Sectors of the Indian Economy

Explain the different sectors of economic activities.

• Primary - sector includes the activities involving the production of goods. Cotton , milk , minerals and ores are the outputs of this sector. It is also known as the agricultural sector.

• Secondary - sector includes activities in which the natural products are changed into finished good through manufacturing. Cotton fibre , sugar etc are the outputs of this sector. It is also known as the industrial or manufacturing sector.

• Tertiary Sector - includes the activities that help in development of the primary and secondary sector. This sector generates services rather than goods. It is also called service sector.

Define GDP

The sum value if all final goods and services produced in all three sectors in a particular year is called the Gross Domestic Product. It can be calculated by counting either the final value of goods or adding up the individual values of the intermediary products.

What are the historical trends and changes with development in the distribution of economic activities between the different sectors?

1. Primary sector is the most important in the initial stages of development. With growth in the economy the dependance on farming reduces allowing for people to move into the other sectors. New methods of farming and machinery , more food was produced with lesser labour allowing people to move onto other sectors for work.

2. With industrialisation , there is a growth in the manufacturing sector , large number of factories were started leading to growth of secondary sector.

3. Further , there is a shift from secondary to teritiary sectors in more developed economies.

4. In india , this linear pattern was not followed due to boom in information technology leading to large growth of the service sector due to large employed and skilled youth and government focus and policies.

What are the reasons for the growth of the Tertiary sector

1. In developing and developed , the government has to mostly provide all the necessary services like police , healthcare , education etc. leading to growing employment in the service sector.

2. With the growth of primary and secondary sectors there is an increased demand for services like transport , storage and banking.

3. Increase in peoples income leads to increase in demands for other services like tourism , entertainment , private hospitals , private schools , shopping malls etc.

4. Growing importance of services like information technology also lead to growth of the tertiary sector.

5. However not all parts of service sector is growing equally , a large number of workers who are engaged in professions like shopkeeping , repairs , electricians and plumbers hardly manage to earn a living and this part of the service sector has not experienced the same amount of growth.

What is the current situation of employment in india?

1. In India since it's independence there has been a shift with the majority of the economic output being produced by the tertiary sector. Despite this the primary sector remains the largest employer.

2. This is because there are not enough jobs being created in the secondary and tertiary sector. Also a lack of skilled and educated workers worsens the situation.

3. More than half of the working population in India is engaged in the primary sector. The employment in this sector is much more than the output that is needed.

4. In agriculture sector , everyone does some work but nobody is fully employed and the removal of some amount of the workforce does not affect the output or production. This situation is known as underemployment or disguised unemployment.

What are the steps that can be taken to generate more employment in the country?

The following measures and steps can be taken to generate more employment in the country :-

1. Banks can provide loans to small farmers at reasonable interest rates allowing the farmers to buy seeds , new land and machinery to improve their output.

2. New construction projects liked dams , highways , parks etc. can be started by the government so that it can create employment in the form of construction jobs and at the same time develop the countries infrastructure.

3. Government should set up small scale industries in the rural and semi-rural areas. For example clothing mills , rice and all mills , honey collection centres and cold storage can be started allowing for employment opportunities with minimum skill requirements.

4. Creating more jobs in the health and education sectors by building new hospitals and schools and hiring staff properly for the existing ones.

5. There is also potential in generating jobs in tourism by developing tourist sites and starting activities like food stalls , boating and other activities to generate employment and income.

What is MGNREGA?

Mahatma Gandhi National Rural Employment Guarantee Act

1. The scheme guarantees 100 days of employment to people in rural areas who are in need of and capable of working.

2. The government guarantees Right to Work in about 625 districts in our country , if the government fails to provide employment , they are required to give unemployment allowances to the people.

Explain Divison Based on Organisation

Organised Sector

1. People are employed while. following proper procedure and processes with a formal contract guaranteeing regular employment.

2. The have fixed salary and have to work only for a fixed number of hours.

3. They get benefits like paid holidays , gratuity , provident fund , medical insurance etc.

4. They are registered by the government and follow the rules and regulation laid out by them along with the acts like Factories Act , Minimum Wages Act , Payment of Gratuity Act , Shop and Establishment Act etc.

Unorganised Sector

1. Characterised by small and scattered workforce who are not registered by the government and hence do not have legal protection or formal contracts.

2. They are paid daily wages and are only paid for the days the work.

3. They do not have the benefits like in the organised sector and their employment is not secure, they can be dismissed at any time based on the employers wishes.

4. This also includes many self employed people working who have their own small scale industries or provide services like repair , house help , plumbing etc.

How can we protect a workforce in the unorganised sector.

1. In rural areas , the farmers can be supported by various means like minimum support price , providing adequate supply of seeds , outlets for sales and marketing and bank credits.

2. In the urban areas , the small scale industries can be supported by the government by providing support for acquiring raw materials and capital , banking credit and outlets for marketing and sales.

Explain the division of sectors based on ownership

• Public Sector - the majority of the assets in the public sector is owned by the government with the aim of providing large scale services at a reasonable cost. Examples are the Indian Postal Service , Indian Railways etc.

• Private Sector - in the private sector majority of the assets is owned by individuals and private companies , they operate with the aim of making a profit. Examples are TISCO and Reliance Industries

What is the role of the public sector?

Role of the Public Sectors

1. The government provides services that the private sector is unable to provide at a reasonable cost like construction of roads , bridges , railways , generation of electricity etc. This is due to the huge capital investment and small to none profit margins , it must be provided by the government.

2. The government subsides commodities in order to help the private sector to continue their production or business while maintaining profits. For example selling electricity at the cost of generation , will massively increase the cost of production for the private sectors , due to this the government absorbs some part of this cost.

3. The government directly buys rice and wheat from the farmers at a fixed support price , storing it is silos and cold storage and providing it to consumers at a lower cost through ration shops. In this way both the farmers and the consumers are benefited as the government absorbs a part of the cost.

4. Government also has the responsibility to provide health and education by running public schools and hospitals.

5. Government must take care of the poorest and most ignored sections fo the society through increased spending in such areas.