1. Agricultural Sector:
One of the most important sectors of the Indian economy remains Agriculture. Its share in the GDP of the country has declined and is currently at 14%. However, more than 50% of the total population of the country is still dependent on agriculture. Keeping this in mind, the Union Budget 2017 – 18 gave high priority to the agricultural sector and aimed to double farmers’ incomes by 2022.
• Government subsidies to agriculture are at an all – time high.
• Further, cropping patterns have shifted in favour of cash crops such as sugarcane and rubber.
• Introduction of cooperative farming like – e – choupal etc.
• Rise of SHGs such as Lijjat Papad.
• Agricultural land is being brought under industrial and commercial use, thereby straining the remaining agricultural land.
• Many export sectors have been opened for agricultural goods.
• Food processing is emerging as a ‘Sunrise Industry’
2. Industry Sector:
Another important part of the Indian economy is the Industry sector. Changes such as the end of the ‘Permit Raj’ and opening up of the economy were welcomed in the country with great enthusiasm and optimism. As a result of these changes, the industrial potential of the economy has increased since 1991.
• Proliferation of industries, from traditional iron and steel to jute and automobiles.
• Autonomy in production, marketing and distribution.
• Reduced red – tapism.
• Encouragement to private investments, both domestic as well as FDI.
• Transfer of technology and benefits of research and development to the advantage of the economy.
• Arrival of investment models such as joint ventures, public-private partnerships, MNCs.
• Private players got an opportunity to enter new sectors, which were earlier under government monopoly.
3. Services Sector:
The sector that benefited most from the New Economic Policy was the services sector. Banking, Finance, Business Process Outsourcing – and most importantly Information Technology services – have seen double – digit growth.
• Indian IT giants such as Infosys, WIPRO and TCS have made their mark on the global platform.
• 60 percent of the GDP contribution comes from the services sector.
• India, with its huge demographic dividend potential, has emerged as the IT hub of the world.
• New employment opportunities are being created in this sector.
• Opening of transportation, tourism and medical sectors have led to the growth of service sector competencies.
• RBI has transitioned from being a regulator to a facilitator.
• Product diversity of financial investments.
• Wider penetration of services such as insurance, banking, stock market etc.
• Considerable improvement in forex reserves.
4. Food Processing:
Food processing has emerged as a high – growth, high – profit sector and is one of the focus sectors of the ‘Make in India’ initiative. The vast availability of raw materials, resources, favourable policy measures and numerous incentives have led India to be considered as a key attractive market for the sector. With a population of 1.3 bn and an average age of 29, as well as a rapidly growing middle – class population that spends a high proportion of their disposable income on food, India boasts of a large consumer base. The total consumption of the food and beverage segment in India is expected to increase from $ 369 bn to $ 1.14 tn by 2025. The output of the food processing sector (at market prices) is expected to increase to $ 958 bn during the same period. India is the second largest producer of food grains in the world, second only to China. This sector has huge potential in India due to increasing urbanization, income levels and a high preference for packaged and processed food. Visit the sectors category to read more about the food processing industry.
5. Manufacturing Sector:
The manufacturing sector is the second largest contributor to India’s GDP after the Services sector. Various government initiatives like Make in India, MUDRA, Sagarmala, Startup India, Freight Corridors, along with a whole – hearted contribution from states, will raise the share of the manufacturing sector in the foreseeable future.
However, if India aims to raise its share of manufacturing in GDP to around 25%, the industry will have to significantly step up its research and development expenditure. The quantum of value addition has to be increased at all levels and the government needs to offer attractive remuneration to motivate people to join the manufacturing sector.