Social Sciences: Class 10 (Part 2) — Chapter 2: Sectors of the Indian Economy

Only the value of final goods and services (goods that reach the consumers) is included in calculations. Intermediate goods (like wheat and flour used to make biscuits) are excluded because their value is already included in the final product. Counting them separately would lead to double counting.

The Gross Domestic Product (GDP) of a country 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 a central government ministry with the help of state and union territory departments.

Recently, the Indian Government began using Gross Value Added (GVA) to measure the contribution of the three sectors after adjusting for taxes and subsidies, aligning with global practices.

Historically, developed countries show a clear pattern of transition over time:

• Initial Stage: The primary sector is the most important sector of economic activity and employment.
• Industrial Stage: With new manufacturing methods, factories expand, and the secondary sector becomes dominant in production and employment.
• Service Stage: In the past 100 years, a further shift to the tertiary sector has occurred, making the service sector the most important in terms of total production and employment.

The tertiary sector has emerged as the largest producing sector in India, replacing the primary sector due to:

• Demand for basic services like hospitals, educational institutions, defense, and banks.
• Development of agriculture and industry, which increases demand for services like transport and trade.
• Rise in income levels, leading to demand for tourism, dining out, and private schooling.
• Introduction of new services based on information and communication technology.

The primary sector continues to be the largest employer in India. This is because not enough jobs were created in the secondary and tertiary sectors, even though industrial output went up by more than nine times and service output by fourteen times.

More than half of the workers in India are in the primary sector, producing only about one-sixth of the GVA. This indicates underemployment or disguised unemployment, where more people are working than necessary, and their labor effort is divided. If some people are moved out, agricultural production will not suffer, and their incomes can increase elsewhere. This issue also exists in urban areas among casual workers, painters, plumbers, and street vendors.

Protection and support are essential for vulnerable groups in this sector:

• Rural Areas: Landless agricultural laborers, small/marginal farmers, and artisans need timely delivery of seeds, agricultural inputs, credit, and marketing outlets.
• Urban Areas: Workers in small-scale industries, casual construction workers, and street vendors need support for procuring raw materials and marketing output.
• Social Protection: Majority of workers from scheduled castes, tribes, and backward communities are in this sector and face both economic exploitation and social discrimination.

Many essential services require large sums of money beyond the capacity of the private sector (e.g., construction of roads, bridges, railways, harbors, and dams). The government must undertake these heavy spendings to ensure they are available to everyone at reasonable costs. Additionally, the government must support critical activities (like supplying electricity at affordable rates and purchasing food grains at fair prices) and prioritize primary responsibilities like health, safe drinking water, and elementary education.