In development theories, developing nations are the one whose population is in transition to find work in the modern (industry or service) sector from the traditional sector (agriculture) sector. In Indian scenario, this transition took place after 4 decades of planning. This was due to the fact that service and industrial sector were not able to absorb the excess agricultural labour.
Indian industries were protected till 1990 and they didn’t try to expand their operations and scope and kept enjoying their monopoly status. Incumbent firms or existing firms were interested in procuring new licenses and quotas not to expand their activities or start new firms but to prevent competition from new firms. This attitude of industrial sector didn’t increase the employment opportunities in the economy. But after 1990’s reforms, there were increased job opportunities in the industrial and service sector due to competition and new foreign entrants in the domestic market. Even though, after green revolution took place the agricultural contribution to GDP declined considerably in later stages. But the employment in agriculture didn’t decline at the same pace. 65% of population continued to be engaged in the agriculture sector till 1990 because industrial and service sector were not able generate new opportunities.