composition of national income.docx

7/26/2019 Composition of National Income.docx

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Trends in Sectoral Composition of Income in both countries

National Income

National income is the total value a countrys fnal output o all new goods

and services produced in one year.

Objective

To study the sector wise composition o National Income in India

To compare the trends in India national Income in comparison to China

To understand the actors aecting the sectoral changes in these two

countries To understand i the growth achieved is a balanced growth.

Composition of National Income in India

This group assignment is ocused on understanding the macroeconomicindicators o Indian economy and comparing them with any other country toassess its strengths and weaknesses.This analysis gives us the deeper insights on how the composition o acountrys national income impacts its economic growth. e have used thesecondary data available on various websites rom !"I# orld"ank# I$% etcto prepare this report.

Indian economy is classifed in three sectors & 'griculture and allied#Industry and (ervices.

'griculture sector includes)* 'griculture +'griculture proper , -ivestock** %orestry , -ogging/* %ishing and related activities

Industry includes)* $anuacturing +!egistered , 0nregistered** 1lectricity/* 2as3* ater supply4* Construction.

(ervices sector includes)* Trade* !epair/* 5otels and restaurants3* Transport


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4* (torage6* Communication , services related to broadcasting7* %inancial8* !eal estate services9* Community

):* (ocial , ;ers. (ervices

(ervices sector is the largest sector o India. 2ross o total India?s 2. hile# 'griculture and allied sector shares )7.:)> and 2*. Contribution oIndustry and (ervices sector is lower than world?s average /:.4> or Industrysector and 6/.4> or (ervices sector.'t previous methodology# compositiono 'griculture , allied# Industry# and (ervices sector was 4).8)># )3.)6>#and //.4># respectively at current prices in )94:=4). (hare o 'griculture ,allied sector has declined at )8.:> in :)/=)3. (hare o (ervices sector hasimproved to 47.:/>. (hare o Industry sector has also increased to 3.77>


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a)Trends in sectoral composition of income in India and ChinaChina and India is the two emerging economy o the world. China and India isnd and 9thlargest country o the world# respectively in nominal basis. Bn

;;; basis# China is at )st and India is at /rd place in :)3. "oth countriestogether share )6.:8> and /.)6> o total global wealth in nominal and ;;;terms# respectively. 'mong 'sian countries# China and India togetheraccount or 4.77> +;;;* and 38.99> +Nominal* o total 'sia?s 2@;.

2@; o China is 4.:6 and ./9 times more than India at nominal and pppterms# respectively. China crossed A) trillion mark in )998 while India in ::7at echange rate basis. Now in :)3# India crossed trillion mark and China

crossed ): trillion. In )98:# siDe o economy o China and India was A/:9 andA)8)# respectively.

2@; o China at ppp terms is ).7 times more than compare to nominal basis.

This ratio o India is /.6:.

'ccording to sector wise 2@; composition o India in :)3 are as ollows E'griculture +)7.9>*# Industry +3.>* and (ervices +47.9>*. (ector wise 2@;

composition o China in :)3 are E 'griculture +9.7>*# Industry +3/.9>* and(ervices +36.3>*.

In nominal terms# per capita gdp o China is A7#489# 8:th position in world

and )9th in 'sia. India?s gdp per capita is around A)#67. India?s rank inworld and 'sia is )34 and //# respectively. Bn ;;; basis# gdp per capita oChina is A)#88: and o India is A4#844. China is 3.66 times richer than Indiain nominal method and .: times richer in ppp method.

2rowth rate o China is estimated at 7./8> in :)3. India?s growth rate isestimated at 7.)7> in :)3. @uring period )98:=:)3# 'verage 2@; growtho China was 9.8> compare to India?s 6./> in same period. China attains

maimum growth o )4.:> in year )983 and minimum /.8:> in )99:. Buto /4 years rom )98: to :)3# China grew by more than ):> in )6 yearswhile India in only one. India reached an all time high o ):.6> in :): and

a record low o ).:6> in )99). India?s growth rate was 9=):> in 3 years#while China in 7 years.

Indian rupee was at 3./ IN! per Chinese yuan +CNF* on Gan )996.


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Yea

r

Nominal GDP

billions !)

PPP GDP billions

Int" !)

Nominal GDP

capita !)

PPP GDP capita

Int" !)

Gro#th

$)

India China India China India China India ChinaIndi

a

Chin

a

:

:/#6/9.8:3 )6#)47.):4

)#7:8./6

/

8#9.)3

3

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:

))#339.)4

7

9#/7.4/

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77.74 6.//

:)

9/#/)).737 )3#968.49:

))#464.7/

4

6#://.6

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#36.69

4

):#66./:

/

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87.7: 6.//

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7 9#9/4.69)

7#9/.34

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8

#):/.47

79#49./3:

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3

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)7.44 6.::

:)6

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3)#93).49

98#649./88

6#734.676

)3#8).994

7.37 6./:

:)

4#/:8.:)8 ))#)).98 7#996.6/

)8#974.87

)

)#8:8.3)

/8#)43./83

6#64.6/

4

)/#8:).:6

47.36 6.76

:)

3#:39.4:) ):#/8:./8: 7#/74.898

)7#6)7./

)

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7#488.996

4#844./:

6

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/7.)7 7./6

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/)#874.)47 9#369.)4 6#78/.644

)6#)7/.7

)#4:8.)6

36#948.9:8

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96.9: 7.74

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)#8/4.8) 8#/86.678 6#4.67)

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7

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::

4/.768 )#344.46: #/78.

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)39/.9/3 )#/)7./6 #43.

:::

376.6/6 )#)9.843 #)::.

)99

9366.83) )#)::.774 )#974.

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)997

3/.)89 984.:33 )#67).

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Observation

s

China India

1conomy =overview

(ince the late )97:s Chinahas moved rom a closed#centrally planned system to

a more market=oriented onethat plays a maHor globalrole = in :): China becamethe world?s largest eporter.

!eorms began with thephasing out o collectiviDedagriculture# and epanded toinclude the gradual

liberaliDation o prices# fscaldecentraliDation# increasedautonomy or state

India is developing into anopen=market economy# yettraces o its past autarkic

policies remain. 1conomicliberaliDation measures#including industrialderegulation# privatiDation o

state=owned enterprises#and reduced controls onoreign trade andinvestment# began in the

early )99:s and served toaccelerate the country?sgrowth# which averaged


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enterprises# growth o theprivate sector# development

o stock markets and amodern banking system#and opening to oreign trade

and investment. China hasimplemented reorms in agradualist ashion. In recentyears# China has renewed its

support or state=ownedenterprises in sectorsconsidered important toeconomic security#

eplicitly looking to osterglobally competitive

industries. 'ter keeping itscurrency tightly linked to the0( dollar or years# in Guly::4 China moved to anechange rate system that

reerences a basket ocurrencies. %rom mid ::4to late ::8 cumulativeappreciation o the renminbi

against the 0( dollar was

more than :># but theechange rate remained

virtually pegged to the dollarrom the onset o the globalfnancial crisis until Gune:):# when "eiHing allowed

resumption o a gradualappreciation and epandedthe daily trading band within

which the !$" is permitted

to Juctuate. Therestructuring o theeconomy and resulting

eKciency gains havecontributed to a more thantenold increase in 2@;since )978. $easured on a

under 7> per year rom)997 to :)). India?s diverse

economy encompassestraditional village arming#modern agriculture#

handicrats# a wide range omodern industries# and amultitude o services.(lightly less than hal o the

work orce is in agriculture#but# services are the maHorsource o economic growth#accounting or nearly two=

thirds o India?s output withless than one=third o its

labor orce. India hascapitaliDed on its largeeducated 1nglish=speakingpopulation to become amaHor eporter o

inormation technologyservices# businessoutsourcing services# andsotware workers. India?s

economic growth began

slowing in :)) because o adecline in investment#

caused by high interestrates# rising inJation# andinvestor pessimism aboutthe government?s

commitment to urthereconomic reorms and aboutthe global situation. In late

:)# the Indian

2overnment announcedadditional reorms anddefcit reduction measures#

including allowing higherlevels o oreignparticipation in directinvestment in the economy.


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purchasing power parity+;;;* basis that adHusts or

price dierences# China in:)/ stood as the second=largest economy in the world

ater the 0(# havingsurpassed Gapan in ::).The dollar values o China?sagricultural and industrial

output each eceed those othe 0(L China is second tothe 0( in the value oservices it produces. (till#

per capita income is belowthe world average. The

Chinese government acesnumerous economicchallenges# includingE +a*reducing its high domesticsavings rate and

correspondingly lowdomestic consumptionL +b*acilitating higher=wage Hobopportunities or the

aspiring middle class#

including rural migrants andincreasing numbers o

college graduatesL +c*reducing corruption andother economic crimesL and+d* containing environmental

damage and social strierelated to the economy?srapid transormation.

1conomic development has

progressed urther in coastalprovinces than in theinterior# and by :)) more

than 4: million migrantworkers and theirdependents had relocated tourban areas to fnd work.

The outlook or India?s long=term growth is moderately

positive due to a youngpopulation andcorresponding low

dependency ratio# healthysavings and investmentrates# and increasingintegration into the global

economy. 5owever# Indiahas many challenges that ithas yet to ully address#including poverty#

corruption# violence anddiscrimination against

women and girls# anineKcient power generationand distribution system#ineective enorcement ointellectual property rights#

decades=long civil litigationdockets# inadeMuatetransport and agriculturalinrastructure# limited non=

agricultural employment

opportunities# high spendingand poorly=targeted

subsidies# inadeMuateavailability o Muality basicand higher education# andaccommodating rural=to=

urban migration. 2rowth in:)/ ell to a decade low# asIndia?s economic leaders

struggled to improve the

country?s wide fscal andcurrent account defcits.!ising macroeconomic

imbalances in India andimproving economicconditions in esterncountries# led investors to


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Bne conseMuence opopulation control policy is

that China is now one o themost rapidly aging countriesin the world. @eterioration in

the environment = notablyair pollution# soil erosion#and the steady all o thewater table# especially in the

North = is another long=termproblem. China continues tolose arable land because oerosion and economic

development. The Chinesegovernment is seeking to

add energy productioncapacity rom sources otherthan coal and oil# ocusingon nuclear and alternativeenergy development.

(everal actors areconverging to slow China?sgrowth# including debtoverhang rom its credit=

ueled stimulus program#

industrial overcapacity#ineKcient allocation o

capital by state=ownedbanks# and the slowrecovery o China?s tradingpartners. The government?s

)th %ive=Fear ;lan# adoptedin $arch :)) and reiteratedat the Communist ;arty?s

Third ;lenum meeting in

November :)/#emphasiDes continuedeconomic reorms and the

need to increase domesticconsumption in order tomake the economy lessdependent in the uture on

shit capital away rom India#prompting a sharp

depreciation o the rupee.5owever# investors?perceptions o India

improved in early :)3# dueto a reduction o the currentaccount defcit andepectations o post=election

economic reorm# resultingin a surge o inbound capitalJows and stabiliDation o therupee.


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fed investments# eports#and heavy industry.

5owever# China has madeonly marginal progresstoward these rebalancing

goals. The new governmento ;resident I Ginping hassignaled a greaterwillingness to undertake

reorms that ocus onChina?s long=term economichealth# including giving themarket a more decisive role

in allocating resources.2@;

+purchasingpower parity*

A)/./9 trillion +:)/ est.*

A).3/ trillion +:) est.*A)).43 trillion +:)) est.*note%data are in :)/ 0(

dollars

A3.99 trillion +:)/ est.*

A3.8// trillion +:) est.*A3.6/ trillion +:)) est.*note%data are in :)/ 0(

dollars2@; = realgrowth rate

7.7> +:)/ est.*7.7> +:) est.*9./> +:)) est.*

/.> +:)/ est.*4.)> +:) est.*7.4> +:)) est.*

2@; = percapita +;;;*

A9#8:: +:)/ est.*A9#):: +:) est.*A8#/:: +:)) est.*

note%data are in :)/ 0(dollars

A3#::: +:)/ est.*A/#9:: +:) est.*A/#8:: +:)) est.*

note%data are in :)/ 0(dollars

2@; =compositionby sector

a&riculture% ):>industr'%3/.9>services%36.)>

+:)/ est.*

a&riculture% )7.3>industr'%4.8>services%46.9> +:)/ est.*

;opulationbelowpoverty line

6.)>note%in :))# China set anew poverty line at !$"/:: +approimately 0(

A/#6/:*+:)/*

9.8> +:): est.*

5ouseholdincome orconsumption

bypercentageshare

lo#est ($% ).7>hi&hest ($%/:>note%data are or urban

households only +::9*

lo#est ($% /.6>hi&hest ($%/).)> +::4*


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InJation rate+consumer

prices*

.6> +:)/ est.*.6> +:) est.*

9.6> +:)/ est.*9.7> +:) est.*

-abor orce 797.6 millionnote%by the end o :)#

China?s population atworking age +)4=63 years*

was ).::3: billion +:)/est.*

387./ million +:)/ est.*

-abor orce =byoccupation

a&riculture% //.6>industr'%/:./>services%/6.)>

+:) est.*

a&riculture% 39>industr'%:>services%/)> +:) est.*

0nemployme

nt rate

3.)> +:)/ est.*

3.)> +:) est.*

note%data are or registeredurban unemployment# which

ecludes private enterprisesand migrants

8.8> +:)/ est.*

8.4> +:) est.*

@istributiono amilyincome = 2ini

inde

37./ +:)/*37.3 +:)*

/6.8 +::3*/7.8 +)997*

"udget revenues% A.))8 trillion

e*penditures%A.9

trillion +:)/ est.*

revenues% A)8)./ billion

e*penditures%A8).6

billion +:)/ est.*Industries world leader in gross valueo industrial outputL miningand ore processing# iron#

steel# aluminum# and othermetals# coalL machinebuildingL armamentsLtetiles and apparelL

petroleumL cementLchemicalsL ertiliDersL

consumer products+including ootwear# toys#and electronics*L oodprocessingL transportationeMuipment# including

automobiles# rail cars andlocomotives# ships# aircratLtelecommunications

tetiles# chemicals# oodprocessing# steel#transportation eMuipment#

cement# mining# petroleum#machinery# sotware#pharmaceuticals


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eMuipment# commercialspace launch vehicles#

satellitesIndustrialproduction

growth rate

7.6> +:)/ est.* :.9> +:)/ est.*

'griculture =products

world leader in gross valueo agricultural outputL rice#wheat# potatoes# corn#

peanuts# tea# millet# barley#apples# cotton# oilseedL porkLfsh

rice# wheat# oilseed# cotton#Hute# tea# sugarcane# lentils#onions# potatoesL dairy

products# sheep# goats#poultryL fsh

1ports A.) trillion +:)/ est.*A.:39 trillion +:) est.*

A/)/. billion +:)/ est.*A96.8 billion +:) est.*

1ports =

commodities

electrical and other

machinery# including dataprocessing eMuipment#apparel# radio telephonehandsets# tetiles#

integrated circuits

petroleum products#

precious stones# machinery#iron and steel# chemicals#vehicles# apparel

1ports =partners

5ong Oong )7.3># 0()6.7># Gapan 6.8># (outhOorea 3.)> +:)/ est.*

0'1 )./># 0( ).># China4># (ingapore 3.9># 5ongOong 3.)> +:)*

Imports A).94 trillion +:)/ est.*A).8)8 trillion +:) est.*

A367.4 billion +:)/ est.*A388.9 billion +:) est.*

Imports =commodities electrical and othermachinery# oil and mineral

uelsL nuclear reactor# boiler#and machinery componentsLoptical and medicaleMuipment# metal ores#

motor vehiclesL soybeans

crude oil# precious stones#machinery# ertiliDer# iron

and steel# chemicals

Imports =partners

(outh Oorea 9.3># Gapan8./># Taiwan 8># 0nited(tates 7.8># 'ustralia 4>#2ermany 3.8> +:)/ est.*

China ):.7># 0'1 7.8>#(audi 'rabia 6.8>#(witDerland 6.># 0( 4.)>+:)*

@ebt =

eternal

A86/. billion +/) @ecember

:)/ est.*A7/7 billion +/) @ecember:) est.*

A3). billion +/) @ecember

:)/ est.*A/78.9 billion +/) @ecember:) est.*

1changerates

!enminbiyuan +!$"* per 0(dollar =

6. +:)/ est.*

Indian rupees +IN!* per 0(dollar =

48.68 +:)/ est.*


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6./)/ +:) est.*6.77:/ +:): est.*

6.8/)3 +::9*6.9/84 +::8*

4/.3/7 +:) est.*34.76 +:): est.*

38.3:4 +::9*3/./)9 +::8*

%iscal year calendar year ) 'pril = /) $arch

;ublic debt .3> o 2@; +:)/ est.*6.)> o 2@; +:)*note%oKcial dataL datacover both central

government debt and localgovernment debt# whichChina?s National 'udit BKce

estimated at !$" ):.7trillion +approimately0(A).66 trillion* in :))L

data eclude policy bankbonds# $inistry o !ailwaydebt# China 'sset$anagement Company debt#

and non=perorming loans

4).8> o 2@; +:)/ est.*4).7> o 2@; +:) est.*note%data cover centralgovernment debt# and

eclude debt instrumentsissued +or owned* bygovernment entities other

than the treasuryL the datainclude treasury debt heldby oreign entitiesL the data

eclude debt issued bysubnational entities# as wellas intra=governmental debtLintra=governmental debt

consists o treasuryborrowings rom surpluses inthe social unds# such as orretirement# medical care#

and unemploymentL debtinstruments or the social

unds are not sold at publicauctions

!eserves o

oreignechangeand gold

A/.8) trillion +/) @ecember

:)/ est.*A/./88 trillion +/) @ecember:) est.*

A94 billion +/) @ecember

:)/ est.*A96 billion +8 @ecember:) est.*

Current'ccount

"alance

A)8.8 billion +:)/ est.*A)4.3 billion +:) est.*

=A73.79 billion +:)/ est.*=A9).37 billion +:) est.*

2@; +oKcial

echangerate*

A9.// trillion

note%because China?sechange rate is determineby fat# rather than by

market orces# the oKcialechange rate measure o2@; is not an accuratemeasure o China?s outputL

2@; at the oKcial echange

A).67 trillion +:)/ est.*


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rate substantiallyunderstates the actual level

o China?s output vis=a=visthe rest o the worldL inChina?s situation# 2@; at

purchasing power parityprovides the best measureor comparing output acrosscountries +:)/ est.*

(tock odirect oreign

investment =at home

A)./33 trillion +/) @ecember:) est.*

A)./ trillion +/) @ecember:)) est.*

A/): billion +/: November:)/ est.*

A4.) billion +/) @ecember:) est.*

(tock odirect oreign

investment =abroad

A43) billion +/) @ecember:)/ est.*

A4/).9 billion +/) @ecember:) est.*

A):.) billion +/) @ecember:)/ est.*

A))8.) billion +/) @ecember:) est.*

$arket valueo publiclytraded shares

A6.399 trillion +/) @ecember:)/ est.*A4.74/ trillion +/) @ecember:)*

A/./89 trillion +/) @ecember:)) est.*

A).6/ trillion +/) @ecember:) est.*A).:)4 trillion +/) @ecember:))*

A).6)6 trillion +/) @ecember:): est.*

Central bankdiscount rate

.4> +/) @ecember :)/est.*

.4> +/) @ecember :)est.*

7.74> +/) @ecember :)/est.*

8> +/) @ecember :):est.*note%this is the Indiancentral bank?s policy rate =the repurchase rate

Commercial

bank primelending rate

4.7/> +/) @ecember :)/

est.*6> +/) @ecember :) est.*

):.6> +/) @ecember :)/

est.*):.6/> +/) @ecember :)est.*

(tock o

domesticcredit

A)).79 trillion +/) @ecember

:)/ est.*A):.: trillion +/) @ecember:) est.*

A)./79 trillion +/) @ecember

:)/ est.*A).3:) trillion +/) @ecember:) est.*

(tock onarrowmoney

A4.4/ trillion +/) @ecember:)/ est.*A3.9)) trillion +/) @ecember:) est.*

A/:/.) billion +/) @ecember:)/ est.*A/)7.3 billion +/) @ecember:) est.*

(tock o A)8.)4 trillion +/) @ecember A)./76 trillion +/) @ecember


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broad money :)/ est.*A)4.4 trillion +/) @ecember

:) est.*

:)/ est.*A)./96 trillion +/) @ecember

:) est.*Taes andother

revenues

)9.3> o 2@; +:)/ est.* ):./> o 2@; +:)/ est.*

"udgetsurplus +P* ordefcit +=*

=.)> o 2@; +:)/ est.* =4.7> o 2@; +:)/ est.*

2@; =

composition#by end use

household

consumption% /6./>&overnment

consumption%)/.7>investment in +*ed

capital%36>

investment ininventories%).>

e*ports of &oods and

services%4.)>imports of &oods and

services%=.>

+:)/ est.*

household

consumption% 46.3>&overnment

consumption%).3>investment in +*ed

capital%9.6>

investment ininventories%8.>

e*ports of &oods and

services%4.>imports of &oods and

services%=/).8>

+:)/ est.*2rossnationalsaving

4:> o 2@; +:)/ est.*4).> o 2@; +:) est.*4:.)> o 2@; +:)) est.*

//.7> o 2@; +:)/ est.*8.8> o 2@; +:) est.*/:./> o 2@; +:)) est.*


17/21

b" ,actors a-ectin& sectoral chan&es in these t#o countries


18/21

c" Comment on overall tends in chan&in& composition .Is it a

balanced &ro#th/

0&riculture

'griculture in India is the maHor sector o its economy. 'lmost two=thirds othe total work=orce earns their livelihood though arming and other allied

sectors like orestry# logging and fshing which account )8> o the 2@;.These sectors provide employment to 6:> o the countrys total population.'bout 3/> o the countrys total geographical area is used or agriculturalpurposes. 'ter independence additional areas were brought under

cultivation and new methods# practices and techniMues o irrigation andarming were introduced by the government. The Q2reen !evolutionR andQBperation %loodR in the country have made India sel=suKcient in producingood grains and milk. 'mong other things# the government also tried to

decrease the dependence on monsoons. "etter seeds# use o ertiliDer#education o armers and provision o agricultural credit and subsidies arereasons or increase in agricultural productivity.

'griculture in India is the responsibility o the states rather than the centralgovernment. The central government ormulates policy and providesfnancial assistance to the states. (tates like ;unHab# 5aryana# 0ttar ;radesh#

'ndhra ;radesh# Tamil Nadu# Oarnataka and est "engal are maHorproducers o ood grains in India. 5imachal ;radesh and Gammu and Oashmirare amous or ruit production. Tea is produced in the high altitudes o

'ssam# @arHeeling in est "engal# Tripura# Boty in Tamil Nadu# 5imachal;radesh and Oerala. Oerala is also the largest producer o natural rubber andspices in India. !aHasthan is among the maHor producers o edible oils in Indiaand second largest producer o oil seeds. ;roduction o non=conventional

items like moong +a type o lentil*# soyabeans and peanuts are graduallygaining importance.

The steady and signifcant decline in the share o agriculture in total output#

as a result o its much slower growth# has been one o the singular eatureso the process o structural change in India since independence. 'mongst the

three broad sectors o the economy# agriculture was the largest contributorto Indias 2@; at the beginning. "y now however it is by ar the smallest.1ven though there has been a steady decline in its share in the 2@;#agriculture still remains the largest economic sector and plays a crucial rolein the socio=economic development o the country.


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Industr' and 1anufacturin&

The larger process o growth and structural change o the Indian economyater independence was not a steady process o industrialiDation.

Indias industrial sector accounts or 7.6> o the 2@; and gives

employment to )7> o the total workorce. Though agriculture is theoremost occupation o the maHority o the people# the government hadalways laid stress on the industrial development o the country. Thus policies

and strategies were ramed to give a boost to Indias industry. Thegovernment aims at achieving sel=suKciency in production and protectionrom oreign competition. (ince independence# India is marching ahead tobecome a diverse industrial base.

Today India holds some key industries in the sectors like steel# engineeringand machine tools# electronics# petrochemicals# tetiles and sotware.

Importance has also been given to improve the inrastructure o the country.The government has liberaliDed its industrial policy thereby attracting hugeoreign direct investment. I on one hand several multinational companiesopened their oKces in India# on the other hand many Indian companies

started their operations in oreign countries.

Industry 2rowth !ate in India 2@; has been impressive in the last ew years.

The 2rowth !ate o the Industry in the India 2@; has grown due to sustainedmanuacturing activity over the years. This has given a maHor boost to theIndian economy.

The reasons or the increase o Industry 2rowth !ate in India 2@; are that

huge amounts o investments are being made in this sector and this hashelped the industries to grow. %urther the reasons or the rise o the 2rowth!ate o the Industrial (ector in India are that the consumption o theindustrial goods has increased a great deal in the country# which in its turn

has boosted the industrial sector. 'lso the reasons or the increase oIndustry 2rowth !ate in India 2@; are that the industrial goods are beingeported in huge Muantities rom the country.

Industrial sector2 P3O4561S

o Failure to achieve targetso Under-utilization of capacity

o Absence of proper infrastructure

o Increasing capital-output ratio

o High cost industrial economy

o Inadequate employment generation

o Poor performance of public sector


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o Sectoral imbalances

o egional imbalances

o Industrial sic!ness "small scale and cottage industries#

Services

;eople need more and more services or leading Mualitatively better liestyle.They need more means o transport# more communication and educationalacilities# more training# more medical acilities# entertainment# technical

acilities# banking acilities etc.

Tertiary sector which mainly comprise o services depends on scientifc

research and innovative developments to increases productivity and itprovides engineering and construction consultancy support services or allproHects in all sectors. @eveloped countries employ more than 8:> theservices sector.

India ranks fteenth in the services output and it provides employment toaround /> o the total workorce in the country. The various sectors underthe (ervices (ector in India are construction# trade# hotels# transport#

restaurant# communication and storage# social and personal services#community# insurance# fnancing# business services# and real estate.

The (ervices (ector contributes the most to the Indian 2@;. The (ector o(ervices in India has the biggest share in the country?s 2@; or it accountsor around 4/.8> in ::4. The contribution o the (ervices (ector in India

2@; has increased a lot in the last ew years.

@uring ::9=): and :):=))# automobiles# rubber and plastics# abricatedmetal products# machinery and eMuipment and radio# T< and communication

eMuipment segments had witnessed double digit growth.

The contribution o the (ervices (ector has increased very rapidly in theIndia 2@; or many oreign consumers have shown interest in the country?s

service eports. This is due to the act that India has a large pool o highlyskilled# low cost# and educated workers in the country. This has made surethat the services that are available in the country are o the best Muality. The


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oreign companies seeing this have started outsourcing their work to India

especially in the area o business services which includes business processoutsourcing and inormation technology services. This has given a maHorboost to the (ervices (ector in India# which in its turn has made the sector

contribute more to the India 2@;.

Service sector . P3O4561S in &eneral

o Inadequate infrastructure facilities " po$er shortage% improper s!ill

development#o High gro$th but lo$ share in providing employment

o Inadequacy in &nance

o Improper maintenance in airports% rail$ays% high$ays% po$er plants etc

o Service sector cannot gro$ in isolation

!eerencesE

httpESSstatisticstimes.comSeconomySsectorwise=gdp=contribution=o=

india.php

httpsESSwww.kpmg.comSINSenSservicesSTaS%lashNewsSI1(=:)3=)4.pd httpESSwww.indemundi.comSactbookScompareSchina.indiaSeconomy httpsESSwww.rbi.org.inSscriptsS"(

composition of national income.docx

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