How Indian economy has transformed since the landmark 1991 reforms

By 2025-26 the primary sector's share had roughly halved to about 18%, the tertiary sector had surged to some 56% and industry sat almost exactly where it began, at around 25%

When the 1991 balance-of-payments crisis pushed India to liberalise, privatise and globalise, the economy leaned heavily on the land. In 1991-92, the primary sector—agriculture, forestry, fishing and mining—made up roughly 33 per cent of gross value added (GVA), against 41 per cent for services and 26 per cent for industry.

 

In the rest of the ’90s, change was gradual, with the primary sector’s share first slipping below 30 per cent in 1995-96 but remaining near that figure for the rest of the decade. That began to change from 2002-03, when the sector’s share dipped to under 25 per cent, falling below 20 per cent in 2018-19.  

 

Meanwhile, services, already dominant, did not clear the halfway mark until 2012-13. The secondary sector—manufacturing, utilities and construction—barely moved, drifting around the mid-to-high 20s and peaking near 30 per cent in the mid-2000s before easing back. By 2025-26 the primary sector’s share had roughly halved to about 18 per cent, the tertiary sector had surged to some 56 per cent, and industry sat almost exactly where it began, at around 25 per cent.

 

Zooming into the three primary activities within these sectors—agriculture, manufacturing and services—sharpens the picture. Agriculture accounted for about 30 per cent of GVA in 1991-92, having already ceded its place as the single largest activity to services around 1980. From there it slid continuously: falling below 20 per cent by 2004-05, and down to roughly 17 per cent by 2025-26.

 

Manufacturing’s share in overall GVA hovered between 16 and 20 per cent for the entire period, edging above agriculture only briefly, before both were left far behind by the services surge. By 2025-26 manufacturing’s share had actually drifted down to about 14 per cent.