In this post chapter 2 Sector of the Indian Economy Class 10 notes is explained comprehensively to have clear understanding in an easy manner. Students would be confident before giving exams after preparing these Sectors of Indian Economy Class 10 Notes.
Chapter 2 Sector of The Indian Economy Notes|Class 10 Economics Notes
Sectors
When various economic activities are grouped using the criteria how income is generated by people engaged in them are called sectors.
Primary Sector
When we produce the goods by exploiting the natural resources directly , it is known as the primary sector. It is called primary because it forms the base of all the products that we produce in secondary Sector E.g., Farming, forestry, hunting, fishing and mining.
Secondary Sector
The secondary sector covers activities in which natural products are changed into other forms through ways of manufacturing that are associated with industrial activities.. Since this sector gradually associated with different kinds of industries that came up,it is also called the industrial sector. For example, using cotton fibre from the plant, we spin yarn and weave cloth.
Tertiary Sector
The tertiary sector includes activities that help in the development of the primary and secondary sectors. These activities, by themselves, do not produce a good, but they are an aid or support for the production process. That’s why It is also called the service sector. Example: Teachers, doctors, washermen, barbers, cobblers, lawyers, call centres, software companies, gives services rather than producing goods.
Economic activities that are grouped into different categories are highly interdependent to one another.
Comparison of three sectors
Each sector has contribution in total production of goods and services.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.And,sum of production in three sectors gives Gross Domestic Product.
Gross Domestic Product (GDP): It is the value of all final goods and services produced within the country during an accounting year
Each sector differs in terms of total production (GDP ) and employment. Service sector has the largest contribution in GDP
How is total production calculated
Economists suggest that the value of goods and services should be calculated rather than adding up the number.It gives us correct calculation .While calculating the value,we add only the value of final goods and services instead of intermediate goods because final goods already includes the value of all intermediate goods.If we add value of intermediate goods it can cause the value of same things counted many times and wrong GDP would come.
Final goods – Those goods that are ready for the consumption by a consumer without any further transformation are final goods .
Intermediate Goods – These goods are used in the production processes to produce final goods and services.
Eg. Biscuit is final goods but flour, sugar and oil etc are intermediate goods.
Money and Credit Class 10 Notes
Historical Change in Sectors
Even in developed countries,at initial of development primary Sector was the important sector.As the farming methods changed and agriculture flourished, many people moved and take up other activities. Over a time,Manufacturing was introduced as good from primary sector used in production of goods and gradually secondary sector expanded.Then,traders, craftsperson, transporter etc were required and most people were employed in providing services and new services were also started.
A shift has occurred from secondary to tertiary sector in developed countries and tertiary sector became the most important in terms of total production and employment ..
Rising Importance of Tertiary Sector
1.Services such as hospitals, educational institutions, post and telegraph services, police stations, courts, village administrative offices, municipal corporations, defence, transport, banks, insurance companies, etc., are considered basic services and are necessary for all people.
2.The development of agriculture and industry leads to the development of services such as transport, trade, storage,
3.As the income of people rise, they start demanding more services like eating out, tourism, shopping, private hospitals, private schools, professional training, etc.
4. Over the past decade, certain new services based on information and communication technology have become important and essential so rising rapidly.
There are limited services that employ highly skilled and educated workers and large number of people are engaged in services like shopkeeper repair person, driver and loader etc.These people barely manage to earn for a living as no other opportunities are available to them.
Where are most people employed?
There is change in the share of all sectors in the GDP and employment.
In the 1973-74, primary sector had huge contribution in both GDP and employment but this trend changed and now,service sector has the largest contribution in GDP but primary sector is still the largest sector in terms of employment.
- Industrial output increased more than 9 times but employment went up three times.
- Production in service sector rose by 14 times but employment increased around five times.
- Agriculture shares quarter in GDP but half of the workers are employed in primary sector.
- Secondary and tertiary sector produce fourth fifth of total production but employment less than half of the people..
Workers in agricultural sector are underemployed as everyone is working,none remain idle but in actual their labour effect gets divided.It means that each of them is busy but not fully employed as everyone works less than the potential. and this situation is called underemployment.It is hidden unemployment as person is not visible as unemployed It is also called disguised unemployment.
Disguised Unemployment – This type of unemployment happens when more persons are engaged than the actual required number of people. It means that if we remove some people then no effect would be in the total output .It is a feature of agriculture.
This underemployment can also be seen in other sectors like casual workers in service sector in urban areas who search for daily employment like plumber,painter,masons etc. These people don’t get work everyday and sometimes earn very little as they don’t have better opportunities.
How to create more employment
- Bank can provide loans at cheap rate for agricultural inputs, seeds and fertilizer etc.
- Investing in infrastructure such as building a dam and canals that would generate employment within the agriculture itself.
- Govt invest in increasing efficiency of transportation, Storage and roads.
- Identity, promote and locate the industries and services in semi rural areas such as mills, cold storage honey collection centers.for farmers that will provide employment at rural areas.
- Building school would employ teachers and other staff so education sector could be developed.
- Health related services in rural areas are needed that require doctor,nurses, health worker etc to work so it would create jobs.
- Identifying potential of every state or region. For example, an area can be developed for tourism,region craft . industries or new services like IT.
Above mentioned points would take long time but in short time govt need quick measures to address unemployment .
MNREGA
Central government in India made a law implementing Right to Work in about 625 districts of India. Under MGNREGA,all those who are able to,and are in need of,work in rural areas are guaranteed 100 days of employment.If a govt fails in its duty to provide employment,it will give unemployment allowances to the people.
How to Protect Workers in Unorganised Sector
Many organised sector enterprises work in unorganised sector to evade taxes and refuse to follow laws that protect labourers.As a result,workers in unorganised sector are exploited by paying low wages and no other benefits.So there is need to protect and support of workers in unorganised sector.
- In rural areas, unorganised sector comprises of landless labourers, small and marginal farmers, sharecroppers and artisans (weavers, blacksmith, carpenter etc)..
- Small and marginal farmers need to be supported by providing adequate facilities for timely delivery of seeds, agricultural inputs, credit, storage facilities and marketing outlets.
- In urban areas, unorganised sector comprises mainly of workers in small scale industry, casual workers in construction, trade and transport, street vendors, garment makers,ragpickers etc.
- Majority of the workers from scheduled castes, tribes and backward castes communities are working in unorganised sector and face social discrimination.
Protection and support to workers in unorganised sector is necessary for both economic and social development
Organised and Unorganised Sector
Organised Sector
- They are registered by the government and have to follow its rules and regulations such as the Factories Act, Minimum Wages Act, Payment of Gratuity Act etc.
- Employment terms are fixed and regular, and the employees get assured work.
- The job is regular and has fixed working hours.
- Workers enjoy the security of employment.
- People get various benefits such as paid leave, payment during holidays, provident fund, gratuity, etc.
- Facilities like drinking water and a safe working environment are provided.
Unorganised Sector
- The unorganised sector is characterised by small and scattered units, which are largely outside the control of the government.
- There are rules and regulations but these are not followed since they are not registered with the government.
- Jobs are low-paid and often not regular.
- Employment is not secure. People can be asked to leave without any reason.
- There is no provision for overtime, paid leave, holidays, leave due to sickness, etc.
- There are no pension ,gratuity etc in the unorganised sector.
Sector on the basis of ownership
Public Sector
- In the public sector, the government owns most of the assets and provides all the services.
- Railways or post office is an example of the public sector.
- The purpose of the public sector is not just to earn profits.
- Its main aim is public welfare.
Private Sector
- In the private sector, ownership of assets and delivery of services is in the hands of private individuals or companies.
- Companies like Tata Iron and Steel Company Limited (TISCO) or Reliance Industries Limited (RIL) are privately owned companies.
- Activities in the private sector are guided by the motive to earn profits.
Responsibilities of the Government
- Government raises money through taxes and other ways to meet expenses on the services rendered by it.
- Government take responsibility of the construction of roads, bridges, railways, harbours, generating electricity, providing irrigation through dams, etc as private sector doesn’t have any interest and also to ensure these facilities to everyone.
- The government can encourage the small scale units to continue their production or business by providing benefits like cheap electricity or infrastructure etc.
- The government in India buys wheat and rice from farmers at a ‘fair price’ and sells them at a lower price to consumers through ration shops. In this way, it supports both farmers and consumers.
- Providing education and health facilities are primary responsibility of the government.
- The government also needs to pay attention to aspects of human development such as the availability of safe drinking water, housing facilities for the poor, food and nutrition, and taking care of the poorest and most ignored regions of the country.
Class 10 Economics Sector of the Indian Economy Notes|Sector of the Indian Economy Class 10 Economics Notes