India is one of the largest economies in the world. As of 2018, the Nominal (current) Gross Domestic Product (GDP) of the country is 2.72 lakh crores USD. The estimated nominal GDP of 2020 is USD 3.202 trillion (as per Wikipedia). Further studies by economists around the world show that by the year 2050, India will become the second-largest economy. One might be curious about the elements that contribute to the Indian economy. To quench the curiosity, the different sectors of the Indian economy are discussed here in detail.
Indian Economy and Its Sectors
The three main sectors of the Indian economy are: primary, secondary and tertiary. When we talk about the style of operation, the Indian economy can be divided into two sectors- organized and unorganized. Again, in terms of ownership, the Indian economy can be divided into two sectors- public sector and private sector. In this essay, we will have a detailed discussion about the sectors of the Indian economy including what each of these sectors consists of.
Classification of the Indian Economy
The primary sector of the Indian economy is mainly based on the availability of natural resources. The goods manufactured by this sector are also largely based on the availability of the natural resources. Natural resources are also required for the execution of certain processes in this sector. All the services of this sector are completely dependent on the presence of sufficient natural resources just to keep up with the required day to day operations.
To further illustrate this point, a fitting example is needed. Let us in this case take the example of the agricultural sector. The sector of agriculture needs water for its daily activities. Without water no plant will grow. Also, it needs land resources to plant crops and so on. Some other examples can be that of fishing, where the fishermen are dependent on the availability of water bodies and aquatic life to sustain the sector. However, agriculture is the largest sector of this section.
One problem that can be noted in the functioning in this sector is disguised employment and underemployment. Disguised employment means that the workers of this sector are to work enough to meet their true potential. Underemployment on the other hand means that the workers are not working to meet their best capabilities.
To reduce this problem, the government must take strict measures. For example, the government both on national as well as state-level can increase the amount of funds allocated for the irrigation facilities and also provide loans for the farmers which can enable them to buy higher quality seeds and fertilizers.
The secondary sector is the sector of the Indian economy that is dependent on the natural ingredients. The natural ingredients are used to create the products or services offered. These products are dated for consumption at the end. This sector is the best sector in terms of value-added to services and products. The most prominent example of this sector is transportation and manufacturing.
Both the transportation and manufacturing sectors' end product is consumed by the people. As much as 14% of the entire workforce of the country is employed under these sectors. This sector is a large contributor to the GDP, as much as 28% of the GDP is contributed by this sector. The secondary sector is the backbone of the Indian economy. There is a promising future for this sector with more development and growth in the coming years.
The Tertiary sector is similar to the secondary sector in terms that it too adds to the value of the products. This sector is associated with the downstream processing of natural goods. If we talk about the GDP of India, this sector is the largest contributor to the GDP of the nation. As much as 59% of the GDP is contributed by this sector. The Tertiary sector is important for the development of the other two sectors. As much as 23% of the total working citizens of the country are employed in this sector.
An example of this sector can be the sectors of IT services, consulting, etc. A problem facing this sector is that the jobs with low salaries do not attract many employees. This is a problem that puts Indian economy in a dilemma as the nation continues to grow.