SECTORS OF INDIAN ECONOMY
Class 10 | RBSE & CBSE Board Exam 2026
Complete Wikipedia-Style Notes | Marwari Mission 100™
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📋 Table of Contents
- 1. Introduction to Economic Sectors
- 2. Primary Sector (Agriculture)
- 3. Secondary Sector (Industry)
- 4. Tertiary Sector (Services)
- 5. Comparison of Three Sectors
- 6. GDP and Sectors
- 7. Employment in Sectors
- 8. Organised vs Unorganised Sector
- 9. Public vs Private Sector
- 10. Key Points for Exam
- 11. Important Questions
- 12. FAQs
1. Introduction to Economic Sectors
The economy of any country can be divided into different sectors based on the nature of economic activities. These sectors help us understand how an economy functions and where people are employed.
Economic activities are broadly classified into three sectors based on the nature of production: Primary, Secondary, and Tertiary sectors.
📘 Definition: Economic Sector
An Economic Sector is a part of the economy that groups similar types of economic activities. The Indian economy is divided into three main sectors: Primary (Agriculture), Secondary (Industry), and Tertiary (Services).
Classification of Sectors:
Primary Sector
Agriculture, Fishing, Mining, Forestry
Secondary Sector
Manufacturing, Construction
Tertiary Sector
Banking, Transport, Trade, Services
2. Primary Sector (Agriculture Sector)
📘 Definition: Primary Sector
Primary Sector includes all activities that are connected with extraction and production of natural resources. It is also called Agriculture and Allied Sector.
Why is it called Primary Sector?
It is called Primary because it forms the base for all other products. The products of this sector are used as raw materials for other sectors.
Activities in Primary Sector:
- Agriculture: Farming of crops like wheat, rice, sugarcane
- Animal Husbandry: Dairy farming, poultry, cattle rearing
- Fishing: Marine and inland fishing
- Forestry: Timber, medicinal plants, forest products
- Mining: Extraction of coal, iron ore, petroleum
- Quarrying: Stone, sand, gravel extraction
💡 Important Facts about Primary Sector in India
- Employs about 42% of India's workforce (largest employer)
- Contributes only about 14-17% to GDP
- This shows disguised unemployment exists in this sector
3. Secondary Sector (Industrial Sector)
📘 Definition: Secondary Sector
Secondary Sector covers activities in which natural products are changed into other forms through ways of manufacturing. It is also called Industrial Sector.
Why is it called Secondary Sector?
It is called Secondary because it uses the products of the primary sector as raw materials and processes them to create finished goods. It comes next after the primary sector.
Activities in Secondary Sector:
- Manufacturing: Textiles, steel, automobiles, electronics
- Construction: Buildings, roads, bridges, dams
- Small Scale Industries: Handicrafts, cottage industries
- Large Scale Industries: Iron & steel plants, refineries
- Food Processing: Sugar mills, bakeries, packaged food
Examples of Transformation:
| Raw Material (Primary) | Finished Product (Secondary) |
|---|---|
| Cotton | Cloth, Textile |
| Sugarcane | Sugar |
| Iron Ore | Steel, Machinery |
| Wood | Furniture, Paper |
| Crude Oil | Petrol, Diesel, Plastics |
📊 Secondary Sector in India
- Contributes about 25-27% to India's GDP
- Employs about 24% of workforce
4. Tertiary Sector (Service Sector)
📘 Definition: Tertiary Sector
Tertiary Sector includes activities that help in the development of primary and secondary sectors. These activities, by themselves, do not produce goods but provide services. It is also called Service Sector.
Why is it called Tertiary Sector?
It is called Tertiary (meaning third) because it comes after primary and secondary sectors. It does not produce goods but provides services that support other sectors.
Activities in Tertiary Sector:
Transport
Banking
Communication
Healthcare
Education
Trade & Commerce
Hotels & Tourism
Insurance
📊 Tertiary Sector in India
- Contributes about 55-57% to India's GDP (highest)
- Employs about 34% of workforce
- Fastest growing sector in India
- Also known as Knowledge Economy (IT, BPO)
Why Tertiary Sector is Growing?
- Basic Services: Hospitals, schools, post offices, courts, police needed by society
- Development of Agriculture & Industry: Transport, trade, storage needed to support them
- Rise in Income: People demand more services like tourism, shopping, eating out
- New Services: IT, BPO, telecom, e-commerce creating new jobs
5. Comparison of Three Sectors
| Basis | Primary Sector | Secondary Sector | Tertiary Sector |
|---|---|---|---|
| Also Called | Agriculture Sector | Industrial Sector | Service Sector |
| Nature | Extraction from nature | Manufacturing goods | Providing services |
| Examples | Farming, Fishing, Mining | Factory, Construction | Banking, Transport, IT |
| GDP Share | ~14-17% | ~25-27% | ~55-57% |
| Employment | ~42% (Highest) | ~24% | ~34% |
| Dependence | On nature | On primary sector | On primary & secondary |
6. GDP and Sectors
📘 Definition: GDP (Gross Domestic Product)
GDP is the total value of all final goods and services produced within a country during a particular year. It is measured by adding the value of goods and services produced in all three sectors.
Formula: GDP = Value added by Primary + Secondary + Tertiary Sector
Historical Changes in Indian Economy:
| Year | Primary (%) | Secondary (%) | Tertiary (%) |
|---|---|---|---|
| 1950-51 | 55% | 15% | 30% |
| 1990-91 | 30% | 27% | 43% |
| 2019-20 | 14-17% | 25-27% | 55-57% |
💡 Key Observation
Over time, Primary sector's share in GDP has decreased while Tertiary sector has increased significantly. This is a sign of economic development. Developed countries have majority contribution from service sector.
7. Employment in Sectors
The Problem of Employment:
Although primary sector's share in GDP has fallen to 14-17%, it still employs about 42% of India's workforce. This creates a major problem called Disguised Unemployment.
📘 Definition: Disguised Unemployment
Disguised Unemployment (or Hidden Unemployment) is a situation where people appear to be employed but their contribution to production is almost nil. If some of them are removed, total production will not decrease.
Example: A small farm needs only 3 workers but 5 family members work on it. The extra 2 are disguisedly unemployed.
Underemployment:
📘 Definition: Underemployment
Underemployment is a situation where people are working but not according to their full capacity or skills. They could contribute more if given full-time work.
Example: A qualified engineer driving a taxi, or farmers getting work only during sowing and harvesting seasons.
How to Create More Employment?
- Government Investment: Building roads, canals, storage facilities creates jobs
- Cheap Credit: Loans to farmers and small businesses to expand
- Promote Local Industries: Tourism, handicrafts, food processing in rural areas
- Education & Training: Skill development programs for youth
- MGNREGA: 100 days guaranteed employment scheme (Mahatma Gandhi National Rural Employment Guarantee Act, 2005)
📌 MGNREGA (2005)
- Full form: Mahatma Gandhi National Rural Employment Guarantee Act
- Guarantees 100 days of employment per year to every rural household
- If government fails to provide employment, it must pay unemployment allowance
- Work includes: Digging wells, building roads, construction of ponds, etc.
8. Organised vs Unorganised Sector
Based on employment conditions, the economy can also be divided into Organised and Unorganised sectors.
| Basis | Organised Sector | Unorganised Sector |
|---|---|---|
| Registration | Registered with government | Not registered |
| Rules & Laws | Follow government rules | No fixed rules |
| Job Security | High (cannot be removed easily) | Low (can be removed anytime) |
| Working Hours | Fixed (8 hours), overtime paid | No fixed hours, long hours |
| Benefits | PF, Medical, Pension, Paid Leave | No benefits |
| Examples | Government offices, Banks, Large companies | Small shops, Street vendors, Domestic workers |
| Employment Share | ~10% | ~90% |
⚠️ Problem in India
About 90% of workers in India work in the unorganised sector without job security, fixed wages, or benefits. They need protection through better laws and social security schemes.
9. Public Sector vs Private Sector
Based on ownership, the economy can be divided into Public and Private sectors.
| Basis | Public Sector | Private Sector |
|---|---|---|
| Ownership | Government owned & controlled | Private individuals/companies |
| Objective | Public welfare, not profit | Earning profit |
| Examples | Indian Railways, BSNL, SBI, NTPC | Reliance, Tata, Airtel, HDFC |
| Services | Schools, Hospitals, Defence, Roads | Manufacturing, IT, Banking |
| Profit | May or may not earn profit | Profit is main motive |
💡 Why Public Sector is Needed?
- Private sector won't provide services where profit is low (rural areas)
- Some services need huge investment that private sector cannot afford (dams, railways)
- Government needs to control essential services for public welfare
- Ensure availability of basic services at low cost for poor
🎯 Key Points for Board Exam
- Primary Sector = Agriculture (Nature → Raw Material)
- Secondary Sector = Industry (Raw Material → Finished Goods)
- Tertiary Sector = Services (Support other sectors)
- GDP = Total value of goods & services produced in a year
- Tertiary sector contributes ~55% to India's GDP (highest)
- Primary sector employs ~42% workforce (highest) but contributes only ~14-17% GDP
- Disguised Unemployment = People appear employed but productivity is nil
- MGNREGA (2005) = 100 days guaranteed employment
- Organised Sector = Registered, follows rules, job security
- Unorganised Sector = ~90% workers, no job security
- Public Sector = Government owned (Railways, BSNL)
- Private Sector = Private ownership (Tata, Reliance)
📝 Important Questions
1 Mark Questions (MCQ/Very Short):
Q1. Which sector is also known as Service Sector?
Ans: Tertiary Sector
Q2. Which sector contributes maximum to India's GDP?
Ans: Tertiary Sector (~55%)
Q3. MGNREGA guarantees how many days of employment?
Ans: 100 days
Q4. Which sector employs maximum workforce in India?
Ans: Primary Sector (~42%)
3 Mark Questions (Short Answer):
Q5. What is Disguised Unemployment? Give an example.
Ans: Disguised Unemployment is a situation where people appear to be employed but their contribution to production is almost nil. If some are removed, production won't decrease. Example: A farm needs 3 workers but 5 family members work there. The extra 2 are disguisedly unemployed.
Q6. Distinguish between Organised and Unorganised sector.
Ans: (1) Organised Sector is registered with government, has fixed working hours, job security, and benefits like PF and pension. Example: Government offices, Banks. (2) Unorganised Sector is not registered, has no fixed hours, no job security, and no benefits. Example: Street vendors, domestic workers.
5 Mark Questions (Long Answer):
Q7. Explain the three sectors of economy with examples.
Ans: (1) Primary Sector: Activities connected with nature. Products are extracted from earth. Examples: Agriculture, Fishing, Mining. (2) Secondary Sector: Activities that convert raw materials into finished goods. Examples: Manufacturing textiles from cotton, making steel from iron ore. (3) Tertiary Sector: Activities that provide services to support primary and secondary sectors. Examples: Banking, Transport, IT services, Healthcare.
Q8. Why is tertiary sector becoming important in India? Explain.
Ans: Tertiary sector is becoming important because: (1) Basic services like hospitals, schools, banks are needed by everyone. (2) Development of other sectors requires transport, trade, storage. (3) Rise in income increases demand for services like tourism, restaurants. (4) New services like IT, BPO have emerged. (5) Globalisation has increased demand for communication and banking services.
❓ Frequently Asked Questions (FAQ)
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