Friday, October 24, 2014

Importance of Various Sectors in Indian Economy – an update



The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry and fishing, mining & quarrying.
The secondary sector of the economy or industrial sector includes those economic sectors that create a finished, tangible product i.e. production of goods and construction.
The tertiary sector of the economy (also known as the service sector or the service industry) is one of the three economic sectors, others being primary and secondary sectors.
In the primary sector, they may consume the natural resources and their reproduction may take many years. The industrial sector generally takes the output of the primary sector and manufactures finished goods. Many of these industries consume large quantities of energy and require factories and machinery to convert the raw materials into goods and products. They also produce waste materials and waste heat that may pose environmental problems or cause pollution. The Services Sector inter-alia includes sub-sectors like Trade; Hotels and Restaurants; Transport; Storage & warehousing; Communication; Banking and Insurance; Real Estate; Business services; Public Administration and Defence; Social and personal services; and Other services including Education, Medical and Health, Religious and Other Community Services, Legal Services, Recreation and Entertainment Services.
Here below we present the share of GDP at constant (2004-05) prices for the various sectors/ sub-sectors for the year 2004-05 (Base Year) and for latest available years 2012-13 (Quick Estimates i.e. based on little less data) and for the year 2013-14 (Revised Estimate based on further less data being used to have advance estimates for the economic sectors).

Sectors
Share of GDP at (2004-05) Prices
(%)
    
2004-05
2012-13
2013-14
QE
RE
1.  agriculture, forestry & fishing
19.0
13.9
13.8
     1.1 agriculture
16.0
11.8
     1.2 forestry & logging
2.1
1.3
     1.3 fishing
0.9
0.8
2.  mining & quarrying
2.9
2.0
1.8
3.  manufacturing
15.3
15.8
14.9
     3.1 registered
9.8
11.2
     3.2 unregistered
5.4
4.5
4.  electricity, gas & water supply
2.1
1.9
1.9
5.  construction
7.7
7.7
8.2
6.  trade, hotels & restaurant
16.1
16.1
15.6
     6.1 trade
14.6
14.8
     6.2 hotels & restaurants
1.5
1.4
7. transport, storage & communication
8.4
10.7
10.7
     7.1 railways
1.0
0.9
     7.2 transport by other means
5.7
5.7
     7.3 storage
0.1
0.1
     7.4 communication
1.7
4.1
8. Financing, insurance., real estate & business services
14.7
19.1
20.1
     8.1 banking & insurance
5.8
9.4
     8.2 real estate, Ownership of dwellings
9.0
9.8
9.  community, social & personnel services
13.8
12.8
13.0
     9.1 public administration & defence
5.9
5.5
     9.2 other services
8.0
7.3
10. GDP of All Sectors
100.0
100.0
100.0

Sectors
Share of GDP at (2004-05) Prices
(%)
    
2004-05
2012-13
2013-14
QE
RE
Primary Sector
21.9
15.9
15.6
Secondary Sector
25.1
25.4
25.0
Tertiary sector or Service Sector
53.0
58.7
59.4

It can be seen that the primary sector’s share is decreasing in India and the manufacturing or secondary sector has been maintaining its share, whereas the tertiary or service sector is gaining the lost share of the primary sector.  Out of various sub-sectors of primary sector, it is mainly agriculture, which is loosing its traditional shine.  Within services, it is mainly banking & insurance and communication followed by real estate & Ownership of dwellings who at present mainly gaining the importance in the economy.  The other services are either loosing marginally or are maintaining their share over time.  It is only other services (small ones) are loosing shine collectively.


This Service Sector constitutes a large part of the Indian economy both in terms of employment potential and its contribution to national income now. Central Statistical Office (CSO), Ministry of Statistics & Programme Implementation (MOSPI) is responsible at the Central level to prepare GDP (Value Addition) estimates for the Indian Economy. The estimates are being released through ages now. The official site of MOSPI does admit the significance and importance of the Sector. About sixty per cent of total GDP (value addition) comes from the Service Sector. Although the service sector has a pivotal role in the country’s economic development, database in this sector is highly disorganized. A major limitation of the existing statistical system in this respect is the absence of a well-organized mechanism for maintaining a regular and proper database for this sector. For services like banking & Insurance, Railway Transport, public administration & defence, the data base is in the hands of the central/ state governments and so can be considered to be better organized and more reliable.  Thus for large chunk of services, CSO may be using some periodical surveys or other administrative / private sources. One may also infer that calculations of our national income may be in trouble as the major part of it having the basis of its calculations on wrong footing. Unlike the Annual Survey of Industries (ASI) that is devoted to collection of data from manufacturing and few other categories of units included in the lists maintained by the Chief Inspectors of Factories, there is no such scheme in the services sector for annual collection of data from the units either having a large number of workers or those contributing significantly in terms of annual turnover. The main difficulty in this regard is the non-availability of an up-to-date frame of such units and lack of regular mechanism for collection of data. The development of National Business Register being envisaged based on the Sixth Economic Census is likely to address the issue of frame to a large extent. The exercises for having a new series of national accounts have been initiated and this time the new base would be the year 2011-12.  There is a good amount of hope that database for the existing and new services would be made on further sound basis this time.

Benefits from Sansad Adarsh Gram Yojana



The new scheme launched by the present Prime Minister of Sansad (Parliament) Adarsh (Model) Gram (Village) Yojana (Scheme) (SAGY) encourages Members of Parliament from both Houses to identify and develop one village from their constituency as a model village by 2016, and two more by 2019.

The Parliament of India consists of two houses: The Lok Sabha or House of the People and the Rajya Sabha or Council of States.  The Lok Sabha  is the lower house of the Parliament of India. The Rajya Sabha is the upper house of the Parliament of India. Membership is limited to 250 members. The Lok Sabha is composed of representatives of the people from 543 constituencies, chosen by direct election on the basis of adult suffrage.

Thus, there are about 800 parliamentarians (543 members in Lower House plus 250 members from Upper House) and in three years, about 2,400-odd could be advantageous villages out of the 6 lakh villages countrywide. If States were to initiate their own similar schemes with MLAs, 6,000 to 7,000 villages could get this advantage. Also, one good village can affect an entire area, and a viral effect could begin – as per Mr. Prime Minister.

This is not a new fund allocated scheme, but a people’s participatory scheme and is a demand-driven scheme.  In fact, MPLAD funds are to help the few selected villages to become the model villages.

The SAGY requires each MP to identify one village with a population in the range of 3,000-5,000 in the plains and 1,000-3,000 in the hills within a month. MPs can choose any village except their own or their spouse’s. There is no other criterion.

Funds: Then they are to work for convergence of existing schemes for socio-economic development of the area. MPs are expected to facilitate a village development plan, motivate villagers to take up activities and use the Rs.5-crore MPLAD fund to fill gaps for funds besides mobilizing “additional resources especially from Corporate Social Responsibility” in sewage and water supply schemes. The SAGY would maximize the use of MPLAD funds over the largest possible area, as this will instead require focusing the funds in a village. In the process, MPs would be able to identify the shortcomings in implementation of these schemes. It need not be taken as that entire MPLAD funds are for this purpose.

Benefits: The activities and outcomes will cover broad development indicators such as health, nutrition and education through organizing immunization drives, improving mid-day meal schemes, improving Aadhaar enrolment, setting up “smart schools” with IT-enabled classrooms and e-libraries, improving panchayat infrastructure under schemes such as MNREGA and Backward Regions Grants Fund. A series of measures speak of better implementation of existing and new schemes and laws including RTI Act, National Food Security Act, National Rural Livelihood Mission, Pradhan Mantri Jan Dhan Yojana, while at the same time emphasizing “activities to improve hygienic behavior” by encouraging bathing among villagers, use of toilets and exercising for thirty minutes every day. It envisions social development in villages through identifying a village day, a village song, and focusing on alternative methods of dispute resolution.

Monitoring and Evaluations: District Collectors will carry out a baseline surveys and then chair monthly review meetings to monitor progress. There will be real-time web-based monitoring and a first review after five months by an independent agency.


At the State-level, Chief Secretaries will lead an empowered committee on the same and the Minister for Rural Development and Secretary, Rural Development, will chair two national-level committees to track the scheme. SAGY is aiming at socio-economic transformation in the rural society.  The aim would be to inculcate a sense of pride, volunteerism, and self-reliance in villages. The success of SAGY will be judged not by the allocation of funds and budgets spent, but by its ability to fundamentally transform the culture of rural governance.