Importance of Various Sectors in Indian Economy (2013-14)

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.