INDIAN ECONOMY AN SECTORS

• Sectors of economic activities

  • Primary
  • Secondary
  • Tertiary
• Primary sector


  • Includes economic activities involving extraction and production of natural resources
  • Provides raw materials to the secondary sector
  • Most activities are not dependent on secondary sector
  • Greater dependence on this sector indicates an underdeveloped economy
• Secondary sector


  • Processes natural resources
  • Converts raw materials provided by primary activities into finished or semi-finished goods
  • Dependent on the primary sector for supply of raw material
  • A shift of economic activities from primary to secondary sectors indicates a developing economy

  
• Tertiary sector


  • Includes activities that help in the development of the primary and secondary sectors
  • Provides essential services like transport, storage, communication, banking, etc.
• Goods and services are of two types: final goods & services, and intermediate goods & services
• Raw materials


  Basic products required to produce intermediate/final goods
• Intermediate products


  Products used to produce a final good or finished product
• Final/consumer goods


  Commodities used by the consumer to satisfy current wants or needs, unlike intermediate goods which are utilized to produce other goods
• Gross Domestic Product (GDP)


  The value of all the final goods and services produced within a country during a particular year, showing how big the economy is
• In India, the task of measuring GDP is undertaken by a central government ministry
• Historical changes in sectors

  1. Primary sector was most important in initial stages of development

  2. Secondary sector grew with introduction of new manufacturing methods

  3. Tertiary sector has become most important in terms of production in developed countries
• Over the 40 years between 1973-74 and 2013-14, India has witnessed growth in all three sectors, particularly remarkable in the Tertiary sector
• Reasons for rising importance of the Tertiary sector


  • Increase in demand for basic services
  • Development of Primary & Secondary Activities
  • Increase in Income Level
  • Increasing Importance of Information and Communication Technology
• Services that employ highly skilled and educated people are growing, while a large part of the service sector that employs small shopkeepers, repair persons, transport persons is not growing
• The primary sector continues to be the largest employer even now
• Not enough jobs were created in the secondary and tertiary sectors, so a shift out of the primary sector did not happen in the case of employment
• More than half of the workers in the country are working in the primary sector, mainly in agriculture, producing only about one sixth of the GDP
• The secondary and tertiary sectors produce the rest of the produce whereas they employ less than half the people
• Workers in the agricultural sector are underemployed
• Unemployment


  A situation where a person is without a job
• Underemployment


  A situation where a job does not use an employee's full capabilities, divided into visible and invisible underemployment
• Disguised unemployment


  A kind of underemployment that is hidden, where people appear to be employed but are actually not employed
• Seasonal unemployment


  A situation in which people are not able to find jobs during some months of the year, common among agricultural labourers
• Underemployment also occurs in urban areas, with thousands of casual workers in the service sector searching for daily employment
• Problems in the Indian economy

  • Not whole of tertiary sector is growing
  • GDP share of primary sector is not up to the mark as per the number of people employed in it
  • Seasonal and Disguised unemployment in rural areas
  • Unorganised employment in Indian economy
• Underemployment


  Occurs when a job does not use an employee's full capabilities
• Types of underemployment


  • Visible
  • Invisible
• Disguised unemployment


  People appear to be employed, but are actually not employed
• Seasonal unemployment


  Situation in which people are not able to find jobs during some months of the year
• Underemployment also occurs in urban areas
• Not whole of tertiary sector is growing
• GDP share of primary sector is not up to the mark as per the number of people employed in it
• Seasonal and Disguised unemployment in rural areas
• Unorganised employment in Indian economy
• Creating more employment


  1. Construction of dams or canals to irrigate farms

  2. Government investing in transportation & storage of crops, or constructing better rural roads

  3. Local bank should provide cheap agricultural credit to the farmers for farming to improve their production

  4. Identify, promote and locate industries and services in semi-rural areas

  5. Opening a cold storage

  6. Emphasis on education and training centres
• In India about 60% of the population belongs to the age group 5-29 years, out of which only about 51% are attending educational institutions
• NITI Aayog estimates that nearly 20 lakh jobs can be created in the education sector alone
• Buying and selling activities increased many times, besides there were also transporters, administrators, army etc.
• Every state or region has potential for increasing the income and employment for people in that area
• Planning Commission says that if tourism as a sector is improved, every year we can give additional employment to more than 35 lakh people