SECTORS OF INDIAN ECONOMY ARE

DIVIDED INTO THREE CATEGORIES

PRIMARY SECTOR SECONDARY SECTOR TERTIARY SECTOR

When we produce
a good by
exploiting natural
resources, it is an
activity of primary
sector.
Example –
agriculture, dairy,
fishing, forestry, etc.
This sector is known
as agricultural and
related sector.
Covers activities in which natural products
are changed into other forms through
ways of manufacturing that we associate
with industrial activities.
Example – using cotton fibre from plants,
we spin yarn and weave cloth, etc.
This sector gradually became associated
with the different kinds of industries that
came up, it is also called as industrial
sector.
These activities by themselves do not
produce a good but they are an aid or a
support for the production process.
For example, goods that are produced in
the primary or secondary sector would
need to be transported by trucks or trains
and then sold in wholesale and retail
shops.
Since, these activities generate services
rather than goods, it is also known as the
service sector.

Adding the sum of all the three sectors

would give you the GDP; Gross Domestic
Product.

Primary sector + Secondary Sector +

Tertiary Sector = GDP

GDP – shows how big the economy is.

VALUE OF GOODS AND SERVICES IN THE THREE

SECTORS ARE CALCULATED, AND THEN ADDED UP

Economists suggest that the values of goods and services

should be used rather than the adding up the actual numbers.

For example
A farmer grows cotton and sells it to the textile industry.
Now, the textile industry makes it into a shirt, adds buttons and thread.
And sells it on a higher rate.

IMPORTANCE OF TERTIARY SECTOR

In any country, there
are several services
which are required –
hospitals, educational
institutions, telegraph
services, police
stations, etc.
The development of Due to the demand in New services based
agriculture and income levels, there is on information and
industry leads to the rise in demand for technology and
development of more services. communication have
services like transport, become important and
storage, trade. essential.

UNDEREMPLOYMENT/DISGUISED EMPLOYMENT

When more people are working than is needed, this situation is

called underemployment or disguised unemployment

IN RURAL AREAS IN URBAN AREAS

All the family members There are thousands of casual workers in the service
sector, who search for daily employment

This means that even if we

remove a lot of people
from agricultural sector
and provide them work There are many others like rikshaw pullers or cart pushers on
somewhere else, the the street selling something, where they may spend the
agricultural production will whole day but earn very little
not be affected

GOVERNMENT POLICIES PROMOTE EMPLOYMENT

Banks can provide a loan to construct wells to irrigate their lands

Dam construction will provide employment opportunities as well as

irrigation facilities

Better rural roads and more transportation facilities to be provided

to farmers to sell their crops

On the credit of local banks, inputs like seeds, fertilisers, agricultural

equipment and pumpsets can be bought

Government can promote and locate industries in the semi-rural

areas to generate employment

Mills like–Dal mill, cold storage, honey collection centres,

processing of vegetables etc.

More schools will lead to employment to teachers, builders, peons

and other staff

For improving health situation, more doctors, nurses, health

workers are needed to work in rural areas

Employment can be generated in tourism, regional craft industry or

new services like IT

The central government in India made a law implementing the Right

to work in 200 districts of India and then to 130

Known as Mahatma Gandhi National Rural Employment Guarantee

Act 2005 (MGNREGA)

All those who are able to and are in need of work are 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.

DIVISION OF SECTOR AS

ORGANISED SECTOR UNORGANISED SECTOR

Terms of employment regular Small scattered units outside the

control of government

Follow rules and regulation of Factory Act,

Minimum Wages Act, Gratuity Act, etc. Rules and regulations not followed

Employees register themselves with the Jobs are low paid and often not regular
government

No provision for overtime, paid leave,

Security of work holidays or leave due to sickness

Work for a fixed number of hours Employment is not secure

If work more, paid overtime They may be told to leave the job any time

Get benefits likes paid leave, payment during Lot of them are employed on their own
holidays, provident fund, gratuity, etc. doing small jobs

Get medical benefits, drinking water, safe

working environment

HOW TO PROTECT THE UNORGANISED SECTOR

RURAL AREAS URBAN AREAS SC/ST

Vulnerable people are—landless Comprise of workers in Majority workers from

agricultural labourers, small and small scale industry, SC/ST and backward
marginal farmers, sharecroppers casual workers, trade and communities are in
and other artisans (weavers transport, vendors head unorganised sectors
carpenters) load workers, garment
makers, rag pickers etc.
Besides irregular and low
Nearly 80% rural households are paid work, they face social
marginal and small farmers Need government’s discrimination
support for providing raw
material and marketing of
output Protection and support is
Can be supported by adequate
facilities for timely delivery of needed to get economic
needs, agricultural inputs, etc. and social development

SECTORS ON THE BASIS OF OWNERSHIP

PUBLIC SECTOR PRIVATE SECTOR

Government owns most of the assets and Ownership of assets and delivery of services is
provides all the services in the hands of private individuals

e.g., Railways, post office

e.g., Tata Iron and Steel company of
Reliance Industries
Meant for social benefit

Guided by motive to earn profit

Government raises money through taxes and other
ways to meet expenses on the services rendered by it

To get services, we have to pay money

Government provide subsidies and bear
part of the cost to support industires
Is unable to provide several things needed
by the people at reasonable rates
Government must spend on provision of
health and educational facilities