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8/3/2019 Major Industries in the Indian Gdp
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TABLE OF CONTENTS
S.No. CHAPTERS PAGE NUMBER
1. RESEARCH METHODOLOGY..............................................................................4
2. INTRODUCTION.....................................................................................................5
3. AN INSIGHT TO THE MAJOR INDUSTRIES IN INDIA....................................6
4. CONTRIBUTION OF TEXTILE INDUSTRY........................................................9
5. CONTRIBUTION OF CHEMICAL INDUSTRY...................................................9
6. CONTRIBUTION OF FOOD PROCESSING INDUSTRY..................................10
7. CONTRIBUTION OF STEEL INDUSTRY...........................................................10
8. CONTRIBUTION OF CEMENT INDUSTRY......................................................10
9. CONTRIBUTION OF MINING INDUSTRY........................................................11
10. CONTRIBUTION OF SOFTWARE INDUSTRY.................................................11
11. RECENT TREND SHOWN BY GDP....................................................................12
12. CONCLUSION.......................................................................................................13
13. BIBLIOGRAPHY...................................................................................................14
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RESEARCH METHODOLOGY
Aims and Objectives:
The aim of the project is to present a detailed study of the topic Role of Major Industries inIndia GDP through reports, suggestions and different writings. The aim has been to come to
a conclusion very much indigenous.
Scope and Limitations:
Though the topic Role of Major Industries in India GDP is an immense project and pages
can be written over the topic but because of certain restrictions and limitations we might not
have dealt with the topic in great detail.
Sources of Data:
The following secondary sources of data have been used in the project-
1. Books2. Internet
Method of Writing and Mode of Citation:
The method of writing followed in the course of this research paper is primarily analytical.
The researcher has followed Uniform method of citation throughout the course of this
research paper.
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INTRODUCTION
Indian economy being one of the fastest growing economy of the world, is the thing to be
looked out for in the coming few years. Along with India, the other Asian economy giving a
slight better performance than India has been the neighbouring country China. Both these
countries have left an impression that in a lapse of a few years both the countries will become
the new economic giants. . The estimated growth rate of India economy for 2004-05 was
7.5% and the projected rate for 2005-06 was 8.1% (CSO, 2006; RBI, 2006). Chinas GDP
growth rates, based on revised data, were 10.1% and 9.9% respectively in 2004 and 2005 and
the projected rate for 2006 is 9.2% (World Bank, 2006, Table 1). Thus both countries
continue to grow rapidly.
Indian economy is a mix is private and public sector. India is an emerging economy which
has witnessed unprecedented levels of economic expansion, alongside China, Russia, Mexico
and Brazil. India is a cost effective and labour intensive economy, and has benefited
immensely from outsourcing of work from developed countries, and has a strong
manufacturing and export oriented industrial framework.1 Legal Outsource industry which is
an emerging trend is India is successful only because of cheap labour intensive service
industry. It is said that the share of the US in the world GDP is expected to fall, from 21% to18%, and the share of India in the world GDP is going to rise from 6% to 11% by 2025.
Hence, India is to emerge as a third pole, after the US and China, in the global economy.
These figures indeed make every Indian happy and are very lucrative but the reality is hard to
achieve. To achieve the status of the 3rd largest economy in the World the major players of
the Indian Economy will have to work immensely very hard and can be achieved only with
the growth of all the sectors.
1 Economy Watch, Indian Economy Overview
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AN INSIGHT TO THE MAJOR INDUSTRIES IN INDIA
Textile Industry
The textile Industry in India adds a major chunk to the revenue of the country. The Indian
textile industry covers a wide gamut of activities. Its production ranges from raw materialssuch as cotton, jute, silk and wool to high value-added products like fabrics and garments to
consumers.
The industry make use of different varieties of fibres, be it natural fibres, manmade fibres or
blends of such fibres. The areas having the major proportion of textile industry includes
Maharashtra, Gujarat, Punjab and Madhya Pradesh.2 In Indian economy, the textile industry
plays a significant role. It provides direct employment to approximately 35 million people
and contributes 4 per cent of GDP. It fetches 35 per cent of gross export earnings and
contributes 14 per cent of the value-addition in the manufacturing sector. Some of the
important benefits offered by the Indian textile industry are as follows:
India covers 61 percent of the international textile market India covers 22 percent of the global market India is known to be the third largest manufacturer of cotton across the globe India claims to be the second largest manufacturer as well as provider of cotton yarn
and textiles in the world
India holds around 25 percent share in the cotton yarn industry across the globe India contributes to around 12 percent of the world's production of cotton yarn and
textiles
2 Ministry of textiles,
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Chemical Industry
This is one of the fastest growing sectors of Indian economy.3 The chemical industry in India
is one of the oldest domestic industries and it currently produces nearly 70,000 commercial
products, from cosmetics and toiletries, to plastics and pesticides. The country is the 13th
largest exporter of pesticides and disinfectants globally. In terms of volume, it figures 12th
largest producer of chemicals. The petrochemical, agrochemical, and pharmaceutical
industries are some of the fastest growing sectors in the Indian economy. The estimated
worth of chemical industry is $28 billion and it accounts for 12.5 per cent of the total
industrial production of India and 16.2 per cent of its total exports. 4
Food Processing Industry
India is the world's second largest producer of food next to China, and has the potential of
being the biggest with the food and agricultural sector. The total food production in India is
likely to double in the next ten years and there is an opportunity for large investments in food
and food processing technologies, skills and equipment, especially in areas of Canning, Dairy
and Food Processing, Specialty Processing, Packaging, Frozen Food/Refrigeration and
Thermo Processing. Fruits & Vegetables, Fisheries, Milk & Milk Products, Meat & Poultry,
Packaged/Convenience Foods, Alcoholic Beverages & Soft Drinks and Grains are important
sub-sectors of the food processing industry.
3 Indian Chemical Portal, 4Ibid
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Health food and health food supplements are another rapidly rising segment of this industry
which is gaining vast popularity amongst the health conscious. 5India is one of the major food
producing country in the world but accounts less than 1.5 per cent of international food trade.
Hence, there is a vast scope for the expansion of this industry.
Steel Industry
Since its independence, India has experienced steady growth in the steel industry, thanks in
part to the successive governments that have supported the industry and pushed for its robust
development.6 During April-December 2004-05, the production of the finished steed recorded
a growth of 4 per cent and reached 28.3 million tonnes. In the world scenario, Indian steel
industry ranks 10th. It represents approximately Rs. 9,000 crore of capital and provides direct
employment to more than 0.5 million people. The major players in the industry are Steel
Authority of India (SAIL), Bhilai Steel Plant, Durgapur Steel Plant, Rourkela Steel
Plant, Bokaro Steel Plant.
5 6The Economy watch, < http://www.economywatch.com/business-and-economy/steel-industry.html>
http://www.indianfoodindustry.net/http://www.economywatch.com/business-and-economy/steel-industry.htmlhttp://www.economywatch.com/business-and-economy/steel-industry.htmlhttp://www.indianfoodindustry.net/8/3/2019 Major Industries in the Indian Gdp
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Cement Industry
Cement industry in India comprises of 125 large cement plants and over 300 mini cement
plants having total installed capacity of 148.28 million tonnes and 11.10 million tonnes per
annum respectively. In addition to this, there are 10 large cement plants owned by various
State Governments. So, the total installed capacity of the country as a whole stands at 159.38million tonnes. The export of cement in 2003-04 was 6.92 million tonnes. The Major Players
are Ambuja cement, Aditya Cement, J K Cement and L & T Cement.
Mining Industry
India is a major mineral producer in Asia and globally. It is currently a global producer of
chromites, coal, iron ore and bauxite. India has been enjoying economic growth during the
nineties. Several of Indias current state owned mining and beneficiation companies have
been faced with drastic production cuts, resulting in operations becoming uneconomical. This
has resulted in the closure of several mining operations. Reasons for poor results have been
given as lower grade reserves and excessive manpower quotas.
Since the enunciation of the National Mineral Policy, 1993, India has made good progress inattracting foreign investment in its mining sector, with attractive incentives. The National
Mineral Policy was revised in 1994 and as a result, private investment (both domestic and
foreign), has been permitted for the exploration and exploitation of the following minerals:
Iron ore, Copper, Manganese, Lead, Chrome ore, Zinc, Sulphur, Molybdenum, Gold,
Tungsten ore, Diamond, Nickel and Platinum group of metals.
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As a result, several foreign companies have begun investing in India, with the majority
coming from Canada and the USA, followed by Australia, the UK and South Africa. Most
interest has been shown in the base metals, diamond, mineral sands and gold sectors.
The Indian Bureau of Mines (IBM) is the principal government agency responsible for
compiling exploration data and mineral maps and for providing access to the latest
information is respect of mineral resources in the country. IBM has both regulatory as well as
service functions.
Software Industry
The software industry in India symbolizes India's strength in the knowledge based economy.It has witnessed a phenomenal growth in last decade. The Compounded Annual Growth Rate
(CAGR) is 42.3%. According to NASSCOM's projection, the software industries contribution
is expected to grow to 7% by 2008 which started with 0.59% in 1994-95 and reached to
2.87% by 2001-02.
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CONTRIBUTION OF TEXTILE INDUSTRY TO GDP IN INDIA
The textile industry is one of the leading sectors in the Indian economy as it contributes
nearly 14 percent to the total industrial production. The textile industry in India is claimed to
be the biggest revenue earners in terms of foreign exchange among all other industrial sectors
in India. This industry provides direct employment to around 35 million people, which has
made it one of the most advantageous industrial sectors in the country.
India textile industry largely depends upon the textile manufacturing and export. It also plays
a major role in the economy of the country. India earns about 27% of its total foreign
exchange through textile exports. Further, the textile industry of India also contributes nearly
14% of the total industrial production of the country. It also contributes around 3% to the
GDP of the country. India textile industry is also the largest in the country in terms of
employment generation. It not only generates jobs in its own industry, but also opens up
scopes for the other ancillary sectors. India textile industry currently generates employment
to more than 35 million people. It is also estimated that, the industry will generate 12 million
new jobs by the year 2010. India holds 22 percent share in the textile market in Europe and
43 percent share in the apparel market of the country. USA holds 10 percent and 32.6 percent
shares in Indian textiles and apparel. The Role of Textile Industry in India GDP also includes
a hike in the investment flow both in the domestic market and the export production of
textiles. The investment range in the Indian textile industry has increased from USD 2.94
billion to USD 7.85 billion within three years, from 2004 to 2007. It has been assumed that
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track to ensure profitability in the coming decades. The sector is expected to attract
phenomenal investments of about Rs 1,400 billion in the next decade.9
CONTRIBUTION OF STEEL INDUSTRY TO THE GDP IN INDIA
The Role of Iron and Steel Industry in India GDP is very important for the development of
the country. In India the visionary Shri Jamshedji Tata set up the first Iron and Steel
manufacturing unit called Tata Iron and Steel Company, at Jamshedpur in Jharkhand. Iron
and steel are among the most important components required for the infrastructure
development in the country. Government targets to increase the production capacity from 56
million tonnes annually to 124 MT in the first phase which will come to an end by 2011 - 12.
Currently with a production of 56 million tonnes India accounts for over 7% of the total steel
produced globally, while it accounts to about 5% of global steel consumption. The steel
sector in India grew by 5.3% in May 2009. Globally India is the only country to post a
positive overall growth in the production of crude steel at 1.01% for the period of January -
March in 2009.
CONTRIBUTION OF CEMENT INDUSTRY TO GDP IN INDIA
The Role of Cement Industry in India GDP is significant in the economic development of the
country. The cement industry in India is one of the oldest sectors in India. The industry is
9 India Brand Equity Foundation, < http://www.ibef.org/industry/foodindustry.aspx>
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driven by the immense growth in the housing sector, the infrastructure development, and
construction of transportation systems.10
India ranks second in the production of cement in the world. The growth rate of the
production of cement during the year 2006-07 was 9.1%. The export of the cement in the year
2006-07 was 9.3 million tonnes. The large manufacturing units accounts for 94% of the total
output of cement
CONTRIBUTION OF MINING INDUSTRY TO GDP IN INDIA
Industry Growth Rate in India GDPhas been impressive in the last few years. The Growth
Rate of the Industry in the India GDP has grown due to sustained manufacturing activity over
the years. This has given a major boost to the Indian economy. The mining industries share in
India's GDP is from 2.2% to 2/5% only but it contributes to 10-11% in industrial sector's
10
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GDP. The organised mining sector employs nearly 0.7 million people. Small scale mining
approximately contributes to 6% of the total value of mineral production.
CONTRIBUTION OF SOFTWARE INDUSTRY TO GDP IN INDIA
IT-ITeS sector's contribution to the country's GDP has increased more than four times to 5.2
per cent in 2006-07 as compared to 1.2 per cent in FY'98, a study has said on Wednesday. It
has been carried out jointly by Nasscom Foundation and global consultancy Deloitte. 11 With
the huge success of the software companies in India, the Indian software industry in turn has
become successful in making a mark in the global arena. This industry has been instrumental
in driving the economy of the nation on to a rapid growth curve. As per the study of
NASSCOM the IT/ITES industry recorded a growth of 4 - 7 percent in the year 2010.
Software export from India accounts for more than 65% of the total software revenue. The
domestic software market largely depends upon sale of software packages and products,
which constitute major part of revenues. Products account for almost 40% of the domestic
market. On the other hand, more than 80% of revenue from software exports comes fromsoftware services like custom software development and consultancy services etc. The IT
industry accounts for 5 percent of India's GDP
RECENT TREND SHOWN BY GDP IN INDIAN ECONOMY
Gross Domestic Product (GDP) is the measure of a country's economic performance. It is the
market value of all the goods and services produced in a year. In 2007, the Indian economy
11IT's contribution to GDP up: Study ,
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GDP crossed over a trillion dollar which made it one of the twelve trillion dollar economy
countries in the world. There has been excellent progress in knowledge process services,
information technology, and high end services. But the economic growth has been sector and
location specific.
The trend for Indias GDP growth rate is given below.
1960-1980 - 3.5%
1980-1990 - 5.4%
1990-2000 - 4.4%
2000-2009 - 6.4%
Below are the contributions of different sectors in the India's GDP for 2005-2006.
Agriculture: 20%
Service: 54%
Industry: 26%
Below are the contributions of different sectors in the India's GDP for 2007-2008.
Agriculture: 17%
Service: - 54%
Industry: - 29%
According to Goldman Sachs, India's GDP in current prices may overtake France and Italy by
2020, Russia, Germany and UK by 2025 and Japan by 2035. It is also predicted that Indian
economy will be the third largest after US and China by 2035. Industry contributes around
27.6% of the GDP (2007 est). The services sector contributed to 55% of the GDP in 2007.
The IT industry contributed around 7% of the GDP in 2008 which was 4.8% in 2005-06.
Remittances from overseas Indian migrants were around $27 billion or around 3% of the
GDP of India's economy in 2006.
CONCLUSION
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The Gross Domestic Product (GDP) in India expanded 8.20 percent in the fourth quarter of
2010 over the same quarter, previous year. From 2004 until 2010, India's average quarterly
GDP Growth was 8.40 percent reaching an historical high of 10.10 percent in September of
2006 and a record low of 5.50 percent in December of 2004. India's diverse economy
encompasses traditional village farming, modern agriculture, handicrafts, a wide range of
modern industries, and a multitude of services. Services are the major source of economic
growth, accounting for more than half of India's output with less than one third of its labor
force. The economy has posted an average growth rate of more than 7% in the decade since
1997, reducing poverty by about 10 percentage points.
The composition of Indian GDP includes many sectors like industry, infrastructure,
agriculture, and services. The percentage of the share of these sectors in the composition of
India GDP differs and also has changed over the years. India GDP Composition Sector Wise
was that the agriculture sector contributed around 32%, services sector contributed 41%, and
the industry sector contributed 27% in 1990- 1991. The sector of industry accounts for 27.6%
of India GDP for it employs around 17% of the total workforce in India. The industrial sector
contributed 7.6% to India GDP in 2005- 2006 and the next year, this figure increased to
9.8%. This shows that the contribution of the industrial sector is increasing in India GDP.
Industry Growth Rate in India GDP has been impressive in the last few years. The Growth
Rate of the Industry in the India GDP has grown due to sustained manufacturing activity over
the years. This has given a major boost to the Indian economy. The reasons for the increase
of Industry Growth Rate in India GDP are that huge amounts of investments are being made
in this sector and this has helped the industries to grow. Further the reasons for the rise of the
Growth Rate of the Industrial Sector in India are that the consumption of the industrial goods
has increased a great deal in the country, which in its turn has boosted the industrial sector.
Also the reasons for the increase of Industry Growth Rate in India GDP are that the industrial
goods are being exported in huge quantities from the country. Industry Growth Rate in India
GDP thus has been registering steady growth over the past few years. This has given a major
boost to the Indian economy. The government of India thus must continue to make efforts to
boost the industrial sector in the country. For this will in turn help to grow the country's
economy.
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BIBLIOGRAPHY
Internet Sources:
1. http://www.economywatch.com/indianeconomy/indian-economy-overview.html 2. http://business.mapsofindia.com/india-gdp/industries/cement.html3. http://business.mapsofindia.com/india-gdp/industries/cement.html 4. http://www.ibef.org/industry/foodindustry.aspx
http://www.economywatch.com/indianeconomy/indian-economy-overview.htmlhttp://www.economywatch.com/indianeconomy/indian-economy-overview.htmlhttp://business.mapsofindia.com/india-gdp/industries/cement.htmlhttp://business.mapsofindia.com/india-gdp/industries/cement.htmlhttp://business.mapsofindia.com/india-gdp/industries/cement.htmlhttp://www.ibef.org/industry/foodindustry.aspxhttp://www.ibef.org/industry/foodindustry.aspxhttp://www.ibef.org/industry/foodindustry.aspxhttp://business.mapsofindia.com/india-gdp/industries/cement.htmlhttp://business.mapsofindia.com/india-gdp/industries/cement.htmlhttp://www.economywatch.com/indianeconomy/indian-economy-overview.html