Disproportionatity and the Services Sector: A Note
1. One major departure in the trends of national income growth in India in the past decade is the sudden spurt in the rate of growth in tertiary activities, that is, in the services sector.
Table 1: National Income by Sectors of Industrial Origin at 1970-71 Prices (Rs. Crores)
1950-51 1960-61 1970-71 1975-76 1984-85
Agriculture and allied activities 10001 13596 16980 18777 21861
Manufacturing, construction and
mining 2954 4211 7117 8348 12783
Tertiary activities 4275 of which defence 6441 10222 13030 23010
and public administration 769 1635 2238 5517
Total net domestic
product 17230 24258 34519 40155 57654
Source: Central Statistical Organisation, National Accounts Statistics, various issues.
For twenty-five years following Independence, growth in service activities was more or less in consonance with that in the primary and secondary sectors. In most years, in fact, the rate of growth of income in the services sector was close to the weighted mean of the rates of
growth in agriculture and industry. This pattern has been deviated ^
Economist and Advisory Editor, Social Scientist.