ITL Public School (2016-17)

Class : X Chapter: SECTORS OF THE INDIAN ECONOMY Subject: ECONOMICS

Instructions:
For 1 mark questions write one line and underline the Key word.
For 3 mark question give three points and each points should be framed into one proper sentence or two
For five mark questions at least five points are to be there again frame each of these points to be framed in to one
proper sentence or two.
For each questions value points are given from the content frame the sentences of your own:
Highlighted points are value points

In order to understand the functioning of any economy, we need to study various sectors that it comprises.
All around us we find people engaged in different types of activities.
CLASSIFICATION OF THE ECONOMIC SECTORS:
The classifications are based on
1.Nature of activity being performed.—Primary, Secondary & Tertiary
2.Working conditions of the workers/ type of employer —Organized & unorganized.
3. Who own the assets/ on the ownership basis.—Public & Private

PRIMARY SECTOR: 1.Activites undertaken by directly using natural resources.

2. Example—Agriculture, Mining, Fishing, Forestry, Dairy etc.
3.It is called primary sector because it forms the base for all other products that we subsequently make.
4. Since most of the natural products we get are from agriculture, dairy, forestry, fishing it is also called
Agriculture and related sector.
SECONDARY SECTOR:
It covers activities in which natural products are changed into other forms through ways of manufacturing
that we associate with industrial activity.
2. it is a next step after primary, where the product is not produced by nature but has to be made.
Some process of manufacturing is essential; it could be in a factory, a workshop or at home.

3. This sector adds utility to the primary products, so that they can be consumed.
4. Example: Using cotton fibre from plant, we spin yarn and weave cloth; using sugarcane as a raw
material we make sugar or gur; we convert earth into bricks.
Since this sector is associated with different kinds of industries, it is also called industrial sector.
TERTIARY SECTOR:
1.These are the activities that help in the development of the primary & secondary sector.
2. These activities by themselves do not produce goods but they are an aid and support to the production
process.
3.Example: a)Transportation--Goods that are produced in the primary sector need to be transported by
trucks or trains and then sold in the wholesale and retail shops;
b) Storage--at times it is necessary to store these products in godowns,which is also a service made
available.
c) Communication --talking to others on telephone;
d) Banking--borrowing money from the banks.
4. Since these activities are generate services rather than goods it is also called Service sector.

Counting of the various goods and services and know the total production in each sector

The value of goods and services is used rather than adding the actual numbers.

PRECAUTION

 Only ‘final goods and services’ counted while computing the total production because
Intermediate goods are used up in producing final goods and services.
 The value of final goods already includes the value of all the intermediate goods that are used in
making the final good.

GDP— 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. And sum of production in three sectors give Gross
Domestic Production—GDP of the country.
--It is the value of all final goods and services produced within the country during a particular year.
--GDP shows how big the economy is.

ESTIMATION OF GDP

 In India the central government ministry estimates GDP each year.

 This Ministry, with the help of various government departments of all the Indian states and union
territories, collects information relating to total volume of goods and services and their prices and
then estimates the GDP.

Historical change in the sectors over past 100 years: three stages

INITIAL STAGE

The Primary Sector was the most important sector of economic activity.
-As the methods of farming changed and agricultural sector began to prosper,
-it produced much more food than before and many people could take-up many other activities which led
to the increase in number of activities.
- At this stage most of the goods produced were natural products from the primary sector, hence most
people were employed in this sector.
SECOND STAGE: secondary sector became most important

 New methods of manufacturing were introduced, factories came up and started

expanding, and extra labor in the agriculture sector was now getting absorbed in the
manufacturing sector.
 Demand for cheap factory made goods increased, thus creating more expansion.
 Secondary sector gradually became the most important in total production and
employment.

THIRD STAGE:
 There has been a further shift from Secondary to Tertiary sector in the developed countries.
 Expansion of industries led to the demand for more services.
 The service sector has become the most important in terms of total production.
 Most of working people are also employed in the service sector.

Rising importance of tertiary sector in production:

1. Growth of basic services
Over past 30-40 years, government has invested hugely on development of schools,
hospitals, roads and railways
2. The development of agriculture and industry

The expansion of agriculture and industries has facilitated the growth of many services such
as storage, transport, banking and communication etc.
3. Increased incomes led to higher demand for specific services
With increasing incomes, there is more demand for tourism, hospitality, hotels, restaurants, shopping,
private schools, hospitals and training institutes.
4. Growth of Information Technology (IT) Sector.
ICT and its related services have increased our export incomes in services and have also gained
importance domestically.
Classify sectors of economy based on the employment activities.

Organized sector. Unorganized sector

1. It covers those enterprises or places of work It is characterized by small and scattered units
where the terms of employment are regular and where jobs are low-paid and often not regular.
people have assurance. _____________________________________
__________________________________ They are largely outside the control of the
2. They are registered by the government and government. There are rules and regulations but
have to follow its rules and regulations which are these are not followed.
given in various laws such as the Factories Act, ____________________________________
Minimum Wages Act, Payment of gratuity Act, There is no provision for overtime, paid leave,
Shops and Establishments Act etc holidays, leave due to sickness etc.
_____________________________________ _______________________________________
3. It has some formal processes and procedures. Employment is not secure. People can be asked
_____________________________________ to leave without any reason. When there is less
4.Workers in the organized sector work, such as during some seasons, some
enjoy security of employment. people may be asked to leave. A lot also
___________________________________ depends on the whims of the employer.
5. They are expected to work only a fixed number
of hours.
If they work more, they have to be paid overtime This sector includes a large
by the employer. number of people who are employed on their
________________________________________ own doing small jobs such as selling on the
8. They get paid leave, street or doing repair work. Similarly, farmers
payment during holidays, provident work on their own and hire laborers as and
Fund, gratuity etc. when they require.

They are supposed to get medical benefits and,

under the laws, the factory manager has to ensure
facilities like drinking water and a safe working
environment.
When they retire, these workers get
Pensions as well.
Classifying economic activities into sectors on the basis of ownership

PUBLIC SECTOR PRIVATE SECTOR

1. In the public sector, the government owns 1. In the private sector,
most of the assets and provides all the ownership of assets and delivery of
services services is in the hands of private
individuals or companies.
2. Railways or post office is an example
2. Tata Iron and Steel Company Limited
3.The purpose of the public sector is not just (TISCO) or Reliance Industries Limited
to earn profits. (RIL) are privately owned

4.Governmentundertake such 3. Activities in the private sector are guided

heavy spending to ensure that by the motive to earn profits.
various facilities are available for everyone.

NREGA

 It is called National Rural Employment Guarantee Act 2005 (NREGA 2005).

 Under NREGA 2005, all those who are able to, and are in need of, work have been 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.
 The types of work that would in future help to increase the production from land will be given
preference under the Act.

How to create more employment in the Agricultural sector

 Can increase employment by increasing the number of crops grown with proper irrigation
 Development of transport network can promote marketing, which will encourage farmers to
produce more.
 This will also generate more employment in the transport sector
 Provision of cheap agricultural credit to the farmers will improve.
 Identify, promote and locate industries and services in semi-rural areas where a large number of
people may be employed.
 Every state or region has potential for increasing the income and employment for people in that
area. It could be tourism, or regional craft industry, or new services like IT.