Growth
What is Economic Growth?
It means increase in capacity of a country to produce goods and service
Example
Increase in Industrial Production
Increase in Agricultural Output
How is Economic Growth Measured?
It is measured with help of GDP (Gross Domestic Product)
GDP is the market value of goods and service produced in a year
Higher the GDP, more rich the country as people are able to enjoy a large variety of goods and services
How is GDP Derived?
It is derived from different sectors of economy
Example
Agriculture Sector
Industrial Sector
Service Sector
GDP Growth depends upon Structural composition of different sectors
What is Structural Composition of an Economy?
It is the amount contributed by different sectors of economy in GDP Growth
For a less developed economy, share of agriculture sector is higher
As a country becomes more developed, share of agriculture sector declines and other sector rises
How did Structural Composition of India change after independence?
In India, Share of Agriculture in GDP was more than 50% at time of independence
(Share of Service Sector and Industrial Sector was very less)
However from 1990, Share of Service Sector Increased to 40.59%
It is because as a country becomes more developed, share of agriculture sector declines and other sector rises
| Sector Name | 1947 | 1990 | |
| Agriculture | 59% | 34.9% | --> Reduced |
| Industry | 13% | 24.6% | --> Increased |
| Service | 28% | 40.5% | --> Increased |
Lets Summarize Growth Goal
NCERT Questions
Question 11
What is sectoral composition of an economy?
Is it necessary that the service sector should contribute maximum to GDP of an economy?
Comment.
View answer
Structural Composition is the amount contributed by different sectors of economy in GDP Growth.
For a less developed economy, share of agriculture sector is higher.
As a country becomes more developed, share of agriculture sector declines and other sector rises.
No, its not necessary that service sector should contribute maximum to GDP of an economy.
However from 1990, Share of Service Sector Increased to 40.59%
It is because as a country becomes more developed, share of agriculture sector declines and other sector rises
MCQ Other Books
Question 1
In the following questions, select the correct answers:
Which of these is a good measure of growth?
- Per Capita Income
- GDP
- NNP
- Factor Income from abroad
View answer
B. GDP
Explanation
Economic Growth is measured with help of GDP (Gross Domestic Product)
GDP is the market value of goods and service produced in a year
Higher the GDP, more rich the country as people are able to enjoy a large variety of goods and services
How is GDP Derived?
It is derived from different sectors of economy :
Agriculture Sector
Industrial Sector
Service Sector
Question 2
This sector witnessed an increase in share of contribution to GDP.
- Agriculture sector
- Industrial sector
- Service sector
- None of the above
View answer
B. Industrial sector
C. Service sector
Explanation
Both of these sectors witnessed an increase in share that they contributed to GDP.
On the other hand, Agriculture sector saw a decrease in the share they contributed to GDP.