sectors of the indian economy

economic activities and its major sectors

the activities which are undertaken with the objective to earn money are called economic activities. some activities produce goods and some provide services. major sectors of the economic activities are as follows;

primary, secondary and tertiary sector (based on production of goods and services)

organised and unorganised sector (based on employment)

public and private sector (based on ownership)

primary sector

this sector of the economy involves conversion of natural resources into primary products. this includes agriculture, forestry, fishing, mining and extraction of oil

since most of the natural products are obtained from nature, it is also called agricultural and related sector

secondary sector

this sector covers activities in which natural products are converted into other forms through manufacturing. this manufacturing may take place in factories, workshops and at home. examples of products are yarn, sugar, gur

since this sector is associated with industries, it is also called industrial sector

tertiary sector

the activities which help in the development of primary and secondary sectors are covered in tertiary sector. these activities do not produce goods but provide services that support the production and manufacturing of goods, like transport, storage, communication, banking etc.

this sector also includes essential services like doctors, lawyers etc. as well as IT such as software industry, atm booths and call centers. hence, it is also called service sector

comparison of primary, secondary and tertiary sectors

the three sectors are compared on the basis of people working in them and amount of goods and services produced

types of goods and services

final goods and services: those goods and services which are directly consumed by consumers and are not meant for further production or processing

intermediate goods and services: those goods and services which are used for further production or processing

gross domestic product (GDP)

the GDP of a country is the sum of the value of all final goods and services produced in all the three sectors in a particular year

it shows the total production in a country

the task of estimating GDP in india is undertaken by the central government ministry

historical change in sectors

primary sector was the most important sector in the initial stages of development. with new methods of farming, more food was produced. thus, people started working in industries/ the secondary sector

this led to the start of different services like transport, banking, health, education etc. now, tertiary sector is the most important sector in terms of production and employment

rising importance of the tertiary sector

the reasons why tertiary sector has replaced the primary sector as the largest producing sector are;

demands for basic services (services that are required by all citizens) like hospitals, schools, postal services, insurance companies etc. have increased

greater development in primary and secondary sectors has induced demand for service sector growth like transport, trade, storage etc.

with the rise in income, certain services like tourism, shopping etc. (enhanced service sector) have seen an increase in demand

due to globalisation, certain new services like IT and communication technology have entered the indian market

disguised employment

more than half of the working population are engaged in primary activities like agriculture

therefore, more people work than actually needed so everyone works less than their capacity and also earns less. this is called disguised employment or underemployment

it also occurs in urban areas with casual workers like plumbers, painters, odd jobs craftsmen etc.

ways to create more employment in the agricultural sector

focus on bank credit: banks can provide loan to small farmers for buying materials needed for farming. this enable them to grow two or more crops and increase their earnings

generating employment: creating employment in construction of dams/ canals, rural roads, storage facilities etc.

focus on small scale industries: setting up small industries in semi-rural areas like mills, food processing industries etc.

improvement in education, health and tourism: creating jobs in these sectors. education sector has potential to generate 20 lakh jobs and while tourism has 35

NITI aayog

national institution for transforming india was formed on 1st january 2015 and aims to foster indias economic development

NREGA (2005)

national rural employment guarantee act (NREGA) was formed in 2005 and launched by PM on 2nd feb 2006. later, it changed its name to mahatma gandhi national rural employment guarantee act (MGNREGA). the main features of this scheme are

targets people suffering from poverty in rural areas

the scheme guarantees 100 days of wage employment in a year to every household in 625 districts of the country

the gram panchayat will register households and issue job cards to them

the act is also called right to work, because if the government fails in its duty to provide employment, it will give unemployment allowances to the people

organised sector

it covers those enterprises where workers are given regular employment

the enterprises are registered by the government and follow the rules and regulations (factories act, minimum wages act, etc.)

workers have job security, work for fixed number of hours, and have benefits like medical leaves, paid holidays etc. the management ensures good working condition like clean drinking water and safe working environment

unorganised sector

this sector is characterised by small and scattered units

they are unregistered and do not follow governmental rules and regulations

workers get lower wages and do not have benefits like paid holidays and health insurance. working conditions are poor and there is no job security so employment is irregular

protection of workers in the unorganised sector

there are many groups of vulnerable people who need protection in the unorganised sector. they are often exploited, paid low, and face social discrimination. they can be protected in the following ways;

rural areas: farmers can be supported through adequate facility for timely delivery of seeds, agricultural inputs, credit and marketing outlets

urban areas: the small scale industries can be protected by government’s support for procuring raw materials and marketing of output

public sector

in the public sector, government owns most of the assets and provides all the services. it is also called state sector or government sector. its roles are as follows;

= developing infrastructure: developing heavy industries, buildings, bridges, roads etc.

= encouraging private sector to open industries and generate employment

= support farmers by buying food grains at a fair price and support poor people by supplying food grains at low price in ration shiops

= provide healthcare facilities and education in backward/ rural areas

= dealing with problems of malnutrition, high IMR, unsafe drinking water etc.