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    Add as FriendSector of Indian Economy

    by: don

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    1 : Name = dheeraj class = X a Subject economics
    2 : Chapter = 2 Sectors Of Indian Economy
    3 : INTRODUCTION India is today one of the six fastest growing economies of the world. The country ranked fourth in terms of Purchasing Power Parity (PPP) in 2001. The Indian economy has transformed into a vibrant, rapidly growing consumer market, comprising over 300 million strong middle class with increasing purchasing power. An abundant and diversified natural resource base, sound economic, industrial and market fundamentals and highly skilled and talented human resources, make India a destination for business and investment opportunities with an assured potential for attractive returns. OVERVIEW OF INDIAN ECONOMY
    4 : Classification Of The Economic Sectors
    5 :
    6 : The Classifications Are Based On :- Nature of activity being performed.—Primary, Secondary & Tertiary Working conditions of the workers—Organised & unorganized. Who own the assets/ on the ownership basis.—Public & Private
    7 : PRIMARY SECTOR: Activites undertaken by directly using natural resources. Example—Agriculture, Mining, Fishing, Forestry, Dairy etc. Example—Agriculture, Mining, Fishing, Forestry, Dairy etc. Since most of the natural products we get are from agriculture, dairy, forestry, fishing it is also called Agriculture and related sector.
    8 : SECONDARY SECTOR: It covers activities in which natural products are changed into other forms through ways of manufacturing that we associate with industrial activity. it is a next step after primary, where the product is not produced by nature but has to be made. Some process of manufacturing is essential, it could be in a factory, a workshop or at home. Example: Using cotton fibre from plant, we spin yarn and weave cloth; using sugarcane as a raw material we make sugar or gur; we convert earth into bricks. Since this sector is associated with different kinds of industries, it is also called industrial sector.
    9 : TERTIARY SECTOR: These are the activities that help in the development of the primary & secondary sector. . These activities by themselves do not produce good but they are an aid and support to the production process. .Example: a)Transportation--Goods that are produced in the primary sector need to be transported by trucks or trains and than sold in the wholesale and retail shops; Storage--at times it is necessary to store these products in godowns,which is also a service made available. Communication --talking to others on telephone Banking--borrowing money from the banks Since these activities are generate services rather than goods it is also called Service sector.
    10 : Evolution of an Economy from Primary Sector Based to Tertiary Sector Based During early civilization all economic activity was in primary sector. When the food production became surplus people’s need for other products increased. This led to the development of secondary sector. The growth of secondary sector spread its influence during industrial revolution in nineteenth century. After growth of economic activity a support system was the need to facilitate the industrial activity. Certain sectors like transport and finance play an important role supporting the industrial activity. Moreover, more shops were needed to provide goods in people’s neighbourhood. Ultimately, other services like tuition, administrative support developed.
    11 : Interdependency of Sectors: To understand this interdependency, let us take an example of a cold drink. A cold drink contains water, sugar and artificial flavour. Suppose if there is no sugarcane production then procuring sugar will become difficult and costly for the cold drink manufacturer. Now to transport sugarcane to sugar mills and sugar to the cold drink plant needs the services of a transporter. A person or system of persons is required to maintain and monitor all these movements of goods from farm to factory to shop in different locations. That is where role of administrative staffs comes. Let us go back to the farmer. He also needs feritlisers and seeds which is processed in some factory and which will be delivered to his doorstep by some means of transportation. To top it all at every step of these activities we require the proper monetary and banking system. So, in a nutshell this describes how interrelated all sectors of an economy are.
    12 : Historical change in the sectors: three stages. After Observing The Changes That Have Come In The Development Patterns Of The Sectors, It Has Been Found That In The Initial Stages Of The Development The Primary Sector Was The Most Important Sector Of Economic Activity. As The Methods Of Farming Changed And Agricultural Sector Began To Prosper, It Produced Much More Food Than Before And Many People Could Takeup Many Other Activities Which Led To The Increase In Number Of Activities. However At This Stage Most Of The Goods Produced Were Natural Products From The Primary Sector, Hence Most People Were Employed In This Sector. INITIAL STAGE:
    13 : SECOND STAGE: Over a long time(more than hundred years or so) because new methods of manufacturing were introduced, factories came up and started expanding. People began to work in factories in large numbers, and also people started using factory goods in large numbers as they were cheap. Secondary sector gradually became the most important in total production and employment. There was a shift and the importance of the sectors also changed.
    14 : THIRD STAGE: In past hundred, there has been a further shift from Secondary to Tertiary sector in the developed countries. The service sector has become the most important in terms of total production.Most of working people are also employed in the service sector.
    15 : Rising importance of tertiary sector in production: Over thiry years between 1973 and 2003, production in the tertiary sector has increased the most, and it has emerged as the largest producing sector in India replacing the primary sector.
    16 : There are several reasons to it: In any country several services such as hospitals , educational institutions, post and telegragh services, police stations, courts, village administrative offices, municipal corporations, defence, transport, banks, insurance companies etc. are required. These services are called the’ Basic services.’ In the developing countries the government has to take the responsibility for provision of these services. . The development of the agriculture and industrial leads to the development of services such as transport, trade, storage and the like. Greater the development of primary and secondary sectors more will be demand of such services. . As the income level rise, certain sections of people start demanding many more services like eating out, tourism, shopping , private hospitals, professional training etc. This is found especially in the big cities. As the income level rise, certain sections of people start demanding many more services like eating out, tourism, shopping , private hospitals, professional training etc. This is found especially in the big cities.
    17 : Growth and Status of Different Sectors in India.
    18 :
    19 : Closely observe the given graphs. The first graph shows the rupeewise turnover of various sectors in 1973 and 2003. The second graph shows the share of three sectors in the GDP during these 20 years and last graph shows share in providing employment. The first graph shows a massive increase in turnover for all these sectors during 20 years, which shows the way our economy grew. The second graph shows that share of agriculture decreased substantially and that of industry remained static and share of services grew. Particularly the growth of share of services sector was phenomenal from 35% to 55%. Now the third graph paints a distressing picture. The share in providing employment was not in tune with the share in GDP. The agriculture provided employment to 75% workers and this decreased to 60% in 2000, which is not as big a drop as agriculture’s drop in GDP contribution. On the other hand the growth in employment provided by other two sectors was substantially low.
    20 : The meaning of this finding is as follows: Majority of people are still employed in agricultural activities. As agriculture provides seasonal employment during cropping season so chances of hidden employment are big. Moreover, as history suggests a developed nation’s dependency shifts from primary sector towards tertiary sector in all aspects of economic development, so it can be said that India is still way behind because majority still depend on agriculture. Secondary and Tertiary Sector have failed to generate enough employment opportunities making a pressure on primary sector. Although educated and skilled workforce do get employed in secondary and tertiary sector but for unskilled and semi-skilled workers there is still shortage of employment avenues.
    21 : Other Classifications of Economy :- The sector which carries out all activity through a system and follows the law of the land is called organized sector. Moreover, labour rights are given due respect and wages are as per the norms of the country and those of the industry. Labour working organized sector get the benefit of social security net as framed by the Government. Certain benefits like provident fund, leave entitlement, medical benefits and insurance are provided to workers in the organized sector. These security provisions are necessary to provide source of sustenance in case of disability or death of the main breadwinner of the family. Otherwise the dependents will face a bleak future. Organised Sector
    22 : Unorganised Sector: The sector which evade most of the laws and don’t follow the system come under unorganized sector. Small shopkeepers, some small scale manufacturing units keep all their attention on profit making and ignore their workers basic rights. Workers don’t get adequate salary and other benefits like leave, health benefits and insurance are beyond the imagination of people working in unorganized sectors.
    23 : Public Sector Companies which are run and financed by the Government comprise the public sector. After independence India was a very poor country. India needed huge amount of money to set up manufacturing plants for basic items like iron and steel, aluminium, fertilizers and cements. Additionally infrastructure like roads, railways, ports and airports also require huge investment. In those days Indian entrepreneur was not cash rich so government had to start creating big public sector enterprises like SAIL (Steel Authority of India Limited), ONGC(Oil & Natural Gas Comission).
    24 : Private Sector Companies which are run and financed by private people comprise the private sector. Companies like Hero Honda, Tata are from private sectors.
    25 : Government Aided Schemes to Fight Unemployment Government, from time to time, announces and implements various employment scheme to fight unemployment or hidden employment to help the weaker section of society. Shcemes like NREG (National Rural Employment Guarantee) is the latest announced by the UPA government in 2004. This programme guarantees a minimum of 100 days of employment to at least one person from every rural household. This is part of government’s effort to ensure the ‘Right to Work’ to the rural poor citizen.
    26 : THANK YOU

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