India’s Development Paradox
From Food Security to a Service Economy
India has achieved self-sufficiency in food grains, yet millions still face hunger. At the same time, its economy has shifted from farms to factories and services. How sustainable is this transformation?
Food Security and Nutrition in India
India has achieved self-sufficiency in grain production in the production of staple food grains, particularly rice and wheat, with production exceeding 330 million tons. As you can see on the graph below, food grain output has kept pace with population growth, supported by the Green Revolution and extensive agriculture.
[Source] World Bank Open Data. Cereal production (metric tons) — India. 2014–2023What is the Green Revolution? The Green Revolution is a period that began in the 1960s, during which agriculture in India was converted into a modern industrial system by the adoption of technology. With this revolution, India continuously raised the food grain production, and in 2023, India achieved 330 million tons of food grains, which is almost a 32% increase compared to 2014.
Nevertheless, food security remains a critical concern due to persistent poverty and malnutrition. According to the Global Hunger Index (GHI), India scored 27.3 in the 2024 GHI, which means India has level of hunger that is serious. According to this data, India ranked 105th out of 127 countries.
[Source] Global Hunger Index. India Profile. https://www.globalhungerindex.org/india.htmlHDI evaluated India with four component indicators: undernourishment, child wasting, child stunting, and child mortality. In two-component indicators, undernourished and child mortality, they have calculated that 13.7% of the population is undernourished and 2.9% of children die before their fifth birthday, evaluated as good indicators with low levels. However, in other indicators (child stunting, child wasting), it doesn’t seem great. Child stunting means the share of children under age five who have low height for their age, reflecting chronic undernutrition. In India, 35.5% of children under five are stunted, which is a very high level. There would be long-term implications for physical and cognitive development. Also, child wasting means the share of children under age five who have low weight for their height. In India, 18.7% of children under five are wasted, which is a very high level. It could reflect the condition indicative of acute undernutrition. Additionally, anemia affects 57% of women and 67% of children in India, reflecting poor nutritional intake. It results from the mismatch between food availability and nutritional outcomes.
The government has been operating massive food security programs to combat hunger. Mainly, two programs are operating. First is the PDS (Public Distribution System). According to the National Food Security Act (2013), it guarantees subsidized grains to 75% of the rural population and 50% of the urban population, which is about two-thirds of the population (around 800 million people). PDS is purposed on providing staple grains at low cost to eligible households. This presently covers 806 million and prevents about 1.8 million children from being stunted. And not only with the common way to operate, but they also tried to operate with a named SMART-PDS process, which has biometrics-based authentication, smart distribution cards, and cloud-based data integration. The second program is PM POSHAN (Pradhan Mantri Poshan Shakti Nirman). This program is an improved and expanded version of the Mid-Day Meal program. PM POSHAN is purposed to provide free lunch to public elementary and middle school students (1~8 grades), which is about 120 million students. And the provided free lunch is ingredient from local agricultural products. This is expected to be helpful in the prevention of hunger and malnutrition, closing education gaps, and promoting local agriculture consumption.
Structural Transformation: From Agriculture to Industry and Services
Over the decades, India’s economy has undergone a structural transformation from an agricultural base toward industry and services. In 1947, the economy was overwhelmingly agrarian. By the 1947s, agriculture and allied activities contributed more than 50% to the nation’s GDP and employed over 70% of its workforce. In the 1970s, the share of agriculture in output had steeply declined. By the 1970s, agriculture was 41% of GDP, and it fell to only 15–18% of GDP in recent years.
[Source] Ministry of Statistics and Programme Implementation (MoSPI), Government of IndiaIn contrast, the service sector has expanded tremendously from around one-third of GDP in 1970 to 55% of GDP by 2020. Industry (including manufacturing, construction, mining, and utilities) has seen a more modest rise, from 24% of GDP in the 1970s to 25–30% today. This indicates that India has transitioned to a service-led economy. Several factors explain this shift, such as the widespread use of English, the large pool of educated workers, and cost advantages that positioned India as a global IT outsourcing hub.
[Source] Vision IAS. India’s Structural Transformation, Current Affairs Monthly Magazine, August 22However, the employment distribution has not kept pace with output changes. A huge portion of India’s workforce is still engaged in low-productive farming. In the early 1970s, about 74% of workers were in agriculture. Even by 2019, agriculture still employed roughly 42% of the workforce, which is a very high figure for a sector contributing only 15% of GDP. This reflects many workers trapped in subsistence farming with low labor productivity, due to limited job creation in other sectors. Meanwhile, service jobs grew from 15% to 31% of employment, and industry jobs from 11% to 24%. Today, roughly 44% of workers are in agriculture, 25% in industry, and 31% in services.
India’s Economic Shift and the Influence of Multinational Corporations
[Source] GlobalEDGE, Michigan State University. India Economy Overview, Statistics Times. India GDP India’s diverse economy comprises several key industries that drive GDP, employment, and exports. There are mainly three key industries.
First is agriculture and allied sectors. Agriculture remains contributing about 17% of GDP (2023–24) and employing the largest share of workers (43–45% of the workforce). Major crops include rice, wheat, cotton, and sugarcane, and India is a top global producer of milk, spices, and pulses. Though its GDP share has fallen, agricultural exports but farm productivity is relatively low.
Second is manufacturing and industry. The industrial sector (manufacturing, mining, utilities, construction) makes up about 27–30% of GDP and around 25% of employment. Within this, manufacturing contributes roughly 13–17% of GDP. Important manufacturing industries include textiles and garments, automotive, petroleum refining and petrochemicals, and pharmaceuticals. Other significant industries are steel and cement, chemicals and fertilizers, electronics, and mining. The construction industry also has a major portion of the economy.
Third is one of the service sectors. Services are the largest contributor to India’s GDP at 55%, while accounting for about 30–34% of employment. And one of the important sectors is IT and BPO. India’s Information Technology and Business Process Outsourcing industry is world-renowned. The tech sector contributes an estimated 7–8% of GDP and forms an essential part of export revenues (IT and business service exports exceeded $300 billion in 2022). Indian IT companies and global companies’ captive centers handle software development, R&D for clients worldwide. This sector has made India a global outsourcing hub, employing millions of skilled workers and accounting for over 50% of India’s services exports.
With this well-known industry, there are several multinational corporations (MNCs) that play a crucial role in India’s IT and BPO sector. Among them, Tata Consultancy Services (TCS) and Infosys stand out as two of the most influential a globally recognized Indian multinational IT companies.
Tata Consultancy Services (TCS), part of the Tata Group, is one of the world’s largest IT services companies. With operations in over 150 countries, TCS delivers software solutions, consulting, cloud computing, and digital transformation services to clients across industries. Its ability to scale projects globally and maintain high-quality service has made it a preferred outsourcing partner for numerous Fortune 500 companies.
Similarly, Infosys is another major Indian multinational corporation headquartered in Bengaluru. Known for its innovation in digital services, artificial intelligence, and cloud platforms, Infosys serves global clients with a strong focus on enterprise technology and consulting. Its reputation for quality delivery and ethical corporate governance has earned it a trusted position in the global IT market.
These companies are not just significant in India, but they are integral players in the global digital economy. They employ hundreds of thousands of skilled professionals and represent over half of India’s services exports. Their consistent growth and technological leadership have solidified India’s reputation as a world-class IT outsourcing hub.
Reference
Global Hunger Index. (2024). India profile. https://www.globalhungerindex.org/india.html
GlobalEDGE, Michigan State University. (n.d.). India economy overview. https://globaledge.msu.edu/countries/india/economy
KPMG. (2025, February). Food and nutritional security in India. https://assets.kpmg.com/content/dam/kpmgsites/in/pdf/2025/02/food-and-nutritional-security-in-india.pdf
KREI. (2024). Trends in Indian agriculture and major agricultural policies. https://repository.krei.re.kr/bitstream/2018.oak/30541/1/FAS-030.pdf
Ministry of Agriculture & Farmers Welfare. (2024). Press Information Bureau releases. Government of India.
Ministry of Statistics and Programme Implementation (MoSPI). (n.d.). https://mospi.gov.in/
Statistics Times. (2023). India GDP by sector — 2023. https://statisticstimes.com/economy/country/india-gdp-sectorwise.php
Trading Economics. (n.d.). India — Urban population (% of total population). https://tradingeconomics.com/india/urban-population-percent-of-total-wb-data.html
Vision IAS. (2024, August 22). India’s structural transformation. Current Affairs Monthly Magazine. https://visionias.in/current-affairs/monthly-magazine/2024-08-22/economics-(indian-economy)/indias-structural-transformation
World Bank. (n.d.-a). GDP growth (annual %) — India. https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=IN
Rao, V. S. (n.d.). Structural growth in the Indian economy: Transition from agriculture to services. Adikavi Nannaya University, MSN Campus, Kakinada.
� This is Part 2 of the series “India’s Development Paradox: From Food Security to a Service Economy.” In Part 3, we’ll explore how rapid urbanization is reshaping India’s cities — and why it may bring both opportunities and new crises.
