An economy consists of three sectors i.. primary , secondary and tertiary sectors. The primary sector includes all the economic activities which involve getting goods in their primary form from nature without any value addition i.e. agriculture, livestock, poultry, fishing and forestry etc. The secondary sector includes the economic activities which involve value addition to the primary products i.e. industries. The tertiary sector include all economic activities which provide services to the primary and secondary sector as well as to the final consumers.
At the dawn of independence India was a predominantly agrarian underdeveloped country with a very small industrial base. The normal course to development that any nation of the world takes is development of industrial sector via development in agriculture and then transformation of the tertiary sector to grow into a fully developed service economy. Although, it is true that the third world nations don’t have enough time to take the long path taken by the developed nation and they need to carve a path of their own towards economic growth & development. Still, the path that India took to development especilally in the post liberalisation era needs a scrutanized look.
In the pre liberalisation period India was following a mixed economy with a bias towards socialism and the govt. did lots of planning to build industrial base in India and strengthen agriculture. It succeeded in its endeavours to an extent and India was self sufficient in food grains by 1970s and also had a basic industrial base. However, as far as economic growth was concerned we were stuck in what has been called the "Hindu rate of growth" by Prof. Raj Krishna for most parts of the pre liberalization era. Consistent lack of growth threw India into an econoimc crisis that made economic liberalisation inevitable and here it was- The Indian economy in its modern look: A mixed economy with a capitalist inclination.
The year 1991 marked a shift inIndia
Agriculture's share in India's GDP has fallen from around 60% in 1959 to 17% in 2009-10. Industries on the other hand have not been able to cross the 30 % barrier and contributed only 27% to GDP last economic year. However the employment scenario is quite different from the GDP scenario. While agriculture employs appx. 50% of the population, industries employ 20% and service sector employs 30% of the population. Thus, there is an imbalance between income generated sector wise and employment generated which has led to increase in income inequality in the country. Agricultural growth has almost stagnated and in one quarter of 2009-10 it was negative too. Neglect of agriculture and industry and excessive income concentration in one sector has startes taking its toil on Indian economy.
Agriculture and industry are the actual goods producer and lack of growthin these two sectors has fuelled the supply side driven recent inflation in Indian economy . With food inflation hovering around 16-18% and WPI inflation around 7-9% india is caught in an inflationary spiral which is now threatening its growth story. The way out is supply side corrections and removing the bottlenecks in way of agricultural and industrial development. Apart from this, employment generation has also been a provblem in India. Despite posting fabulous growth figures for past decade India has not been able to transform growth into employment oppurtunities. One reason being that the growth has come in the capital and skill intensive service and not industries which are considered to be the actual employment generators. Poverty also is rampant in India and most of the 33% poors in India are either marginal farmers or landless labourers.
Thus, the twin problem of unemployment and poverty have aggravated due to neglect ofagriculture and industry. Although the growth that services have brought to India is worth welcoming but, "yes off late India has been Over Tertiarized" and balanced agricultural and industrial development is required to maintain the growth momentum and continue with the 'Shining India' story.
In the pre liberalisation period India was following a mixed economy with a bias towards socialism and the govt. did lots of planning to build industrial base in India and strengthen agriculture. It succeeded in its endeavours to an extent and India was self sufficient in food grains by 1970s and also had a basic industrial base. However, as far as economic growth was concerned we were stuck in what has been called the "Hindu rate of growth" by Prof. Raj Krishna for most parts of the pre liberalization era. Consistent lack of growth threw India into an econoimc crisis that made economic liberalisation inevitable and here it was- The Indian economy in its modern look: A mixed economy with a capitalist inclination.
The year 1991 marked a shift in
Agriculture's share in India's GDP has fallen from around 60% in 1959 to 17% in 2009-10. Industries on the other hand have not been able to cross the 30 % barrier and contributed only 27% to GDP last economic year. However the employment scenario is quite different from the GDP scenario. While agriculture employs appx. 50% of the population, industries employ 20% and service sector employs 30% of the population. Thus, there is an imbalance between income generated sector wise and employment generated which has led to increase in income inequality in the country. Agricultural growth has almost stagnated and in one quarter of 2009-10 it was negative too. Neglect of agriculture and industry and excessive income concentration in one sector has startes taking its toil on Indian economy.
Agriculture and industry are the actual goods producer and lack of growthin these two sectors has fuelled the supply side driven recent inflation in Indian economy . With food inflation hovering around 16-18% and WPI inflation around 7-9% india is caught in an inflationary spiral which is now threatening its growth story. The way out is supply side corrections and removing the bottlenecks in way of agricultural and industrial development. Apart from this, employment generation has also been a provblem in India. Despite posting fabulous growth figures for past decade India has not been able to transform growth into employment oppurtunities. One reason being that the growth has come in the capital and skill intensive service and not industries which are considered to be the actual employment generators. Poverty also is rampant in India and most of the 33% poors in India are either marginal farmers or landless labourers.
Thus, the twin problem of unemployment and poverty have aggravated due to neglect ofagriculture and industry. Although the growth that services have brought to India is worth welcoming but, "yes off late India has been Over Tertiarized" and balanced agricultural and industrial development is required to maintain the growth momentum and continue with the 'Shining India' story.
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