In India, which sector contributes the largest share to the National Income?

Introduction / Context:
National income is a key macroeconomic indicator that shows the total value of goods and services produced in a country during a period. In India, the structure of the economy has shifted over time from agriculture to industry and then to services. Understanding which sector contributes the largest share to national income helps candidates appreciate the pattern of economic development and the dominance of the service sector in modern India.

Given Data / Assumptions:

• The question is about the present broad structure of India's national income.
• National income is measured at factor cost in real terms.
• The three main sectors are agriculture, industry, and services, with trade usually treated as a part of services.
• We assume current typical exam level data where services have overtaken agriculture and industry.

Concept / Approach:
In developing economies like India, the initial dominant sector is agriculture, followed by industrial expansion, and finally a strong rise in services. Over the last few decades, India has seen rapid growth in information technology, financial services, communication, trade, tourism, and other service activities. As a result, the service sector now contributes the highest share to Gross Domestic Product, which is closely related to national income. Therefore, we select the sector that broadly covers banking, finance, trade, transport, communication, real estate, and public administration.

Step-by-Step Solution:
Step 1: Recall that historically agriculture used to provide the largest share of national income at the time of independence. Step 2: Over time, industrialisation increased the share of manufacturing and construction, but this sector still did not remain the largest for long. Step 3: With liberalisation and growth in information technology, finance, communication, and trade, the service sector started growing much faster than the other two sectors. Step 4: Recent national income data and standard exam references clearly show that services contribute well above agriculture and industry in percentage terms. Step 5: Therefore, among the given options, the correct answer is the service sector.

Verification / Alternative Check:
We can cross check with typical data from exam preparation material, where the service sector contribution is often around or above fifty percent of GDP. Agriculture has gradually declined to below twenty percent, and industry remains somewhere between twenty and thirty percent, depending on the year and the base. These approximate ranges are enough to confirm that the service sector is the largest contributor. Thus, service sector being the largest component of national income in India is a well accepted fact in standard economics and general awareness books.

Why Other Options Are Wrong:
Agriculture sector is still important for employment but its share in national income has reduced significantly, so it is not the largest. Industrial (manufacturing) sector has grown but has not surpassed the combined contribution of services. Trade and commerce sector is only one part of the broader service sector and on its own is not the largest component. Therefore, these options do not match the macroeconomic reality for India.

Common Pitfalls:
Many candidates assume that agriculture is still the largest because a large proportion of the population depends on it for livelihood. This confuses employment share with income share. Some also think industry is largest because they associate development with factories and infrastructure. The key is to focus on actual contribution to GDP or national income, not only on the visible presence of a sector. Remember that in India, modern services such as IT, banking, and communication create high value added output.

Final Answer:
The largest component of national income in India is the Service sector.