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In CBSE Class 10 Economics Chapter 2, “Sectors of the Indian Economy,” we explore how different parts of our daily lives contribute to economic activities.
The chapter categorises the economy into primary, secondary, and tertiary sectors, highlighting their roles in producing goods and services. It also discusses the distinctions between organized and unorganised sectors, and public versus private sectors.
These classifications help us understand how economic activities are structured, impacting employment, income distribution, and overall economic growth, which is crucial for comprehending our economy’s functioning.
Table of Contents
- 1 Sectors of Economic Activities
- 2 Comparing the 3 Sectors
- 3 Where are Most People Employed?
- 4 How to Create More Employment?
- 5 Division of Sectors as Organised and Unorganised
- 6 How to Protect Workers in Unorganised Sector?
- 7 Sectors in Term of Ownership: Public and Private Sectors
- 8 Responsibilities of Government
- 9 FAQs
Sectors of Economic Activities
| In economics, sectors categorize large segments of the economy based on the types of goods and services they produce or provide. 1. Primary Sector: This sector involves the extraction and collection of natural resources. Activities like farming, forestry, mining, and fishing fall under this category. 2. Secondary Sector: Also known as the industrial sector, it involves transforming natural products into other forms through manufacturing processes. Examples include converting cotton into yarn and cloth or processing sugarcane into sugar or gur. 3. Tertiary Sector: Known as the service sector, it encompasses activities that support the production processes of the primary and secondary sectors. These include professions like teaching, healthcare, services like laundry, hairdressing, and legal services, and industries such as software development and call centres. |
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Comparing the 3 Sectors
| The total production of each sector in a specific year represents the value of the final goods and services produced. When combined, these sectoral productions determine the Gross Domestic Product (GDP) of a country. GDP quantifies the total value of all final goods and services produced within a nation annually, serving as a measure of economic size and activity. In India, the responsibility for calculating GDP rests with a ministry of the central government, reflecting the country’s economic health and growth over time. |
The graph below shows the production of goods and services in the three sectors.
In the fiscal year 2013-14, the tertiary sector surpassed the primary sector to become India’s largest producing sector. This shift underscores the growing importance of services in the country’s economy due to several key factors: 1. Essential Services: Services such as healthcare, education, postal services, law enforcement, administrative offices, and banking are essential for all citizens, contributing significantly to the tertiary sector’s growth. 2. Support from Agriculture and Industry: The development of agriculture and industry fuels demand for related services like transportation, trade, and storage, further boosting the tertiary sector. 3. Rising Income and Changing Consumption Patterns: As people’s incomes rise, there is an increased demand for services such as dining out, tourism, retail shopping, private healthcare, private education, and professional training. 4. ICT Revolution: In the past decade, services based on information and communication technology (ICT) have become crucial, driving growth in sectors like IT services, telecommunications, e-commerce, and digital platforms. These trends highlight the evolving nature of India’s economy, where the tertiary sector plays a pivotal role in meeting diverse consumer needs, fostering economic development, and contributing significantly to Gross Domestic Product (GDP) growth. |
Where are Most People Employed?
| Primary Sector: – More than half of India’s workforce is employed in the primary sector, primarily in agriculture. Despite employing a large workforce, it contributes only a quarter of the Gross Domestic Product (GDP). Secondary Sector: – The secondary sector, which includes manufacturing and industry, employs fewer people compared to the primary sector. – However, it contributes significantly to the economy, producing four-fifths (or 80%) of the total products. Tertiary Sector: – The tertiary sector, comprising services such as healthcare, education, banking, and transport, employs fewer people than the primary sector. – It has emerged as the largest producing sector in terms of GDP contribution, reflecting its growing importance in the Indian economy. – These sectors illustrate the distribution of labor and economic output in India, with the primary sector employing the most people but contributing less to GDP compared to the secondary and tertiary sectors. |
How to Create More Employment?
| – Creating employment opportunities in semi-rural areas is vital for economic growth and livelihood improvement. Each state and region possesses the unique potential to enhance income through initiatives such as tourism, regional crafts, and new services like IT. – For instance, a study by the Planning Commission (now NITI Aayog) suggests that the education sector alone can create approximately 20 lakh jobs. – To address rural unemployment, the Indian government enacted the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in 2005. – This law mandates that eligible individuals in rural areas receive 100 days of guaranteed employment per year from the government. In cases where the government fails to provide work, it compensates beneficiaries with unemployment allowances, thereby supporting livelihoods and ensuring economic security in rural communities. |
Division of Sectors as Organised and Unorganised
Here’s a comparison between the organised and unorganised sectors based on their characteristics and examples:
| Organised Sector: – Employment terms are fixed and regular with assured work. – They are governed by various laws such as the Factories Act, Minimum Wages Act, Payment of Gratuity Act, etc. – Workers enjoy job security, fixed working hours, and overtime pay. – Employees receive benefits like paid leave, provident fund, a gratuity, medical benefits, and pensions upon retirement. – Examples include government employees, registered industrial workers, Anganwadi workers, and village health workers. Unorganised Sector: – Characterized by small and scattered units largely outside government control. – Not registered with the government, hence laws and regulations are often not followed. – Jobs are low-paid, irregular, and lack security. – No provision for overtime pay, paid leave, holidays, or medical benefits. – Facilities like safe working environments and pensions are generally not provided. – Examples include shopkeeping, farming, domestic work, laboring, and rickshaw pulling. |
This comparison highlights significant differences in employment conditions, benefits, and regulatory oversight between the organised and unorganised sectors in India.
How to Protect Workers in Unorganised Sector?
| To safeguard and support workers in the unorganised sector, several measures can be implemented: 1. Minimum Wage and Working Hours: The government can enforce minimum wage rates and regulate working hours to ensure fair compensation and prevent exploitation. 2. Financial Support: Providing access to affordable loans for self-employed individuals can stimulate economic growth and stability within the sector. 3. Basic Services: Ensuring affordable access to essential services such as education, healthcare, and food can improve living standards and overall well-being. 4. Labor Laws: Introducing new legislation that includes provisions for overtime pay, paid leave, and sick leave can enhance job security and protect workers’ rights. These initiatives are crucial for promoting social equity, economic development, and improving the quality of life for millions of workers in the unorganised sector across India. |
Sectors in Term of Ownership: Public and Private Sectors
Here’s a comparison between the public sector and private sector:
| 1. Public Sector: – Owned and managed by the government; the government owns most assets and provides services. – Examples include railways, post offices, public schools, and hospitals. – Primary goal is public welfare rather than profit generation. – Services are often subsidized to ensure affordability for the general public. – Operates under government regulations and policies. 2. Private Sector: – Owned and operated by private individuals or companies. – Examples include Tata Iron and Steel Company Limited (TISCO), Reliance Industries Limited (RIL), and small businesses. – Main objective is profit maximization and financial gain. – Operates in a competitive market environment. – Services are priced based on market demand and supply, without government subsidies. |
This comparison highlights the distinct ownership, objectives, and operational principles of the public sector, which focuses on public welfare, and the private sector, which prioritizes profitability and efficiency in market-driven economies.
Responsibilities of Government
| The government shoulders numerous responsibilities essential for the welfare and development of society: 1. Financial Responsibilities: Governments collect taxes and other revenues to fund public services and infrastructure projects. 2. Infrastructure Development: Governments invest in constructing roads, bridges, railways, harbors, and electricity generation facilities, ensuring widespread access to these amenities. 3. Supporting the Private Sector: Facilitating an environment conducive to private sector growth through supportive policies and initiatives is crucial for economic progress. 4. Food Security: Government intervention in agricultural markets ensures fair prices for farmers and affordable food prices for consumers through schemes like ration shops. 5. Social Services: Providing accessible and quality education, healthcare, and other essential services to all citizens is a fundamental duty. 6. Human Development: Addressing critical human development needs such as safe drinking water, housing for the underprivileged, nutrition, and upliftment of marginalized regions are priorities for equitable growth and social justice. These responsibilities underscore the government’s role in fostering a balanced and inclusive socio-economic environment for its citizens. |
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FAQs
Q.1: What are the sectors of the Indian economy Class 10 notes Economics Chapter 2?
Ans: The sectors typically discussed are the primary sector (including agriculture, forestry, fishing, mining), the secondary sector (manufacturing, industry), and the tertiary sector (services).
Q.2: What is a tertiary sector of class 10 Economics chapter 2 ¨Sectors of Indian Economy¨ notes?
Ans: The tertiary sector refers to the sector of the economy that provides services rather than producing goods. It includes professions like healthcare, education, transportation, banking, tourism, and IT services.
Q.3: What is the full form of GDP?
Ans: GDP stands for Gross Domestic Product. It is the monetary value of all final goods and services produced within a country’s borders in a specific time period, usually annually or quarterly. It is a key indicator of a country’s economic performance and size.
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