Sectors of the Indian Economy – Key Vocabulary

These vocabulary flashcards cover the crucial terms, classifications, and concepts introduced in the Chapter “Sectors of the Indian Economy,” enabling quick revision of sectoral divisions, measurement indicators, employment patterns, legal frameworks, and government programmes discussed in the lecture notes.

Economy

The system through which a country produces, distributes, and consumes goods and services.

Sector (Economic)

A broad grouping of economic activities sharing a common characteristic, such as nature of activity or ownership.

Primary Sector

Sector that extracts or harvests natural resources—agriculture, mining, fishing, forestry; also called the agriculture and related sector.

Secondary Sector

Sector that transforms raw materials into finished or semi-finished goods through manufacturing; also known as the industrial sector.

Tertiary Sector

Sector that provides services—transport, banking, education, IT—supporting primary and secondary production; called the service sector.

Organised Sector

Enterprises with formal registration, regular rules, job security and benefits (e.g., factories, registered offices).

Unorganised Sector

Small, scattered units outside formal regulation, offering irregular, low-paid, insecure work (e.g., street vendors, casual labour).

Public Sector

Part of the economy owned and run by government for public welfare (e.g., Railways, Post Office).

Private Sector

Enterprises owned by individuals or companies, driven by profit motive (e.g., TISCO, Reliance).

Gross Domestic Product (GDP)

Total value of all final goods and services produced within a country in one year; measures the size of an economy.

Gross Value Added (GVA)

Contribution of each sector to the economy after adjusting GDP for taxes and subsidies.

Final Goods

Goods and services consumed by end-users; counted in GDP to avoid double counting.

Intermediate Goods

Inputs used up in the production of final goods (e.g., flour for biscuits); not separately added to GDP.

Employment

The state of having paid work; measured to analyze labour distribution across sectors.

Underemployment

Situation where workers are employed below their skill or time potential; includes disguised unemployment.

Disguised Unemployment

Form of underemployment in which more workers are engaged than required, so some contribute zero marginal productivity.

Right to Work

Guarantee under MGNREGA 2005 that every rural adult who demands work must receive 100 days of employment a year.

MGNREGA 2005

Mahatma Gandhi National Rural Employment Guarantee Act providing rural households with wage employment and, if unmet, unemployment allowance.

Basic Services

Essential public services like health, education, policing that governments must provide for development.

Interdependence of Sectors

The way primary, secondary and tertiary sectors rely on each other for inputs, markets, and services.

Value of Output

Market price multiplied by quantity produced; used to compare production across diverse goods.

Economic Survey

Annual Government of India report providing data on GVA, GDP, and other economic indicators.

NSO (Formerly NSSO)

National Statistical Office; conducts surveys on employment and other socio-economic data.

Factories Act

Indian law regulating working conditions, safety and welfare in factories—applies to organised sector.

Minimum Wages Act

Law that sets legally enforceable floor wages for different types of work in India.

Provident Fund

Retirement savings benefit in organised employment where employer and employee contribute regularly.

Paid Leave

Legally mandated time off work with salary, typical of organised-sector jobs.

Overtime Pay

Higher wage rate paid to organised-sector workers for hours worked beyond the normal schedule.

Service Sector Boom

Rapid growth of tertiary activities in India since 1977–78, making it the largest contributor to GVA.

Agricultural Credit

Loans provided to farmers for seeds, fertilisers, equipment; crucial for raising farm productivity.

NITI Aayog

Policy think-tank of the Government of India (replaced Planning Commission); conducts research on employment, growth.

Disinvestment

Sale of public-sector equity to private investors; affects ownership classification of enterprises.