06/08/2022 8.

The Sectors of the Indian Economy

(A) all the production activity in an economy can be classified using some important criterion.
These groups are called sectors.
(B) there are three sectors in an economy-
1) Primary sector
2) Secondary sector
3) Tertiary sector
(B) Primary sector -
(i) When we produce a good by exploiting natural resources, it is an activity of the primary
sector.
(ii) Q1:- why are goods produced in primary sector called primary goods ?
A:- Because they form the base for all the other products that we subsequently make.
Activities- Agriculture, Fishing, Quarrying etc.
(iii) This sector is also called agriculture and allied sector, since most of the natural products we
get from agriculture, diary, fishing etc.
(C) Secondary sector-
(i) the secondary sector covers activities in which natural products are changed into other forms
through ways of manufacturing that we associate with industrial activity.
(ii) Ex- Cloth from Cotton, Sugar from Sugarcane.
(iii) This sector is also known as Industrial sector or Manufacturing sector as it is associated with
different kinds of industries.
(D) Tertiary sector-
(i) includes all those activities which help in the development of both primary and secondary
sector.
(ii) This sector does not produce any goods but provides services.
(iii) Ex- Transport, Communication, Banking, Insurance etc.
(iv) This sector is also called service sector because all the activities under this sector generate
services rather than goods.
(E) Comparing the three sectors-
In order to compare the production in three sectors, we add up the values of goods and services
rather than adding the actual number.
Q2-:- When we find out the value we take up the value of only final goods and services. Why ?
A:- 1) We add the value of only final goods and services because intermediate goods are used
up in producing final goods and services.
2) The value of final goods and services already included the value of intermediate goods if we
do so we will be counting the same value.
3) 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.
4) The sum of production in the three sectors gives which is called the Gross Domestic Product
( GDP ).
5) It is the value of all final goods and services produced within a country during the particular
year.
6) In India GDP is measured by a central government ministry.
(F) Historical changes in sectors-
1) In all the countries at the initial stages of development primary sector is the most important.
2) Over a long period of time trade and town grew and industries became important.
3) Many people, who earlier worked on farms began to work in industries.
4) In the past 100 years, there is a shift from secondary to tertiary sector.
5) The service sector has become the most important in all the countries.
Q3:- Why is Tertiary sector become important in India in recent times ?
A:- 1) Every country need certain services such as Hospital, Educational institutions, Post and
Telegraph, Banks, Police station etc. , are called basic services and every country needs the
basic services.
2) The development of agriculture and industry leads to the development of tertiary sector.
3) As the income level rises, certain sections of people start demanding more services like
outing , tourism, shopping, private hospitals, schools etc.
4) In the past few decades certain new services such as IT ( Computer ) have been growing
rapidly and have become important and essential.
Q4-:- Where are most of the people employed ?
A:- The primary sector continues to be the largest employer even now.
Q5:- Why did not similar shift out of primary sectors happen in case of employment ?
A:- It is because enough jobs are not created in the secondary and tertiary sector . Because of
this, there are more people in agriculture than necessary.
(G) Under employment or Disguised unemployment-
1) It is a situation in which more than required people are involved in a work even if the surplus
labour is removed the production will not suffer.
2) Ex- In a field 8 people are working, where as 5 people are only required. Even if the surplus
is removed, the production will not suffer.
3) Person does not work to his full potential.