Sankar Projecj 1

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
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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
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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.
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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.)
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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)
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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,
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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,
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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.
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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
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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.
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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.
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 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.
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 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
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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
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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
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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.
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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.

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 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.
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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.
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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.
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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.
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,
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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
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 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
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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
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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
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 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.
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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
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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
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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
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 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
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 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
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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
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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.
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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
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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.
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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 transform 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 industrialisation 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
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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
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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
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)

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

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

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

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

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

150000
100000
50000
Table 4.7 Community ,social and personal services

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

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

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Chapter-I

Introduction & objectives

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

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

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

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

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

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,

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

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

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

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

of fudging various economic data especially GDP growth.

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

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

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

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

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

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

Mumbai, the financial centre of India

Currency Indian rupee (INR, ₹)

Fiscal year. 1 April – 31 March

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.)

GDP per capita rank1.

1. 42nd (nominal; 2018)

2. 119th (PPP; 2018)

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%