerned with the extraction of raw materials. This sector includes agriculture,

forestry, animal husbandry, fishing, mining etc. This sector is more important in developing

countries than in developed countries. This sector generally takes the output of the primary

sector and manufactures finished goods. More than 50 % of the Indian population is engaged

in this sector in the agriculture and allied activities and produces more than 15 % of the

national GDP.

The well being of the other two sectors depends upon the primary sector. If agriculture is well

with good yields then secondary which consists of industries will run smoothly. Many

industries are based on agricultural products. Primary sector is still the largest economic

sector and plays a significant role in the overall socio-economic development of India.

Secondary Sector is the most important sector of an economy. According to economic theory,

countries dependent on agriculture and allied activities ie primary sector, grow slowly and

remain under-developed or developing economies. The export the raw material to the rest of

the world. The secondary sector is dependent on primary sector but after processing of goods

in industries its value addition is more which leads to more profitability. It generates more

employment in the economy and helps in improving the standard of living and per capita

income of the people rapidly. Similarly the service sector also flourishes with the

improvement in industries. So Secondary sector is most important for the growth of and

economy.

It includes the industries where finished products are made from natural materials produced

in the primary sector. Industrial production, cotton fabric, sugar cane production etc.

92
activities comes under this sector. Hence its the part of a country's economy that

manufactures goods, rather than producing raw materials Since this sector is associated with

different kinds of industries, it is also called industrial sector. People engaged in secondary

activities are called blue collar workers.

Tertiary sector depends on scientific research and innovative developments to increase

productivity and it provides engineering and construction consultancy support services for all

projects in all sectors. Developed countries employ more than 80% the services sector.India

is the fifteenth largest country in the world in terms of services' output. This sector provides

employment to 23% of the workforce and is the fastest growing sector, with a growth rate of

7.5% in 1991–2000 up from 4.5% in 1951–80. It has the largest share in the GDP, accounting

for 53.8% in 2005 up from 15% in 1950.

This sector’s activities help in the development of the primary and secondary sectors. By

itself, economic activities in tertiary sector do not produce a goods but they are an aid or a

support for the production. Goods transported by trucks or trains, banking, insurance,

finance etc. come under the sector. It provides the value addition to a product same as

secondary sector. This sector jobs are called white collar jobs.

For the study I have taken three sectors such as primary sector, secondary sectors and tertiary

sector. In that I have taken different departments from the each sector. From the primary

sector agriculture and allied activities, industry, mining and quarrying, manufacturing, service

(including construction) and social and personal services. For the study I have taken their

contribution in GDP from the year 2005 to 2015.

93
FINDINGS

Basing on the analysis the following points were identified and presented below.

 Basing on the analysis I identified during these recent years agricultural sector’s

contribution to GDP has increased but the increase is insignificant as population has

also increased.

 Here I identified the agricultural yield increased in India after independence but in the

last few years it has decreased. This in its turn has declined the Growth Rate of the

Agricultural Sector in India GDP.

 India has initiated several progressive policy measures, putting itself in a good

starting position to undertake the transformation of the mining sector. Unlocking the

potential of the mining sector in India could add around USD

 210 billion to USD 250 billion (` 945 to 1,125 thousand crore or 6 to 7 percent) to the

GDP and create 13 to 15 million jobs through direct and indirect contribution by

2025.

 Here I identified Industry Growth Rate in India GDP has been impressive in the last

few years. The Growth Rate of the Industry in the India GDP has grown due to

sustained manufacturing activity over the years. This has given a major boost to the

Indian economy.

 The reasons for the increase of Industry Growth Rate in India GDP are that huge

amounts of investments are being made in this sector and this has helped the

industries to grow.

 Here I identified During 2009-10 and 2010-11, automobiles, rubber and plastics,

fabricated metal products, machinery and equipment and radio, TV and

communication equipment segments had witnessed double digit growth.

94
 Here I identified The higher the productivity in primary and secondary sector and

lower the employment in these sectors, the better it is. People need more and more

services for leading qualitatively better lifestyle. They need more means of transport,

more communication and educational facilities, more training, more medical facilities,

entertainment, technical facilities, banking facilities etc.

 Here for the service sector I identified The contribution of the Services Sector has

increased very rapidly in the India GDP for many foreign consumers have shown

interest in the country's service exports. This is due to the fact that India has a large

pool of highly skilled, low cost, and educated workers in the country. This has made

sure that the services that are available in the country are of the best quality. The

foreign companies seeing this have started outsourcing their work to India especially

in the area of business services which includes business process outsourcing and

information technology services. This has given a major boost to the Services Sector

in India, which in its turn has made the sector contribute more to the India GDP.

 Here I identified The manufacturing sector is the second largest contributor to India’s

GDP after the Services sector. Various government initiatives like Make in India,

MUDRA, Sagarmala, Startup India, Freight Corridors, along with a whole - hearted

contribution from states, will raise the share of the manufacturing sector in the

foreseeable future.

 India ranks fifteenth in the services output and it provides employment to around 23%

of the total workforce in the country. The various sectors under the Services Sector in

India are construction, trade, hotels, transport, restaurant, communication and storage,

social and personal services, community, insurance, financing, business services, and

real estate.

95
SUGGESTIONS

 Medium industries and large scale industries and its functioning should be under the control

of government in the view of society’ development. Assets and liabilities of micro and small

industries grow up as well as it’s physically and profitability become vast, then all criteria to

become Medium size industries is fulfilled by the micro and small industries. such as

industries should come under the government.

 there are lot of deficit between export and import and lot of devaluation of Indian rupees

respectively. It does not provide sustainable development. Due to this Constitution of India

are having directive principles for sustainable development of economy. The socialism

principle is given into preamble of constitution of India. It can be implemented for better

development of society. The principle of privatization is in favor of capitalist class. Very

small group of people are getting lot of benefit through privatization. It is becoming

centralization of assets of country. That is why, to be 100% implementation of constitution of

India is a way of decentralization of assets of the country.

 The development is relay on basic infrastructure, and the development of basic infrastructure

is largely dependent on power, transport and communication facilities, and so top priority has

been given to these in the state plans. Some industrial regions are provided infrastructures but

most of the industrial regions do not have provided such infrastructures.

 In order to detect sickness at the primary stage and early finalization of rehabilitation

programme, maximum efforts must be made to cut procedural delays by Government

institute, Directorate of industries and 295 concern banks. It may establish effective

communication system and complete thrust between them. And other side, the SML units and

its subsidiary units may adopt management information system the help of consultancy

organizations and services of professionals like C.A.’s, I. C. W. A.’s M. Com., M. B. A.’s etc.

to detect the warning signal of sickness at the initial stage.

96