Saturday, May 16, 2015

sector to transform an economy

In your opinion, what are the underlying characteristics that allow a sector to transform an economy and durably raise living standards? Which sector in India has the potential to transform India’s economy and why? Examine.

For a sector to transform an economy and durably raise living standards, following are some characteristics needed:
1. Employment generation capacity and ability to absorb skilled, semi-skilled and unskilled labours
2. High productivity and Product quantity to meet domestic need and produce surplus for exports
3. World standard product qualities to challenge competition in world market
4. Expansion prospects
5. Dynamic in ability to change according to need of hour

It would be wrong to say that any one sector can transform India’s economy. It should be cumulative effort from all three-Agriculture, Industry and services sector. However,
Industry seems to take the lead in transforming India, due to following reasons:

1. India will have advantage of Demographic dividend for atleast next 2-3 decades. But most people are either semi-skilled or unskilled. Agriculture sector is already overemployed and service sector needs skilled labours. So industries only provide opportunity for employment generation at large scale
2. India’s industry has been mostly laggard till now, due to constraints ranging from policy making to lack of capital and infrastructure. But, now with govt policies focusing of generating investment through FDI and developing infrastructure, Industries can improve upon their quality and quantity and expand. This will give impulse to export
3. Expansion of industry, particularly agro-based industries also give impetus to agriculture which is still employing around 60% of India's population

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