CHAPTER---2 SECTORS OF THE INDIAN ECONOMY

People are engaged in various economic activities producing goods and services.
There could be several ways of classifications depending on the purpose.
In this chapter we will study about these different ways of classifications.
1. On the Basis of nature of activity
a) Primary Sector
b) Secondary Sector
c) Tertiary Sector

2. On the basis of Employment
a) Organised Sector
b) Unorganised Sector

3. On the basis of Ownership
a) Public Sector
b) Private Sector

1. PRIMARY SECTOR---
There are many activities that are undertaken by directly using natural resources. Since most of the natural products we get are from agriculture, dairy, fishing, forestry, this sector is also called AGRICULTURE AND RELATED SECTOR.Eg--- Dairy, cultivation, mining of mineral ores etc.

2. SECONDARY SECTOR---
It covers activities in which natural products are changed into other forms through ways of manufacturing that we associate with industrial activities.
The product is not produced by nature but has to be made therefore some process of manufacturing is essential. Since this sector Gradually became associated with different kinds of industries that came up, it is also called as INDUSTRIAL SECTOR .Eg, Sugar of gur is manufactured form sugarcane, building from bricks and bread from wheat flour etc.

3. TERTIARY SECTOR---
These are the activities that helped in development of primary and secondary sector.
These activities do not produce goods but they are an aid or support for the production process.
Since these activities generate services rather goods, the tertiary sector is also called THE SERVICE SECTOR. Eg,Tranport, storage, communication, banking, trade etc, are some examples of tertiary sector.

HOW GDP OF OUR COUNTRY IS CACULATED?

1. Values of goods and services should be used rather than adding up the actual numbers. Value of goods and services in three sectors are calculated and then added up.
2. Not every good or service that is produced and sold needs to be counted. It is required to add the final goods and services.
3. Intermediate goods are used in producing final goods and services. The value of final goods already includes the value of all the intermediate goods that are used in making the final goods.
4. The value of final goods and services produced in each section 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 of a country
GDP IS THE VALUE OF ALL FINAL GOODS AND SERVICES PRODUCED WITHIN A COUNTRY DURING A PARTICULAR YEAR.
5. Measurements of the GDP is done by a central govt. Ministry.This ministry with the help of Various govt. Departments of all Indian states, collect information relating to total volume of goods and services and their prices and then estimates the GDP.

HISTORICAL CHANGES IN SECTORS---

PRIMARY SECTOR----
1. As the methods of farming changed farmers produce much more food then before.
2. Many people could take other activities also.
3. No. of craftsmen and traders increased.
4. Buying and selling activities increased.
5. Besides this people are opting jobs of transporters, army and administrators etc.
SECONDARY SECTOR----
1. Over a long time, new methods of manufacturing were introduced, factories came up and started expanding.
2. People who worked in farms, started working in factories.
3. Secondary sector gradually became the most important in total production and employment.
4. Importance of sectors had changed.

TERTIARY SECTORS ---
1. There has been a further shift from secondary to tertiary sector.
2. Service sector has become most important in terms of total production.
3. Most of the working people are also employed in the service sector.

RISING IMPORTANCE OF TERTIARY SECTOR IN INDIA
1. In any country several services such as hospitals, educational institutions, post and telegraph services, police stations, courts, village administrative offices, municipal corporations, banks, defence, transport, insurance companies etc are required.
2. Development of agriculture and industry leads to development of services like transport, trade, storage etc. Greater the development of the primary and secondary sectors more would be the demand for such services.
3. As income level rises people start demanding more services like eating out, tourism, shopping, private hospitals, private schools, professional training etc. especially in cities.
4. Over the past decade certain new services such as those based on information and communication technology have become important and essential. The production of these services has been rising rapidly.
But remember ---
1. Not all the service sectors are growing equally well.
2. Service sector in India employs different kinds of people.
3. At one end there are a limited number of services that employ highly skilled and educated workers.
4. On the other hand there are a large number of workers engaged in services like small shop keepers, repair persons, transport persons etc.
5. These people barely manage to earn a living yet they perform these services because no other job is available to them.
6. Hence only a part of this sector is growing in importance.