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• Government of India Report of 2020-21 by Ministry of Agriculture &

Farmers’ Welfare
▪ “Agriculture plays a vital role in India’s economy.
▪ 54.6% of the total workforce is engaged in agricultural and allied sector
activities (Census 2011) and accounts for 17.8% of the country’s Gross
Value Added (GVA) for the year 2019-20 (at current prices).
▪ Given the importance of the agriculture sector, Government of India has
taken several steps for its development in a sustainable manner.
• Steps have been taken to improve the income of farmers.
• Further, to mitigate risk in the agriculture sector, a scheme ‘Pradhan
Mantri Fasal Bima Yojana’ (PMFBY) was also launched in 2016.
• Schemes such as Formation & promotion of 10,000 FPOs & the
Agriculture Infrastructure Fund have also been launched recently to
benefit the sector.”
As per the Land Use Statistics 2016-17

• Agriculture Gross Value Added (GVA): As per the provisional estimates of Annual
National Income released by Central Statistics Office (CSO), Ministry of Statistics
& Programme Implementation, the agriculture and allied sectors contributed
approx 17.8% of India’s GVA at current prices, during 2019-20, marginally
higher than 17.7% in 2015-19.
INDUSTRY
• The industrial sector is equally vital, since it promotes
▪ Economic growth,
▪ Provides self-sufficiency and employment,
▪ Generates demand for agricultural commodities and produces a ‘ripple
effect

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• Manufacturing = Around 18% of total gross value added (GVA),

• construction = Around 8% of total GVA.
• Mining and quarrying, as well as power, gas, water supply, and other utility
services = Approx 3% and 2% respectively.
• Industry’s share of GVA has increased
▪ 1950-51 : nearly 17%
▪ 2021-22 : 29%
The journey of Indian industry can be summed up into 4 phases including both
pre-reform and post-reform period.

• IIP : The Index of Industrial Production (IIP) measures the change in volume of
production in a given year (base year 2010-11).
• It is an index reflecting growth in the broad sectors of mining, manufacturing and
electricity and also the growth in use-based sectors of basic goods, capital goods
and intermediate goods.
• Calculated by the National Statistical Office which also calculates the Index of
Core Industries (ICI).
8 Core industries:
• Refinery
• Products
• Electricity,

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• Steel,
• Coal,
• Crude oil,
• Natural gas,
• Cement
• Fertilisers.

SERVICES
• The sector produces ‘intangible or invisible goods’ for businesses as well as
consumers, Trade, repairs, hotels & restaurants, transport, storage,
communication & broadcasting services, railways, road transport, water
transport, air transport, services incidental to transport, storage, financial, real
estate, and professional services are all sub-sectors of the services sector.
• Financial services, real estate, property ownership, and professional
services, communal, social, and personal services, government administration
and defence, and other services are all a part of the services.
• The services sector’s proportion has increased from 33% in 1950 to 53% in
2021-22.
• As per Government of India publication, chapter 9 of Union Budget 2019-20 –
▪ “The services sector accounts for 54% of India’s Gross Value Added (GVA).
▪ Its growth rate moderated to 7.5% in 2018-19 from 8.1% in 2017- 18.
▪ The segments that saw deceleration are tourism, trade, hotels, transport,
communication and services related to broadcasting, public administration and
defence.
▪ Financial, real estate and professional services category accelerated.
▪ An important finding is that India’s services sector does not generate jobs in
proportion to its share in GVA.
▪ Foreign Tourist: 2017-18 : 10.4 million
▪ 2018-19 : 10.6 million
▪ Foreign exchange earnings from tourism in India
▪ 2017-18: US$28.7 billion
▪ 2018-19: US$27.7 billion
▪ Many of the high frequency indicators, such as bank credit to services sector,
decelerated in 2018-19.

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▪ However, the IT-BPM industry grew by 8.4% in 2017-18 (US$167 bn) & is
estimated to have reached US$181 bn in 2018-19”.
As per the findings of the Ministry of Statistics and Programme Implementation
(MoSPI), in the year 2019-20

• As per the World Investment Report 2021 by the UN Conference on Trade and
Development (UNCTAD), India in 2020 was the 5th largest recipient of FDI.
• India has made a global impact by being amongst the top ten service exporter
countries.
• India’s and Indians dominance in Software is globally respected. Of the total net
Service Exports, about 40% pertains to Software.
Employment Growth Rate In Secondary Sector

• Manufacturing employs roughly 12% of the labour force.

▪ Known throughout the world for creating mass employment for low-
skilled workers in the modern economy.
• With agriculture’s capability to provide jobs rapidly dwindling and the modern
services sector’s limited ability to absorb relatively unskilled labour displaced
from agriculture, hopes are that the manufacturing sector will generate mass
employment.
• The construction sector : 2nd largest employment sector in the country, only
after agriculture.
• Construction activity is an essential component of a country’s industrial and
infrastructure growth, as well as a key input for socioeconomic development.
• This sector provides significant employment and growth input to other sectors
via backward and forward linkages.

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• Cement, steel, bricks, tiles, sand, aggregates, fixtures, fillings, paints & chemicals,
construction equipment, petro-products, timber, mineral products, metal, glass,
and plastics are all important components of the construction industry.
• The Indian construction sector is an important element of the economy, and it is
positioned for strong expansion as a result of industrialisation, urbanisation,
and economic development, as well as people’s aspirations of higher living
standards.
• The construction industry employs over 31 million people and accounting for
around 8% of total employment.
SUNRISE SECTOR OF INDIAN ECONOMY
• A sunrise sector is one that is still in its infancy, but has the potential for
significant growth.
• CHARACTERISTICS:
▪ strong growth rates,
▪ a high degree of innovation,
▪ a high level of public awareness, with investors attracted to its long-term
growth prospects.
Existing Indian industries that may be categorised as Sunrise sectors are likely to
benefit the economy in terms of job creation and business growth, in the future.
▪ Green Energy,
▪ Fintech, Information Technology,
▪ Electronics,
▪ Pharmaceuticals,
▪ Automobiles,
▪ Healthcare,
▪ Infrastructure Sector,
▪ Retail Sector,
▪ Processing Plants,
▪ and other emerging sectors of the Indian economy
ORGANISED AND UNORGANISED SECTORS
• Organised Sector : where the job terms are fixed and regular, and the
employees are guaranteed work and social security
▪ Comprises : Manufacturing, enterprise, business, school, hospital, and
unit registered with the government.

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▪ Also comprises legally licenced stores, clinics, and offices.

▪ Lower unemployment than the unorganised sector.
• Unorganised sector: where employment terms are not defined and regular, and
enterprises are not registered with the government.
▪ Construction workers, domestic workers, street workers, and those
operating in tiny workshops unaffiliated with the government are all part
of the unorganised sector.
▪ A home-based worker, self-employed worker or wage worker in the
unorganised sector is an unorganised worker.
▪ Characteristics: Low wages, unstable and irregular work, and a lack of
protection from legislation or trade unions Relies heavily on labour and
indigenous technologies.
▪ According to the NCEUS (National Commission for Enterprises in
Unorganised Sector) categorisation, “the unorganised sector comprises
of all unincorporated private enterprises owned by individuals or
households engaged in the sale and production of goods and services
operated on a proprietary or partnership basis and with fewer than ten
total workers.”
▪ However, “informal workers” are defined as “those who work in
unorganised firms or families, excluding regular workers with social
security benefits, and workers in the formal sector who do not get any
employment benefits/social security from their employers.”

Difference between Organised and Unorganised sectors

BASIS FOR ORGANISED SECTOR UNORGANISED SECTOR

COMPARISON

Meaning The sector in which the The sector that comprises of

employment terms are fixed small scale emterprises or units
and employees have assured and are not registered with the
work is Organised sector. government.

Governed by Various acts like Factories Act, Not governed by any act.
Bonus Act, PF Act, Minimum
Wages Act etc.

Government rules Strictly followed Not followed

Remuneration Regular monthly salary. Daily wages

Job security Yes No

Working hours Fixed Not fixed

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Overtime Workers are paid remuneration No provision for overtime.

for overtime.

Salary of workers As prescribed by the Less than the salary prescribed

government. by the government.

Contribution to Yes No
Provident fund by
the employer

Increment in salary Once in a while Rarely

Benefits and Employees get add-on benefits Not provided.

perquisites like medical facilities, pension,
leave travel compensation, etc.

Paper IE and IFS Module A Unit 3 Economic Planning in India &

NITI Aayog
Definition Of Economic Planning

• Economist H. D. Dickinson - “the making of major economic decisions–what

and how much is to be produced and to whom it is to be allocated by the
conscious decision of a determinate authority, on the basis of a comprehensive
survey of the economic system as a whole.”
• National Planning Committee, set up in 1938 by the Indian National Congress
defined planning in India as “Planning, under a democratic system, may be
defined as the technical coordination, by disinterested experts of consumption,
production, investment, trade, and income distribution, in accordance with social
objectives set by bodies representative of the nation. Such planning is not only to
be considered from the point of view of economics, and raising of the standard of living,
but must include cultural and spiritual values, and the human side of life.”

• Planning is the skill of reaching any sort of objective utilising the resources at
hand.
Types Of Planning
• Depending on the goal, planning may be categorised into several types.
• Territorial standpoint: Planning may be regional or national.
• Political standpoint: Federal, state, or local.
• Participation : Centralised or decentralised planning
• Temporal standpoint: long-term or short-term.

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• Similarly, planning may be sectoral as well as geographical

• Sectoral planning : Focuses on a single sector of the economy,
• Spatial planning : Focuses on development in the geographical context (which
aims at influencing the distribution of people and activities in places).
• Some of the key forms of planning that are a part of the Indian planning
process are as follows:
National Planning:
• Joseph Stalin was the first person to implement the Five-Year Plan in the
Soviet Union, in the year 1928-1933.
• Various Industrialists came together in 1944 and drafted a joint proposal for
setting up a planned economy in India. It is famously known as the Bombay
Plan.
• The government sought national strategy in order to take an active role in
resource allocation and mobilisation for equitable growth and development as a
result of the abject poverty.

Regional Planning:
• 1st country : US in 1916
• It was a huge success in achieving its well-defined goals.
• Planning is implemented at the regional level and is targeted to a wide
geographical area (i.e., a region consisting of rural and/or urban communities),
guaranteeing optimal space utilisation and human activity distribution.
Objectives Of Economic Planning In India
In India, the primary goals of planning are not only broad, but also open-ended.
However, the following are some of the broad objectives of planning in India.
• Economic Growth: It aims for a sustainable growth in the economy’s output levels.
Sustained growth in economic output, is one of the primary goals of planning in India.
• Poverty Alleviation: One of the goals of Indian planning is to alleviate poverty. Several
programmes aimed at alleviating poverty have been introduced in India, by all
governments, till date.
• Employment Generation: Fundamental goals of planning has been to reduce
unemployment. Employment generation in India has therefore been an integral aspect
of poverty alleviation programmed in India.
• Social justice and reducing the inequalities: Economic disparities have far-reaching
negative consequences in any society, and there were visible economic inequalities in
India at both the interpersonal and intra-personal levels. By the time India started
planning, economic planning was widely acknowledged, as a technique for addressing
all types of economic inequities and injustices.
• Self-reliant economy: Self-reliance was characterised as an endeavor, to combat a
subservient position in the global economy, not as autarchy.

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• Modernisation of the economy: India’s plans prioritised the industrialisation . Began

with agriculture, a traditional sector that necessitated the quick integration of modern
farming, dairying, and other practices.
Note: Modernisation also refers to changes in social outlook such as the recognition that
women should have the same rights as men.

History Of Economic Planning In India

• By the 1930s, there was political agreement that independent India would be a
planned economy
• By early 1950s, India had begun economic planning.
• Directed by five-year plans, with a mid-term review.
• In unusual years of wars and other such crises, India has opted for yearly plans,
commonly denoted as ‘plan holidays’, as a departure from five-year plans.
• In 2015, - established the NITI (National Institution for Transforming
India) Aayog, [nature of the economy had shifted to a market-dominated system
and that state rights required to be prioritised, necessitating the establishment of
a new structure with dynamic purposes.
• Centralised Planning Procedure: Offers a broad framework for the economy’s
developmental and investment requirements.
• Also aims for equal resource mobilisation to accomplish targeted socioeconomic
progress.
Planning Commission
• In charge of planning in India since 1950.
• Chairman : Prime Minister and headed by a Deputy Chairman [ Not a statutory
entity]
• Plans are approved for implementation by the National Development Council
(NDC), which is chaired by the Prime Minister.
• Meanwhile, the central government sought to redefine the parameters of
decentralised planning throughout the country.
• GoI established the NITI Aayog, to replace the Planning Commission.
• This was done to better serve the needs and ambitions of the people of India
• NITI Aayog, serves as the Government of India’s primary platform for
bringing States together in national interest, fostering Cooperative
Federalism.
• Established as a Think Tank, to provide relevant strategic and technical
assistance to governments at the federal and state levels, on a wide range of
policy issues.

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