Which sector contributes the most to India's national income (GDP/GVA)?

Economic activities are divided into three broad sectors:

Primary sector: activities that directly use natural resources, such as agriculture, forestry, fishing and mining. In India, it is often called the agriculture and allied sector.

Secondary sector: activities that convert raw materials into finished goods, such as manufacturing, construction, electricity, gas and water supply.

Tertiary (service) sector: activities that provide services rather than goods, such as trade, hotels, transport, communication, banking, insurance, real estate, information technology, education, health and public administration.

The service sector contributes the largest share, more than half (about 54-55%), of India's Gross Value Added (GVA). Industry contributes about 25-28%, and agriculture and allied activities about 17-18%.

This structure has changed greatly since Independence. In 1950-51, agriculture was the largest sector, contributing more than half of India's GDP. Over the decades, the share of services rose steadily, especially after the economic reforms of 1991, driven by IT and software exports, telecommunications, banking and finance. India is a major exporter of services, particularly software and business process outsourcing.

However, there is a mismatch between output and employment. While agriculture's share of GVA has fallen to below one-fifth, it still employs about 45% of India's workforce, according to the Periodic Labour Force Survey. This means that productivity and incomes in agriculture are much lower than in other sectors. India's growth has been described as "service-led", unlike many East Asian economies, which grew mainly through manufacturing. Programmes such as Make in India (2014) and the Production Linked Incentive (PLI) schemes aim to increase the share of manufacturing.

A fourth category, the quaternary sector, is sometimes used for knowledge-based services such as research and IT, and a quinary sector for top-level decision-making.

Why not the other options?

• ✗Agriculture contributes about 17-18% of GVA but employs the largest share of workers.
• ✗Industry contributes about a quarter of GVA.
• ✗Mining is a part of the industry sector (and sometimes primary) and contributes a small share.