Page 57 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 5: Trends and Structure of National Income Since 1951

agriculture alone. There is also a contraction in the share of forestry from about 6 percent Notes
in 1950-51 to nearly 0.7 per cent in 2010-11. The share of fishery has remained more or less
constant around 1 percent throughout the period.
(2) The share of industry which includes mining, manufacturing, electricity, gas & water
supply and construction has shown a steady increase from 15 per cent in 1950-51 to 24
percent in 1980-81 and 27.9 per cent in 2010-11.
Two major components of industry are manufacturing and construction. The share of
manufacturing increased form 8.9 per cent in 1950-51 to 15.8 per cent in 2010-11. Similarly,
the share of construction improved from 4.4 per cent in 1950-51 to 7.9 per cent in 2010-11.
(3) The share of the service sector has three components; (a) Trade, Transport, Storage and
Communication, (b) Finance, Insurance, Real Estate and Business Services and (c)
Community, Social and Personal Services. The share of the service sector indicated a sharp
improvement from 29.6 percent in 1950-51 to about 57.8 percent in 2010-11. There was a
significant increase in the share of trade, transport and communications from only 11.3
percent in 1950-51 to 27.0 percent in 2010-11. The expansion of transport, especially road
transport and communications, during the last decade of mobile revolution has been the
major contributor to this increase.
Share of Gross Domestic Product by industry of Origin ( 1999-00 series)
The share of finance, insurance, real estate and
1950 – 51
30 business services marginally declined from
7.7 percent in 1950-51 to 7.5 percent in 1980-81 and
I. Agriculture &
Allied Services thereafter improved to 17.4 percent in 2010-11.
II. Industry
III. Services
55
15

The process of economic development involves a
1980 – 81 rapid expansion of public administration especially
38
a rapid expansion of economic and welfare services
I. Agriculture &
Allied Services such as education, health and family welfare. Taking
II. Industry community and personal services a group, there was
an improvement in its share from 10.6 percent in
38 III. Services
1950-51 to 13.4 percent in 2010-11.
24

The structural change in the composition of national
2010 – 11 income by industrial origin is the consequence of the
14
process of economic growth initiated during the
I. Agriculture &
Allied Services plans. Since the growth process involved a rapid
II. Industry expansion of manufacturing in the organised sector,
III. Services the share of manufacturing was bound to indicate a
28
58 relatively sharp increase. However, agriculture did
not indicate a fast rate of growth.
As is evident, the rate of growth of agriculture showed a decline from 3 per cent during 1950-51
and 1960-61 to 1.5 per cent during 1970-71 and 1980-81 and thereafter, it picked up to 3.4 per
cent during 1980-81 and 1990-91. However, it declined to 2.6 per cent during 1990-91 and 2000-
01 and then improved to 3.79 percent between 2004-05 and 2010-11.

LOVELY PROFESSIONAL UNIVERSITY 51