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Chapter 2: Sectors of The Indian Economy
There are many activities that are undertaken by directly using natural resources. Take, for example, the cultivation of cotton. It takes place within a crop season. For the growth of the cotton plant, we depend mainly, but not entirely, on natural factors like rainfall, sunshine and climate. The product of this activity, cotton, is a natural product.
Similarly, in the case of an activity like dairy, we are dependent on the biological process of the animals and availability of fodder etc. The product here, milk, also is a natural product. Similarly, minerals and ores are also natural products. When we produce a good by exploiting natural resources, it is an activity of the primary sector. Why primary? This is because it forms the base for all other products that we subsequently make.
Since most of the natural products we get are from agriculture, dairy, fishing, forestry, this sector is also called agriculture and related sector. The secondary sector covers activities in which natural products are changed into other forms through ways of manufacturing that we associate with industrial activity. It is the next step after primary.
The product is not produced by nature but has to be made and therefore some process of manufacturing is essential. This could be in a factory, a workshop or at home. For example, using cotton fibre from the plant, we spin yarn and weave cloth. Using sugarcane as a raw material, we make sugar or gur.
We convert earth into bricks and use bricks to make houses and buildings. Since this sector gradually became associated with the different kinds of industries that came up, it is also called as industrial sector. After primary and secondary, there is a third category of activities that falls under tertiary sector and is different from the above two. These are activities that help in the development of the primary and secondary sectors.
These activities, by themselves, do not produce a good but they are an aid or a support for the production process. For example, goods that are produced in the primary or secondary sector would need to be transported by trucks or trains and then sold in wholesale and retail shops. At times, it may be necessary to store these in godowns.
We also may need to talk to others over telephone or send letters (communication) or borrow money from banks (banking) to help production and trade. Transport, storage, communication, banking, trade are some examples of tertiary activities.
Since these activities generate services rather than goods, the tertiary sector is also called the service sector. Service sector also includes some essential services that may not directly help in the production of goods. For example, we require teachers, doctors, and those who provide personal services such as washermen, barbers, cobblers, lawyers, and people to do administrative and accounting works.
In recent times, certain new services based on information technology such as internet cafe, ATM booths, call centres, software companies etc have become important. The various production activities in the primary, secondary and tertiary sectors produce a very large number of goods and services. Also, the three sectors have a large number of people working in them to produce these goods and services.
The next step, therefore, is to see how much goods and services are produced and how many people work in each sector. In an economy there could be one or more sectors which are dominant in terms of total production and employment, while other sectors are relatively small in size.
How do we count the various goods and services and know the total production in each sector? With so many thousands of goods and services produced, you might think this is an impossible task! Not only would the task be enormous, you might also wonder how we can add up cars and computers and nails and furniture. It won’t make sense!!! You are right in thinking so.
To get around this problem, economists suggest that the values of goods and services should be used rather than adding up the actual numbers. For example, if 10,000 kgs of wheat is sold at Rs 20 per kg, the value of wheat will be Rs 2,00,000.
The value of 5000 coconuts at Rs 15 per coconut will be Rs 75,000. Similarly, the value of goods and services in the three sectors are calculated, and then added up. Remember, there is one precaution one has to take. Not every good (or service) that is produced and sold needs to be counted. It makes sense only to include the final goods and services.
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NCERT Solutions Class 11 Social Science Chapter 2 Sectors of The Indian Economy
Q6: Do you think the classification of economic activities into primary, tertiary, and secondary is useful? Explain how.
The classification of economic activities into primary, secondary, and tertiary sectors is helpful as mentioned below :
- It provides information on how and where the people of a country are employed. For example in India in 2000, the share of the primary sector in employment was about 60 percent e., more than other sectors.
- It also helps in ascertaining as to which sector of economic activity contributes more or less to the country’s GDP and per capita income.
- If the tertiary sector is developing much faster than the primary sector, then it implies that agriculture is depleting and the government must take measures to rectify this.
- The knowledge that the agricultural profession is becoming unpopular or regressive can only come if we know which sector it belongs to.
- It provides us information about employment conditions in different sectors. For example in India, the primary sector faces the problem of disguised unemployment. In this sector, more people are employed and even if some are removed, production will not be affected.
- It provides us the information about progress in different sectors. For example, the importance of the tertiary sector has increased due to various factors need for basic services and the coming of IT services.
In view of the above factors, it is necessary to classify economic activities into three sectors for smooth economic administration and development.
Q7: For each of the following sectors that we came across in this chapter why should one focus on employment and GDP? Could there be other issues which should be examined? Discuss.
(1) For each of the sectors we focus on employment and GDP due to the reasons mentioned below :
- To know the number of people employed in that sector. For example in 2000, the share of the primary sector in employment was more than secondary and tertiary sectors.
- To know the share of each sector in the GDP. For example in 2000, the share of the tertiary sector was more than that of the agriculture sector and secondary sector in the GDP.
- By focusing on GDP and employment we can draw conclusions regarding the generation of new employment opportunities in various sectors and take necessary steps accordingly.
- We come to know employment conditions for workers such as in the unorganized sector and take necessary steps to improve their condition. So that the workers are not exploited.
(2) Focus should be laid on other issues such as conditions of work, profit motive, efficiency, public welfare, environmentally friendly.
- Conditions of work should be in the favour of workers.
- The employment should be regular and the employer should follow various laws such as Factories Act, Minimum Wages Act etc.
- The production must be for the welfare of the people who should not be exploited by raising prices or creating a scarcity of goods in the market. Thus, such issues must be examined while discussing the role of different sectors in the economy of the country.
NCERT Class 11 Social Science Textbook Chapter 2 With Answer PDF Free Download