DPS-MODERN INDIAN SCHOOL, DOHA, QATAR

CLASS X
ECONOMICS NOTES
ACADEMIC YEAR 2016-2016
CHAPTER-2 Sectors of Indian Economy

1. DEFINATION:
i. Final Goods and services: Goods and services that reach the
consumer or are consumed directly by the consumer. The value of
only final goods and services is added in the accounting of
National income.
ii. Intermediate goods and services: Goods and services which are
used in the production process of any other commodity. The value
of the intermediate goods and services is already included in the
value of the Final goods and services.
iii. GDP- Gross Domestic Product: The value of all final goods and
services produced within an economy during a particular year.
It is also the sum total of the income from all the three sectors.
2. Division of sectors on the basis of Economic activities or Occupation:
i. Primary sector: or the Agriculture sector includes all the activities which produce natural
goods. Eg. Agriculture, fishing, poultry farming etc.
ii. Secondary sector: Industrial sector- includes all the activities that produce
manufactured or man-made goods. E.g. Textile, machines, cars etc.
iii. Tertiary sector: Service Sector- includes all the services e.g. insurance, banking,
transport, communication etc.
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Economic activities: All such activities which undertaken by people with the object of
earning money is called economic activities.
Non-economic activities: All such activities which are undertaken to satisfy social,
psychological and emotional needs and does not provide money in return is called noneconomic activities.
Organized Sector: Here people have assured work and terms of employment are regular.
Rules and regulations given in various laws are followed as they are registered by the
government.
Unorganized Sector: It consists of small and scattered units which are largely outside the
control of the government. It is characterized by low-paid and insecure jobs. Rules and
regulations are not followed.
3. Shift in the importance of the sectors: In modern economies the tertiary sector has taken
the place of the most important sector because it contributes the maximum share in
income and employment of these economies
There has been a similar shift in India in case of tertiary sectors share in income. But a
similar shift has not happened in terms of employment i.e. in India the primary sector
continues to dominate the employment being the largest employer till date.
4. Types of Unemployment:
i.
ii.

iii.

Open unemployment: when a person is clearly not employed and visibly looking
for work then it is called as Open unemployment.
Disguised or Underemployment: when the number of workers employed are
more than required or the workers are not working to their full potential it is
called as disguised or underemployment. The labour effect in this case
distributed and the potential of workers is wasted.
Seasonal or Cyclical unemployment: The employment which is available in only
some parts of the year it is Seasonal unemployment. It usually seen in the
agriculture sector.

5. Ways to create employment in the rural areas:

i. Provide irrigational facilities: more irrigation would result in more output and increase
in production which will provide employment to more people in the primary sector itself.
ii. Improvement in Infrastructure: there should be investments made by the government in
Infrastructure like construction of rural roads, provision of electricity, construction of
dams, creation of rural market etc.
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iii. Cheap affordable credit: for cultivation the farmers need credit at lower interest rate so
that they do not have to depend on the moneylenders who exploit them, charging high rate
of interest.
iv. Identify, promote and locate industries in the semi-rural areas. Like setting up of daal
mill close to the area of cultivation would employ surplus labour in that area and will also
will also save the time and cost of transport of raw material.
v. Expansion in education and health sector in rural areas will have both long and short
term benefits. In short term, the need for teachers, principal, doctors, nurses, cleaners,
compounder etc. will create immediate employment opportunities. Whereas in long term,
the more healthy and educated population will have more productive capacity.
vi. Promotion of Tourism: tourism has lot of potential in creating employment and
generating income.
vi. Special employment programs by the Government like National Rural Employment
Guarantee Act ( NREGA) 2005.
6. Classification of sectors on the basis of employment conditions:
i. Organised
ii. Unorganised
7. Difference between the Organised and the Unorganised sector:
Organized sector
1. This sector includes all the
Companies which are registered with
government under some act.
2. These companies have to follow rules
and regulations for protection of
workers.
3. Workers in this sector enjoy special
benefits like paid leaves, payment for
overtime,

Unorganized sctor
The companies which are not registered
with government are included in this sector.
These companies do not follow rules and
regulations for protection of workers.

Workers here are not given any special

benefits, they do not get paid leave, sick
leave, etc.
4. There job security.
There is no job security.
5. Worker get retirement benefits like Worker do not get retirement benefits like
gratuity, provident fund, pension etc. gratuity, provident fund, pension etc.

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8. Distinguish between under employment and open unemployment.

Ans. Under employment:
(a)It is a situation where people are apparently working but all of them are made to
work less than their potential or the worker also gets work for less time than the
time he can work. For example: if just two persons are required to cultivate a farm
measuring 1 hectare but actually five persons are engaged there, then three are
under employed.
(b)This sort of unemployment is hidden and is also disguised unemployment.
Open unemployment:(a)Is a situation where in although the worker is willing to
work and he has the necessary ability to work and yet he does not get a work.
(b) He remains unemployed for full time and is totally dependent on the other
earning members of the family.
9. Give a few examples of public sector activities and explain why the government
has taken them up
Ans- Various activities of public sectors include
a. providing for safe drinking water, housing facilities to the poor, food nutrition
education schools and health facilities.
b. Other activities include construction of railways, roads, bridges, harbours,
Generating electricity, providing irrigation through dams etc.
c. The government has taken up these activities because they are vital for
development of any country . The government must also provide these services at
reasonable cost to every one. Moreover these activities involve high expenditure
which can be taken up by the government only. Hence it is the duty of the
government to take care of the poorest and the most ignored regions of the country
through increased expenditure.

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10. Explain how public sector contributes to the economic development of a nation.
Ans- The public sector contributes to the economic development of a nation in the
following waysa. The public sector can provide services at a reasonable rate. While providing
this the government is not guided by any profit motive but the welfare of the
people. Eg construction of railways, roads, bridges, harbours, generating
electricity, providing irrigation through dams etc. Eg selling electricity at the
cost of generation may increase the cost of production of various industries and
ultimately may result in the closure of industries. The govt. must step in to
support the supply of electricity at affordable rates so that THE ECONOMIC
DEVELOPMENT IS NOT HAMPERED. Similarly the govt. has to promote
fair price shops so that people can avail the basic necessities of life
b. The public Sector controls and develops the key and basic industries of the
country
c. Public sector provides employment to achieve Equal distribution of Income.
d. The government has to support various activities of the service sector for
uniform growth and development in all areas. The primary responsibility of
the government is to provide some basic facilities like supply of safe drinking
water, housing facilities, health, schools etc to the needy and the most ignored
regions for development. Hence human development promotes economic
development
e. Public sector also provides for major employment.

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11. Distinguish between Public sector and private sector.

Ans. Public Sector
i) It is controlled and managed by the government.
ii) The main aim of this sector is public welfare.
iii) This sector provides basic facilities like education, health, food and security to the
people.
iv) E.g. the Indian Railways, Post Office and the BSNL.
Private Sector
i) It is controlled and managed by an individual or a group
ii) The main aim of this sector is to earn maximum profits.
iv) This sector provides consumer goods to the people.
v) E.g. Reliance, TISCO, etc

12. What are the main causes of unemployment?

Ans.i). Insufficient economic development: It is true that under the planned development
millions of new jobs were created but the number of job lookers was much more than
those jobs.
ii). Defective system of education: In our educational system there is lack of training
facilities, lack of vocational and professional guidance.
iii). Slow growth of industrialization: Slow growth of industrialization in the country is
yet another cause of unemployment in the urban areas
Q. 13.What are the advantages of working in an organized sector?
Ans. i). Workers in the organized sector enjoy security of employment.
ii). They work only a fixed number of hours. If they work more, they have to be paid
overtime by the employer.
iii). They also get several other benefits from the employers like paid leave, payment
during holidays, provident fund, gratuity, etc.
iv). They also get medical benefits and, under the laws, the factory manager has to ensure
facilities like drinking water and a safe working environment.
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Q. 14.What are the disadvantages of working in an organized sector?

Or
Why is it necessary to give protection and support to the unorganized sector
workers? Explain.
Ans. i).The unorganized sector is characterized by small and scattered units which are
largely outside the control of the government.
ii). There is no provision of overtime, paid leave, holidays, leave due to sickness, etc.
iii). Employment is subject to high degree of insecurity.
iv). Workers working in an unorganized sector get fewer wages.

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