Using the following data, analyse the sectoral contribution of India and Pakistan towards Gross Value Added (GVA).
Sectoral Share of Employment and GVA (%) in 2018 – 19
| Sector | Contribution to GVA – India | Contribution to GVA – China | Contribution to GVA – Pakistan | Distribution of Workforce – India | Distribution of Workforce – China | Distribution of Workforce – Pakistan |
|---|---|---|---|---|---|---|
| Agriculture | 16 | 7 | 24 | 43 | 26 | 41 |
| Industry | 30 | 41 | 19 | 25 | 28 | 24 |
| Services | 54 | 52 | 57 | 32 | 46 | 35 |
| Total | 100 | 100 | 100 | 100 | 100 | 100 |
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Start your 14-day free trial to unlock the full solution →India's economy shows a significant contribution from the services sector to GVA, while a large portion of its workforce remains in agriculture; Pakistan also relies heavily on services for GVA, but its agricultural sector contributes more to GVA than India's, despite similar employment patterns.
Gross Value Added (GVA) represents the total value of goods and services produced in an economy after deducting the cost of intermediate consumption. Analysing sectoral contributions to GVA helps us understand the structure of an economy and its stage of development. Typically, developing economies have a larger share of GVA and employment in agriculture, while developed economies see a shift towards industry and then services. Comparing the share of GVA with the distribution of the workforce across sectors reveals insights into productivity and structural transformation.
Let's first present the given data for clarity:
| Sector | Contribution to GVA – India (%) | Contribution to GVA – China (%) | Contribution to GVA – Pakistan (%) | Distribution of Workforce – India (%) | Distribution of Workforce – China (%) | Distribution of Workforce – Pakistan (%) |
|---|---|---|---|---|---|---|
| Agriculture | 16 | 7 | 24 | 43 | 26 | 41 |
| Industry | 30 | 41 | 19 | 25 | 28 | 24 |
| Services | 54 | 52 | 57 | 32 | 46 | 35 |
| Total | 100 | 100 | 100 | 100 | 100 | 100 |
Analysis of India's Sectoral Contribution to GVA
India's economic structure in 2018-19 shows a clear dominance of the services sector in terms of GVA contribution, while a substantial portion of its workforce is still engaged in agriculture.
- Services Sector: This sector contributes the largest share to India's GVA at . This indicates a significant shift towards a service-led economy, a characteristic often seen in more developed nations. However, the services sector employs only of the workforce, suggesting relatively high productivity per worker in this sector.
- Industry Sector: The industrial sector contributes to GVA and employs of the workforce. This indicates a relatively balanced contribution to both output and employment, suggesting a moderate level of industrial development.
- Agriculture Sector: Despite contributing only to GVA, the agricultural sector employs the largest share of the workforce at . This disparity highlights low productivity per worker in agriculture, a common feature of developing economies where disguised unemployment can be prevalent. Many people are engaged in agriculture, but their marginal contribution to output is low.
Analysis of Pakistan's Sectoral Contribution to GVA
Pakistan's economy in 2018-19 also exhibits a strong reliance on the services sector for GVA, but its agricultural sector plays a more prominent role in GVA compared to India, while also employing a large share of the workforce.
- Services Sector: Similar to India, the services sector is the largest contributor to Pakistan's GVA, accounting for . It employs of the workforce. This indicates a service-oriented economy, with the services sector being a key driver of economic output.
- Agriculture Sector: Agriculture contributes to Pakistan's GVA, which is higher than India's . This sector also employs a significant of the workforce. While the GVA contribution is higher than India's, the large share of employment still points to relatively lower productivity per worker compared to the industrial and services sectors.
- Industry Sector: The industrial sector contributes the smallest share to Pakistan's GVA at , employing of the workforce. This suggests a less developed industrial base compared to India, with its contribution to overall output being relatively modest.
Comparative Analysis of India and Pakistan
Comparing the two economies reveals distinct characteristics and similar challenges: …
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