Sectors of Indian Economy Class 10 CBSE Economic

Sector of India economy Class 10 CBSE

1. ECONOMICS CHAPTER 2 SECTORS OF INDIAN ECONOMY

2. In our day to day life ,we perform various types of activities. Some of the activities are performed to earn income and some of the activities are performed as a part of our duty and for our own amusement. Depending on the purpose, we can divide the activities into two types- Eonomic activities and (ii) Non-economic activities Economic activities: The activities which are performed to earn and income is called economic activities. Non- economic activities: The activities for which we do not get any income, but we perform the activities as a part of our duty or for our own amusement. For example, the services of the house wife, a teacher teaching his own children, a player playing for his own amusement etc.

3. All the economic activities that we perform are classified into three sectors- (on the basis of nature of economic activities) Primary sector (ii) Secondary Sector and (iii) Tertiary Sector   Primary Sector : When we produce a good by exploiting natural resources, it is an activity of the primary sector. This sector is also called agriculture and related sector. Examples of primary sector activities are- cultivation of crops, mining, , Pisciculture, horticulture etc. Secondary Sector: The secondary sector covers activities in which natural products are changed into other forms through ways of manufacturing that we associate with industrial activity. For example, spinning yarn from cotton fibre , making sugar from sugarcane etc.

4. Tertiary sector: The tertiary sector activities help in the development of primary and secondary sectors. These activities are an aid or a support for the production process. For example, transport, storage, communication, banking etc.

5. What is the need of classifying the activities into three sectors? Classification of economic activities into primary, secondary and tertiary sector is useful as there are varieties of economic activities which are performed by the humans. In order to understand the nature of these activities and the role performed by the people in fulfilling these activities, we need to classify these into the three sectors. Further, the classification also helps us in ascertaining the contribution of each sector to the Indian economy. Based on these, the government may also initiate reforms in a sector, which according to it has not developed up to its full potential.   All the three sectors produce a very large number of goods and services. The contribution of each sectors towards the economy of a country is calculated.

6. Gross Domestic Product(GDP) : It is the value of all final goods and services produced by the three sectors during a particular year within the geographical boundary of a country. When we add the earnings from abroad with GDP, we get GNP(Gross National Product). The Central Statistical Office (CSO) is responsible for compiling data for calculating GDP. It uses two methods- ( i ) GDP at factor cost, it looks at economic activity. (ii) Expenditure – based method.

7. Historical change in sectors: At the initial stages of development, primary sector was the most important sector of economic activity. As the agricultural sector began to prosper, many other activities were taken up by people. Over a long time, and especially because new methods of manufacturing were introduced, factories came up and started expanding. People began to use many more goods that were produced in factories at cheap rates. Secondary sector gradually became the most important in total production and employment. The importance of sectors changed from primary to secondary.

8. In the past 100 years, there has been a further shift from secondary to tertiary sector. The service sector has become the most important in terms of total production. Most of the working people are also employed in the service sector. So, now a days, the tertiary sector is the most important sector in the economy and it’s contribution is also the maximum towards National Income.

9. Why is the importance of Tertiary sector rising so fast? The main reasons for the rising importance of the tertiary sector are- In any country the basic services such as hospitals, educational institutions, post and telegraph services, police stations, courts, defence , transport, banks etc are taken up by the government. All these services employ a large number of people and all these people come in the service sector. The development of agriculture and industry leads to the development in the tertiary sector by demanding many services such as transport, trade, storage and the like.

10. As income levels rise, certain sections of people start demanding many more services such as eating out, tourism, shopping, private hospitals, private schools etc. All these services also come in the tertiary sector. Over the past decades, certain new services have become essential such as those based on information and communication technology. All those services also come in tertiary sector.

11. Where are most of the people employed in India ? Though the contribution of the tertiary sector is the maximum towards national income, till today in India the maximum people are employed in the primary sector. How can it happen? Maximum people , but contribution is the least. Definitely there would be some problems in the primary sector. What are these problems?

12. There are two main problems in the primary sector- Disguised unemployment and Under employment Disguised unemployment : It is a situation in which people seems to be employed, but if we remove some of them the total production remains unchanged. In agricultural sector, there are many people who are disguised. Under employment: In case of under employment, people work below their capacity.

13. How to create more employment opportunities for the unemployed people? People those who are not practically doing any work, we will have to create some employment opportunities for them. The following steps can be taken for this purpose- In rural areas:-   Ans.  ( i ) Diversification of agriculture: More than 60 per cent of our workers are employed in agriculture. But ‘our farmers are producing only limited crops. There is need to diversify agriculture. Farmers should be encouraged to adopt pisciculture, horticulture, animal rearing, etc., along with cultivation of crops.

14. (ii) Cheap credit : Most of the farmers depend on informal sources of credit, i.e., moneylenders, relatives, traders, etc., who charge a very high rate of interest. Government should encourage the commercial banks to provide loans to the farmers at cheaper rates.   Provision of basic facilities : Our rural areas lack the basic facilities like roads, transportation, banking, warehouses, markets, etc. The government should invest some money in these sectors so that the Indian villages can be linked to other markets. This activity can provide productive . employment to not just farmers, but also to others such as those in services like transport or trade

15. (iv) Promotion of local industries and other activities : Another way to tackle this problem is to identify, promote and locate industries, especially the cottage and small- scale industries in semi-rural areas, where a large number of people may be employed. It also includes setting up a flour or rice mill to procure and process these and sell in the cities. In villages, near forest areas, honey collection centres can be started where farmers can come and sell wild hone

16. In Urban areas:- To increase employment in urban areas, we will need to carry out the following tasks   ( i ) Invest in basic industries which provide mass employment.   (ii) Improve local and inter-city transportation so that more people can be employed to work in the transportation industry.   (iii) Increasing vocational education courses, so that people educated for a vocation get jobs easily.   Give incentives for industry in urban areas to increase their capacity.   Except these measures, to create more employment opportunities in rural areas, the government introduced MNREGA in 2005.

17. NATIONAL RURAL EMPLOYMENT GUARANTEE SCHEME The National Rural Employment Guarantee Act was notified by The Government of India on September, 2005 and was made effective w.e.f . 2nd February 2006. In the first phase, the National Rural Employment Guarantee scheme (NREGS) was introduced in District Chamba and Sirmour on 2nd February, 2006. In second phase NREGS was started in District Kangra and Mandi w.e.f . 1-4-2007. In the third phase all the remaining 8 districts of the State have been covered under the scheme w.e.f . 1.4.2008.

18. 1. SALIENT FEATURE The salient feature of the scheme is to provide for the enhancement of livelihood security of the households in rural areas of the State by providing 100 days of guaranteed wage employment in every financial year to every household whose adult members volunteer to do unskilled manual work. PERMISSIBLE WORKS As per schedule 1 of the Act the focus of the scheme is on the following works in their order of priority:- ( i ) Water Conservation and Water Harvesting works; (ii) Drought proofing works (including afforestation and tree plantation) (iii) Irrigation canals including micro and minor irrigation works;

19. (iv) Provision of irrigation facility, horticulture plantation and land development facilities on land owned by the households belonging to the Scheduled Caste and Scheduled Tribes or to below poverty line families or to Marginal Farmers or Small Farmers to beneficiaries of land reforms or to the beneficiaries under the Indira Awas Yojana of the Government of India; (v) Renovation of traditional water bodies including de-silting of tanks ; (vi) Land developments works; (vii) Flood control and protection works including drainage in water logged areas;

20. (viii) Rural connectivity to provide all-weather access; and (ix) Any other work which may be notified by the Government of India in consultation with the State Government. The Government of India has been requested to allow engaging "Crop protectors" as one of the Permissible works under NREGA for Himachal Pradesh.

21. Divisions of sectors on the basis of facilities available:   On the basis of facilities available, sectors are divided into- ( i ) Organised and (ii) Unorganised sector   Key Differences Between Organised and Unorganised Sector The difference between organised and unorganised sector can be drawn clearly on the following grounds: Organised Sector is a sector where the employment terms are fixed and regular, and the employees get assured work. Unorganised sector is one where the employment terms are not fixed and regular, as well as the enterprises, are not registered with the government.

22. A number of acts apply to an organised sector like Factories Act, Bonus Act, PF Act, Minimum Wages Act, etc. whereas unorganised sector is not governed by any such act. The government rules are strictly followed in the organised sector, which is not in the case of unorganised sector. In organised sector, the employees draw regular monthly salaries. On the other hand, in the unorganised sector, the workers are paid on a daily basis. Job security exists in the organised sector, but not in the unorganised sector. The organised sector, provide additional remuneration to employees for overtime. Conversely, there is no such provision for overtime in case of the unorganised sector.

23. In organised sector, the salaries of employees are as per government norms. In contrast to an unorganised sector where wages are below, what is prescribed by the government. In organised sectors, workers get a hike on salary, once in a while. As opposed to an Unorganised sector where the salaries or workers are rarely hiked. Employees get add-on benefits like medical facilities, pension, leave travel compensation, etc. in the organised sector, which is not provided to the employees working in unorganised sector.

24. How to protect workers in unorganized sector? ( i ) Government can fix the minimum wages rate and working hours. (ii) Government can provide cheap loans to the self employed people. (iii) Government can provide cheap and affordable basic services like education, health, food to these workers. (iv) Government can frame new laws which can provide provision for overtime, paid leave, leave due to sickness, etc

25. Creation of more employment opportunities in organised sector. : Reservation of jobs. : Unemployed allowances. : Implementation of rules for the protection of labourers . : Providing cheap and affordable credit.

26. Labourers in construction work are employed on a daily basis. They have no job security. Their wages differ from time to time. So govt. has set up minimum wages act. this protects them from economic exploitation. • Miners working in private companies have no job security. Their safety is secondary to companies' profits. Govt. has laid down strict rules to protect them. • Most companies in unorganised sector do not provide health facilities to their employees. Most of them are involved in dangerous factory production. Here govt. takes steps to protect such workers.

27. Landless agricultural labourers, small and marginal farmers , artisans etc. need to be supported through adequate facility for timely delivery of seeds, agricultural inputs, credit , storage and marketing facilities • Workers in small scale industries, construction work, trade, transport, vendors etc. should be provided support for procuring raw material and their marketing. • Workers from SC, ST and OBC have to be provided with regular and fair paid work

28. Divisions of sectors on the basis of ownership: ( i ) Public sector and (ii) Private sector In public sector ,resources of the country are owned by the government. On the other hand, in private sector, resources are owned by the private individuals. The main aim of the public sector is the welfare of the people, on the other hand, the main aim of the private sector is the maximization of profit.

29. Though both public and private both the sectors provide various goods and services to the people in a country like India where the country follows the mixed economic principle, some of the services must be always in the hands of the government. The reasons are- 1.Greater equality –the government redistribute income and wealth to improve equality of opportunity and equality of outcome.

30. 2.Some of the services need spending large sum of money, which is beyond the capacity of the private sector. So, governments have to undertake such heavy spending and ensure that these facilities are available for everyone. 3. There are some activities, which the government has to support. For example producing and supplying electricity to the small-scale units at rates which these industries can afford. Government has to bear part of the cost.

31. 4. The government needs to support both the farmers and consumers. The government supports the farmers by buying the surplus food crops from the farmers at a ‘fair price’. The government also support the consumers by selling those food crops to the consumers at a lower price through ration shops. 5. To provide some of the services is the prime responsibility of the government. For example, providing health and education facilities for all. So, the government must provide these services as a part of its prime responsibility.

32. 6. Government also needs to pay attention to aspects of human development such as availability of safe drinking water, housing facilities for the poor and food and nutrition. It is also the duty of the government to take care of the poorest and most ignored regions of the country through increased spending in such areas.

33. Some other Needs : Overcome market failure  – Markets fail to take into account externalities and are likely to under-produce public/merit goods. For example, governments can subsidised or provide goods with positive externalities.   Macroeconomic intervention. – intervention to overcome prolonged recessions and reduce unemployment.   Disaster relief – only government can solve major health crisis such as pandemics.