02. Sectors of The Indian Economy E

Economic Activities : Those activities which generates income are known as economic activities.

Sectors of Economic Activities

✶Primary sectors: Related to Agriculture activities.

✶Secondary sectors: related to manufacturing.

✶Tertiary sector: provide support to other two sectors.

Primary sectors: Those activities in which goods is produced by directly using natural resources are known as activities of primary sector

We get most of the natural products from agriculture, dairy, fishing, forestry hence this sector is also called agriculture and related sector.

These activities are undertaken by directly using natural resources.

These activities are primary because it forms the base for all other products that we subsequently make.

Example : Hunting and Food gatheringAgriculture, Dairy, Fishing, Mining

Secondary sectors : Those activities which change the form of natural resources through manufacturing and increase their utility and value are called activities of secondary sector.

⇨ In secondary sectors, natural products are changed into other forms through manufacturing (industries), hence this sector is also called industrial sector.

⇨ It is the next step after primarysector.

⇨ Example Manufacturing, Processing and Construction etc.

Tertiary sector : Personal and professional services provided to different communities are called activities of tertiary sector.

⇨ These activities help in the development of the primary and secondary sectors.

⇨ These activities generate services rather than goods so the tertiary sector is also called the service sector.

Example :

⇨ Teachers, Doctors, washermen, barbers, cobblers, lawyers, and people to do administrative and accounting works.

⇨ Services based on information technology such as internet cafe, ATM booths, call centres, software companies.

⇨ Transportation ,Banking

All sectors are linked or interconnected

For example

Cotton crop → cotton ( Agricuture, primary sector)

Cotton → textile (Manufacturing, secondary sector)

Textile → market (Transportation,Tertiary sector)

Gross Domestic Product (GDP)

The total value of all final goods and services produced by three sectors in a country during a particular year is called GDP

GDP shows how big the economy is.

In India GDP is calculated by a central government ministry.

Total GDP = GDP of Primary + GDP of secondary+ GDP oftertiary sector.

Importance of Tertiary sector :-

Tertiary sector has emerged as the largest producing sector in India because -

✦ Government has developed hospitals, school, courts, banks, police, defence, insurance companies etc. which are basic need of a country and are part of tertiary sector .

✦ Development in primary(agriculture) and secondary (industry) sector has led to development of tertiary(transport, trade) sector as they are interdependent.

✦ Over the past decade, some new services based on information and communication technology have become important and essential. The production of these services has been rising rapidly.

✦ As income levels rise, certain sections of people start demanding many more services like eating out, tourism, shopping etc.These services are part of tertiary sector.

All the services of the ‘service sector’ are not growing equally well.

✶ Service sector in India employs many different kinds of people.

✶ At one end there are a limited number of services that employ highly skilled and educated workers.

✶ At the other end, there are a very large number of services engaged in services such as small shopkeepers, repair persons, transport persons etc.

✶ These people barely manage to earn a living and yet they perform these services because no alternative opportunities for work are available to them. Hence, only a part of this sector is growing in importance.

Historical Change in Sectors

⇨ Primary sector’ was the most important sector of economic activity at initial stages of development.

⇨ Agriculture (Primary sector) was the primary source of livelihood for the majority of the population in the initial stages of development.

⇨ As the methods of farming change and agriculture sector began to prosper, it produce much more food than before.

⇨ At this stage, most of the goods produced were natural products from the primary sector and most people were also employed in this sector.

⇨ After a long time new methods of manufacturing were introduced and factories came up. Those people who had earlier worked on farms now began to work in factories in large numbers. Secondary sector gradually became the most important in total production and employment.

⇨ In the past 100 years, there has been a further shift from secondary to tertiary sector in developed countries. Most of the working people are employed in the service sector. The service sector has become the most important in terms of total production

Where are most of the people employed?
The primary sector continues to be the largest employer even now in india
Graph presents percentage share of the three sectors in GDP

Graph shows the share of employment in the three sectors

More than half of the workers in the country are working in the primary sector (mainly in agriculture), producing only about one sixth of the GDP.

In contrast to this, the secondary and tertiary sectors produce the rest of the produce whereas they employ less about half the people.

It means that more people are working in the agricultural sector than required. Therefore, if some people are removed from the agricultural sector, agricultural production will not be affected. In other words, This is the situation of underemployment

Disguised Unemployment :

In an activity when more people are engaged than required It is also known as underemployment/ disguised unemployment.

Ways to create more employment :

⇨ Government can provide irrigation facilities to farmers so that farmers harvest two or three crops in one year,thus more people can be employed.

⇨ Government can invest money in transportation and construct new roads , this will create employment for labours and taxi drivers.

⇨ Government can locate industries in semi-rural areas where a large number ofpeople can be employed in the factories .

⇨ Honey collection centers,Dal mill, vegetable and fruit processing units can be set up.

⇨ Only 52% children goto school , it more school are constructed, teachers are appointed. It can create more than 20 lakh jobs .

⇨ If tourism as a sector is improved it can generate more than 35 lakh jobs

Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA 2005).

This act was passed in the year 2005.

According to this Act, In rural areas, all those who are able to, and are in need of work are guaranteed 100 days of employment in a year by the government.

Under MGNREGA 2005:

In rural areas, all those who are able to, and are in need of work are guaranteed 100 days of employment in a year by the government.

If the government fails in its duty to provide employment, it will give unemployment allowances to the people.

Under this Act, will be given preference to works that help in increasing production from land in future.

This Act helps in providing income and livelihood to the people in the rural areas.

Organised and Unorganised sector

Organised sector : Organised sector enterprises are registered by government and have to follow all the rules .

Workers in the organized sector enjoy job security

People have fixed number of work hours in organized sector and if they work more they are paid overtime by the employer.

They enjoy benefits like paid leaves, payment during holidays, provident fund, gratuity, etc.

Organized sector Offices have good working conditions and safe environment.

Organized sector employees also get pension on retirement.

Example Government jobs , schools, banks etc.

Unorganised sector :

Unorganised sector enterprises are not registered with the government and rules and regulations are violated by them.

Workers don't have job security (can be fired anytime) and do not get pension when they retire.

People sometimes have to work in dangerous work environment without any safe equipment.

Here people don't have fixed work hours and nothing extra Ps paid for over time.

NO paid leave , holidays or leave due to sickness.

How to protect the unorganised sector

In Rural Areas - In Rural areas the unorganised sector mostly comprises of landless agricultural labourers, small and marginal farmers, sharecroppers and artisans etc.

Small and marginal farmers can be supported through adequate facility for timely delivery of seeds, agricultural inputs, credit, storage facilities and marketing outlets.

In urban Areas - In the urban areas, unorganised sector comprises mostly of workers in small-scale industry, casual workers in construction, trade and transport, street vendors, head load workers, garment makers, rag pickers etc.

labours and small industries can be supported with good labour laws and favourable policies for small industries .

Backward communities - A large no of workers from backward communities(SC,ST and OBC) work in unorganised sector.

They get irregular and low paid work. These workers also face social discrimination.

They can be protected if they don't face any discrimination based on their caste or background.

Protection and support to the unorganised sector workers is thus necessary for both economic and social development.

Classification of Economic activities on the basis of ownerships

Activities can be classified into two types:

Public sector:

→ The government owns most of the assets and provides all the services.

→The purpose of the public sector is not just to earn profits.

→ Example: Railways or post office

• Private sectors:

→ Ownership of assets and delivery of services is in the hands of private individuals or companies.

→ The purpose of the private sector is just to earn profits.

→ Example: Tata Iron and Steel Company Limited (TISCO) or Reliance Industries Limited (RIL).

✮ There are some facilities which needed by entire society but these facilities are not provided by the private sector at reasonable cost. Thus, the government provide these facilities available to all by heavy spending.

Fore Example : construction of roads, bridges, railways, harbours, generating electricity

✮ There are some activities, which the government has to support. The private sector may not continue their business without government support.

Fore Example :

Supplying electricity at a ppropriate rates to industries.

✮ The Government buys wheat and rice from farmers at a ‘fair price’.

There are a large number of such activities and it is the primary responsibility of the government to spend on them.

Fore Example : Health and Education

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'Classify the economy on the basis of ownership of enterprises.
Public Sector and Private Sector.
What was the most important sector of economic activities at the earliest stages of development?
Primary sector.
Name the sector which forms the base for all other products.
Primary sector
A' is a worker in a garment export industry of jaipur. He get fecilities
like health insurance, provident fund, medical leave, etc. In which sector 'A' working.
Organized sector
What does GDP stands for ?
GDP stands for Gross Domestic Product.
When we produce goods by exploiting natural resources, in which category of economic sector such activities come?
Primary sector
Where is the disguised employment found mostly?
The disguised employment is mostly found in the agriculture sector.
Mention any one feature of the unorganised sector.
Unorganised sector is not registered with the government.
ATM is an example of which sector?
Tertiary sector
Name the sector in which the natural products are changed into other forms.
Secondary sector
How many days of guaranteed employment are provided under National Rural Employment Guarantee Act, 2005?
100 days
On what basis are the sectors classified into public and private sector?
Basis of ownership of enterprises
In which sector are a large number of workers losing their jobs since 1990 ?
In the organised sector
TISCO and Reliance are owned by which sector?
TISCO and Reliance are owned by the private sector.
What are the main objectives of Private Sector?
To earn more and more profit.
What are the main objectives of Public Sector?
To provide basic facilities to all citizens with the purpose of social welfare.
Explain the main advantage of organised sector in respect of employment.
(i) Job security. (ii) Fixed working hours.
Name the sector which helps in the development of primary and secondary sectors.
Tertiary sector
Who has the ownership of the assets in the public sector?
The ownership of the assets in the public sector is with the Government.
Study the data given below in the table and answer the question by selecting the correct option. Which is the most important sector that provides maximum jobs to the people ?
Table Workers in different sectors (in millions)
Sector
Organized
Unorganized
Total
Primary
1
231
232
Secondary
41
74
115
Tertiary
40
88
128
Total
82
393
475
Primary sector specially unorganized
Which activity continued to prove largest employer between 1973 to 2013?
Agriculture
Who is measured/calculated GDP of India?
In India GDP is calculated by a central government ministry.
Contribution of which sector is largest in GDP?
Tertiary Sector
In which sector is Seasonal and Disguised Unemployment most prevalent in India?
Seasonal and disguised unemployment are most prevalent in the agriculture sector (Primary sector).
What is MGNREGA stands for? When was Mahatma Gandhi National Rural Employment Guarantee Act implemented?
MGNREGA is stands for Mahatma Gandhi National Rural Employment Guarantee Act. It Was 'implemented in 2005.
What does Underemployment mean?
In a situation of underemployment, people are apparently working but all of them are made to work less than their potential
Why is Tertiary sector also called the service sector?
These activities generate services rather than goods so the tertiary sector is also called the service sector.
Why is the tertiary sector becoming so important in India ? Explain the main reason.
(i) Highest in term of Total production.
(ii) Highest in term of Employment generation.
Explain the meaning of Disguised Unemployment
In an activity when more people are engaged than required it comes under disguised employment: It is also known as underemployment.
How is Public sector different from Private sector?
In the public sector, the government owns most of the assets and provides all the services whereas in the private sector, private individuals or corporations own the assets and provides all the services.
Suggest any three ways to save workers of unorganized sector from exploitation
(i) Provide social security to workers.
(ii) Provide support from the Labour Ministry.
(iii) Provide support for the conversion of unorganized sector to organized sector.
Give four reasons for the rising of the tertiary sector in India.
(i) Provision of basic services
(ii) Rise in income
(iii) Development of primary and secondary sectors
(iv) Development of ICT.
Suggest any three ways to improve the condition of the public sector at grassroot level
(i) More investment by government at grass root.
(ii) Establishment of more banks and cooperatives.
(iii) Infrastructural development at grass root.
(iv) Health and education profits at grass root.
‘There is need for protection and support for the workers in the unorganised sector.’’ Evaluate this statement.
(i) They are often exploited and not paid fair wages.
(ii) They get irregular and low paid work
(iii) lack of job security and no other benefits.
(iv) These workers also face social discrimination.
(v)They are vulnerable people so need economic/ social protection
“ ‘Primary sector’ was the most important sector of economic activity at initial stages of development.” Evaluate the statement
(i) Agriculture (Primary sector) was the primary source of livelihood for the majority of the population in the initial stages of development.
(ii) As the methods of farming change and agriculture sector began to prosper, it produce much more food than before.
(iii)At this stage, most of the goods produced were natural products from the primary sector and most people were also employed in this sector.
What is Gross Domestic Product (GDP)? Why are final goods and services included in the calculation of the Gross Domestic Product?
The total value of all final goods and services produced by three sectors in a country during a particular year is called GDP
Final goods and services are included in the calculation of the GDP because :-
(i) Only final goods and services are counted to avoid multiple counting.
(ii) The value of final goods already includes the value of all the intermediate goods that are used in making the final good.
Distinguish between ‘Organised’ and ‘Unorganised Sector’.
Organized Sector
(i) Employment are regular.
(ii) Rules and regulations are followed.
(iii) Paid leave, Provident fund gratuity given.
Unorganised Sector
(i) Employment are not regular.
(ii) Rules and regulations are not followed.
(iii) Paid leave, Provident fund not gratuity given.
Examine the benefits that are enjoyed by the people working in the organized sector.
Or Why do people prefer to work in the organized sector? Explain any three reasons.
Or Workers in the organized sector enjoy security of employment.” valuate the statement.
(i) Workers in the organized sector enjoy job security
(ii) People have fixed number of work hours in organized sector and if they work more they are paid overtime by the employer.
(iii)They enjoy benefits like paid leaves, payment during holidays, provident fund, gratuity, etc.
(iv) Organized sector Offices have good working conditions and safe environment.
(v) Organized sector employees also get pension on retirement.
Differentiate between secondary and tertiary sectors with examples
(i) Secondary sector covers activities in which natural products are changed into other forms. While tertiary sector includes the services that help in the development of primary and secondary sectors.
(ii) Secondary sector is related to manufacturing activities while tertiary sector is related to services.
(iii) Cotton textile is the example of secondary activity while banking is an example of tertiary sector
Suggest any two ways to create more employment in the rural sector.
(i) Irrigation facilities should be improved so that farmers harvest two or three crops in one year,thus more people can be employed.
(ii) Government can invest money in transportation and construct roads , this will create employment for labours and taxi drivers.
(iii) Honey collection centers or vegetable and fruit processing units should be set up.
(iv) Government can locate industries near rural areas where a large number ofpeople can be employed in the factories.
“All the services of the ‘service sector’ are not growing equally well.”
Evaluate the statement.
(i) Service section in India has different kinds of people in service sector.
(ii) At one end there are a limited number of services that employ highly skilled and educated workers.
(iii) At the other end, there are a very large number of services engaged in services such as small shopkeepers, repair persons, transport persons etc.
(iv) These people barely manage to earn a living in these services and yet they perform these services because there is no alternative work opportunity available for them.
‘‘Activities in the private sector are guided by the main motive to earn profit.’’ Evaluate this statement
(i) Ownership of assets and delivery of services is in the hands of private individuals or companies.
(ii) The purpose of the private sector is just to earn profits.
(iii) The private sector Work according to price mechanism
(iv) To get services from private sector we have to pay money to these individuals and companies
(v) Tata Iron and Steel Company Limited (TISCO) or Reliance industries Limited (RIL) are privately owned
“Tertiary sector activities help in the development of the primary and secondary sectors.” Evaluate the statement
(i)The tertiary sector provides expertise and financial services to the primary and secondary sectors.
(ii)These activities, by themselves do not produce a goods but they are supported the production process.
(iii)Transport, Storage, Communication, Banking, Trade are some example of services which connect the primary and secondary sectors.
(iv) The tertiary sector activities like advertising and marketing help in promoting and showcasing the products and services of the primary and secondary sectors.
Why is NREGA also called the Right to work? Explain the objectives of National Rural Employment Guarantee Act 2005.
Because this Act guarantees 100 days of employment in a year to all those who are able to work.
Main objectives of the NREGA
In rural areas, all those who are able to, and are in need of work are guaranteed 100 days of employment in a year by the government.
If the government fails in its duty to provide employment, it will give unemployment allowances to the people.
Under this Act, will be given preference to works that help in increasing production from land in future.
How primary, secondary and tertiary sectors are dependent on each other? Explain.
(i) Primary sector activities produces goods by exploiting natural resources and provide raw material to manufacturing(secondary) sector
(ii) Secondary sector change the raw material to final goods which are helpful to primary and tertiary sectors (machines, tools, etc.)
(iii). Tertiary sector provides services to primary and secondary sector.
Tertiary sectors do not production but they are support for the production process
Cotton crop → cotton ( Agricuture, primary sector)
Cotton → textile industries (manufacturing, secondary sector)
Textile → market (Transportation,Tertiary sector)
Why is ‘Tertiary Sector’ becoming important in India? Explain.
Examine the rising importance of the tertiary sector in India.
(i) The tertiary sector provides basic services like public transportation, medical care, electricity, banking, post office, etc
(ii) The development of agriculture and industry leads to the development of services such as transport, trade etc.
(iii) As income levels rise, certain sections of people start demanding many more services like eating out, tourism, shopping etc.These services are part of tertiary sector.
(iv) Over the past decade, some new services based on information and communication technology have become important and essential.
(v) Tertiary sector creates employment even for uneducated and unskilled
workers.
Compare the employment conditions prevailing in the organized and unorganized Sector.
(i) Organized sectors are registered by the government while unorganized sectors are not registered.
(ii) In organized sector rules and regulation are followed while though there are rules and regulation for unorganized sector they are not followed.
(iii) Workers in organized sector enjoy security of job while in unorganized sector there is no security of job.
(iv) In organized sector there is fixed hours of work and If a worker works for more time he get overtime payment but in unorganized sector it depends on management.
(v) In organized sector there are several benefits like Provident fund, paid leave, grauatiy etc. which are not covered in the unorganized Sector.
Explain the contribution of Public Sector in the economic development of a nation
(i) In the public sector the government owns most of the assets and provide all the services.
(ii) Railways and post office are examples of public sector, which provides maximum employment and service.
(iii) The purpose of the public sector is not just to earn profit but to provide services to all.
(iv) Public sector provides subsidies to many business units and it helps in the development of industries.
(v) Public sector provides many services which one needs as a whole.
Differentiate between Primary and Secondary sectors.
Primary Sector
(i) Primary sector includes the activities in which goods is produced by directly using natural resources
(ii) It is also known as Agriculture and related sector.
(iii) It provides the raw material to the secondary sector.
(iv) For example, agriculture, dairy, fishing, forestry etc.
Secondary sector
(i) Secondary sector includes the activities in which natural products
are changed into other forms through manufacturing.
(ii) It is also known as manufacturing or industrial sector.
(iii) It deals with production, manufacturing and processing of raw materials
(iv) For example, making sugar from sugarcane, using cotton to weave
cloth.

02. Sectors of The Indian Economy E

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Sector	Organized	Unorganized	Total
Primary	1	231	232
Secondary	41	74	115
Tertiary	40	88	128
Total	82	393	475