Data Insight: Sectors Contributed Maximum to Indian GDP
Over 60 Years
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)
Figure-1: Growth Rates of Different Sectors Over 60 Years (1951-2014)
Figure-1: Growth Rates of Different Sectors Over 60 Years (1951-2014)
Table-2: Different Sectoral Growth Rates and GDP Growth Rate: Correlation
Table
Data Insights (From Table-2):
1. 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.
2. 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.
3. 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.
4. Construction and Infrastructure sector is also strongly correlated to Indian
GDP growth rates over 60 years (Correlation coefficient value >0.64)
5. 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.Agriculture, Forestry & FishingMining & QuarryingManufacturingElecrtricity, Gas & Water SupplyConstructionTrade, Hotels and RestaurantsTransport, Storage & CommunicationFinance, Insurance & Real EstateCommunity & Personal ServicesGDP Growth Rate
Agriculture, Forestry & Fishing 1
Mining & Quarrying 0.104931081 1
Manufacturing 0.937212366 0.373163 1
Elecrtricity, Gas & Water Supply -0.023239867 0.360667 0.033214 1
Construction 0.78717718 -0.41742 0.560381 0.095137 1
Trade, Hotels and Restaurants 0.760177726 -0.41359 0.627593 -0.55776 0.711687 1
Transport, Storage & Communication 0.419090954 -0.6536 0.247698 -0.79013 0.499729 0.902772 1
Finance, Insurance & Real Estate 0.712872685 0.003602 0.742251 -0.58706 0.351013 0.84519 0.695661 1
Community & Personal Services 0.586410807 -0.25891 0.605038 -0.51062 0.409182 0.853164 0.751464 0.902256 1
GDP Growth Rate 0.834369178 -0.20937 0.762063 -0.50087 0.643871 0.965786 0.79813 0.938436 0.890097 1
Table
Data Insights (From Table-2):
1. 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.
2. 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.
3. 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.
4. Construction and Infrastructure sector is also strongly correlated to Indian
GDP growth rates over 60 years (Correlation coefficient value >0.64)
5. 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.Agriculture, Forestry & FishingMining & QuarryingManufacturingElecrtricity, Gas & Water SupplyConstructionTrade, Hotels and RestaurantsTransport, Storage & CommunicationFinance, Insurance & Real EstateCommunity & Personal ServicesGDP Growth Rate
Agriculture, Forestry & Fishing 1
Mining & Quarrying 0.104931081 1
Manufacturing 0.937212366 0.373163 1
Elecrtricity, Gas & Water Supply -0.023239867 0.360667 0.033214 1
Construction 0.78717718 -0.41742 0.560381 0.095137 1
Trade, Hotels and Restaurants 0.760177726 -0.41359 0.627593 -0.55776 0.711687 1
Transport, Storage & Communication 0.419090954 -0.6536 0.247698 -0.79013 0.499729 0.902772 1
Finance, Insurance & Real Estate 0.712872685 0.003602 0.742251 -0.58706 0.351013 0.84519 0.695661 1
Community & Personal Services 0.586410807 -0.25891 0.605038 -0.51062 0.409182 0.853164 0.751464 0.902256 1
GDP Growth Rate 0.834369178 -0.20937 0.762063 -0.50087 0.643871 0.965786 0.79813 0.938436 0.890097 1
Table-3: Different Sectoral Contribution to Indian GDP (1951-2011)
Figure-2: Sectoral Contribution (%) to Indian GDP
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
Table-5: Effect of Different Sectors Over Indian GDP (Over 60 Years):
Regression Table
59.2 54.8
46.3 39.2 32.2
24
16.7
13.3 16.6 21.6 23.7 27.2 26.7 2627.5 28.6 32.1 36.6 40.6
49.3
57.3
0
10
20
30
40
50
60
70
1950-51 1960-61 1970-71 1980-81 1990-91 2001-02 2010-11
Sectoral Contribution(%) to Indian GDP [1951-2011]
Primary Sector Secondary Sector Teritiary SectorSUMMARY OUTPUT
Regression Statistics
Multiple R 0.957534
R Square 0.916872
Adjusted R Square0.625308
Standard Error745932.1
Observations 7
ANOVA df SS MS F Significance F
Regression 3 2.45E+13 8.18E+12 14.70623 0.026746
Residual 4 2.23E+12 5.56E+11
Total 7 2.68E+13
CoefficientsStandard Error t Stat P-value Lower 95%Upper 95%Lower 95.0%Upper 95.0%
Intercept 0 #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Primary Sector-27191 12925.76 -2.10363 0.10323 -63078.6 8696.684 -63078.6 8696.684
Secondary Sector-218081 88079.69 -2.47595 0.068508 -462629 26467.67 -462629 26467.67
Teritiary Sector180785.2 46359.86 3.899606 0.017547 52069.6 309500.8 52069.6 309500.8
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
Table-5: Effect of Different Sectors Over Indian GDP (Over 60 Years):
Regression Table
59.2 54.8
46.3 39.2 32.2
24
16.7
13.3 16.6 21.6 23.7 27.2 26.7 2627.5 28.6 32.1 36.6 40.6
49.3
57.3
0
10
20
30
40
50
60
70
1950-51 1960-61 1970-71 1980-81 1990-91 2001-02 2010-11
Sectoral Contribution(%) to Indian GDP [1951-2011]
Primary Sector Secondary Sector Teritiary SectorSUMMARY OUTPUT
Regression Statistics
Multiple R 0.957534
R Square 0.916872
Adjusted R Square0.625308
Standard Error745932.1
Observations 7
ANOVA df SS MS F Significance F
Regression 3 2.45E+13 8.18E+12 14.70623 0.026746
Residual 4 2.23E+12 5.56E+11
Total 7 2.68E+13
CoefficientsStandard Error t Stat P-value Lower 95%Upper 95%Lower 95.0%Upper 95.0%
Intercept 0 #N/A #N/A #N/A #N/A #N/A #N/A #N/A
Primary Sector-27191 12925.76 -2.10363 0.10323 -63078.6 8696.684 -63078.6 8696.684
Secondary Sector-218081 88079.69 -2.47595 0.068508 -462629 26467.67 -462629 26467.67
Teritiary Sector180785.2 46359.86 3.899606 0.017547 52069.6 309500.8 52069.6 309500.8
Data Insights:
1. 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)
2. 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).
3. Another Thing is Services sector is strongly correlated to Manufacturing
sector (over 60 years).
4. Similarly, Agricultural Sector is not related to economies of manufacturing and
services.
5. 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
1. 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)
2. 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).
3. Another Thing is Services sector is strongly correlated to Manufacturing
sector (over 60 years).
4. Similarly, Agricultural Sector is not related to economies of manufacturing and
services.
5. 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