Post-Independence, Indian Economy has experienced Extraordinary Transition. The Economic GDP has been Contributed by Agriculture (Primary) Sector, Manufacturing (Secondary} Sector and Services (Tertiary) Sector. Decade by Decade Since 1950, Agriculture Sector Contribution (%) to Overall GDP was Decreasing and Services Sector Contribution (%) to Indian GDP was increasing. This is because over all Economy was growing in real terms and other sectors such as Industry (CAGR: 7% to 8%) and Services (More than CAGR: 12%) and Agriculture was experienced Growth Rate of 4%. These were the Main Reasons for Economic Sectoral Contribution Transition: 1) Overall Economy/GDP was Growing (CAGR: 7%; more than agriculture sector growth rate of 4%); 2) Manufacturing and Services were growing at Higher Growth Rates than Agriculture. To Experience this specific Phenomena, and to Practically/Statistically see the facts, this specific Data Insight I am Presenting here. Data Tables are Small Only, However the Outcomes are insightful.
Hence, Lets us consider the Data Points related to Different Sectors Growth Rates of Indian Economy and Different Sectors Contribution to Indian GDP between 1950-2011 (over 60 Years).
Research Questions:
Q1: Which Sector Growth Rate Contributed Maximum to Indian GDP Growth Rate Over 60 Years?
Q2: Which Sector Contributed Maximum to Indian GDP Over 60 Years among Agriculture (Primary), Manufacturing (Secondary) and Services (Tertiary) Sectors?
Answer Q1: Q1: Which Sector Growth Rate Contributed Maximum to Indian GDP Growth Rate Over 60 Years?
Please Consider the Data Table-1; Here Independent Variables Include Different Sectors Growth Rates and Dependnt Variable is GDP Growth Rate.
Table-1: Different Sectors Growth Rate (1951-2014)
Data Insights (From Table-2):
- The Sectors Growth Rates Which Contributed to GDP Growth Rate (Strong Correlation >0.75) include Agriculture Sector, Manufacturing and Industries, Trade (Retail), Transportation, and BFSI (Banking, Financial Services and Insurance) sector. All these sectors have higher correlation/strong relationship with Indian GDP Growth Rate Over 60 Years.
- Mining and Quarrying sector growth is Not Related to Indian GDP Growth Rate Over 60 Years (negative correlation coefficient). This is because Decade by Decade Mining & Quarrying Experiencing Reducing Growth Rates.
- Another thing is, Electricity, Gas and Water sector growth rate also experienced Negative Correlation with Indian GDP growth rate (over 60 years). This is because Decade by Decade Electricity, Gas and Water sector is experiencing Decreasing growth Rates. This is because Several Areas in the country could already get these facilities. Decade by Decade self-sufficiency is being achieved in different states in India specific to these facilities. That is the reason decade by decade This sector experiencing reducing Growth Rates over 60 years. That means, certain areas does not need new investments in this sector, because they already have it.
- Construction and Infrastructure sector is also strongly correlated to Indian GDP growth rates over 60 years (Correlation coefficient value >0.64)
- IN this case, REGRESSION cannot be calculated because Number of Independent Variables are More than Number of Data Rows in Table
Answer Q2: Which Sector Contributed Maximum to Indian GDP Over 60 Years among Agriculture (Primary), Manufacturing (Secondary) and Services (Tertiary) Sectors?
Please consider data Table3; Figure-2 describes the Trends of Contribution of Different Sectors to Indian GDP.
Table-3: Different Sectoral Contribution to Indian GDP (1951-2011)
Table-4: Different Sectors and Indian GDP Relationship: Correlation Matrix
| Primary Sector | Secondary Sector | Tertiary Sector | GDP | |
| Primary Sector | 1 | |||
| Secondary Sector | -0.90686 | 1 | ||
| Tertiary Sector | -0.97768 | 0.798326 | 1 | |
| GDP | -0.7699 | 0.474474 | 0.86414 | 1 |
Data Insights:
- From Table-4: Correlation Matrix, it is Evident that Services (Tertiary) Sector is Strongly Correlated to Indian GDP over 60 Years (Correlation Coefficient Value > 0.86)
- Agri Sector is negatively correlated to Indian GDP. This is because its contribution (%) was decreasing decade by decade to Overall GDP (the phenomena behind is explained at the beginning of this data insight).
- Another Thing is Services sector is strongly correlated to Manufacturing sector (over 60 years).
- Similarly, Agricultural Sector is not related to economies of manufacturing and services.
- Further, From Table-5: regression table, we can Find that Services sector (Tertiary sector) has Effect/Impact over Indian GDP over 60 years. Means Services sector increase or decrease effects the Overall Indian GDP.
Hope this helps. Thank You.
Best Wishes,
Dr.Goparaju Purna Sudhakar
(https://gpsudhakar.com)