SECTORS OF THE INDIAN ECONOMY
ECONOMICS
CLASS X
1. **Primary Sector:**
- **Nature:** Involves extraction and collection of natural resources.
- **Examples:** Farming, forestry, hunting, fishing, mining.
- **Focus:** Initial production from natural resources.
2. **Secondary Sector:**
- **Nature:** Transformation of natural products into different forms through manufacturing.
- **Examples:** Manufacturing processes like spinning yarn, weaving cloth, making sugar.
- **Focus:** Industrial sector, follows primary sector in production chain.
3. **Tertiary Sector:**
- **Nature:** Activities supporting the development of primary and secondary sectors.
- **Examples:** Teachers, doctors, barbers, lawyers, call centres, software companies.
- **Focus:** Service sector, aids production but doesn't directly produce goods.
👊TEST YOUR KNOWLEDGE(TYK)📚
**1. What is the primary focus of the Secondary Sector?**
- A. Extraction and collection of natural resources
- B. Transformation of natural products through manufacturing
- C. Services supporting primary and secondary sectors
- D. Initial production from natural resources
**2. Which sector involves activities like farming, forestry, and fishing?**
- A. Primary Sector
- B. Secondary Sector
- C. Tertiary Sector
- D. Quaternary Sector
**3. In the Tertiary Sector, what is the primary focus of activities?**
- A. Manufacturing processes
- B. Extraction of natural resources
- C. Supporting the development of primary and secondary sectors
- D. Initial production from natural resources
*Answers:*
1. B. Transformation of natural products through manufacturing
2. A. Primary Sector
3. C. Supporting the development of primary and secondary sectors
**Summary:**
- **Primary Sector:** Initial extraction of natural resources.
- **Secondary Sector:** Transformation through manufacturing.
- **Tertiary Sector:** Support activities aiding primary and secondary sectors.
- Together, these sectors define distinct segments of the economy with different roles in production and development.
**Comparing the 3 Sectors:**
1. **Primary Sector:**
- **Nature:** Extraction of natural resources.
- **Contribution:** Initial stage in production.
- **Importance:** Foundation for other sectors.
2. **Secondary Sector:**
- **Nature:** Transformation through manufacturing.
- **Contribution:** Adds value to raw materials.
- **Importance:** Bridges primary and tertiary sectors.
3. **Tertiary Sector:**
- **Nature:** Service-oriented activities.
- **Contribution:** Supports and enhances primary and secondary sectors.
- **Importance:** Emerging as a dominant sector.
**Gross Domestic Product (GDP):**
- **Calculation:** Sum of production in all three sectors.
- **Indicator:** Reflects the value of final goods and services produced in a country.
- **Significance:** Measures the size and health of the economy.
**Tertiary Sector Dominance:**
- **Shift in 2013-14:** Tertiary sector surpasses primary in production.
- **Reasons for Importance:**
- Basic services crucial for all citizens.
- Development in agriculture and industry spurs service growth.
- Increasing income leads to higher demand for services.
- Emergence of new technology-based services.
👊TEST YOUR KNOWLEDGE(TYK)📚
**1. What does the Primary Sector contribute to in the production process?**
- a) Final goods
- b) Initial stage
- c) Value addition
**2. In the Secondary Sector, what does manufacturing primarily focus on?**
- a) Extraction
- b) Adding value to raw materials
- c) Service-oriented activities
**3. Why is the Tertiary Sector considered emerging and dominant?**
- a) Foundation for other sectors
- b) Supporting and enhancing primary and secondary sectors
- c) Transforming natural resources
*Answers:*
1. b) Initial stage
2. b) Adding value to raw materials
3. b) Supporting and enhancing primary and secondary sectors
**Summary:**
- **Primary Sector:** Foundation for production.
- **Secondary Sector:** Adds value and connects primary and tertiary.
- **Tertiary Sector:** Emerging as the largest, driven by diverse services.
- **GDP:** Sum of all three sectors' production, indicating economic health.
**Employment in India's Sectors:**
1. **Primary Sector:**
- **Workers:** More than half employed.
- **Mainly:** Agriculture.
- **Contribution to GDP:** Only a quarter.
2. **Secondary Sector:**
- **Workers:** Less than half compared to primary.
- **Contribution to GDP:** Produces four-fifths of the product.
3. **Tertiary Sector:**
- **Workers:** Less than half compared to primary.
- **Contribution to GDP:** Not specified.
👊TEST YOUR KNOWLEDGE(TYK)📚
**1. In the Primary Sector, what is the main area of employment?**
- a) Manufacturing
- b) Agriculture
- c) Service-oriented activities
**2. What percentage of workers is employed in the Secondary Sector compared to the Primary Sector?**
- a) More than half
- b) Less than half
- c) Equal
**3. How much does the Secondary Sector contribute to the GDP in terms of production?**
- a) One-fourth
- b) Four-fifths
- c) Not specified
*Answers:*
1. b) Agriculture
2. b) Less than half
3. b) Four-fifths
**Summary:**
- **Primary Sector:** Employs over half but contributes only a quarter to GDP, mainly in agriculture.
- **Secondary Sector:** Employs less than half but produces four-fifths of the product.
- **Tertiary Sector:** Employed less than primary but its GDP contribution not specified.
- **Overall Pattern:** Majority employed in the primary sector, while secondary dominates in production, showcasing the diverse economic landscape in India.
**Creating Employment Opportunities:**
1. **Identifying Potential Areas:**
- **Strategy:** Locate industries and services in semi-rural areas.
- **Potential Sectors:** Tourism, regional craft industry, IT services.
2. **Utilizing Regional Potential:**
- **Approach:** Every state or region has income and employment potential.
- **Diverse Sectors:** Explore tourism, craft, and new services like IT.
3. **Education Sector Impact:**
- **Study Findings:** Planning Commission estimates 20 lakh jobs potential in the education sector.
- **Opportunities:** Promote and enhance educational services.
4. **Right to Work Legislation:**
- **Implementation:** Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005.
- **Coverage:** Applicable in about 625 districts.
- **Guarantee:** 100 days of employment per year for those in need in rural areas.
- **Government Accountability:** Failsafe with unemployment allowances if employment not provided.
👊TEST YOUR KNOWLEDGE(TYK)📚
**1. What is the suggested strategy for identifying potential areas for economic development?**
- a) Concentrate industries in urban areas
- b) Locate industries and services in semi-rural areas
- c) Promote only agricultural activities
**2. According to the Planning Commission, how many jobs are estimated to be potential in the education sector?**
- a) 2 lakh
- b) 10 lakh
- c) 20 lakh
**3. Which legislation guarantees 100 days of employment per year for those in need in rural areas?**
- a) Industrial Policy
- b) Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005
- c) Right to Education Act
*Answers:*
1. b) Locate industries and services in semi-rural areas
2. c) 20 lakh
3. b) Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005
**Summary:**
- **Diversifying Sectors:** Identify and promote industries in semi-rural areas.
- **Regional Focus:** Leverage regional potential in tourism, crafts, and IT services.
- **Education Sector Impact:** Significant job creation potential.
- **Legislative Measures:** MGNREGA 2005 ensures the Right to Work, providing guaranteed employment and accountability.
**Division of Sectors: Organised vs. Unorganised**
1. **Organised Sector:**
- **Employment Terms:** Fixed and regular.
- **Control:** Registered and follows government rules (Factories Act, Minimum Wages Act, etc.).
- **Job Nature:** Regular with fixed working hours.
- **Security:** Employment is secure.
- **Benefits:** Paid leave, holidays, provident fund, gratuity, medical benefits, pensions.
- **Examples:** Government employees, registered industrial workers, Anganwadi workers.
2. **Unorganised Sector:**
- **Characteristics:** Small, scattered units outside government control.
- **Registration:** Not registered, rules often not followed.
- **Job Nature:** Low-paid, irregular jobs.
- **Security:** Employment not secure; can be terminated without reason.
- **Benefits:** No provision for overtime, paid leave, holidays, medical benefits, pensions.
- **Examples:** Shopkeeping, farming, domestic work, laboring, rickshaw pulling.
👊TEST YOUR KNOWLEDGE(TYK)📚
**1. What is a characteristic of the Organised Sector regarding employment terms?**
- a) Irregular and unpredictable
- b) Fixed and regular
- c) Temporary and contractual
**2. In the Unorganised Sector, what is the characteristic related to job nature?**
- a) Regular with fixed working hours
- b) Low-paid, irregular jobs
- c) Fixed and secure jobs
**3. Which of the following benefits is typically associated with the Organised Sector?**
- a) No provision for overtime
- b) Paid leave, holidays, medical benefits
- c) Termination without reason
*Answers:*
1. b) Fixed and regular
2. b) Low-paid, irregular jobs
3. b) Paid leave, holidays, medical benefits
**Summary:**
- **Organised Sector:** Regular, secure jobs with government-regulated benefits.
- **Unorganised Sector:** Small, unregulated units with low-paid, insecure jobs and minimal benefits.
**Protecting Workers in Unorganised Sector:**
1. **Minimum Wage and Working Hours:**
- **Government Intervention:** Set minimum wage rates and working hour standards.
2. **Financial Support for Self-Employed:**
- **Government Initiative:** Provide inexpensive loans to self-employed individuals.
3. **Affordable Basic Services:**
- **Government Provision:** Offer low-cost and accessible education, health, and food services.
4. **New Laws for Workers' Rights:**
- **Government Legislation:** Frame laws with provisions for overtime, paid leave, and sickness leave.
👊TEST YOUR KNOWLEDGE(TYK)📚
**1. What does the government primarily regulate concerning Minimum Wage and Working Hours?**
- a) Maximum wage rates
- b) Working hour flexibility
- c) Set minimum wage rates and working hour standards
**2. How does the government support the self-employed according to the text?**
- a) Providing free healthcare
- b) Offering inexpensive loans
- c) Setting up government-run businesses
**3. In the context of Affordable Basic Services, what does the government aim to provide?**
- a) High-cost luxury services
- b) Low-cost and accessible education, health, and food services
- c) Expensive loans for entrepreneurs
*Answers:*
1. c) Set minimum wage rates and working hour standards
2. b) Offering inexpensive loans
3. b) Low-cost and accessible education, health, and food services
**Summary:**
To safeguard workers in the unorganised sector, the government can implement measures such as setting minimum wage rates, providing financial support, offering affordable basic services, and enacting new laws to ensure workers' rights like overtime, paid leave, and sickness leave.
**Public Sector vs. Private Sector:**
1. **Public Sector:**
- **Ownership:** Government-owned assets.
- **Services:** Government provides all services.
- **Examples:** Railways, post office.
- **Purpose:** Main aim is public welfare, not just profit.
2. **Private Sector:**
- **Ownership:** Private individuals or companies.
- **Services:** Privately owned entities deliver services.
- **Examples:** Tata Iron and Steel Company (TISCO), Reliance Industries Limited (RIL).
- **Purpose:** Guided by the motive to earn profits.
👊TEST YOUR KNOWLEDGE(TYK)📚
**1. What characterizes the ownership of assets in the Public Sector?**
- a) Owned by private individuals
- b) Jointly owned by government and private entities
- c) Government-owned assets
**2. In the Private Sector, what is the main motive guiding entities?**
- a) Social welfare
- b) Profit
- c) Public services
**3. Which sector's main aim is described as public welfare rather than profit?**
- a) Private Sector
- b) Public Sector
- c) Joint Sector
*Answers:*
1. c) Government-owned assets
2. b) Profit
3. b) Public Sector
**Summary:**
- **Public Sector:** Government-owned, focused on public welfare.
- **Private Sector:** Privately owned, driven by profit motive.
**Responsibilities of Government:**
1. **Revenue Generation:**
- **Government Task:** Raises money through taxes and other means.
2. **Infrastructure Development:**
- **Government Duty:** Undertakes heavy spending on construction of roads, bridges, railways, harbors, electricity generation, dams for irrigation, etc.
- **Accessibility:** Ensures these facilities are available to everyone.
3. **Supporting Private Sector:**
- **Government Role:** Supports activities to encourage the private sector.
4. **Fair Price Mechanism:**
- **Government Initiative:** Buys from farmers at a fair price, sells at lower prices to consumers through ration shops.
- **Objective:** Supports both farmers and consumers.
5. **Education and Healthcare:**
- **Government Duties:** Runs schools, provides quality education, and ensures healthcare facilities for all.
6. **Human Development:**
- **Government Focus:** Addresses aspects of human development like safe drinking water, housing for the poor, food and nutrition.
- **Inclusivity:** Prioritizes the well-being of the poorest and most neglected regions.
👊TEST YOUR KNOWLEDGE(TYK)📚
**1. What is one of the government's primary tasks in terms of revenue?**
- a) Generating profits
- b) Raising money through taxes
- c) Encouraging private investments
**2. In infrastructure development, what is the government's role?**
- a) Limited involvement
- b) Ensuring accessibility
- c) Focusing on luxury projects
**3. What is the objective of the Fair Price Mechanism?**
- a) Maximizing profits for farmers
- b) Selling products at higher prices
- c) Supporting both farmers and consumers
**4. In the context of education and healthcare, what are government duties?**
- a) Encouraging private institutions
- b) Providing quality education and healthcare facilities
- c) Promoting profit-driven healthcare
**5. What does the government focus on in terms of human development?**
- a) Luxury amenities for the wealthy
- b) Addressing human development aspects
- c) Prioritizing urban development
*Answers:*
1. b) Raising money through taxes
2. b) Ensuring accessibility
3. c) Supporting both farmers and consumers
4. b) Providing quality education and healthcare facilities
5. b) Addressing human development aspects
**Summary:**
The government's responsibilities include generating revenue, developing infrastructure, supporting the private sector, implementing fair price mechanisms, ensuring education and healthcare, and focusing on human development to improve the well-being of all citizens.
👇PRACTICE MAKES YOU PERFECT💯
Q1: Fill in the blanks using the correct option given in the bracket:
(i) Employment in the service sector _________ increased to the same extent as production. (has / has not)
(ii) Workers in the _________ sector do not produce goods. (tertiary / agricultural)
(iii) Most of the workers in the _________ sector enjoy job security. (organised / unorganised)
(iv) A _________ proportion of labourers in India are working in the unorganised sector. (large / small)
(v) Cotton is a _________ product and cloth is a _________ product. (natural / manufactured)
(vi) The activities in primary, secondary and tertiary sectors are _________. (independent / interdependent)
Answer:
(i) Employment in the service sector has not increased to the same extent as production.
(ii) Workers in the tertiary sector do not produce goods.
(iii) Most of the workers in the organised sector enjoy job security.
(iv) A large proportion of labourers in India are working in the unorganised sector.
(v) Cotton is a natural product and cloth is a manufactured product.
(vi) The activities in primary, secondary and tertiary sectors are interdependent.
Very Short Answer Type Questions [1 Mark]
Question 1.
Who has the ownership of the assets in the public sector?
Answer:
The government of a country has the ownership of the assets in the public sector.
Question 2.
What does GDP stand for?
Answer:
GDP stands for Gross Domestic Product. It is the value of all the final goods and services that are produced in a country within a particular year.
Question 3.
Mention one feature of unorganized sector
Answer:
The following are the features of the unorganized sector.
- Working hours are more and harsh.
- No job security is there.
- No employment benefits are given.
- Employees work in poor working conditions
Question 4.
Where is the disguised employment found mostly?
Answer:
Disguised employment is mostly found in the rural areas.
Question 5.
In which sector are a large number of workers losing their jobs in, since 1990?
Answer:
Since 1990, a large number of workers are losing their jobs in primary sector.
Short Answer Type Questions [3 Marks]
Question 1.
What constitutes the unorganized sector in urban areas? Why do workers in this area need protection?
Answer:
- In the urban areas, unorganised sector comprises mainly small-scale industry, casual workers in construction, trade and transport, street vendors, head-load workers, garment makers, ragpickers, etc.
- All these workers constitute unorganized sector in urban areas.
- A majority of workers in the unorganized sector are from scheduled castes scheduled tribes and backward communities.
- Workers in unorganised sector urban areas need protection because, besides getting the irregular and low- paid work, these workers also face social discrimination.
- They are looked down upon by the people in urban areas.
- Protection and support to the unorganised sector workers is thus necessary for both economic and social development.
Question 2.
Explain the working condition of workers in unorganized sector.
Answer:
- The following points show the working condition of workers in unorganized sector.
- The unorganised sector is characterised by small and scattered units, which are largely outside the control of the government.
- There are rules and regulations but these are not followed.
- Jobs here are low-paid and often not regular.
- The condition of workers in unorganized sector is not good or stable.
- There is no provision for overtime, paid leave, holidays, leave due to sickness, etc.
- Employment is not secure. People can be asked to leave without any reason. When there is less work, such as during some seasons, some’people may be asked to leave.
- A lot also depend on the whims of the employer.
- This sector includes a large number of people who are employed on their own, doing small jobs such as selling things on the street or doing repair work.
Question 3.
Why has the entire tertiary sector not grown in importance? Explain.
Answer:
The entire tertiary sector has not grown in importance because of the following reasons:
- Peculiarity of skills in the tertiary sector: Highly-educated and skilled professionals only are able to get employment. Other engage themselves in low-paid jobs.
- High incomes: Higher incomes are available for the top-level administrative jobs only. Low-paid jobs do not attract employment.
- No job security: Large number of workers are casual with irregular and low incomes barely to sustain livelihoods.
Question 4.
Why does disguised employment not help in productivity of a country? Explain with the help of an example.
Answer:
- Disguised employment means that more number of people employed in an economic activity than required.
- If these extra people are removed, there will be no effect on the production.
- They seem to be employed but actually they are not. The workforce is not being used to its potential.
- They divide the work but do not increase production.
- They do not help in increasing the productivity as their efforts are not economic.
- For example, in the rural areas, the entire family is engaged in the production of crops on the same piece of land.
- If there are ten people in the family, three people can manage the production.
- If the extra seven people ard removed the productivity will be the same.
- They seem to be making no contribution.
- Hence, it is truly stated that disguised or hidden employment does not help in productivity of a country.
Question 5.
Explain how public sector contributes to the economic development of nation.
Answer:
- Creation of infrastructure: Public sector promotes the economic development since it brings about creation and expansion of infrastructure and the infrastructure plays an important role in economic development.
- Generates financial resources: Public Sector provides for various employment opportunities since major part of public sector depends on manpower and higher employment opportunities implies higher generation of financial resources for economic development.
- Contributes to HDI: Public sector majorly contributes to the Human Development Index since health and education industries come under the purview of public sector.
- Availability of goods: Public sector helps in availability of goods at moderate rates, which helps in maintaining financial security and thus helps in economic development.
- Provides encouragement: It provides encouragement to small, medium and cottage production units. It also strives for the creation of welfare state.
Long Answer Type Questions [5 Marks]
Question 1.
Give five reasons for the rising importance of the tertiary sector in production
Answer:
Over the forty years, between 1970 and 71, and 2010 and 11, while production in all the three sectors has increased, it has increased the most in the tertiary sector. The following factors are making the tertiary sector important in India.
- Basic services: In any country, several services such as hospitals, educational institutions, post and telegraph services, police stations, courts, village administrative offices, municipal corporations, defence, transport, banks and insurance companies, are required. These can be considered as basic services. In a developing country, the government has to take responsibility for the provision of these services.
- Development of primary and secondary sector: The development of agriculture and industry leads to the development of services such as transport, trade and storage. The greater the development of the primary and secondary sectors, the more would be the demand for such services.
- Rise in income levels: As income levels rise, certain sections of people start demanding many more services like eating out, tourism, shopping, private hospitals, private schools and professional training centres. We can see this change quite sharply in cities, especially in big cities.
- Rise in information technology: Over the past decade or so, certain new services, such as those based on information and communication technology have become important and essential. The production of these services has been rising rapidly.
- Globalization: Due to globalization, people have become aware of new services and activities, and communication because of which the tertiary sector has gained importance.
Question 2.
Explain with suitable examples how public sector contributes to the economic development of the nation.
Answer:
- Creation of infrastructure: Public sector promotes the economic development since it brings about creation and expansion of infrastructure and the infrastructure plays an important role in economic development.
- Generates financial resources: Public Sector provides for various employment opportunities since major part of public sector depends on fhanpower and higher employment opportunities implies higher generation of financial resources for economic development.
- Contributes to HDI: Public sector majorly contributes to the Human Development Index since health and education industries come under the purview of public sector.
- Availability of goods: Public sector helps in availability of goods at moderate rates, which helps in maintaining financial security and thus helps in economic development.
- Provides encouragement: It provides encouragement to small, medium and cottage production units. It also strives for the creation of welfare state.
- Eligibility: Any Indian citizen who is above the age of 18 years and resides in the rural area is entitled to apply for work.
- Distance: Work is to be provided by the government in a radius of 5 km of the applicant if possible and in any case within the block. If the work provided is beyond 5 km of distance, extra travel allowance is to be paid.
- Wages: Workers under NREGA are entitled to the statutory minimum wage applicable to agricultural labourers in the state, until and unless the central government notifies a different wage. In whichever case, the minimum wage cannot go below ? 60 per day.
- Timely payment: Workers are to be paid weekly or in any case not later than a fortnight. Payment of wages should be made directly to the person concerned on pre-announced dates.
- Entitlement: Any applicant is entitled to work within 15 days, for as many as he/she applied, subject to a limitation of 100 days per year per household.
Question 4.
In what ways can employment be increased in urban areas?
Answer:
Urban unemployment is characterised by the existence of both open unemployment, which in turn is an offshoot of rural unemployment itself, and the educated unemployment. Main causes of urban unemployment are insufficient economic development, defective system of education and slow growth of industrialisation.
Urban unemployment can be increased in the following ways.
- Reform of the educational system to make it vocational at the school stage.
- Concrete action will have to be taken to promote decentralisation and dispersal of industrial activity.
- Promotion of small-scale industries and encouragement to self-employment by banks.
- Develop techniques of production that can be taken up with low capital intensity.
- Provision of infrastructure like railways, roads, hospitals and schools which will not only create employment opportunities but also contribute to development.
Question 5.
How far is it correct to say that several services which cannot be provided by private sector can be provided by the public sector? Explain.
Answer:
- A few examples of public sector activities are Indian Railways, water, electricity board and modes of transport.
- There are several necessities of common man, but it is not possible for the private sector to provide all these things at reasonable cost.
- For example, water and electricity are the basic needs of everyone.
- If the work of providing these is given to private sector then the latter can exploit this opportunity by selling the same at high rates.
- Therefore the supply of basic amenities is given to the government so that it provides these facilities to the people at low and affordable rates, ensuring the smooth and uninterrupted supply to the public.
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Nicely explained lesson!
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