Chapter-2, Sectors of Indian Economy, Class-X, Economics

Class-X, Economics

Chapter- 2 

Sectors of Indian Economy

Chapter Outline

• Three sectors of Economy
• Comparison of three sectors of the Economy
• Difference between organised and unorganised sectors
• Classification of economic activities

Economic Activities

• Those activities which generates some income are known as economic activities.
→ For example, a computer engineer creating software for profit is making money from his work.

• Division of Economic Activities:
→ Primary sectors: related to farming activities.
→ Secondary sectors: related to manufacturing.
→ Tertiary sector: provide support to other two sectors.

Comparison of three sectors of the Economy (Through productivity and population)

• As thousands of economic activities going around in all three sectors, it makes almost impossible to take account of every such activities.

• We check only final goods and services.

• for example, a farmer who sells wheat to a flour mill for Rs 8 per kg. 

→ The mill grinds the wheat and sells the flour to a biscuit company for Rs 10 per kg. 

→ The biscuit company uses the flour and things such as sugar and oil to make four packets of biscuits. 

→ It sells biscuits in the market to the consumers for Rs 60 (Rs 15 per packet). 

→ Biscuits are the final goods, i.e., goods that reach the consumers.

Gross Domestic Product (GDP) 

• The value of final goods and services produced in all three sectors during a particular year provides the total production of the sector for that year is called the Gross Domestic Product (GDP) of a country. 

• More the GDP, more bigger the economy of the country is.

Historical Changes in sectors

• At initial stages of development, primary sector was the most important sector of economic activity in a country. 

• With the innovation in farming methods, agriculture sector began to produced much more food than before. 

• People started working in industries. 5. Some people also get involved in transportation.

• Gradually, Secondary sector became the most important in economy and providing employment. 2. 

• Different industries related to food processing, equipment’s making, textiles coming in large numbers. 

• This lead to start of services such as banking, health, education etc. 

• The service sector has become the most important sector in terms of total production and started employing more people.

Contribution in GDP

• In the period of 1973-74, the primary sector has contributed maximum to the GDP

• But in 2013-14 when tertiary sector has contributed maximum in GDP. Now the question is Why? There are various factors behind this. Let’s study these in detail.

Factors behind the shift in contribution in GDP

• The development of agriculture and industry leads to the development of services such as transport, trade, storage, banking. 

• The greater the development of the primary and secondary sectors, more would be the demand for such services. 

Where are most of the people employed? 

• In the period during 1973-74, 40% is contributed by the primary sector in GDP of the country 

→ Secondary sector contributed only 12% and 48% is contributed by the tertiary sector. 

→ Employment percent during the period of 1972-73, 74% people of India are engaged in primary sector while only 15% are involved in tertiary sector.

• In 2013-14, the percent of contribution of tertiary sector in GDP of the country increased and reached to 67% 

→ The primary sector reduced to only 12%. 

→ The primary sector continues to be the largest employer during 2011-12.

Disguised Unemployment

• More people engaged in agriculture than the necessity. 

• This kind of underemployment is hidden in contrast to someone who does not have a job and is clearly visible as unemployed, it is also called disguised unemployment.

How to create employment?

• Granting Loans at lower interest Rate

• Investing in infrastructure such as Building a dam at suitable place.

• Increasing efficiency of transportation and Storage. 

• Promoting small scale Industries such as mills, honey collection centers.

• Emphasis on Education and training center.

• Identifying Potential of an area. For example, an area can be developed as tourist site.

• Government Welfare Schemes like making well or pump near farms, providing electricity, building hospitals.

MGNREGA

• The central government in India made a law implementing the Right to Work in 625 districts called Mahatma Gandhi National Rural Employment Guarantee Act 2005 known as MGNREGA 2005. 

• Under MGNREGA 2005:

→ In rural areas, all those who are able to, and are in need of work are guaranteed 100 days of employment in a year by the government.  

→ If the government fails in its duty to provide employment, it will give unemployment allowances to the people.

Difference between Organised and unorganised sectors

• Organised sector are registered by the government and have to follow its rules and regulations while unorganised sector are largely outside the control of the government. 

• Workers in the organised sector enjoy security of employment while in the unorganised sector, there is no job security. 

• Organised sector are expected to work only a fixed number of hours while in unorganised sector, there is no pay for overtime working. 

• Organised sector workers get paid leave, payment during holidays, provident fund, gratuity, medical benefits etc while no such benefits are given in unorganised sector. 

• Examples of organised sectors are government employees, banks while examples of unorganised sectors are home tutors, person working in small general stores.

Classification of Economic activities into sectors (on the basis of who owns assets and is responsible for the delivery of services)

Activities can be classified into two types:

• Private sector: 

→ The government owns most of the assets and provides all the services.

→ Example: Railways or post office

• Public sectors:

→ Ownership of assets and delivery of services is in the hands of private individuals or companies.

→ Example: Tata Iron and Steel Company Limited (TISCO) or Reliance Industries Limited (RIL).

THE END

Class-X : Economics Chapter- 1 : Development

 

ODISHA ADARSHA VIDYALAYA PALASAGADIA

Class-X : Economics

Chapter- 1 : Development

 

Topics in the Chapter
• Overview
• What Development Promises —Different People, Different Goals.
• Income and Other Goals.
• National Development.
• How to Compare Different Countries or States?
• Income and Other Criteria.
• Public Facilities.
• Sustainability of Development.

Overview

(i) Perspectives on development.

(ii) Common indicators for development.

(iii) Method for measuring development.

(iv)Concept of purchasing power parity.

What Development Promises - Different People, Different Goals

→ Development promises a real growth by enhancing total income and standard of living of a person.

→ Different people have different development goals. The development goals are varying from people to people.

→ For example, a girl from a rich urban family gets as much freedom as her brother and is able to decide what she wants to do in life. She is able to pursue her studies abroad.

Income and Other Goals

→ People prefer to earn more income for fulfilling their daily requirements of life. Companies provide material thing like, money. But people also want non-material thing like, freedom, security, and respect of others.

→ Some companies provide less salary but offer regular employment which enhances sense of securities.

→ In other case, some companies provide high salary but offer no job securities. They reduce sense of securities.

National Development

→ National development refers to ability of a nation to improve standard of living of its citizens.

→ Standards of living of citizens depend upon per capital income, Gross Domestic Product, literacy rate and availability of health etc. These factors also consider as measure of improvement.

How to Compare Different Countries or States?

→ We can compare different countries or state on the basis of per capital income.

→ We cannot take national income to compare different countries because each country has different population rate.

→ Per capita income is calculated by dividing total income of a country to total population of that particular country.

→ Per capita income of a country shows the standard of living of the citizens of that particular company.

→ A country with higher per capita income is more developed than others with less per capita income.

Income and Other Criteria

→ For achieving development goal of people, people not only want better income, they also want non-material thing like, freedom, security, and respect of others. 

→ For development of a nation average income or per capital income is needed.

If per capita income were to be used as the measure of development, Haryana will be considered the most developed and Bihar the least developed state of the three. However, this is not true, if we look at the other criteria. 

• Literacy Rate: It is the number of people above 7 years of age who are able to read and write with understanding. Higher the literacy rate, more developed a state will be. India has a literacy rate of 64%. Kerala has the highest literacy rate and Bihar has the lowest.

• Infant Mortality Rate: It is the number of children that die before attaining one year of age as a proportion of 1000 live births in a year. It indicates the development of health facilities in a country. In India, Kerala has the lowest IMR while Bihar has the highest.

• Net Attendance Ratio: It is the total number of children of age group 14 and 15 years attending school as a percentage of total number of children in the same age group.

• In this table:

→ The first columns shows that in Kerala, out of 1000 children born, 12 died before completing one year of age but in Haryana, the proportion of children dying within one year of birth was 36, which is two times more than that of Kerala. This number is 44 in Bihar.

→ Literacy rate in Kerala is 94 percent which is higher than Haryana (82%) and Bihar (62%).

→ The last columns shows that in Kerala, 83 children out of 100 aged 14-15 are not attending school beyond Class 8 which is greater than Haryana (61) and Bihar (43).

 

Public Facilities

→ Facilities which are provided by the government considered as public facility like schools, hospitals, community halls, transport, electricity etc.

→ As we know that Punjab has more income than the average person in Kerala but Kerala has a low infant Mortality Rate because of better public system like, Public Distribution System which provide Health and nutritional status to the state.

→ We need public facility because we are not able to purchase all things by money. We cannot able to buy a pollution free environment with the help of money.

 

Sustainability of Development

→ Sustainable Development refers to development of human with at the same time sustaining the ability of natural system.

→ It is helpful to fulfils the needs of the human being without harming the ability of the future generation.

→ For sustainable development, we have to use non-renewable resources like carbon based originally designed fuel for the quantity how much we needed.

→ Some renewable resources like groundwater will take long time for replenished. So, we should use that resource in finite quantity.

• Infant Mortality Ratio: Infant Mortality Ratio indicates the number of children who die before the age of one year, as a proportion of 1000 live children born in that particular year.

• Literacy Rate: Literacy Rate measures the proportion of literate population in the 7 and above age group.

• Net Attendance Ratio: It is the total number of children of age group 14 and 15 years who attending school as a percentage of total number of children in the same age group.

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PEOPLE AS RESOURCE

 

CLASS- IX                    ECONOMICS

02.              PEOPLE AS RESOURCE

 

Chapter outline

·       Human capital

·       Sectors under economic activities

·       Market and non-market activities

Overview

This chapter provides following concepts:

Human Capital: Human capital is the stock of knowledge, habits, social and personality attributes, including creativity, embodied in the ability to perform labor so as to produce economic value.

Humans perform many activities, one way to classify these activities, Economic Activities and Non-economic Activities

1. Economic Activities

Economic activities are those activities which are done for monetary gains or in other person doing the activity get money in return of his/her services. Such activities include Teaching, engineering, doctors, labourer, shop keepers, lawyers etc.

2. Non-Economic Activities

Non economic activities are done without any monetary gains.

Sectors under Economic activities:

• Primary Sector

An industry involved in the extraction and collection of natural resources, such as copper and timber, as well as by activities such as farming and fishing. A company in a primary industry can also be involved in turning natural resources into products. This sector includes agriculture, forestry, animal husbandry, fishing, poultry farming and mining etc.

• Secondary Sector

The secondary sector of the economy includes industries that produce a finished, usable product or are involved in construction. This sector generally takes the output of the primary sector and manufactures finished goods or where they are suitable for used by other businesses, for export, or sale to domestic consumers.

• Tertiary Sector

The tertiary sector of industry involves the provision of services to other businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer, as may happen in wholesaling and retailing, pest control or entertainment. The goods may be transformed in the process of providing the service, as happens in the restaurant industry.

Market and Non-market activities:

Market activities involves the remuneration paid to anyone who performs an activity for earning money, it may generate profits.

 

 

 

 

 

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