SECTORS OF INDIAN ECONOMY ON THE BASIS OF NATURE OF ACTIVITIES

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Sectors of Indian economy :

Sectors of Indian economy PRESENTED BY : MUKEEB UL RASHID ROLL NO . 18 CLASS : 10TH

What is economy ?:

What is economy ? Economy is a framework in which economic activities take place and therefore gives income in return . we divide them into sectors .

We classify sectors into different criteria i.e.,:

We classify sectors into different criteria i.e., Nature of job Working conditions Ownership

On the basis of nature of job , we divide them into -:

On the basis of nature of job , we divide them into - Primary sector Secondary sector Tertiary sector

Primary sector :

Primary sector It covers activities that are undertaken by directly using natural resources .In other words when we produce goods by exploiting natural resources it is an activity of primary sector. It is called primary sector because it forms the base for all other products Since most of the natural products we get from agriculture, dairy, fishing, forestry, apiculture, mining etc. So this sector is also called agriculture and related sector

Agriculture:

Agriculture In developed countries primary industry are becoming more technologically advanced, for instance the mechanization of farming as opposed to hand picking and planting. In more developed economies additional capital is invested in primary means of production. As an example, in the United States corn belt, combine harvesters pick the corn, and spray systems distribute large amounts of insecticides, herbicides and fungicides, producing a higher yield than is possible using less capital-intensive techniques. These technological advances and investment allow the primary sector to require less workforce and, this way, developed countries tend to have a smaller percentage of their workforce involved in primary activities, instead having a higher percentage involved in the secondary and tertiary sectors. Developed countries are allowed to maintain and develop their primary industries even further due to the excess wealth. For instance, European Union agricultural subsidies provide buffers for the fluctuating inflation rates and prices of agricultural produce. This allows developed countries to be able to export their agricultural products at extraordinarily low prices. This makes them extremely competitive against those of poor or underdeveloped countries that maintain free market policies and low or non-existent tariffs to counter them. Such differences also come about due to more efficient production in developed economies, given farm machinery, better information available to farmers, and often larger scale.

Secondary sector :

Secondary sector It covers activities in which the natural products are changed in other forms through ways of manufacturing that we associate with industrial activities. The product is not produced by nature but has to be made in a factory or workshop or at home and, therefore, some process of manufacturing is essential. Since this sector gradually became associated with different kinds of industries that came up, it is also called as industrial sector . For example, sugar or gur is manufactured from sugarcane, bread from wheat flour etc.

Tertiary sector :

Tertiary sector When the activity involves providing intangible goods like services then this is part of the tertiary sector. Financial services, management consultancy, telephony and IT are good examples of service sector.

Tertiary sector :

Tertiary sector These are the activities that help in the development of primary and secondary sector. These activities do not produce goods but they are an aid or support for the production process. Since these activities generate services rather than producing goods, the tertiary sector is also called service sector .

Evolution of an Economy from Primary Sector Based to Tertiary Sector Based :

Evolution of an Economy from Primary Sector Based to Tertiary Sector Based During early civilization all economic activity was in primary sector. When the food production became surplus people’s need for other products increased. This led to the development of secondary sector. The growth of secondary sector spread its influence during industrial revolution in nineteenth century. After growth of economic activity a support system was the need to facilitate the industrial activity. Certain sectors like transport and finance play an important role in supporting the industrial activity. Moreover, more shops were needed to provide goods in people’s neighbourhood. Ultimately, other services like tuition, administrative support developed.

Primary , secondary and tertiary sector in India :

Primary , secondary and tertiary sector in India

Economic activities are highly interdependent on each other :

Economic activities are highly interdependent on each other To understand this interdependency, let us take an example of a cold drink. A cold drink contains water, sugar and artificial flavour. Suppose if there is no sugarcane production then procuring sugar will become difficult and costly for the cold drink manufacturer. Now to transport sugarcane to sugar mills and sugar to the cold drink plant needs the services of a transporter. A person or system of persons is required to maintain and monitor all these movements of goods from farm to factory to shop in different locations.

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That is where role of administrative staffs comes. Let us go back to the farmer. He also needs fertilisers and seeds which is processed in some factory and which will be delivered to his doorstep by some means of transportation. To top it all at every step of the se activities we require the proper monetary and banking system. So, in a nutshell this describes how interrelated all sectors of an economy are.

Comparing the three sectors:

Comparing the three sectors We count only final goods and services and not the intermediate goods as the value of final gods already includes the value of all intermediate goods . For example , the value of Rs. 60 for the biscuits ( final good ) already includes the value of flour Rs. 10 similarly , the value of all other intermediate goods would have been included .

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To count the value of the flour and the wheat separately is therefore not correct because then we would be counting the value of the same things a number of times first as wheat then as flour and finally as biscuit . 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 us the GDP . The finance ministry , with the help of various government department of all the Indian states and union territories estimates the GDP .

The distribution of the workforce among the three sectors progresses through different stages as follows,:

The distribution of the workforce among the three sectors progresses through different stages as follows , First phase: Traditional civilizations Workforce quotas: Primary sector: 70% Secondary sector: 20% Tertiary sector: 10% This phase represents a society which is scientifically not yet very developed, with a negligible use of machinery. The state of development corresponds to that of European countries in the early Middle Ages, or that of a modern-day developing country.

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Second phase: Transitional period Workforce quotas: Primary sector: 40% Secondary sector: 40% Tertiary sector: 20% More machinery is deployed in the primary sector, which reduces the number of workers needed. As a result, the demand for machinery production in the secondary sector increases. The transitional phase begins with an event which can be identified with industrialisation: far-reaching mechanisation (and therefore automation) of manufacture, such as the use of conveyor belts. The tertiary sector begins to develop, as do the financial sector and the power of the state.

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Third phase: Tertiary civilization Workforce quotas: Primary sector: 10% Secondary sector: 20% Tertiary sector: 70% The primary and secondary sectors are increasingly dominated by automation, and the demand for workforce numbers falls in these sectors. It is replaced by the growing demands of the tertiary sector. The situation now corresponds to modern-day industrial societies and the society of the future, the service or post-industrial society. Today the tertiary sector has grown to such an enormous size that it is sometimes further divided into an information-based quaternary sector, and even a quinary sector based on non-profit services.

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BASIC GOODS 45.68% CAPITAL GOODS 8.83% CONSUMER GOODS 8.46% MANUFACTURING < 25 LAKH >25 LAKH >5 CR SERVICE <10LAKH >10 LAKH >2CR MINING 14.16% MANUFACTURING 75.53% ELECTRICITY 10.32% SIZE OF INVESTMENT USEOF GOODS SECTORS

Tertiary sector is not playing any significant role in development of Indian economy . . .:

Tertiary sector is not playing any significant role in development of Indian economy . . . Tertiary sector in India employs many different kind of people . At one end there are a limited no, of services that employs highly skilled and educated workers . At the other end there are large number of workers engaged in services such as small shopkeepers , repair people , transport people . These people barely manage to earn for life and yet they perform these services because no other alternate opportunities for work are available for them Hence only a part of this sector is growing importance .

Service sector in India employs two different kinds of people. :

Service sector in India employs two different kinds of people. Service sector in India employs two different kinds of people. These are primary and ancillary workers. Primary workers include those who directly provide services while ancillary workers are composed of those who give services to the service providers. For example, consultants make available their services to consultancy firms etc.

Evolution of an Economy from Primary Sector Based to Tertiary Sector Based :

Evolution of an Economy from Primary Sector Based to Tertiary Sector Based During early civilization all economic activity was in primary sector. When the food production became surplus people’s need for other products increased. This led to the development of secondary sector. The growth of secondary sector spread its influence during industrial revolution in nineteenth century. After growth of economic activity a support system was the need to facilitate the industrial activity. Certain sectors like transport and finance play an important role in supporting the industrial activity. Moreover, more shops were needed to provide goods in people’s neighbourhood. Ultimately, other services like tuition, administrative support developed.

Economic activities are highly interdependent on each other :

Economic activities are highly interdependent on each other To understand this interdependency, let us take an example of a cold drink. A cold drink contains water, sugar and artificial flavour. Suppose if there is no sugarcane production then procuring sugar will become difficult and costly for the cold drink manufacturer. Now to transport sugarcane to sugar mills and sugar to the cold drink plant needs the services of a transporter. A person or system of persons is required to maintain and monitor all these movements of goods from farm to factory to shop in different locations.

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To count the value of the flour and the wheat separately is therefore not correct because then we would be counting the value of the same things a number of times first as wheat then as flour and finally as biscuit . 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 us the GDP . The finance ministry , with the help of various government department of all the Indian states and union territories estimates the GDP .

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Historical change in the sectors: three stages.

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INITIAL STAGE: After observing the changes that have come in the development patterns of the sectors, it has been found that in the Initial stages of the development the Primary Sector was the most important sector of economic activity . As the methods of farming changed and agricultural sector began to prosper, it produced much more food than before and many people could take-up many other activities which led to the increase in number of activities. However at this stage most of the goods produced were natural products from the primary sector, hence most people were employed in this sector .  

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SECOND STAGE: Over a long time(more than hundred years or so) because new methods of manufacturing were introduced, factories came up and started expanding. -People began to work in factories in large numbers, and also people started using factory goods in large numbers as they were cheap. -Secondary sector gradually became the most important in total production and employment. There was a shift and the importance of the sectors also changed . THIRD STAGE: In past hundred, there has been a further shift from Secondary to Tertiary sector in the developed countries. -The service sector has become the most important in terms of total production. Most of working people are also employed in the service sector.

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WHERE ARE MOST OF THE PEOPLE EMPLOYED ? WHY ? The primary sector employs the largest number of people in India. --It is because not enough jobs were created in the secondary and tertiary sectors .

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THANK YOU!.....

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