Sectors of the Indian Economy

Economic activities in a country can be grouped into sectors. In the primary sector, goods are produced by directly using natural resources, as in agriculture, fishing and mining. In the secondary sector, natural products are changed into other forms through manufacturing. The tertiary or service sector supports the other two through transport, storage, communication, banking and trade, and it also includes services such as teaching and medicine. This chapter explains how the value of final goods and services produced in a year gives the Gross Domestic Product (GDP), and why only final goods are counted to avoid double counting. You will see how the tertiary sector has become the largest producing sector in India, while the primary sector still employs the largest share of workers. The chapter explains underemployment and disguised unemployment, and ways to create jobs, such as the Mahatma Gandhi National Rural Employment Guarantee Act of 2005. It also contrasts the organised and unorganised sectors, and the public and private sectors, and examines why protecting unorganised workers and providing public facilities such as railways, schools and hospitals matter.

Detailed Worksheet: Sectors of the Indian Economy Section A - Definitions (10 marks) 1. Define the primary, secondary and tertiary sectors with one example each. (2 marks) 2. What is Gross Domestic Product (GDP)? (2 marks) 3. What are final goods and intermediate goods? (2 marks) 4. What is disguised unemployment? Give an example. (2 marks) 5. Distinguish between the organised and unorganised sectors. (2 marks) Section B - Calculations and Applications (15 marks) 6. A farmer sells wheat to a flour mill for Rs 8 per kg. The mill sells flour to a biscuit company for Rs 10 per kg. The company uses the flour to make biscuits sold for Rs 60. Calculate the value of the final good and the value that would be counted wrongly if all sales were added. Explain double counting. (3 marks) 7. In an illustrative year, India's GDP was Rs 200 lakh crore, of which the primary sector contributed Rs 36 lakh crore and the secondary sector Rs 50 lakh crore. Calculate the tertiary sector's contribution and the percentage share of each sector. (3 marks) 8. A family of 8 works on a small farm that needs only 5 workers. Calculate the number of disguised unemployed. If 3 of them get jobs elsewhere earning Rs 300 per day for 25 days a month, calculate the extra monthly family income. (3 marks) 9. Under MGNREGA, a rural household is guaranteed 100 days of work in a year. If the wage is Rs 250 per day, calculate the guaranteed annual income per household. What happens if the government fails to provide work? (3 marks) 10. In an illustrative workforce of 50 crore, 44% work in the primary sector, 25% in the secondary sector and 31% in the tertiary sector. Calculate the number of workers in each sector. Compare this with each sector's share in GDP. (3 marks) Section C - Diagrams (10 marks) 11. Draw a flowchart showing how the three sectors are interdependent, using the example of cotton, textile mills and transport. (4 marks) 12. Draw a bar diagram for the illustrative shares of GDP: primary 18%, secondary 25%, tertiary 57%. (3 marks) 13. Draw a chart classifying the sectors on the basis of ownership and employment conditions. (3 marks) Section D - Analysis and Higher-order Thinking (15 marks) 14. Why has the tertiary sector become so important in India? Explain the reasons, and why not all of the service sector is growing equally well. (5 marks) 15. 'The primary sector employs the largest share of workers but produces a much smaller share of GDP.' Explain this situation and suggest ways to create more employment in rural areas. (5 marks) 16. Why is it necessary to protect workers in the unorganised sector? Explain with examples, and the role of the public sector in providing essential services. (5 marks) Instructions: Time allowed 2 hours. Attempt all sections. Show the steps of all calculations. Data marked illustrative are for practice only.