CAPF AC 2021 Q59: Indian Economy – National Income & Economic Growth
- (a) Electricity, gas, water supply and other utility services
- (b) Trade, hotel, transport, communication and services related to broadcasting
- (c) Public administration, defence and other services
- (d) Financial, real estate and professional services
Answer: (d) Financial, real estate and professional services
Explanation
Which services pushed up the share of services in GVA
How to think: first remove any option that is not a service in national accounts.
Electricity, gas and water supply is counted under industry.
Then recall which services grew fastest: finance, real estate, IT and business services.
| Head in national accounts | Sector | Trend in share of GVA, 2009-10 to 2018-19 |
|---|---|---|
| Electricity, gas, water supply and other utilities | Industry | Not part of services |
| Trade, hotels, transport, communication and broadcasting | Services | Broadly steady |
| Public administration, defence and other services | Services | Small rise |
| Financial, real estate and professional services | Services | Largest rise |
Why this group grew: it includes banking, insurance, real estate, IT and IT-enabled services and other business services.
It is also the largest block within services, at roughly one-fifth of total GVA.
Note: the bank earlier carried key (a); it is corrected to (d).
Answer: (d) Financial, real estate and professional services.
Why each option is right or wrong
- (a) Incorrect. Electricity, gas and water supply belongs to industry, not to the service sector.
- (b) Incorrect. The share of trade, hotels, transport and communication stayed broadly steady.
- (c) Incorrect. Public administration and defence rose only a little.
- (d) CORRECT. Financial, real estate and professional services drove the biggest rise.
Key point
Services GVA has three heads: (1) trade, hotels, transport, communication and broadcasting; (2) financial, real estate and professional services; (3) public administration, defence and other services. The second is the largest and rose the most. Services are over half of India's GVA.
Remember
Finance, real estate and professional services lead the services sector.
Common mistakes
- Marking electricity, gas and water supply, which is an industry head.
- Assuming trade and hotels grew most because they employ the most people.
- Forgetting that IT and business services are counted with professional services.
Exam tip
Educated guess: the question asks about services, so the utilities option is out at once. India's growth story after 2009 is IT, banking and real estate, all inside option (d).
Sources
- Economic Survey 2019-20, Volume 2, Chapter 9: Services (share of services sub-sectors in GVA)
- Ministry of Statistics and Programme Implementation — National Accounts Statistics (GVA by economic activity)