Economic Clusters in India.

Abstract

The primary sector has its biggest industry, agriculture, in Punjab. During the agriculture revolution which began in 1967, agriculture in Punjab,  got the boost it needed in order to grow. The measures used, had  adverse long-term effects  of  an increasing rate of farmer suicide, depletion of underground water and the degradation of environmental and human health. . Prime Minister Narendra Modi, is has introduced its own 'Green Revolution', to solve the issues challenging  the primary sector. The automotive industry in Chennai, is the largest sub-section of the secondary sector. The sector is now facing environmental pressure and a slump in growth . To revive this ailing sector Modi has introduced, 'Make in India'. Which is an initiative, to woo foreign investors to move their production facilities to India. Benagaluru is India's home of the IT sector, the backbone of the tertiary sector. This sector facing labor shortages and lack of investment. FDI caps and restrictions have eased, some even abolished and laws for IPRs have been tightened.

Table of Contents

1. Background and Introduction        

1.1 Introduction        

1.2 Background        

1.2.1 GDP        

1.2.2 GDP Per Capita        

1.2.3 Growth Rate        

1.2.4 GDP Composition and Labor Force        

1.2.5 FDI        

2. Primary Sector        

2.1 Background        

2.2 Challenges and Issues        

2.3 Future Prospects        

3. Secondary Sector        

3.1 Background        

3.2  Challenges and Issues        

3.3 Future Prospects        

4. Tertiary Sector        

4.1 Background        

4.2. Challenges and Issues        

4.3 . Future Prospects        

7. Conclusion        

8. References        

1. Background and Introduction

1.1 Introduction

This research essay explores the economy of India, by looking at its three economic sectors. This paper further discusses the composition of each sector, the challenges and issues that the sector is facing and the future prospects of the individual sector concerned. The text will look at the economic cluster of each sector. The primary sector is clustered in the Northern State of Punjab, where agriculture is widespread; the automotive industry in Chennai is analyzed in order to understand the secondary sector and tertiary sector is examined through Bengaluru, where it is the cluster for the  IT sector.

The reason why these locations are chosen is straightforward.  Each location, may it be Punjab, Chennai or Bengaluru contains the largest cluster for that certain industry. In addition, the industry chosen is the largest in their respective sectors. Punjab, has the largest agriculture cluster in India, and the agriculture industry is largest in industry in the primary sector. The largest industry in the secondary sector is the automotive industry, it's largest concentration is located in Chennai. The tertiary sector's most productive industry is the IT sector, its biggest cluster is in the provincial capital of Bengaluru. The biggest cluster of epitomizes challenges and the prospects the sector, it enables the comprehension of the seventh largest economy, by looking at each cluster individually.

1.2 Background

India is country of about 1.3 billion people. Started in the Indus valley as a small civilization, it is now a dynamic economy, and the seventh largest in the world. The nation is one of the G-20 major economies, a member of BRICS  and SAARC. It currently has a large young  population, low dependency ratio, enjoys high savings and investment rates and is increasingly integrated to the economy.

1.2.1 GDP

India has one of the largest economies in the world. The overall trend has been in an increase in gross domestic product. In 2011, India's GDP was at US$ 1,843.02 billion, due to, uncertainty in the global economy and policy paralysis, it decreased in 2012 to US$ 1,835.82. From  2013 onward the GDP has been increasing, the GDP was at US$1,875.16 billion. Due to the election in 2014, there was new optimism in the economy, and the GDP rose to US$ 2,049,50 billion, while in the fiscal year of 2014, which ends in March 2015, the new policies rolled out by Prime Minister Narendra Modi, has secured investors confidence in the economy and it is reflected in the further increase in the gross domestic product, to US$ 2,306.02 billion.^[1] 

[pic 1]

Figure 1 India's Nominal GDP, 2011-2015. Source: IMF.

1.2.2 GDP Per Capita

The GDP per Capita in India's economy has followed the same trend as its GDP. Starting at the level of US$ 1,521.92, it then decreases, US$1,495.95. In 2013, the GDP per Capita started increasing to 1,508.16. The elections bringing in optimism in the economy increased the per capita to US$ 1,626,98. The new policies and investors confidence, enabled the per capita income to increase sharply, which is now at the level of US$ 1,808.41.

[pic 2]

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