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ACHIEVE A
TUTORIAL
“Maximizing Potential with assured results through individual attention”

CLASS: Xth Economics

Chapter:2 Sectors of Indian Economy

Economy: An economy is an area of production, distribution or trade and consumption of goods and services by
different agents in a given geographical location in various countries.

It is also known as economic system.

Different sectors of and economy:

Primary sector: (Produces natural goods)

 When production is done by exploiting the natural resources, it is an activity of primary sector.
 It forms the base for all other products.
 Example- agriculture, fishing, forestry, mining etc.
Secondary sector: (produces manufactured goods)

 Secondary sector covers the industrial activities, where raw material are converted into finished
goods.
 It is also known as industrial sector.
 Example- sugarcane is a raw material through which sugar is made in an industry.
Tertiary activity: (helps to develop other sector)

 Activities that help in the development of primary and secondary sector is known as tertiary sector.
 It is also known as service sector.
 Example- banking, transport, communication, hospitality, education etc.
GDP: (Gross Domestic Products)

 GDP is the value of all final goods and services produced in each sector within a country during a
particular year.
 Only finished products and services are counted in calculation of GDP.
 The value of products and services are counted.
 Example- Biscuits are the final goods that is used by the consumer. If the biscuit company sells 10
packets of biscuits at ₹15/packet, the value counted of 10 packets of biscuit would be ₹150.
 In this way, the value of each product in each sector is counted and added up in the end of one
financial years and we arrived to our GDP.
Intermediate goods:

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  Intermediate goods are the goods used in the production of final product.
 While calculating GDP, the value of intermediate goods are not taken separately, they are added
together in the final product.
 As discussed above, in the manufacturing of biscuits, the value of wheat, flour, sugar, salt etc. are not
taken separately, but it is added up in the final products; biscuits.
Transition of different sectors:

 Generally, it is noted that previously the most important sector of all the developed countries were
the primary sector.
 With the advancement in technology, people started up opting for another occupation such as
manufacturing, arts, crafts and trade.
 Factories came up and the manufacturing increased. There was a shift of employment from farms to
industries.
 Secondary sector gradually flourished and became one of the important sector.
 In the fast 50-100 years, there is a further shift from secondary to tertiary sector.
 The tertiary or the service sector has become the most important sector and without which the other
two sectors cannot work. The tertiary sector has given most of the opportunity of employment.
 Tertiary sector has become the backbone of the country’s economy.
Unemployment:

 It is a situation in which a person is willing to work at the prevailing wages, but does not find any
gainful work.
 It is calculated as a percentage by dividing the number of unemployed individuals by all individuals
currently in the labour force.
Under employment or disguised unemployment:

 If more people are employed in an activity then required, it is known as under employment.
 In this type of unemployment, people are apparently seen working, but all of them do not works to
their best potential for capability.
 Disguised unemployment can be commonly seen in agriculture, where all the members of the family
are engaged in farms, but still the production remains the same.
 In urban areas, people work as plumbers, painters and other doing odd jobs and do not work
according to their capabilities. This is so because, they do not have better opportunities.
Distinguish between open unemployment and disguised unemployment:

Open unemployment:

 It is very apparent and clear that people are unemployed.

 It is feel deeply and can be seen anywhere.
Disguised unemployment:

 People appear to be employed in disguised unemployment.

 It is mostly seen in agriculture or in family run activity.
Measures to curb or tackle under employment:

 Government or Bank should lend more money in agriculture, for the improvement in technology and
increase the land in agriculture, so as to increase employment in agriculture sector.
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  Improvement in educational scenario in the country. More and more children should be educated to
build a strong financial feature of country, which can create a large number of job opportunities in
India.
 Development of tourism can promote employment opportunities in the same sector.
 Improved health facilities can provide a large number of employment opportunities.
 There is still a lot of employment scope in tertiary sector. Therefore, more focus should shift to the
tertiary sector.
Mahatma Gandhi National Rural Employment Guarantee Act, 2005:(MNREGA)

 Under MNREGA 2005, all the youth who are need of jobs are guaranteed hundred days employment
in a year by government.
 If the government fails to do so, it will give unemployment allowances to the people.
 The work which can help to increase production from land in future will be given preference under
this Act.
Classification of economy based on employment conditions:

Economy can be classified as organised and unorganised on the basis of employment conditions.

Organised sector:

 Terms of employment is regular, people have assured work and job security as well.
 They are registered by the government and have to follow rules and regulations like factories Act,
minimum wages act, payment and gratuity Act etc.
 Workers work for fixed hours and are paid for overtime.
 Workers get paid leave, payment during holidays, gratuity, provident fund, medical benefits etc.
 Some jobs offer pension after retirement also.
Unorganised sector:

 Terms of employment is irregular. Work is not assured and jobs are highly insecure.
 They are not registered with the government. There are rules and regulations but it is not followed.
 There is no fixed time and workers are not paid for overtime.
 Facilities like paid leave is not available. Job depends on the wishes of the employer.
 There is no provision of pension.
Workers in an unorganised sector needs protection on the following issues:

Wages: Wages are very low or in unorganised sector. There is no provision of overtime, paid. Leave, holidays etc.

Safety: There is no assurity and safety of job in an unorganised sector. Workers are prone to accidents in the places
where adequate measures of safety are not taken.

Health: The workers in an unorganised sectors are in bad health conditions. This is so because, they live in slums and
in unhealthy living conditions and their jobs do not provide them with health facilities.

Classification of economic activities on the basis of ownership:

On the basis of ownership, economic activities are classified into public and private sector enterprise and joint sector
enterprise.

Public sector:

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  These are owned and controlled by the government.
 It is run for the benefits of the people.
 Example- Steel Authority of India(SAIL), Indian Oil Corporation(IOC), Delhi Transport Corporation
(DTC).
Private sector:

 These are owned and controlled by individuals or group.

 The main motive behind these companies is profit maximization.
 Example-Tata Iron and Steel company (TISCO), Reliance Industries Limited, Maruti Udyog
Limited.
Joint sector enterprise:

 When both the government and individuals enter into agreement to run an enterprise, on a
partnership basis, the enterprise is changed into joint sector enterprise.
 Example- Reliance Petrochemicals Limited, Power Trading Corporation, etc.
Importance of public sector enterprises:

 To build infrastructure which requires large amount of money. Example- Road, bridges, railways,
Harbours, electricity providing, irrigation through dams etc.
 To support industrial development.
 To protect the poor section of society.
 To provide basic facilities like elementary education, safe drinking water, housing facilities and food
and nutrition for the poor. Example- public distribution system (PDS) run by the central government
which enables poor to purchase cereals and pulses at a very low and reasonable price.
The agriculture sector is the largest employer in India. Nearly 51% population is engaged in this sector in one way
all the other.

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