7. (a) What is the sectoral composition of India's national income? Mention the most important source of national income in India.

Sectoral Composition of India's National Income

The Indian economy is broadly classified into three main sectors, each contributing to the national income (measured primarily through Gross Value Added - GVA):

1. Primary Sector (Agriculture and Allied Activities)

This sector involves the extraction and production of raw materials directly from natural resources. It includes:

• Agriculture (crop cultivation)
• Forestry
• Fishing
• Mining and Quarrying

Historically, this sector was the largest contributor to India's national income and employer of the workforce. However, its share has steadily declined over the decades as the economy has diversified and developed.

2. Secondary Sector (Industry)

The secondary sector processes raw materials into finished goods and includes:

• Manufacturing (both registered and unregistered)
• Electricity, Gas, Water Supply, and other utility services
• Construction

This sector is vital for creating jobs, driving technological advancements, and adding value to raw materials. Government initiatives like 'Make in India' aim to boost the manufacturing segment within this sector.

3. Tertiary Sector (Services)

Also known as the service sector, this segment provides intangible services rather than tangible goods. It is a broad and diverse sector encompassing:

• Trade, Hotels, Transport, Communication, and services related to Broadcasting
• Financial, Real Estate, and Professional Services
• Public Administration, Defence, and other Services (like education, healthcare, entertainment)

The services sector has emerged as the most dynamic and fastest-growing segment of the Indian economy, reflecting a global trend seen in developed nations.

Current Sectoral Shares in India's Gross Value Added (GVA)

Based on recent estimates (e.g., FY 2024-25 / 2023-24), the sectoral composition of India's GVA at current prices is approximately:

Sector	Approximate Share in GVA (FY 2024-25/2023-24)
Primary Sector (Agriculture & Allied)	~17-18%
Secondary Sector (Industry)	~27-28%
Tertiary Sector (Services)	~54-55%

(Source: Ministry of Statistics & Programme Implementation, NSO; World Bank data for 2023 also shows similar trends with Services at ~49.80%, Industry at ~25.01%, and Agriculture at ~15.57%).

Most Important Source of National Income in India

The **Services Sector (Tertiary Sector)** is overwhelmingly the most important source of national income in India. Its consistent growth over the past few decades has propelled it to the forefront of the Indian economy.

Factors Contributing to the Dominance of the Services Sector:

1. Technological Advancement: The rapid growth of Information Technology (IT) and IT-enabled services (ITES) has been a significant driver. India has established itself as a global hub for software development and BPO services.
2. Globalization and Liberalization: Economic reforms initiated in the early 1990s opened up the Indian economy, leading to increased foreign investment and integration with global markets, particularly in services.
3. Rising Domestic Demand: A growing middle class with increasing disposable income has fueled demand for services such as banking, insurance, healthcare, education, retail, and tourism.
4. Skilled Workforce: India's large pool of educated and English-speaking workforce has been instrumental in the growth of various service industries.
5. Government Policies: Policies promoting investment in infrastructure, digital India initiatives, and ease of doing business have indirectly supported the growth of the services sector.
6. Urbanization: The increasing urbanization has led to a greater demand for a wide array of urban services, from transport to real estate and financial services.

The services sector's dominance signifies a structural transformation of the Indian economy from an agrarian to a service-oriented one, a trajectory observed in many developed economies. While it contributes the most to the national income, it is important to note that the primary sector still employs a significant portion of the Indian workforce, highlighting a persistent challenge of disguised unemployment and the need for inclusive growth.