Inter- Sectoral Distribution of GDP over the Five Company Year Plans name

Prepared by Rahul H Kadam 23

Introduction
Economic Growth is measured in terms of an increase in the size of an nations economy. A broad measure of an economys size is its output. The most widely measure of economic output is the

Gross Domestic Product ( GDP ).

Gross Domestic Product

The Gross Domestic Product (GDP) is a measure of a countrys overall economic output.

It is the market value of all final goods and

services made within the borders of a country in a year.

Gross Domestic Product

It is often co-related with the standard of living, alternative measures to GDP for that purpose.

It is commonly used as an indicator of the

economic health of a country.

Gross Domestic Product

GDP is the monetary value of all the finished goods and services produced within a countrys borders in a specific time period.

It

includes

all

of

private

and

public

consumption, government outlays, investments and exports less imports that occur within a defined territory.

Gross Domestic Product

GDP = C + G + I + NX
Where,
C = All private Consumption or consumer

spending.
G I = Sum of Government Spending. = Investment in business.

NX = Exports minus Imports.

Five year plans

The economy of India is based in part on planning through its five-year plans.

Five year plans are developed, executed and

monitored by the Planning Commission of India.

First Five year plan started in the year 1951 while twelfth plan started in the year 2012.

Inter Sectoral Distribution of the Gross Domestic Product over the Five Year Plan

Inter Sectoral Distribution of the Gross Domestic Product over the Five Year Plan Indias GDP composition sector wise consists of

many sectors such as

1. Agriculture 2. Industry 3. Services 4. Infrastructure

Inter Sectoral Distribution of the Gross Domestic Product over the Five Year Plan

Agriculture
Important contributor to the Indias GDP. Agriculture growth rate increased after independence but it is been declining over the last few years. It has slow growth and low production due to number of factors such as illiteracy of farmers Insufficient Finance. Inadequate marketing of agricultural products Unusual weather Conditions

Inter Sectoral Distribution of the Gross Domestic Product over the Five Year Plan

Agriculture
Growth rate has declined due to the fact that the sector has not adopted modern technology and agricultural

practices.
As a result of this, the farmers are dependent more on rainfall which is however very unpredictable.

Inter Sectoral Distribution of the Gross Domestic Product over the Five Year Plan

Agriculture
Plan
Ninth Five Year Plan Tenth Five Year Plan Eleventh Plan (200708 to 201112)

Share of Growth Rate of Agriculture in Agriculture the and Allied Economy Sectors
23.4 19.0 15.2 2.5 2.4 3.3

Growth Rate of Total Economy

5.7 7.6 7.9

Source : www.planningcommission.nic.in

Inter Sectoral Distribution of the Gross Domestic Product over the Five Year Plan

Industry
Industry growth rate in Indias GDP has been impressive in the last few years.

The growth is due to sustained manufacturing activity over the years. This has given boost to the economy.
Currently, India ranks 14th in factory output of the world.

This sector consists of manufacturing, mining, electricity, water supply and gas sectors.

Inter Sectoral Distribution of the Gross Domestic Product over the Five Year Plan

Industry
The industrial sector accounts for around 27.6% of the Indias GDP.

Employs around 17% of the total work force in the country.

Huge amount of investments from domestic as well as international investors is the main reason for the increase of industry growth rate in Indias GDP.

Inter Sectoral Distribution of the Gross Domestic Product over the Five Year Plan

Services
Growth has been very rapid in the last few years. Contributes the most to the Indian GDP.

The Growth Rate of the Services Sector in India GDP has risen due to several reasons and it has also given a major boost to the Indian economy. India ranks fifteenth in the services output and it provides employment to around 23% of the total workforce in the country

Inter Sectoral Distribution of the Gross Domestic Product over the Five Year Plan

Services
The various sectors under the Services Sector in India are
trade, and hotels, storage, transport, social and restaurant, personal construction, communication

services, community, insurance, financing, business services,

and real estate. Services in India has the biggest share in the country's GDP for it accounts for around 53.8% in 2005.

Inter Sectoral Distribution of the Gross Domestic Product over the Five Year Plan

Services
The contribution of the Services Sector has increased very

rapidly in the India GDP for many foreign consumers have

shown interest in the country's service exports.

This is due to the fact that India has a large pool of highly

skilled, low cost, and educated workers in the country.

Inter Sectoral Distribution of the Gross Domestic Product over the Five Year Plan

Services
The foreign companies seeing this have started outsourcing
their work to India specially in the area of business services which includes business process outsourcing and information technology services. This has given a major boost to the Services Sector in India, which in its turn has made the sector contribute more to the India GDP

Inter Sectoral Distribution of the Gross Domestic Product over the Five Year Plan

Infrastructure
Infrastructure Sector Growth Rate in India GDP has been on the rise in the last few years. India's

less

spending

on

real and

estate,

power,

telecommunications,

construction,

transportation

prevented the country from sustaining very high rates of growth.

Inter Sectoral Distribution of the Gross Domestic Product over the Five Year Plan

Infrastructure
The Growth Rate of this Sector in India GDP increased after the Indian government opened the sector to 100%

foreign direct investment (FDI).

The result of opening the sector to the private sector has been that Infrastructure Sector Growth Rate in India GDP has increased at the rate of 9%

Inter Sectoral Distribution of the Gross Domestic Product over the Five Year Plan

Table no.1 Sectoral Growth in recent plans

Sectors Agriculture Industry Services Total Ninth Plan (1997 2001) 2.44 4.29 7.87 5.52 Tenth Plan (2002 06) 2.30 9.17 9.30 7.74 Eleventh Plan (2007 11) 4.0 10-11 9-11 9.0

Source : www.planningcommission.nic.in

Table no. 2 - GDP Growth Performance over the Five Year Plans
Plan Period
First Plan (1951 - 55) Second Plan (1956 - 60) Third Plan (1960 - 65) Annual Plan (1966 - 68) Fourth Plan (1969 - 73) Fifth Plan (1974 - 78) Annual Plan (1979 - 80) Sixth Plan (1980 - 84) Seventh Plan (1985 89) Annual Plan ( 1990 91) Eighth Plan ( 1992 96) Ninth Plan ( 1997 2001) Tenth Plan ( 2002 2006) Eleventh Plan ( 2007 2011) Twelfth Plan ( 2012 2017)

Target
2.1 4.5 5.6 5.7 4.4 5.2 5.0 5.6 6.5 7.9 8.3 9.5

Realization
3.5 4.2 2.8 3.9 3.2 4.7 -5.2 5.5 5.6 3.4 6.5 5.5 7.7 7.9 Continuation