Sectors of Economy (Revn Note)
Primary Sector
Those activities wherein goods are produced by exploiting natural resources. It
provides the basic raw materials for all goods subsequently produced.
E.g. Agriculture, forestry, mining, fishing, animal husbandry etc.
Share in India’s GDP: 17%
Eg:- Agriculture, Forestry, Fishing, Animal
Husbandry, Mining etc.
Secondary Sector
It refers to the
industrial activity that involves the manufacturing process. Goods are produced in big factories using natural or synthetic products as raw material.
E.g. Textile production, construction, automobile, manufacturing etc.
Share in India’s GDP: 28%
Eg:-
Textile, Automobiles, Construction ,
Manufacturing
Tertiary Sector
This sector covers those activities that aid the
primary and secondary sectors. It provides services rather than goods
and hence, it is also called the service sector.
E.g. Transportation, education services, telephone, information technology,
banking, health services etc.
Share in India’s GDP: 55%
Eg:- Transportation, Education, IT sector,
Communication etc.
GDP (Gross Domestic Product)
It is the
value of all
final goods and services produced in a country during a year. It
includes the total production of all
the
three sectors of the
economy.
It is a measure of the size of a country’s economy.
In India, primary sector was traditionally the
biggest and most
important sector.
With the coming of industrialisation, secondary sector gained importance.
Manufacturing became a major industry of the Indian economy.
In the past few decades, tertiary sector has assumed much importance in terms of total production. Today, tertiary sector is the largest producing sector in India and
contributes the
most
to
the country’s GDP.
Reasons for the Growing Importance of Tertiary Sector
With the
development of the nation, services such as banking, education, health,
information technology, municipal corporation, transport etc. are increasingly
required.
Development of agriculture and industry
propelled the growth of service sector.
Increase in the
standard of living led to the
introduction of new services such as eating outlets, shopping arcades, professional training centres, tourism and
hotels etc.
Growth of information technology-based services.
Sectors in Terms of Employment & Share in GDP
Sectors
|
Employment
|
Share in GDP (%)
|
Primaryy
|
63%
|
17%
|
Secondary
|
14%
|
28%
|
Tertiaryy
|
23%
|
55%
|
Primary sector is the
largest employer yet its contribution to the GDP is the least.
Underemployment
A situation wherein a person is apparently employed in an activity though is not working to his/her full potential. It is also called disguised unemployment as the
person seems to be
employed but in actuality, he/she is not adding anything to production. It is most commonly observed in the Indian agricultural sector where all
members of a family work
on
a single field that produces the same output every year.
Solutions for
Reducing Underemployment
Provision of bank loans to farmers so that they can buy HYV seeds for increasing the
yield.
Irrigation facilities must be
provided by constructing wells, canals and dams
in
order to increase production and provide employment.
Connecting villages to the nearby town through pukka roads so that farmers can sell
their produce. Also,
the
transportation of food crops to markets will generate employment opportunities for many.
Promotion of local and small-scale industries in rural areas for channelizing the
excessive work force of the agricultural sector into the secondary sector.
E.g. Flour mill, cold storage, etc.
National Rural Employment Guarantee Act (NREGA)
Passed by the
Government of India
in 2005.
Initially implemented in 200 districts of India. Later extended to cover the
entire nation.
Guaranteed 100 days of wage employment in a year is provided to each person able and willing to do unskilled manual work.
In case of failure to provide employment, the
government shall give an
unemployment allowance.
Organised Sector
It refers to those work places where the
terms of employment are fixed and the rules established by the government are followed.
Features
Registered by the
government
Follow labour laws such as the
Factories Act, the Minimum Wages Act
and
the Payment of Gratuity Act
etc.
Job security
Fixed working hours
Fixed salary and leave policy
Provision of provident fund and gratuity, medical benefits etc.
Unorganised Sector
It is characterized by small and scattered work units that are largely outside the
government’s control.
Features
Laws laid down by the
government are not followed
No job security
Low paying jobs
No leave policy
No fixed working hours
In rural areas, the
workers are mostly landless farmers, sharecroppers and
artisans.
In urban areas, it includes workers in small-scale industry, trade and
transport, construction etc.
Public Sector
It refers to the
business enterprises owned by the
government that provide services for the
welfare of the people.
E.g. Railways, post offices, education etc.
Private Sector
It refers to those enterprises that are owned by private individuals. The production is done with a motive of earning profits.
E.g. TISCO, Reliance etc.
Sectors of the Indian Economy
|
Basis of Classification
|
Primary
Secondary
Tertiary
|
The nature of production process
|
Organized
Unorganized
|
The nature of employment
|
Public
Private
|
On the
basis of ownership
|
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