SOCIAL SCIENCE - ECONOMICS - CHAPTER-2 - SECTORS OF THE INDIAN ECONOMY - Edited

SOCIAL SCIENCE - ECONOMICS
CHAPTER-2
SECTORS OF THE INDIAN ECONOMY
Sectors of Economic Activities and ways to create more employment
 All activities that give an income in return are called economic activities. For example,
people going to work in factories, banks, schools, etc.
 People are engaged in various economic activities of producing goods and services.
Economic activities can be classified into three sectors:
 Primary Sector: Goods which are produced by utilizing natural resources come under
the category of primary sector.
 Secondary Sector: The transformation of one good into another comes under the
category of secondary sector. For example: the transformation of sugarcane into sugar.
 Tertiary Sector: All service providers which help in the development of primary and
secondary sectors come under the category of the tertiary sector. For example, doctors,
teachers, lawyers, etc.
 Economic activities, though, are grouped into three different categories and are very
much interdependent.
 The various production activities in primary, secondary and tertiary sectors produce a
large number of goods and services and employ a large number of people.
 The value of final goods and services produced in each sector during a particular year
provides the total production of the sector for that year.
 More than half of the workers in the country are engaged in the primary sector, especially
in agriculture.
 The sum of production in all three sectors is known as the Gross Domestic Product
(GDP) of a country. The contribution of agriculture to the GDP is only one–fourth
whereas, the secondary and tertiary sector contributes three-fourth of the GDP.
 In the year 2013-14, the tertiary sector emerged as the largest producing sector in India
replacing the primary sector.
The tertiary sector is becoming very important in India due to several reasons:
 The government has taken responsibility for the provision of services such as hospitals,
educational institutions, post and telegraph services, etc.
 Agriculture and industry have developed which has ultimately resulted in the
development of services.
 As income levels rise in big cities, certain sections of people start demanding many more
services like eating out, tourism, shopping, private hospitals, etc.
 Over the past decade or so, certain new services such as those based on information and
communication technology have become important and essential.
 The service sector in India employs many different kinds of people like highly skilled and
educated workers on one side, and a very large number of workers engaged in services
such as small shopkeepers, repair persons, transport persons, etc., on the other side.
 Underemployment or disguised unemployment means more people engaged in a job than
needed.
 More employment can be created in a country like India by building more dams and
canals to provide water to the farmers, by providing cheap credit facilities and crop
insurance, by spending more money on transport and storage, technical training and by
providing cheap bank loans at cheaper interests.
 A study conducted by the erstwhile Planning Commission of India (now known as NITI
Aayog) estimates that nearly 20 lakh jobs can be created in the education sector alone.
 In our country, the Central Government made a law implementing the Right to Work in
200 districts and expanded to an additional 130 districts. It is called the National Rural
Employment Guarantee Act, 2005 (NREGA, 2005).
The objectives of implementing MGNREGA 2005 were :
 To give employment opportunities to the people who live in rural areas.

 To raise the standard of living of the people.
 To implement the right to work.
Division of Sectors in Terms of Organised & Unorganised and Public and Private sectors
On the basis of the nature of economic activities, there are two types of sectors:
 Organized Sector
 Unorganized Sector.
 Workers in the organized sector enjoy the security of employment. They are expected to
work only for a fixed number of hours.
 The unorganized sector is characterised by small and scattered units which are largely
outside the control of the government. Jobs here are low-paid and often not regular.
 In the urban areas, the unorganized sector comprises mainly workers in the small-scale
industry, casual workers in construction, trade and transport, etc.
 In an unorganised sector, jobs are not secure, workers are not paid a fair wage and
earnings are low. Thus, there is a need to protect and support the workers.
 In our country, the majority of workers from scheduled castes, tribes and backward
communities are working in the unorganised sector.
On the basis of ownership, economic activities can be classified into two sectors :
 Public Sector
 Private Sector
 In the public sector, the government owns most of the assets and provides all the services,
e.g., railways or post offices.
 In the private sector, ownership of assets and delivery of services is in the hands of
private individuals or companies, e.g., Tata Iron and Steel Company Limited (TISCO) or
Reliance Industries Limited (RIL).
 There are a large number of activities which are the primary responsibility of the
government. The government must spend on these activities.
 In India, nearly half of the children are malnourished and a quarter of them are critically
ill.
 Government needs to pay attention to the availability of safe drinking water, housing
facilities for the poor, food and nutrition, etc.
 Running proper schools and providing quality education, particularly elementary
education is the duty of the government.
Key Term
Service: A service is an 'act' or use for which a consumer, firm or government is willing to pay.
Key Facts
 Tertiary Sector contributes the most to the GDP of India. It accounts for 53.89% of the
Indian GDP by 2021.
 The chairman of NITI Aayog is the Prime Minister of India. The current chairman is Mr.
Narendra Modi.

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SOCIAL SCIENCE - ECONOMICS

SECTORS OF THE INDIAN ECONOMY

Sectors of Economic Activities and ways to create more employment

Economic activities can be classified into three sectors:

The objectives of implementing MGNREGA 2005 were :

 To give employment opportunities to the people who live in rural areas.

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