Sectors of the Indian Economy – Key Concepts and Notes for Class 10 Economics

Sectors Of Economic Activities

Primary Sector

This Sector includes activities in which goods are produced by exploiting natural resources.
It is also known as agricultural related sector.
E.g. Dairy, Agriculture, Fishing, Horticulture, Forestry, etc.

Secondary Sector

This sector includes activities in which natural products are converted into useful products and other forms through manufacturing.
These activities takes place in a factory.
It is also known as industrial sector.
E.g. Manufacturing of Paper, making of bricks, manufacturing biscuits, converting cotton into a clot, etc.

Tertiary Sector

This sector generate services.
This sector helps in the development of primary and secondary sectors.
They do not produce goods but the services support the production process
It is also known as service sector.
E.g. Communication, transport, insurance, customer care, doctors, lawyers, etc.

Comparing the Three Sectors

These three sectors are compared on the basis of people working in them and amount of goods and services produced.

There are two types of goods and services:

Final Goods and services: These goods and services are consumed by the consumers and don't need any further production and processing.

These goods are included while calculating total production.
E.g. Pencil, Pen, Notebooks, Biscuits

Intermediate Goods and Services: These goods and services are used further in the production of goods and services.

Their value is already included in the value of final goods.
That's why this is no included in the calculation of total production.
E.g. Flour, Sugar, milk are used in the production of biscuits

The following example is given in your textbook to understand it in a more better way:-

A farmer who sells wheat to a flour mill for Rs 20 per kg. The mill grinds the wheat and sells the flour to a biscuit company for Rs 25 per kg. The biscuit company uses the flour and things such as sugar and oil to make four packets of biscuits. It sells biscuits in the market to the consumers for Rs 80 (Rs 20 per packet). Biscuits are the final goods, i.e., goods that reach the consumers.

Gross Domestic Product: It is the sum value of all final goods and services produced in all the three sectors in a particular year.

Historical change in Sectors

Earlier people depended on agriculture for their livelihood.
Primary sector was most important sector in initial stages of development.
As factories expanded, people started working in these factories in the hope of getting a better livelihood.
With the development of technology, a shift occurred from secondary to tertiary sector in developed countries.
Today, tertiary sector remains the most important in terms of production and employment.

Why the importance of tertiary sector is rising in the production?

There are four major reasons to support this answer:-

In a country government has the responsibility to fulfill the basic need of its population. In order to do that it opens schools, hospitals, banks colleges, courts, police stations, etc.
The rapid development in the industrial sector and agriculture sector, other tertiary services like transportation, communication, trade, storage, etc. services are also required.
Increase in the income levels of people has led people demanding several other services like tourism, private schools and hospitals, shopping and other leisure services.
Rapid development in the information and technology and its increased consumption and rising demands.
To provide all these services government and other institutions recruit teachers, doctors, software engineers, drivers, soldiers, civil servants, policemen, etc.

Difference between Organised and Unorganised Sectors

Organised	Unorganised
They follow rules and regulations made by the government	They don't follow the formal procedures
Workers get good salaries, paid extra for overtime	Workers work with low salaries
They get paid leaves	They don't get paid leaves
Secured job	No job security
Fixed working hours	Often work overtime
Safe working environment	Poor working environment
E.g. Government offices	E.g. Street vendors, repair workers, etc.

Difference between Public and Private Sector

Public	Private
Government owns the assets	Individuals owns the assets
Public welfare is the main aim	Personal profit is the main aim
Generally provides cheap and affordable services	Generally offers more expensive services and products
Funded by government through taxes and public money	Funded by private owners or shareholders or profit
E.g. Indian Railways, Bharat Sanchar Nigam Limited (BSNL), Life Insurance Corporation of India (LIC), Oil and Natural Gas Corporation (ONGC), Steel Authority of India Limited (SAIL)	E.g. ICICI Bank, Adani Group, Bharti Airtel, Mahindra & Mahindra

Ways to create more employment

You can add points of your own

Creating employment by building roads, dams, bridges, storage facilities, etc.
Giving IT-related skills to the educated unemployed youth in rural areas.
Government should give incentives to people opening their own small scale industries.
Providing more loans to the farmers so that they can buy more inputs and technology generating more income.
Opening more schools and hospitals.
Improving Education, Health and Tourism.

MGNREGA

ye topic kabhi kabhi 3 Mark ke liye puch leta hai toh kuch book ke bahar se kuch points daala hai

Mahatma Gandhi National Rural Employment Guarantee Act was enacted in 2005.
This scheme guarantee 100 days of wage employment in a year for those who are in search of work in rural areas.
If Government failed to do so then it will pay unemployment allowances to the people.
The Central Government in India made this law to implement the Right to Work in 625 districts.
The Act encourages women’s participation, and at least one-third (33%) of the jobs are reserved for women workers.
The Gram Panchayat (village council) is responsible for planning and implementing the scheme at the village level.

Why we need to protect the workers in the unorganised sector?

To earn more profit, employers force the workers to work in hazardous environment.
They work on low salaries.
No paid leaves.
Forced to work over time.
No job security.

How can we protect the workers in the unorganised sector?

Strengthening the laws to protect the workers in the unorganised sectors.
Helping small scale industries to grow in the rural and urban areas so that they don't need to work in unorganised sectors.
Supporting the farmers in the rural areas through adequate irrigation facilities, timely delivery of seeds, increasing MSP on produce, etc.

Role of Public Sector

Government provides facilities which the private sector will not provide at a reasonable cost.
The government has to support the private sector so that they can continue their production or business.
The GOI buys wheat and rice from farmers at a fair price. It stores this in its godowns and sells at a lower price to consumers through ration. This way Gov. supports both farmers and consumers.
Government needs to pay attention to aspects of human development such as availability of drinking water, housing facilities, food and nutrition, etc.
It is the duty of the government to take care of the poorest and ignored regions of the country through increased spending in such areas.

Understanding Economic Development Chapter 2: Sectors of Indian Economy