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.

1. WEL COME

3. This means that the activities through which people earn money
are known as Economic activities.

4. Classification of Economic sectors

12. 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.

14. 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.

15. 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.

20. 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.

21. 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.

22. 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.

23. 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.

24. 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.

25. Cont….

26. 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.

27. Where are most of the people
employed?

28. 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.

29. 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.

30. 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.

31. 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.

32. 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.

33. 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

34. Unemployment & Its types

37. 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.

38. 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.

45. 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.

46. Sectors in terms of Ownership

51. 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.

52. 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.