composition of national income.docx
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Trends in Sectoral Composition of Income in both countries
National Income
National income is the total value a countrys fnal output o all new goods
and services produced in one year.
Objective
To study the sector wise composition o National Income in India
To compare the trends in India national Income in comparison to China
To understand the actors aecting the sectoral changes in these two
countries To understand i the growth achieved is a balanced growth.
Composition of National Income in India
This group assignment is ocused on understanding the macroeconomicindicators o Indian economy and comparing them with any other country toassess its strengths and weaknesses.This analysis gives us the deeper insights on how the composition o acountrys national income impacts its economic growth. e have used thesecondary data available on various websites rom !"I# orld"ank# I$% etcto prepare this report.
Indian economy is classifed in three sectors & 'griculture and allied#Industry and (ervices.
'griculture sector includes)* 'griculture +'griculture proper , -ivestock** %orestry , -ogging/* %ishing and related activities
Industry includes)* $anuacturing +!egistered , 0nregistered** 1lectricity/* 2as3* ater supply4* Construction.
(ervices sector includes)* Trade* !epair/* 5otels and restaurants3* Transport
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4* (torage6* Communication , services related to broadcasting7* %inancial8* !eal estate services9* Community
):* (ocial , ;ers. (ervices
(ervices sector is the largest sector o India. 2ross o total India?s 2. hile# 'griculture and allied sector shares )7.:)> and 2*. Contribution oIndustry and (ervices sector is lower than world?s average /:.4> or Industrysector and 6/.4> or (ervices sector.'t previous methodology# compositiono 'griculture , allied# Industry# and (ervices sector was 4).8)># )3.)6>#and //.4># respectively at current prices in )94:=4). (hare o 'griculture ,allied sector has declined at )8.:> in :)/=)3. (hare o (ervices sector hasimproved to 47.:/>. (hare o Industry sector has also increased to 3.77>
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a)Trends in sectoral composition of income in India and ChinaChina and India is the two emerging economy o the world. China and India isnd and 9thlargest country o the world# respectively in nominal basis. Bn
;;; basis# China is at )st and India is at /rd place in :)3. "oth countriestogether share )6.:8> and /.)6> o total global wealth in nominal and ;;;terms# respectively. 'mong 'sian countries# China and India togetheraccount or 4.77> +;;;* and 38.99> +Nominal* o total 'sia?s 2@;.
2@; o China is 4.:6 and ./9 times more than India at nominal and pppterms# respectively. China crossed A) trillion mark in )998 while India in ::7at echange rate basis. Now in :)3# India crossed trillion mark and China
crossed ): trillion. In )98:# siDe o economy o China and India was A/:9 andA)8)# respectively.
2@; o China at ppp terms is ).7 times more than compare to nominal basis.
This ratio o India is /.6:.
'ccording to sector wise 2@; composition o India in :)3 are as ollows E'griculture +)7.9>*# Industry +3.>* and (ervices +47.9>*. (ector wise 2@;
composition o China in :)3 are E 'griculture +9.7>*# Industry +3/.9>* and(ervices +36.3>*.
In nominal terms# per capita gdp o China is A7#489# 8:th position in world
and )9th in 'sia. India?s gdp per capita is around A)#67. India?s rank inworld and 'sia is )34 and //# respectively. Bn ;;; basis# gdp per capita oChina is A)#88: and o India is A4#844. China is 3.66 times richer than Indiain nominal method and .: times richer in ppp method.
2rowth rate o China is estimated at 7./8> in :)3. India?s growth rate isestimated at 7.)7> in :)3. @uring period )98:=:)3# 'verage 2@; growtho China was 9.8> compare to India?s 6./> in same period. China attains
maimum growth o )4.:> in year )983 and minimum /.8:> in )99:. Buto /4 years rom )98: to :)3# China grew by more than ):> in )6 yearswhile India in only one. India reached an all time high o ):.6> in :): and
a record low o ).:6> in )99). India?s growth rate was 9=):> in 3 years#while China in 7 years.
Indian rupee was at 3./ IN! per Chinese yuan +CNF* on Gan )996.
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Yea
r
Nominal GDP
billions !)
PPP GDP billions
Int" !)
Nominal GDP
capita !)
PPP GDP capita
Int" !)
Gro#th
$)
India China India China India China India ChinaIndi
a
Chin
a
:
:/#6/9.8:3 )6#)47.):4
)#7:8./6
/
8#9.)3
3
#67).4:
:
))#339.)4
7
9#/7.4/
:#::/.47
77.74 6.//
:)
9/#/)).737 )3#968.49:
))#464.7/
4
6#://.6
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#36.69
4
):#66./:
/
8#6::.44
9
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87.7: 6.//
:)
8 /#:).896 )/#876.)))
):#48.77
4
3#::3.7)
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#69.9/
7 9#9/4.69)
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#)38.48
8
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79#49./3:
7#/:8.3/
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)4#93).77
)7.44 6.::
:)6
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3)#93).49
98#649./88
6#734.676
)3#8).994
7.37 6./:
:)
4#/:8.:)8 ))#)).98 7#996.6/
)8#974.87
)
)#8:8.3)
/8#)43./83
6#64.6/
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)/#8:).:6
47.36 6.76
:)
3#:39.4:) ):#/8:./8: 7#/74.898
)7#6)7./
)
)#66.98
7#488.996
4#844./:
6
)#879.84
/7.)7 7./6
:)
/)#874.)47 9#369.)4 6#78/.644
)6#)7/.7
)#4:8.)6
36#948.9:8
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4
))#884.8)
96.9: 7.74
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)#8/4.8) 8#/86.678 6#4.67)
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7
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) 4.:8 7.76
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6939.))8 #79/.)49 /#686.976 7#398.)9 8/9.97 #)3.9)6
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48/3.)8 #87.48 /#7/.776 6#346.48 738.84: )#739.46
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::
37).489 )#933.673 #9:.64 4#6)9.96: 647.4 )#396.:3)
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33#//.334 7.84 ):.):
::
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)/#833.36 7.93 ):.:)
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::
4/.768 )#344.46: #/78.
::
)39/.9/3 )#/)7./6 #43.
:::
376.6/6 )#)9.843 #)::.
)99
9366.83) )#)::.774 )#974.
)99
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)997
3/.)89 984.:33 )#67).
)99
6/99.79) 89.:): )#479.
)99
4/66.6:: 746.963 )#33).
)99
3///.:)3 48.67/ )#/)/.
)99
/83.)93 63).:63 )#:4.
)99
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)99)
73.83 33.))6 )#:3).
)99
:/6.6:8 3:3.394 997.7
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Observation
s
China India
1conomy =overview
(ince the late )97:s Chinahas moved rom a closed#centrally planned system to
a more market=oriented onethat plays a maHor globalrole = in :): China becamethe world?s largest eporter.
!eorms began with thephasing out o collectiviDedagriculture# and epanded toinclude the gradual
liberaliDation o prices# fscaldecentraliDation# increasedautonomy or state
India is developing into anopen=market economy# yettraces o its past autarkic
policies remain. 1conomicliberaliDation measures#including industrialderegulation# privatiDation o
state=owned enterprises#and reduced controls onoreign trade andinvestment# began in the
early )99:s and served toaccelerate the country?sgrowth# which averaged
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enterprises# growth o theprivate sector# development
o stock markets and amodern banking system#and opening to oreign trade
and investment. China hasimplemented reorms in agradualist ashion. In recentyears# China has renewed its
support or state=ownedenterprises in sectorsconsidered important toeconomic security#
eplicitly looking to osterglobally competitive
industries. 'ter keeping itscurrency tightly linked to the0( dollar or years# in Guly::4 China moved to anechange rate system that
reerences a basket ocurrencies. %rom mid ::4to late ::8 cumulativeappreciation o the renminbi
against the 0( dollar was
more than :># but theechange rate remained
virtually pegged to the dollarrom the onset o the globalfnancial crisis until Gune:):# when "eiHing allowed
resumption o a gradualappreciation and epandedthe daily trading band within
which the !$" is permitted
to Juctuate. Therestructuring o theeconomy and resulting
eKciency gains havecontributed to a more thantenold increase in 2@;since )978. $easured on a
under 7> per year rom)997 to :)). India?s diverse
economy encompassestraditional village arming#modern agriculture#
handicrats# a wide range omodern industries# and amultitude o services.(lightly less than hal o the
work orce is in agriculture#but# services are the maHorsource o economic growth#accounting or nearly two=
thirds o India?s output withless than one=third o its
labor orce. India hascapitaliDed on its largeeducated 1nglish=speakingpopulation to become amaHor eporter o
inormation technologyservices# businessoutsourcing services# andsotware workers. India?s
economic growth began
slowing in :)) because o adecline in investment#
caused by high interestrates# rising inJation# andinvestor pessimism aboutthe government?s
commitment to urthereconomic reorms and aboutthe global situation. In late
:)# the Indian
2overnment announcedadditional reorms anddefcit reduction measures#
including allowing higherlevels o oreignparticipation in directinvestment in the economy.
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purchasing power parity+;;;* basis that adHusts or
price dierences# China in:)/ stood as the second=largest economy in the world
ater the 0(# havingsurpassed Gapan in ::).The dollar values o China?sagricultural and industrial
output each eceed those othe 0(L China is second tothe 0( in the value oservices it produces. (till#
per capita income is belowthe world average. The
Chinese government acesnumerous economicchallenges# includingE +a*reducing its high domesticsavings rate and
correspondingly lowdomestic consumptionL +b*acilitating higher=wage Hobopportunities or the
aspiring middle class#
including rural migrants andincreasing numbers o
college graduatesL +c*reducing corruption andother economic crimesL and+d* containing environmental
damage and social strierelated to the economy?srapid transormation.
1conomic development has
progressed urther in coastalprovinces than in theinterior# and by :)) more
than 4: million migrantworkers and theirdependents had relocated tourban areas to fnd work.
The outlook or India?s long=term growth is moderately
positive due to a youngpopulation andcorresponding low
dependency ratio# healthysavings and investmentrates# and increasingintegration into the global
economy. 5owever# Indiahas many challenges that ithas yet to ully address#including poverty#
corruption# violence anddiscrimination against
women and girls# anineKcient power generationand distribution system#ineective enorcement ointellectual property rights#
decades=long civil litigationdockets# inadeMuatetransport and agriculturalinrastructure# limited non=
agricultural employment
opportunities# high spendingand poorly=targeted
subsidies# inadeMuateavailability o Muality basicand higher education# andaccommodating rural=to=
urban migration. 2rowth in:)/ ell to a decade low# asIndia?s economic leaders
struggled to improve the
country?s wide fscal andcurrent account defcits.!ising macroeconomic
imbalances in India andimproving economicconditions in esterncountries# led investors to
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Bne conseMuence opopulation control policy is
that China is now one o themost rapidly aging countriesin the world. @eterioration in
the environment = notablyair pollution# soil erosion#and the steady all o thewater table# especially in the
North = is another long=termproblem. China continues tolose arable land because oerosion and economic
development. The Chinesegovernment is seeking to
add energy productioncapacity rom sources otherthan coal and oil# ocusingon nuclear and alternativeenergy development.
(everal actors areconverging to slow China?sgrowth# including debtoverhang rom its credit=
ueled stimulus program#
industrial overcapacity#ineKcient allocation o
capital by state=ownedbanks# and the slowrecovery o China?s tradingpartners. The government?s
)th %ive=Fear ;lan# adoptedin $arch :)) and reiteratedat the Communist ;arty?s
Third ;lenum meeting in
November :)/#emphasiDes continuedeconomic reorms and the
need to increase domesticconsumption in order tomake the economy lessdependent in the uture on
shit capital away rom India#prompting a sharp
depreciation o the rupee.5owever# investors?perceptions o India
improved in early :)3# dueto a reduction o the currentaccount defcit andepectations o post=election
economic reorm# resultingin a surge o inbound capitalJows and stabiliDation o therupee.
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fed investments# eports#and heavy industry.
5owever# China has madeonly marginal progresstoward these rebalancing
goals. The new governmento ;resident I Ginping hassignaled a greaterwillingness to undertake
reorms that ocus onChina?s long=term economichealth# including giving themarket a more decisive role
in allocating resources.2@;
+purchasingpower parity*
A)/./9 trillion +:)/ est.*
A).3/ trillion +:) est.*A)).43 trillion +:)) est.*note%data are in :)/ 0(
dollars
A3.99 trillion +:)/ est.*
A3.8// trillion +:) est.*A3.6/ trillion +:)) est.*note%data are in :)/ 0(
dollars2@; = realgrowth rate
7.7> +:)/ est.*7.7> +:) est.*9./> +:)) est.*
/.> +:)/ est.*4.)> +:) est.*7.4> +:)) est.*
2@; = percapita +;;;*
A9#8:: +:)/ est.*A9#):: +:) est.*A8#/:: +:)) est.*
note%data are in :)/ 0(dollars
A3#::: +:)/ est.*A/#9:: +:) est.*A/#8:: +:)) est.*
note%data are in :)/ 0(dollars
2@; =compositionby sector
a&riculture% ):>industr'%3/.9>services%36.)>
+:)/ est.*
a&riculture% )7.3>industr'%4.8>services%46.9> +:)/ est.*
;opulationbelowpoverty line
6.)>note%in :))# China set anew poverty line at !$"/:: +approimately 0(
A/#6/:*+:)/*
9.8> +:): est.*
5ouseholdincome orconsumption
bypercentageshare
lo#est ($% ).7>hi&hest ($%/:>note%data are or urban
households only +::9*
lo#est ($% /.6>hi&hest ($%/).)> +::4*
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InJation rate+consumer
prices*
.6> +:)/ est.*.6> +:) est.*
9.6> +:)/ est.*9.7> +:) est.*
-abor orce 797.6 millionnote%by the end o :)#
China?s population atworking age +)4=63 years*
was ).::3: billion +:)/est.*
387./ million +:)/ est.*
-abor orce =byoccupation
a&riculture% //.6>industr'%/:./>services%/6.)>
+:) est.*
a&riculture% 39>industr'%:>services%/)> +:) est.*
0nemployme
nt rate
3.)> +:)/ est.*
3.)> +:) est.*
note%data are or registeredurban unemployment# which
ecludes private enterprisesand migrants
8.8> +:)/ est.*
8.4> +:) est.*
@istributiono amilyincome = 2ini
inde
37./ +:)/*37.3 +:)*
/6.8 +::3*/7.8 +)997*
"udget revenues% A.))8 trillion
e*penditures%A.9
trillion +:)/ est.*
revenues% A)8)./ billion
e*penditures%A8).6
billion +:)/ est.*Industries world leader in gross valueo industrial outputL miningand ore processing# iron#
steel# aluminum# and othermetals# coalL machinebuildingL armamentsLtetiles and apparelL
petroleumL cementLchemicalsL ertiliDersL
consumer products+including ootwear# toys#and electronics*L oodprocessingL transportationeMuipment# including
automobiles# rail cars andlocomotives# ships# aircratLtelecommunications
tetiles# chemicals# oodprocessing# steel#transportation eMuipment#
cement# mining# petroleum#machinery# sotware#pharmaceuticals
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eMuipment# commercialspace launch vehicles#
satellitesIndustrialproduction
growth rate
7.6> +:)/ est.* :.9> +:)/ est.*
'griculture =products
world leader in gross valueo agricultural outputL rice#wheat# potatoes# corn#
peanuts# tea# millet# barley#apples# cotton# oilseedL porkLfsh
rice# wheat# oilseed# cotton#Hute# tea# sugarcane# lentils#onions# potatoesL dairy
products# sheep# goats#poultryL fsh
1ports A.) trillion +:)/ est.*A.:39 trillion +:) est.*
A/)/. billion +:)/ est.*A96.8 billion +:) est.*
1ports =
commodities
electrical and other
machinery# including dataprocessing eMuipment#apparel# radio telephonehandsets# tetiles#
integrated circuits
petroleum products#
precious stones# machinery#iron and steel# chemicals#vehicles# apparel
1ports =partners
5ong Oong )7.3># 0()6.7># Gapan 6.8># (outhOorea 3.)> +:)/ est.*
0'1 )./># 0( ).># China4># (ingapore 3.9># 5ongOong 3.)> +:)*
Imports A).94 trillion +:)/ est.*A).8)8 trillion +:) est.*
A367.4 billion +:)/ est.*A388.9 billion +:) est.*
Imports =commodities electrical and othermachinery# oil and mineral
uelsL nuclear reactor# boiler#and machinery componentsLoptical and medicaleMuipment# metal ores#
motor vehiclesL soybeans
crude oil# precious stones#machinery# ertiliDer# iron
and steel# chemicals
Imports =partners
(outh Oorea 9.3># Gapan8./># Taiwan 8># 0nited(tates 7.8># 'ustralia 4>#2ermany 3.8> +:)/ est.*
China ):.7># 0'1 7.8>#(audi 'rabia 6.8>#(witDerland 6.># 0( 4.)>+:)*
@ebt =
eternal
A86/. billion +/) @ecember
:)/ est.*A7/7 billion +/) @ecember:) est.*
A3). billion +/) @ecember
:)/ est.*A/78.9 billion +/) @ecember:) est.*
1changerates
!enminbiyuan +!$"* per 0(dollar =
6. +:)/ est.*
Indian rupees +IN!* per 0(dollar =
48.68 +:)/ est.*
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6./)/ +:) est.*6.77:/ +:): est.*
6.8/)3 +::9*6.9/84 +::8*
4/.3/7 +:) est.*34.76 +:): est.*
38.3:4 +::9*3/./)9 +::8*
%iscal year calendar year ) 'pril = /) $arch
;ublic debt .3> o 2@; +:)/ est.*6.)> o 2@; +:)*note%oKcial dataL datacover both central
government debt and localgovernment debt# whichChina?s National 'udit BKce
estimated at !$" ):.7trillion +approimately0(A).66 trillion* in :))L
data eclude policy bankbonds# $inistry o !ailwaydebt# China 'sset$anagement Company debt#
and non=perorming loans
4).8> o 2@; +:)/ est.*4).7> o 2@; +:) est.*note%data cover centralgovernment debt# and
eclude debt instrumentsissued +or owned* bygovernment entities other
than the treasuryL the datainclude treasury debt heldby oreign entitiesL the data
eclude debt issued bysubnational entities# as wellas intra=governmental debtLintra=governmental debt
consists o treasuryborrowings rom surpluses inthe social unds# such as orretirement# medical care#
and unemploymentL debtinstruments or the social
unds are not sold at publicauctions
!eserves o
oreignechangeand gold
A/.8) trillion +/) @ecember
:)/ est.*A/./88 trillion +/) @ecember:) est.*
A94 billion +/) @ecember
:)/ est.*A96 billion +8 @ecember:) est.*
Current'ccount
"alance
A)8.8 billion +:)/ est.*A)4.3 billion +:) est.*
=A73.79 billion +:)/ est.*=A9).37 billion +:) est.*
2@; +oKcial
echangerate*
A9.// trillion
note%because China?sechange rate is determineby fat# rather than by
market orces# the oKcialechange rate measure o2@; is not an accuratemeasure o China?s outputL
2@; at the oKcial echange
A).67 trillion +:)/ est.*
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rate substantiallyunderstates the actual level
o China?s output vis=a=visthe rest o the worldL inChina?s situation# 2@; at
purchasing power parityprovides the best measureor comparing output acrosscountries +:)/ est.*
(tock odirect oreign
investment =at home
A)./33 trillion +/) @ecember:) est.*
A)./ trillion +/) @ecember:)) est.*
A/): billion +/: November:)/ est.*
A4.) billion +/) @ecember:) est.*
(tock odirect oreign
investment =abroad
A43) billion +/) @ecember:)/ est.*
A4/).9 billion +/) @ecember:) est.*
A):.) billion +/) @ecember:)/ est.*
A))8.) billion +/) @ecember:) est.*
$arket valueo publiclytraded shares
A6.399 trillion +/) @ecember:)/ est.*A4.74/ trillion +/) @ecember:)*
A/./89 trillion +/) @ecember:)) est.*
A).6/ trillion +/) @ecember:) est.*A).:)4 trillion +/) @ecember:))*
A).6)6 trillion +/) @ecember:): est.*
Central bankdiscount rate
.4> +/) @ecember :)/est.*
.4> +/) @ecember :)est.*
7.74> +/) @ecember :)/est.*
8> +/) @ecember :):est.*note%this is the Indiancentral bank?s policy rate =the repurchase rate
Commercial
bank primelending rate
4.7/> +/) @ecember :)/
est.*6> +/) @ecember :) est.*
):.6> +/) @ecember :)/
est.*):.6/> +/) @ecember :)est.*
(tock o
domesticcredit
A)).79 trillion +/) @ecember
:)/ est.*A):.: trillion +/) @ecember:) est.*
A)./79 trillion +/) @ecember
:)/ est.*A).3:) trillion +/) @ecember:) est.*
(tock onarrowmoney
A4.4/ trillion +/) @ecember:)/ est.*A3.9)) trillion +/) @ecember:) est.*
A/:/.) billion +/) @ecember:)/ est.*A/)7.3 billion +/) @ecember:) est.*
(tock o A)8.)4 trillion +/) @ecember A)./76 trillion +/) @ecember
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broad money :)/ est.*A)4.4 trillion +/) @ecember
:) est.*
:)/ est.*A)./96 trillion +/) @ecember
:) est.*Taes andother
revenues
)9.3> o 2@; +:)/ est.* ):./> o 2@; +:)/ est.*
"udgetsurplus +P* ordefcit +=*
=.)> o 2@; +:)/ est.* =4.7> o 2@; +:)/ est.*
2@; =
composition#by end use
household
consumption% /6./>&overnment
consumption%)/.7>investment in +*ed
capital%36>
investment ininventories%).>
e*ports of &oods and
services%4.)>imports of &oods and
services%=.>
+:)/ est.*
household
consumption% 46.3>&overnment
consumption%).3>investment in +*ed
capital%9.6>
investment ininventories%8.>
e*ports of &oods and
services%4.>imports of &oods and
services%=/).8>
+:)/ est.*2rossnationalsaving
4:> o 2@; +:)/ est.*4).> o 2@; +:) est.*4:.)> o 2@; +:)) est.*
//.7> o 2@; +:)/ est.*8.8> o 2@; +:) est.*/:./> o 2@; +:)) est.*
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b" ,actors a-ectin& sectoral chan&es in these t#o countries
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c" Comment on overall tends in chan&in& composition .Is it a
balanced &ro#th/
0&riculture
'griculture in India is the maHor sector o its economy. 'lmost two=thirds othe total work=orce earns their livelihood though arming and other allied
sectors like orestry# logging and fshing which account )8> o the 2@;.These sectors provide employment to 6:> o the countrys total population.'bout 3/> o the countrys total geographical area is used or agriculturalpurposes. 'ter independence additional areas were brought under
cultivation and new methods# practices and techniMues o irrigation andarming were introduced by the government. The Q2reen !evolutionR andQBperation %loodR in the country have made India sel=suKcient in producingood grains and milk. 'mong other things# the government also tried to
decrease the dependence on monsoons. "etter seeds# use o ertiliDer#education o armers and provision o agricultural credit and subsidies arereasons or increase in agricultural productivity.
'griculture in India is the responsibility o the states rather than the centralgovernment. The central government ormulates policy and providesfnancial assistance to the states. (tates like ;unHab# 5aryana# 0ttar ;radesh#
'ndhra ;radesh# Tamil Nadu# Oarnataka and est "engal are maHorproducers o ood grains in India. 5imachal ;radesh and Gammu and Oashmirare amous or ruit production. Tea is produced in the high altitudes o
'ssam# @arHeeling in est "engal# Tripura# Boty in Tamil Nadu# 5imachal;radesh and Oerala. Oerala is also the largest producer o natural rubber andspices in India. !aHasthan is among the maHor producers o edible oils in Indiaand second largest producer o oil seeds. ;roduction o non=conventional
items like moong +a type o lentil*# soyabeans and peanuts are graduallygaining importance.
The steady and signifcant decline in the share o agriculture in total output#
as a result o its much slower growth# has been one o the singular eatureso the process o structural change in India since independence. 'mongst the
three broad sectors o the economy# agriculture was the largest contributorto Indias 2@; at the beginning. "y now however it is by ar the smallest.1ven though there has been a steady decline in its share in the 2@;#agriculture still remains the largest economic sector and plays a crucial rolein the socio=economic development o the country.
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Industr' and 1anufacturin&
The larger process o growth and structural change o the Indian economyater independence was not a steady process o industrialiDation.
Indias industrial sector accounts or 7.6> o the 2@; and gives
employment to )7> o the total workorce. Though agriculture is theoremost occupation o the maHority o the people# the government hadalways laid stress on the industrial development o the country. Thus policies
and strategies were ramed to give a boost to Indias industry. Thegovernment aims at achieving sel=suKciency in production and protectionrom oreign competition. (ince independence# India is marching ahead tobecome a diverse industrial base.
Today India holds some key industries in the sectors like steel# engineeringand machine tools# electronics# petrochemicals# tetiles and sotware.
Importance has also been given to improve the inrastructure o the country.The government has liberaliDed its industrial policy thereby attracting hugeoreign direct investment. I on one hand several multinational companiesopened their oKces in India# on the other hand many Indian companies
started their operations in oreign countries.
Industry 2rowth !ate in India 2@; has been impressive in the last ew years.
The 2rowth !ate o the Industry in the India 2@; has grown due to sustainedmanuacturing activity over the years. This has given a maHor boost to theIndian economy.
The reasons or the increase o Industry 2rowth !ate in India 2@; are that
huge amounts o investments are being made in this sector and this hashelped the industries to grow. %urther the reasons or the rise o the 2rowth!ate o the Industrial (ector in India are that the consumption o theindustrial goods has increased a great deal in the country# which in its turn
has boosted the industrial sector. 'lso the reasons or the increase oIndustry 2rowth !ate in India 2@; are that the industrial goods are beingeported in huge Muantities rom the country.
Industrial sector2 P3O4561S
o Failure to achieve targetso Under-utilization of capacity
o Absence of proper infrastructure
o Increasing capital-output ratio
o High cost industrial economy
o Inadequate employment generation
o Poor performance of public sector
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o Sectoral imbalances
o egional imbalances
o Industrial sic!ness "small scale and cottage industries#
Services
;eople need more and more services or leading Mualitatively better liestyle.They need more means o transport# more communication and educationalacilities# more training# more medical acilities# entertainment# technical
acilities# banking acilities etc.
Tertiary sector which mainly comprise o services depends on scientifc
research and innovative developments to increases productivity and itprovides engineering and construction consultancy support services or allproHects in all sectors. @eveloped countries employ more than 8:> theservices sector.
India ranks fteenth in the services output and it provides employment toaround /> o the total workorce in the country. The various sectors underthe (ervices (ector in India are construction# trade# hotels# transport#
restaurant# communication and storage# social and personal services#community# insurance# fnancing# business services# and real estate.
The (ervices (ector contributes the most to the Indian 2@;. The (ector o(ervices in India has the biggest share in the country?s 2@; or it accountsor around 4/.8> in ::4. The contribution o the (ervices (ector in India
2@; has increased a lot in the last ew years.
@uring ::9=): and :):=))# automobiles# rubber and plastics# abricatedmetal products# machinery and eMuipment and radio# T< and communication
eMuipment segments had witnessed double digit growth.
The contribution o the (ervices (ector has increased very rapidly in theIndia 2@; or many oreign consumers have shown interest in the country?s
service eports. This is due to the act that India has a large pool o highlyskilled# low cost# and educated workers in the country. This has made surethat the services that are available in the country are o the best Muality. The
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oreign companies seeing this have started outsourcing their work to India
especially in the area o business services which includes business processoutsourcing and inormation technology services. This has given a maHorboost to the (ervices (ector in India# which in its turn has made the sector
contribute more to the India 2@;.
Service sector . P3O4561S in &eneral
o Inadequate infrastructure facilities " po$er shortage% improper s!ill
development#o High gro$th but lo$ share in providing employment
o Inadequacy in &nance
o Improper maintenance in airports% rail$ays% high$ays% po$er plants etc
o Service sector cannot gro$ in isolation
!eerencesE
httpESSstatisticstimes.comSeconomySsectorwise=gdp=contribution=o=
india.php
httpsESSwww.kpmg.comSINSenSservicesSTaS%lashNewsSI1(=:)3=)4.pd httpESSwww.indemundi.comSactbookScompareSchina.indiaSeconomy httpsESSwww.rbi.org.inSscriptsS"(
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