Over the last few years when most of the developed countries
of the world were struggling hard to get over the effects of financial recession
and sovereign debt crisis, India was among the fastest growing economies of the
world. Recently with the new methodology of GDP calculations released on Jan 31
2015 by the ministry of statistics and programme implementation (MOSPI) the
country is believed to be the fastest growing.
It has been historical observed that the stages of growth
followed by an economy to the path of development can be classified into three
broad categories. The first stage is the traditional society where a majority
of the work force is involved in the agricultural activities followed by the
phase of industrialization ruled by the emergence of leading manufacturing
sector that define the growth and finally the developed economies which are led
by the growth of their service sector.
SERVICE SECTOR
INDIA indeed has a natural comparative advantages in
services, which are explained by the splintering effect by the bhagwati,
according to which with the maturing of economies, industries tend to outsource
different activities like legal and security services research and development
etc to specialist and this rise the share of services in GDP further India has
a natural advantage of low cost availability of manpower suitable of ITES. The foreign
companies set up their back offices here and outsource services to the Indian companies
on a large scale. Moreover with the growth of per ca pita income levels in the
economy there is a larger spending on the services sector like education,
health and medical services, communication etc. India is a country which has
experienced a growth in GDP driven by its service sector throughout the last
few decades, however service sector has largely been jobless therefore creating
a large segments of unemployed population. India is believed to have a
demographic dividend wherein the majority of our population falls in the
working age groups which is itself a double edged sword. Hence the govt and the
policy makers have started revisiting the Indian growth story and addressing
its flaws. The role and importance of the manufacturing sector comes in here
both in terms of creating a self reliant economy and in the process generating
the much needed employment.
AGRICULTURE
In the last few years of post independence agriculture
contributed to more than 50 percent of India GDP, services contributing to
about 30% and industry to less than 20% of the GDP.
The contribution of agriculture has been declining continuously
and that of services has been increasing steeply with the share reaching nearly
60% of GDP in the current years. India has charted this typical growth chart
jumping from the agriculture sector to the service sector as the lead
contributor to GDP unlike other developed countries. During the entire period
from 1951-2014 the contribution of the industrial sector to the total GDP has
varied the least being in the range of 16-26% of GDP throughout. This trend for
industrial sector is a cause of concern because industry and manufacturing
forms the basis of the real growth of the economy both in terms of employing the
labor force of the country.
UNEMPLOYMENT SCENARIO
The unemployment scenario in India continues to remain grim.
Further, agricultural which now contributes to only around 14% of the GDP
continues to employ more than 50% of the workforce, reflecting the , mass of
disguised labor in the agriculture and also the low labor productivity. The service
sector contributing nearly 60% to GDP manages to employ only around 25% of the
workforce.
MANUFACTURING SECTOR
India is typical in its demographic and demand patterns. The
PM recently said and highlighted that India is a unique country with the
characteristics of 3D’s namely democracy, demand and demography. India is
believed to have to have a demographic dividend wherein the majority of our
population falls in the working age group which in itself is a double edged
sword. Hence the government and the policy makers have started revisiting the Indian
growth story and addressing its flaws. The role and importance of the
manufacturing sector comes in here both in terms of creating a self-reliant
economy and in the process generating the much needed employment.
HINDERENCE IN THE SECTOR
The manufacturing
sector is still afflicted by the problems of land acquisition, rehabilitation
multiple laws and rules to adhere lack of clarity for the entrepreneurs,
multiple and complex process of clearance to be obtained to setup a factory,
lack of marketing strategies and export orientation, lack of infrastructure,
power and water supplies.
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