Basics of Indian Economy

📚 This topic overlaps across exams — read our in-depth, shared write-up: National Income Accounting — GDP, GNP, NNP & Related Concepts →

📖 The three sectors

Any economy is broadly divided into the Primary sector (agriculture, mining, fishing — extracting raw materials), the Secondary sector (manufacturing and industry — processing raw materials), and the Tertiary sector (services — banking, IT, trade, tourism). In India today, the services sector contributes over half of Gross Value Added (GVA), followed by industry and then agriculture — even though agriculture still employs the largest share of the workforce.

📊 National income concepts

GDP (Gross Domestic Product) — total value of goods and services produced within a country's borders, regardless of who produces them.
GNP (Gross National Product) — GDP plus net income earned by residents from abroad, minus income earned by foreigners domestically.
NDP / NNP — GDP/GNP minus depreciation (wear and tear of capital).
Nominal vs Real GDP — nominal GDP is measured at current prices; real GDP adjusts for inflation, making it the better measure of actual economic growth.

🏦 Who measures this?

In India, the National Statistical Office (NSO), under the Ministry of Statistics and Programme Implementation (MoSPI), is responsible for compiling and releasing GDP and related national income data.

💡 Key Facts

India's services sector contributes the largest share of GVA, over industry and agriculture.
Real GDP (inflation-adjusted) is a better measure of actual growth than nominal GDP.
GDP measures output within national borders; GNP adds net income from abroad.
India's GDP data is compiled by the National Statistical Office (NSO).

🔖 60-Second Revision

3 sectors: Primary (raw materials) → Secondary (manufacturing) → Tertiary (services).
Services sector = largest GVA contributor in India today.
GDP (within borders) vs GNP (+ net income from abroad).
Nominal (current prices) vs Real GDP (inflation-adjusted) — Real GDP is the better growth measure.