Class 10 Economics Chapter 2- Sectors of Indian economy Notes

 

Class 10 Economics

Chapter 2- Sectors of Indian economy

Notes

 

Understanding the economy requires a breakdown of its sectors. This includes the primary sector, involving raw resource extraction, the secondary sector, encompassing manufacturing, and the tertiary sector, comprising services. Analyzing these sectors illuminates economic dynamics and societal progress.

1. Introduction:

Understanding the economy requires sectoral classification, which encompasses three crucial sectors: primary, secondary, and tertiary.

2. Different Sectors of the Economy:

a)    Primary Sector: Involves activities such as agriculture, fishing, forestry, and mining, which directly extract natural resources from the earth. For example, in India, agriculture is a significant component of the primary sector, with millions of farmers engaged in crop cultivation and livestock rearing.

b)    Secondary Sector: Encompasses industries that process or manufacture goods using raw materials obtained from the primary sector. Examples include textile manufacturing, automobile assembly, and steel production. For instance, the Tata Group operates several steel plants across India, contributing to the secondary sector's growth.

c)    Tertiary Sector: Comprises service industries that facilitate the exchange of goods and provide various services to consumers and businesses. This sector includes activities such as retail, transportation, healthcare, education, banking, and hospitality. A notable example is the banking sector, with banks like the State Bank of India and HDFC Bank offering financial services to individuals and businesses.

3. Historical Changes in Sectors:

Shifts have occurred from the primary to the secondary and then to the tertiary sector:

• 1973-1974: Primary sector dominance due to agricultural growth. For instance, during this period, India experienced the Green Revolution, leading to increased agricultural productivity.
• Industrial Revolution: Secondary sector prominence with factory employment. In India, the textile industry witnessed significant growth during the Industrial Revolution, particularly in regions like Gujarat and Maharashtra.
• Present: Tertiary sector dominance, with services like IT, telecommunications, and e-commerce playing a vital role in driving economic growth. For example, India's IT sector, including companies like Infosys and TCS, has emerged as a global leader in software services.

4. Factors Leading to Tertiary Sector Dominance:

a)    Essential Services: Services like healthcare and banking are indispensable for societal well-being. For instance, hospitals like Apollo Hospitals and Fortis Healthcare provide essential healthcare services to millions of Indians.

b)    Development in Other Sectors: Growth in the primary and secondary sectors necessitates tertiary services. For instance, expansion in manufacturing requires efficient transportation and logistics services.

c)    Rising Standards of Living: As incomes rise, there is an increased demand for specific services like private healthcare, education, and leisure activities.

d)    Emergence of New Service Sectors: Advancements in technology have led to the emergence of new service sectors like IT, telecommunications, and e-commerce, driving the growth of the tertiary sector.

5. Employment Distribution:

• Over half employed in the primary sector (agriculture), yielding one-sixth of GDP. For example, in rural India, agriculture remains the primary source of employment for millions of people.
• Secondary and tertiary sectors employ fewer people but contribute more to GDP. Industries like manufacturing and services employ a significant portion of the urban workforce.
• Underemployment exists due to inefficiencies in the agricultural sector, leading to a surplus workforce engaged in low-productivity activities.

6. Creating More Employment:

Potential in education, healthcare, and tourism sectors for job creation. For instance, the Indian government's initiative to promote medical tourism has led to the growth of the healthcare sector, creating employment opportunities for healthcare professionals and support staff. Industries in semi-rural areas, processing agricultural products, and promoting small-scale ventures can generate employment. For example, agro-processing units in rural areas create job opportunities for farmers and rural youth.

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): Provides 100 days of rural employment for unskilled workers, aiming for asset creation and unemployment allowances. For example, in states like Rajasthan and Andhra Pradesh, MGNREGA has provided rural households with employment opportunities in various infrastructure projects.

7. Organised and Unorganised Sectors:

• Organised sector: Government-regulated with fixed hours and payroll. Industries like IT, banking, and manufacturing operate within the organised sector, offering formal employment with benefits.
• Unorganised sector: Small, unregulated units with irregular employment and low wages. For example, street vendors, construction workers, and domestic helpers often work in the unorganised sector, lacking job security and social benefits.

8. Protecting Unorganised Sector Workers:

 Government interventions needed to ensure fair wages, regular employment, and social security. For instance, the government can enforce minimum wage laws and provide social security benefits like healthcare and pension schemes for unorganised sector workers. Support for small-scale industries and protection for casual workers essential for social and economic development. For example, government-backed microfinance initiatives and skill development programs can empower workers in the unorganised sector, improving their livelihoods.

9. Public and Private Sectors:

• Public sector: Government-owned, providing essential services at reasonable costs. Industries like railways, defense, and public healthcare operate within the public sector, catering to the diverse needs of the population.
• Private sector: Profit-driven, offering services at market rates. Companies like Reliance Industries and Tata Group operate within the private sector, focusing on profitability and market competitiveness.

10. Examples of some important public sector units of India

a)    Indian Oil Corporation Limited (IOCL): One of India's largest oil and gas companies, IOCL operates refineries, pipelines, and fuel stations nationwide, playing a pivotal role in the country's energy sector.

b)    Bharat Heavy Electricals Limited (BHEL): A leading engineering and manufacturing company, BHEL specializes in power generation equipment, transformers, and transmission systems, contributing significantly to India's power infrastructure.

c)    Steel Authority of India Limited (SAIL): A major steel producer in India, SAIL operates integrated steel plants, producing a wide range of steel products essential for infrastructure development, construction, and manufacturing sectors.

d)    State Bank of India (SBI): India's largest public sector bank, SBI provides a comprehensive range of banking services, including retail and corporate banking, wealth management, and international banking, serving millions of customers

11. Examples of some important private sector units of India

a)    Tata Consultancy Services (TCS): As a global leader in IT services, consulting, and business solutions, TCS leverages cutting-edge technology to drive digital transformation for businesses worldwide.

b)    Reliance Industries Limited (RIL): RIL is India's largest conglomerate, with interests in petrochemicals, refining, retail, telecommunications, and digital services, contributing significantly to the country's economic growth.

c)    Infosys Limited: A leading global provider of consulting, technology, and outsourcing services, Infosys delivers innovative solutions to help clients navigate the digital landscape and achieve business objectives.

d)    HDFC Bank: HDFC Bank is one of India's largest private sector banks, offering a wide range of financial products and services, including retail banking, corporate banking, and wealth management, catering to diverse customer needs.

e)    Flipkart: As India's leading e-commerce marketplace, Flipkart offers a vast array of products across categories such as electronics, fashion, home essentials, and more, revolutionizing the way Indians shop online.