Economics-Sectors of The Indian Economy 01 - Handwritten Notes

Lecture No.
- 01 FOR CLASS 10TH
(Handwritten Notes)
Shigraf Ma’am
Today’s Goal
 Primary, Secondary and Tertiary sector.
 Interdependency of economic sectors.
 Comparing the three sectors.
 Gross Domestic Product (GDP)
 Historical Change in sectors.
What are sectors?
 Economic activities include activities producing goods

as well as services.
 When these activities are grouped for the purpose of

classification, it is called sectors.
Primary Sector
 Includes the activities that are undertaken by directly

using natural resources.
 Primay activites forms the base for the other products
that we subsequently make.
 Since most of the natural products we get are from
agriculture, dairy, fisheries, forestry etc., this sector is also
known as agriculture and related sector.
 For example, for the cultivation of cotton– we depend
mainly, but not entirely, on natural factors like rainfall,
sunshine and climate. Sunshine
Climate
Rainfall Cotton
 In terms of dairy products, we depend on the biological
process of the animals and also availability of fodders etc.
The product here milk, is a natural product.
 Similarly, minerals and ores are also natural products. When

we produce a good by exploiting natural resources, it is an
activitity of the primary sector.
Secondary Sector
 Activities in which natural products are changed into
other forms through ways of manufacturing that we
associate with industrial activity. That is why, it is also
called industrial sector.
 In this sector, the product is not produced by
nature as in the primary sector, but has to be
made by some process of manufacturing. This
manufacturing could be in a factory, in a
workshop or at home.
 We convert earth [Soil] into bricks and use them to
make houses and buildings.
Tertiary Sector
 This sector is different from the above two. In this
sector, those activities that help in the development
of the primary and secondary sector are included.
 This sector does not produce a good by themselves but it helps
and support the production process.
 For example- goods that are produced in the primary or the
secondary sector would need to be transported by trucks or
trains and then sold in wholesale and retail shops.
 At times, it may be necessary to store these products in
godowns.
 We also may need to talk to others or send letters
[communication] or borrow money from banks [Banking] to
help production and trade.
 Since all these activities generate services rather than
goods, this sector is also called the service sector.
 Example:- Transport, storage, communication, Banking,
trade etc.
Indirect Services
 Service sector also includes some essential services that may not
directly help in the production of goods but provide personal
services. For example:- Teachers, Doctors, Washerman,
Barbers, Cobblers, Lawyers etc.
 In recent times, certain new services based on
information technology [IT] such as internet cafe, ATM
booths , Call centers, software companies, Ola, Uber,
Swiggy, Zomato, shopping companies have also become
important.
Interdependency of three sectors
 All the three sectors are highly interdependent on

each other.
Comparing the three sectors. How?
 The various production activities in the three sectors

produce a very large number of goods and services.
 Similarly, the three sectors have a large number of

people working in them to produce these goods and
services.
 In an economy, there could be one or more sectors
which are dominant in terms of total production
and employment, while other sectors are relatively
small in size.
How do we know the total production in each sector?
 First question is as to how much goods and services are

produced?
 Second question is how many people work in each sector?
 Economists suggest that the values of goods and services should
be used rather than adding up the actual numbers. For
example:- Wheat and coconut.
One precaution: only final goods and services
 One precaution has to be taken in this respect.

 Not every goods or services that is produced and
sold, need to be counted.
 It makes sense only to include the “final goods and
services.” For example:- Wheat.
Why only final goods and services?
 In contrast to final goods, goods such as wheat and the wheat
flour in this example are intermediate goods which are used up
in producing final goods and services.
 The value of final goods already includes the value of all the
intermediate goods that are used in making the final goods. For
example- Biscuit.
 To count the value of intermediate goods separately
is 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 Biscuits.
What is GDP?
 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 what is

called Gross Domestic Product (GDP) of a country.
 Thus, GDP is the value of all final goods and services
produced within a country during a particular year.
 GDP shows how big the economy is.
 For example:- 3 Trillion dollar economy.
Who counts GDP in India?
 Central government with the help of various

departments of all the Indian states and union
territories.
 Collects information relating to total volume of
goods and services and their prices and then finally
estimate the GDP.
Historical change in sectors in terms of
Production & Employment
 Generally, at initial stages of development of a country

primary sector had been the most important sector of
economic activity. Most of the goods produced were
natural products and most people were also employed in
this primary sector.
 Over a period of time, factories came up and started
expanding. Those people who had earlier works on farms now
began to work in factories in large numbers.
[Example-Colonial period – Forces to work in factories etc.]
 People began to use many more goods that were produced
in factories at cheap rates.
 Secondary sector gradually became the most important in
total production and employment. Thus, there is a shift
from primary to secondary sector.
 In the past 100 years, there has been a further shift from
secondary to tertiary sector in developed countries.
 The service sector has become the most important in
terms of total production and employment.
Q1. Classify the following list of occupation under
primary, secondary and tertiary sectors.
(a) Tailor
(b)Courier
(c) Farmer
(d)Worker in match factory
(e) Call center employee
Q2. How do we know the total production in each sector?
(a)Adding up the actual numbers of goods and services.

(b)Adding the value of all the intermediate goods.
(c) Adding the value of final goods and services.
(d) adding the number of people working in each sector.
Q3. Who counts GDP in India?
(a) State government
(b) Local government
(c) Central government
(d) Community government
THANK YOU

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Lecture No.

- 01 FOR CLASS 10TH

 Economic activities include activities producing goods

 When these activities are grouped for the purpose of

 Includes the activities that are undertaken by directly

 Similarly, minerals and ores are also natural products. When

 All the three sectors are highly interdependent on

 The various production activities in the three sectors

 Similarly, the three sectors have a large number of

 First question is as to how much goods and services are

 One precaution has to be taken in this respect.

 The value of final goods and services produced in each

 The sum of production in the three sectors gives what is

 Central government with the help of various

 Generally, at initial stages of development of a country

(a)Adding up the actual numbers of goods and services.

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