Introduction / Context:
The composition of national income shows how an economy evolves from agriculture to industry and then to services. For India, exams frequently ask which sector currently contributes the most to gross domestic product. This question checks whether candidates are aware that India has moved towards a service dominated structure rather than remaining agriculture dominated.
Given Data / Assumptions:
- The question talks about the largest contribution to national income in India.
- Options list key sectors: agriculture, industry, services, mining and construction.
- We are concerned with the modern period when India has already undergone structural change.
Concept / Approach:As economies develop, the share of agriculture in GDP declines, the share of industry rises initially, and ultimately the services sector becomes dominant. India has followed a pattern where services expanded rapidly. Official data from national accounts consistently show that services, which include trade, transport, communication, finance, real estate, public administration and other services, contribute the largest share to India's GDP, well above agriculture and industrial activities.
Step-by-Step Solution:Step 1: Recall the three main sectors of the economy: primary (agriculture and allied), secondary (industry) and tertiary (services).Step 2: Note that agriculture's share in India's GDP has been declining and is now much lower than that of services.Step 3: Remember that the services sector in India includes a wide range of activities such as information technology, banking, tourism, communication and trade.Step 4: Compare the current contributions: services sector is the largest contributor, followed by industry, while agriculture contributes a smaller share.Step 5: Therefore, select the option that clearly mentions the services sector as the main contributor to national income.
Verification / Alternative check:You can verify by recalling common economy facts from government economic surveys and standard textbooks, which repeatedly mention that services contribute more than half of India's GDP. Agriculture is still important for employment, but not for the largest share of national income. Mining and construction are sub components and do not dominate overall GDP by themselves.
Why Other Options Are Wrong:Industrial sector including manufacturing and mining: Important for growth and employment, but its share is smaller than services in current data.
Agriculture and allied primary activities: Agriculture employs many people but its GDP share has declined and is no longer the largest contributor.
Mining and quarrying sector alone: This is a relatively small component within industry, not a dominant contributor by itself.
Construction sector only: Construction has grown with infrastructure and real estate, yet it does not exceed the broad services sector in contribution to national income.
Common Pitfalls:Many students assume that because a large part of India's workforce is in agriculture, it must also contribute the most to national income. This is incorrect; agriculture has low productivity compared to services and industry. Another mistake is to focus on older historical patterns instead of updated figures. Always remember that modern India is a service dominated economy when it comes to GDP share.
Final Answer:The largest contribution to India's national income comes from the
services sector including trade, transport and finance.
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