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Slides on sectors of indian economy

The document discusses economic sectors and classifies them as primary, secondary and tertiary. It notes that the primary sector, which includes agriculture, is the most essential as it provides raw materials to other sectors. It also discusses how the importance of sectors has historically shifted from primary to secondary to tertiary in developed countries. The document then examines employment in India's sectors and notes that over half still work in primary despite changes in GDP share. It also discusses types of unemployment, including disguised unemployment, and ways to generate rural and urban employment opportunities such as developing tourism.

Education◦
WEL COME
This means that the activities through which people earn money are known as Economic activities.
Classification of Economic sectors
Most essential sector & Benefits of Classification as Primary, Secondary & Tertiary Most Essential Sector: The Primary sector is the most essential sector. This is because this sector provides raw materials to the secondary sector and promotes the tertiary sector. Moreover about 2/3 of the Indian population is directly or indirectly engaged in this sector. Benefits of Classification: I) It helps us to know the share of each sector in the GDP. II) It tells us about the employment in each sector. III) It gives a correct picture of the importance of each sector. IV) It helps in planning for the future.
Cont…. i) Agricultural activities produce raw materials for agro-based industries and food for employees in secondary and tertiary sectors. It shows industrial sector and service sectors dependency on primary sector. ii) Industrial activities produce instruments like tractors, fertilizers for agricultural inputs and increase production. Here primary sector depends on secondary sector. iii) Transport facilities are much required for transportation of agricultural products and industrial products to markets. Here primary sector and secondary sectors dependent on tertiary sector.
Cont…. iv) Industrial sector produces trucks, autos etc, for transportation, computers for proper banking activities and knowledge outsourcing. So it shows that now tertiary sector depend on secondary sector. v) So, Its reflected that all the sectors of economy are highly interdependent in India and else where in the world.
How do we count and calculate GDP? a) The value of final goods and services produced in each sector during a particular year is counted and calculated. b) For Example: i) A farmer sells wheat to a flour mill for Rs. 15/kg. ii) The mill grinds the wheat and sells the flour to a biscuit company for Rs. 20/kg. iii) The Biscuit company uses flour and other ingredients such as sugar, milk to make four packets of biscuits. It also uses services in this process such as banking, transport etc. iv) It sells biscuits in the market to the consumer for Rs. 120/kg, i.e, Rs. 30 per 250 grams packet. v) Biscuits are the final goods the value of these are counted and calculated.
Cont…. Why are only final goods and services counted while computing total produce?  The value of final goods and services already includes the value of all the intermediate goods and services that are used in making the final goods.  What does double counting mean?  The value of final goods already includes the value of all intermediate goods, so counting the value of intermediate goods & final goods separately will be double counting.
Historical Changes in Sectors i) The history of developed countries indicates that the initial stage of development, the primary sector was the most important sector of economic activities. ii) As the methods of farming changed and agriculture became prosperous, it produced much more food than before. Many people could now take up other activities like craft persons, traders, transporters, administrators, army etc. iii) Over a long time and especially because, new methods of manufacturing were introduced, factories came up and started expanding. iv) Those 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.
Cont…. v) Secondary sector gradually became the most important in total production and employment. Thus the importance of the sectors had changed. vi) In the past 100 years, there has been a further shift from secondary to tertiary sector in developed countries. This sector is also called service sector because it provides basic services such as teachers, doctors, lawyers, internet café, ATM booths. Thus tertiary sector became most important in terms of production. At present it employs the maximum number of people. So there has been a shift from primary sector to secondary sector and then to tertiary sector or service sector in the developed countries.
Rising importance of the Tertiary sector in production I) In any country several services such as hospital, education institutions, post and telegraph services, police stations, courts, village administrative offices, municipal corporation, defense, transport, bank insurance companies etc, are required. This can be considered as the basic services. In the developing country the government has taken responsibility. II) The development of agriculture and industry leads to the development of services such as transport, trade, storage already seen. Greater the development of the primary and secondary sector more would be the demand for such services. III) As income level rise, certain sections of people start demanding many more services like eating out, tourism, shopping, private hospitals, private schools, professional training,etc. In this Sector you can see this change quite sharp in city that to specially in big cities.
Cont….
Cont…. IV) Over the past decade or so, certain new services such as those based on Information Technology have been important and essential. The production of this services has been rising rapidly. V) Not all the services sector is growing equally well. Service sector in countries employs many different kinds of people, at one end there are limited numbers of services that employee highly skilled and educated workers.
Where are most of the people employed?
Cont…. i) A remarkable fact about India is that while there has been a change in the share of the three sectors in GDP, a similar shift has not taken place in employment. ii) Graph shows the share of employment in the 3 sectors in 1970 and 2010 the primary sector continues to be the largest employer even in the year 2010. iii) It is because not enough jobs were created in the secondary and tertiary sectors. iv) Though industrial out put or the production of goods went up by Eight times during the period, employment in the industry went up by only 2.5.
Cont…. v) The same applies to tertiary sector as well, while production in the service sector rose by 11 times, employment in the service sector rose less than 3 times. vi) As a result more than half of the workers in the country are working in the primary sector. vii) Does this mean that the workers in agriculture are not producing as much as they could ? What it means is that there are more people in agriculture than is necessary.
Under employment/ Disguised unemployment 1. Under employment is a situation where people are apparently working but all of them are made to work less than their potential. Here, each one is doing some work but no one is fully employed. 2. This kind of under employment is hidden in contrast to someone who does not have a job and is clearly visible as unemployed. 1. For Example; Rohit and his family have an agricultural plot where they find work. The work requires the service of 5 people but all 8 members of the family are engaged in it. In this way 3 extra people are underemployed. If these 3 people are removed, the productivity of the field will not decline.
How to create employment opportunities? ( in rural & Urban areas) IN RURAL AREAS: i) Dams, canals, tube-wells for irrigation should be constructed. ii) Public facilities such as transport and storage facilities should be developed. iii) Agro-Based industries can be set-up. iv) Provision for education and health services should be made. v) Rural crafts and rural tourism should be promoted.
Cont…. IN URBAN AREAS: i) The education system should be made employment oriented. Vocational training should be merged in mainstream of education pattern. ii) The Government should encourage cottage and small scale industries, agro-based , handicraft industries. iii) Cheap credit should be provided so that people may take up new enterprises. Encouraging foreign investment will also generate employment. iv) Labour intensive technology should be adopted in place of capital intensive techniques and promoting to evolve new avenues of generating employment. v) The government should form policies to promote business activities to enhance growth and employment sectors like education, health, banking etc. must be promoted which have huge job opportunities.
Role of Tourism in creation of Employment  Tourism can definitely provide additional employment to Lakhs of people.  According to the Planning commission of India, if tourism as a sector is improved, every year we can give additional employment to more than 35 lakh people.  For this, the tourism industry in |India would require proper planning and support form the government.  India needs to improve its public services and foster basic hygiene if it wants to appeal to foreign tourists.  India needs to improve its transportation facilities to market itself to the world as a unique country with much to offer to the visiting tourists
Unemployment & Its types
Types of Unemployment 1. The unemployment which generates due to the variation in seasons is called seasonal unemployment. Ex: A person working in Ice factory, a person working in sugar industry. 2. When more people are working than required, it is called disguised unemployment. Ex: Agriculture. 3. As old industries have declined, new industries have emerged, such as higher tech manufacture, IT, computing insurance and internet based companies. However, these new industries may required a different skill set to previous manufacturing jobs, and it is this that can cause structural unemployment.
4. The unemployment that is created because of depression in an economy, it is called cyclic unemployment. Ex: During this downturn people are buying fewer vehicles, so the manufactured doesn’t need as many workers to meet the demand , to cut labour costs he may laid off. It is only temporary. 5. When unemployment happens because of transferring from one job to another, the period between changing the job is called frictional unemployment . Ex: Some one who leaves their current job to look for another. Until they successfully find and begin another job, they are temporarily unemployed.
How to protect workers in the Unorganized sector? 1. In the Unorganized sector, mostly landless agricultural labours, casual workers and artisans are included. 2. The following measures can be adopted to protect the labourers in the unorganized sector: a) Farmers need to be supported through the timely delivery of seeds , agricultural inputs, credit, marketing, storage facilities, etc. b) In urban areas, casual workers need government support for procuring regular jobs. c) The small –scale industry also needs support for procuring raw materials, marketing , loans at cheaper rates. d) There should be strict implementation of the minimum wages Act, Factories Act, etc. e) The Government should devise schemes for their literacy , skill development, social security. f) A Board can be set-up for overlooking as well as suggesting over the laws for the protection of people from the unorganized sector.
Sectors in terms of Ownership
The areas where the government must spend  Providing health and education facilities for all.  Government also needs to pay attention to the aspects of human development.  Availability of safe drinking water , housing facilities for the poor and food and nutrition.  The government should take care of ignored regions of the country through increased spending in such areas.
Role of the Government in Public sector activities • There are several things needed by the society as a whole but which the private sector will not provide at a reasonable cost. • Some of these need spending in large sums of money which is beyond the capacity of the private sector .EX: Construction of Roads and Railways. • The private sector may not continue production of some goods or services unless the government encourages it. EX: Selling electricity at the cost of generation. The government has to bear part of the cost. • The government of India buys wheat and rice form farmers at a fair price and sell them at lower than the market price through ration shops. • There are a large number of activities which are the primary responsibility of the government. EX: Health & Education facilities, etc.
Slides on sectors of indian economy