SECTORS OF THE INDIAN ECONOMY
Sectors of Economic Activities : Those activities which generate some income are known as economic activities. There are many activities that are undertaken by directly using natural resources. When we produce a good by exploiting the natural resources, it is an activity of the Primary sector. 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 sectors. The Secondary sector covers activities in which natural products are changed into other forms through ways of manufacturing that we associate with industrial activity. Secondary sector gradually becomes associated with the different kinds of industries that came up, it is called the industrial sector. The Tertiary sector activities that help in the development of the primary and the secondary sector like Transport, storage, communication, banking, trade are some examples of the tertiary sector. Since these activities generate services rather than goods, the tertiary sector is also called the service sector. Comparing the Three Sectors- The value of final goods and services produced in each sector during a particular year provides the total production of the sector for that year. The sum of production in the three sectors gives gross domestic product( GDP) of a country. GDP is the value of all final goods and services produced within a country during a particular year. It shows how big the economy is. In India, the task of measuring GDP is undertaken by the central government ministry.
Historical Changes in Sectors : The primary sector was the most important sector of economic activity. New methods of manufacturing were introduced, factories came up and started expanding. Secondary sector gradually became the most important in total production and employment. In the past 100 years, there has been a further shift from secondary to tertiary sector in developed countries. Rising Importance of the Tertiary Sector in Production. Over the forty years between 1970-71 and 2011-12, while production in all the three sectors has increased, it has increased the most in the tertiary sector. As a result, in the year 2011-12 the tertiary sector has emerged as the largest producing sector in India replacing the primary sector.
Tertiary sector is becoming more important. some of the reasons are: The government has taken responsibility to provide basic services like transportation, education, hospitals etc. The development of agriculture and industry leads to the development of services. Income level rise, certain sections of people start demanding many more services like tourism etc. ICT has become important and essential.
Where Are Most People Employed? A remarkable fact about India is that while there has been a change in the share of the three sectors in GDP, but a similar shift has not taken place in employment. The primary sector continues to be the largest employer even now. More than half of the workers in the country are working in the primary sector, mainly in agriculture, producing only a quarter of the GDP. Though industrial output or the production of goods went up by 9 times during this period, employment in the industry went up by only three times. The same applies to the tertiary sector as well. While production in the service sector rose by 14 times, employment in the service sector rose less than five times. It means that there are more people in agriculture than is necessary. So, even if you move a few people out, production will not be affected. In other words, workers in the agricultural sector are under-employed. The underemployment is hidden in contrast to someone who does not have a job and is clearly visible as unemployed. Hence, it is also called disguised unemployment.
How to Create More Employment? Promote and locate industries and services in semi-rural areas where a large number of people may be employed. A study conducted by the Planning Commission estimates that nearly 20 lakh jobs can be created in the education sector alone. And if tourism as a sector is improved, every year we can give additional employment to more than 5lakh people. The central government in India made a law implementing the Right to Work. Under Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA 2005), 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.
Division of Sectors as Organized and Unorganized - Organized sector: It covers those enterprises or places of work where the terms of employment are regular and therefore, people have assured work. It is called organized because it has some formal processes and procedures. Unorganized sector : It is characterized by small and scattered units which are largely outside the control of the government. There are rules and regulations but these are not followed. Jobs here are low-paid and often not regular. Employment is not secure. This sector includes a large number of people who are employed on their own doing small jobs such as selling on the street or doing repair work.
How to Protect Workers in the Unorganized Sector? The organized sector offers jobs that are the most sought-after. It is also common to find many organized sector enterprises in the unorganized sector. Since the 1990s, it is also common to see a large number of workers losing their jobs in the organized sector. In the rural areas, the unorganized sector mostly comprises landless agricultural laborer's, small and marginal farmers, sharecroppers and artisans. Nearly 80% of rural households in India are in the small and marginal farmer category. In the urban areas, the unorganized sector comprises mainly of workers in the small-scale industry, casual workers in the construction, trade and transport etc., and those who work as street vendors, head load workers, garment makers, rag pickers etc. Majority of workers from scheduled castes, tribes and backward communities find themselves in the unorganized sector. Besides getting the irregular and low paid work, these workers also face social discrimination. There is a need for protection and support of the workers in the unorganized sector. The government can fix the minimum wages rate and working hours. Government can provide cheap loans to self-employed people. Government can provide cheap and affordable basic services like education, health, and food to those workers. Framing new laws which can provide provision for overtime, paid leave, leave due to sickness, etc. Protection and support to the unorganized sector workers is thus necessary for both economic and social development.
Sectors in terms of Ownership: Public and Private Sectors - Public sector: In the public sector, the government owns most of the assets and provides all services. The purpose of the public sector is not just to earn profits. Governments raise money through taxes and other ways to meet expenses on the services rendered by it. Private sector: In the private sector, ownership of assets and delivery of services is in the hands of private individuals or companies. Activities in the private sector are guided by the motive to earn profits. There are several things needed by the society as a whole but which the private sector will not provide at a reasonable cost. Collecting the money from thousands of people who use these facilities is not easy. Even if they provide these things they would charge a high rate for them. Thus, governments have to undertake such heavy spending and ensure that these facilities are available for everyone. There are some of the activities, which the government has to support. The private sector may not continue their production or business unless the government ensures it like selling electricity, etc. The government also needs to pay attention to aspects of human development such as drinking water, sanitation, housing facilities etc. It is also the duty of the government to take care of the poorest and most ignored regions of the country through increased spending in such areas.
Share
& Comment
Tweet