Wednesday, 13 May 2015

Sectors of Indian Economy

Sectors according to Economic activities
Primary Sector :- activities that are undertaken by directly using natural resources, by exploiting natural resources, Agriculture, dairy, fishing, forestry are example of this sector. This sector is also called agriculture and related sector.
Secondary Sector :- activities in which natural products are changed into other forms through ways of manufacturing,  For example cotton fiber from the plant, we spin yarn and weave cloth, using sugarcane as a raw material, we make sugar or gur. It is also called as industrial sector.
Tertiary Sector :- activities that help in the development of the primary and secondary sectors, do not produce a good but they support in production process,  for example transport, storage, communication, banking, trade etc., is also called the service sector.
Comparing the three sectors : 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 the sum of production in the three sectors gives what is called the Gross Domestic Product (GDP) of a country.
Historical Change in Sectors :
At initial stages of development, primary sector was the most important sector of economic activity.
Over a long time (more than hundred years), and especially because new methods of manufacturing were introduced, factories came up and started expanding. Those people who had earlier worked on farms now began to work in factories in large numbers. 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.
In the past 100 years, there had been a further shift from secondary to tertiary sector in developed countries. 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. This is the general pattern observed in developed countries.
Rising importance of the tertiary Sector :
(i) Governments taking  responsibility of providing basic services
(ii) The development of agriculture and industry  led to the development of services.
(iii) With the rise of income levels of the people, more and more services were demanded
(iv) New services based on information and communication has become essential.
Where are the most of the people employed ?
More than half of the workers in the country are working in the primary sector, mainly in agriculture, producing only a quarter of the GDP. In contrast to this, the secondary and tertiary sectors produce three – fourth of the produce whereas they employ less than half the people
Disguised Employment : Situations were people are apparently working but all of them are made to work less than their potential. This kind of underemployment is hidden in contrast to someone who does not have a job and is clearly visible as unemployed. Hence, it is also called disguised unemployment.
How to create more employment ?
(i) Promotion of irrigation activities.
(ii) Government investment in transportation and storage
(iii) Local banks providing easy credit.
(iv) Promotion and location of industries and services in semi-rural areas.
(v) Jobs in tourism, education and regional craft industry.

Organised and Unorganised sectors :
Organised sector covers those enterprises or places of work where the terms of employment are regular and therefore, people have assured work. They are registered by the government and have to follow its rules and regulations which are given in various laws such as the Factories Act, Minimum Wages Act, Payment of Gratuity Act, Shops and Establishments Act etc. It is called organised because it has some formal processes and procedures. Workers in the organised sector enjoy security of employment. They are expected to work only a fixed number of hours.
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. Jobs here are low-paid and often not regular. There is no provision for overtime, paid leave, holidays, leave due to sickness etc. Employment is not secure. People can be asked to leave without any reason.
How to protect workers in the Unorganised Sector?
Rural areas - need to be supported through adequate facility for timely delivery of seeds, agricultural inputs, credit, storage facilities and marketing outlets
Urban areas - Small scale industry’s needs government’s support for procuring raw material and marketing of output.

Public and Private Sectors :
In the public sector, the government owns most of the assets and provides all the services.
In the private sector, ownership of assets and delivery of services is in hands of private individuals or companies.
Reasons for the promotion of Public sector
(i) There are several things needed by the society as a whole but which the private sector will not provide at a reasonable cost.
(ii) There are some activities, which the government has to support.
(iii) There are a large number of activities which are the primary responsibility of the government. The government spend on these.


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