What is the structure of the Indian Economy?
The Indian Economy is divided into three sectors and these sectors are as follow.
1 Primary Sector - Agriculture - 19.90 percent
2 Secondary Sector - Manufacturing - 25.33 percent
3 Tertiary Sector - Services - 54.77 percent
The total value generated in India is calculated in GDP- (Gross Domestic product) which is nothing but the sum total of all the goods and services produced in
a given year in an economy (Indian) to learn more about the Indian Economics you can click on the link but for genreal purposes this definition and
understanding is sufficient - Statistics Times
So GDP of India = Everything India has produced be it goods or services in one year. For the year 2019-2020 the GDP stood at
2,03,51,013 Crore = 203.5 Lac Crores in short which can be seen in the image below. Data source -
There are broadly three sectors of the Indian Economy and then there are many listed companies that are competing in the various sub sectors of the
broader 3 sectors of the Indian economy therefore we must first know the size of the broader 3 sector and their share of revenue i.e contribution of the sectors in the Indian GDP.
After that we must look at the sub sectors where the listed companies are servicing their customers and competing with their competitors, having done this task now
we need to make a calculated pridiction about the headroom which is available for the listed companies to grow in their businesses.
Example Let us take an example of the HDFC BANK LIMITED, HDFC BANK is a listed company it comes under the tertiary sector. The flow goes like this.
Indian Economy GDP = 203 Lac Crores
Tertiary Sector is 54.77% of GDP = 111 Lac Crores
Financials + Real Estate + Professional Services are the part of Tertiary sector which is 54.77% out of these 54.77%
Financials + Real Estate + Professional Services contribute upto 20.95% of the Indian GDP
= 42 Lac Crores
Since there are three patition i.e Financials + Real Estate + Professional Services in 20.95% therefore we will have to divide
42 Lac Crores/3 = 14 Lac Crore
Full market Capitalization of HDFC BANK = 7.86 Lac Crore
HDFC BANK is one the leading bank which is competing with many banks, financial institutions and NBFCs for a
a revenue if 14 Lac Crores. This 14 Lac crore is the entire number for which 100s or maybe 1000s of companies or institutions will compete.
Considering its existing size the headroom for growth is not huge because of large market capitalization
In the image below you can see that the three sectors mentioned above are further divided into many more components from here you can apply filter on almost all the companies
and know their standing and scope of growth in their sectors.
Primary Sector = Agriculture,forestry & fishing + Mining & quarrying
Secondary Sector = Manufacturing + Electricity, gas, water supply & other utility services + Construction
Tertiary Sector = Trade, hotels, transport, communication and services related to broadcasting + Financial, real estate & prof services +
Public Administration, defence and other services.