Critically discuss the structural changes that have taken place in India's economy since dawn of new millennium.
The key structural changes that have taken place in the Indian economy since 2000 are as follows:
Decreasing the share of agriculture sector to national income
In 2000-2001, agricultural sector contributed to approximately 24.7 % of India’s GDP. This share has continuously fallen and currently hovers around 13-14%. The decreasing share of agriculture shows structural change indicating economic development as contribution of agriculture to GDP in advanced countries remains around 2-3%. However, for a country like India, the role of agriculture is very critical because it is still accounting for more than half of total workforce and provides food, fodder and raw material for manufacturing.
Increasing share of service sector
India has one of the fastest growing services sector in the world. The Services constitute a major portion of India’s GDP with a 57 per cent share in GDP at factor cost (at current prices) in 2013-14, an increase of 6 percentage points over 2000-01. Thus, with more than half of India’s GDP coming from services, India has truly become service based economy in last few decades. The key and peculiar structural change here was that while most countries move from primary to secondary to tertiary sector along the growth path; India has jumped directly from primary to tertiary sector.
From Mix Economy to Private Sector Economy
In the first decade of this new millennium, private corporate sector overtook the public sector not only in terms of net sales but also in net profits. The share of private sector in net sales of manufacturing and services output was 48.83% in 2000-10; it had grown to 68.55 per cent in 2009-10. Today, the term “mixed economy” does not apply aptly for India. India is now essentially a private enterprise economy.
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