Key Points

Economic activities are classified into three sectors: Primary (based on natural resources), Secondary (manufacturing), and Tertiary (services).

The Primary sector involves exploiting natural resources. It is also called the agriculture and related sector, including activities like farming, fishing, forestry, and mining.

The Secondary sector transforms natural products into other forms through manufacturing. It is also known as the industrial sector, including activities like making cloth from cotton or sugar from sugarcane.

The Tertiary sector provides services that support the primary and secondary sectors. It is also called the service sector and includes transport, banking, communication, and teaching.

GDP represents the value of all final goods and services produced within a country during a particular year. It is used to measure the total production and size of an economy.

To calculate GDP accurately, only the value of final goods and services is included. Intermediate goods, which are used to produce final goods, are not counted separately to avoid counting their value multiple times.

In developed countries, the economy historically shifted from being dominated by the primary sector to the secondary sector, and finally to the tertiary sector in terms of both production and employment.

In India, the tertiary sector has become the largest producing sector, contributing the most to the Gross Value Added (GVA). This is due to rising incomes, demand for basic services, and growth in information technology.

While production has shifted to the tertiary sector, the primary sector continues to be the largest employer in India. This indicates that not enough jobs have been created in the secondary and tertiary sectors.

Disguised unemployment, or underemployment, is a situation where more people are working than are necessary, and their removal would not affect production. It is prevalent in the agricultural sector in India.

The organised sector consists of enterprises registered by the government where employment terms are regular. Workers have job security, fixed working hours, and benefits like paid leave and provident fund.

The unorganised sector is characterized by small, scattered units outside government control. It offers low-paid, irregular jobs with no job security, paid leave, or other benefits.

A large majority of Indian workers are in the unorganised sector and face exploitation. They need protection through government support for fair wages, job security, and access to social security benefits.

Sectors can also be classified based on ownership. In the public sector, the government owns assets and provides services, while in the private sector, ownership is in the hands of private individuals or companies.

The public sector aims for public welfare rather than just profit. It provides essential services like railways, roads, and electricity, which require huge investment and which the private sector might not provide at a reasonable cost.

The Mahatma Gandhi National Rural Employment Guarantee Act 2005 guarantees 100 days of wage employment in a year to every rural household. It is also known as the 'Right to Work' and aims to reduce underemployment.