NCERT Textbook: Sectors of the Indian Economy - Social Studies (SST) Class 10

 Page 1


SECTORS
OF THE INDIAN ECONOMY
CHAPTER 2
SECTORS OF ECONOMIC ACTIVITIES
Let us look at these pictures. You will find that people are
engaged in various economic activities. Some of these are
activities producing goods. Some others are producing
services. These activities are happening around us every
minute even as we speak.  How do we understand these
activities? One way of doing this is to group them (classify
them) using some important criterion. These groups are also
called sectors.
Rationalised 2023-24
Page 2


SECTORS
OF THE INDIAN ECONOMY
CHAPTER 2
SECTORS OF ECONOMIC ACTIVITIES
Let us look at these pictures. You will find that people are
engaged in various economic activities. Some of these are
activities producing goods. Some others are producing
services. These activities are happening around us every
minute even as we speak.  How do we understand these
activities? One way of doing this is to group them (classify
them) using some important criterion. These groups are also
called sectors.
Rationalised 2023-24
     U U U U UNDERST NDERST NDERST NDERST NDERSTANDING ANDING ANDING ANDING ANDING E E E E ECONOMIC CONOMIC CONOMIC CONOMIC CONOMIC D D D D DEVEL EVEL EVEL EVEL EVELOPMENT OPMENT OPMENT OPMENT OPMENT
20 20 20 20 20
There are many activities that are
undertaken by directly using
natural resources. Take, for
example, the cultivation of cotton. It
takes place within a crop season. For
the growth of the cotton plant, we
depend mainly, but not entirely,
on natural factors like rainfall,
sunshine and climate. The product
of this activity, cotton, is a natural
product. Similarly, in the case of an
activity like dairy, we are dependent
on the biological process of
the animals and availability
of fodder etc. The product
here, milk, also is a natural
product. Similarly, minerals
and ores are also natural
products. When we produce
a good by exploiting natural
resources, it is an activity of
the primary sector. Why
primary? This is because it
forms the base for all
other products that we
subsequently make. Since
most of the natural
products we get are from
agriculture, dairy, fishing,
forestry, this sector is also
called agriculture and related
sector.
The secondary sector covers
activities in which natural products
are changed into other forms through
ways of manufacturing that we
associate with industrial activity. It is
the next step after primary. The
product is not produced by nature
but has to be made and therefore
some process of manufacturing is
essential. This could be in a factory, a
workshop or at home.  For example,
using cotton fibre from the plant, we
spin yarn and weave cloth. Using
sugarcane as a raw material, we make
sugar or gur. We convert earth into
bricks and use bricks to make houses
and buildings. Since this sector
gradually became associated with the
different kinds of industries that came
up, it is also called as industrial sector.
After primary and secondary, there
is a third category of activities that falls
under tertiary sector and is different
from the above two. These are
activities that help in the development
of the primary and secondary sectors.
These activities, by themselves, do not
produce a good but they are an aid
or a support for the production
process. For example, goods that are
produced in the primary or 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 in
godowns. We also may need to talk to
others over telephone or send letters
(communication) or borrow money
from banks (banking) to help
production and trade. Transport,
storage, communication, banking,
trade are some examples of tertiary
activities. Since these activities
generate services rather than goods,
the tertiary sector is also called the
service sector.
Service sector also includes some
essential services that may not directly
help in the production of goods. For
example, we require teachers, doctors,
and those who provide personal
services such as washermen, barbers,
cobblers, lawyers, and people to do
administrative and accounting works.
In recent times, certain new services
based on information technology such
as internet cafe, ATM booths, call
centres, software companies etc have
become important.
Tertiary
(Service)
Sector
Primary
(Agriculture)
Sector
Secondary
(Industrial)
Sector
produces
natural
goods
produces
manufactured
goods
helps to develop
other sectors
We begin by looking at different
kind of economic activities.
Rationalised 2023-24
Page 3


SECTORS
OF THE INDIAN ECONOMY
CHAPTER 2
SECTORS OF ECONOMIC ACTIVITIES
Let us look at these pictures. You will find that people are
engaged in various economic activities. Some of these are
activities producing goods. Some others are producing
services. These activities are happening around us every
minute even as we speak.  How do we understand these
activities? One way of doing this is to group them (classify
them) using some important criterion. These groups are also
called sectors.
Rationalised 2023-24
     U U U U UNDERST NDERST NDERST NDERST NDERSTANDING ANDING ANDING ANDING ANDING E E E E ECONOMIC CONOMIC CONOMIC CONOMIC CONOMIC D D D D DEVEL EVEL EVEL EVEL EVELOPMENT OPMENT OPMENT OPMENT OPMENT
20 20 20 20 20
There are many activities that are
undertaken by directly using
natural resources. Take, for
example, the cultivation of cotton. It
takes place within a crop season. For
the growth of the cotton plant, we
depend mainly, but not entirely,
on natural factors like rainfall,
sunshine and climate. The product
of this activity, cotton, is a natural
product. Similarly, in the case of an
activity like dairy, we are dependent
on the biological process of
the animals and availability
of fodder etc. The product
here, milk, also is a natural
product. Similarly, minerals
and ores are also natural
products. When we produce
a good by exploiting natural
resources, it is an activity of
the primary sector. Why
primary? This is because it
forms the base for all
other products that we
subsequently make. Since
most of the natural
products we get are from
agriculture, dairy, fishing,
forestry, this sector is also
called agriculture and related
sector.
The secondary sector covers
activities in which natural products
are changed into other forms through
ways of manufacturing that we
associate with industrial activity. It is
the next step after primary. The
product is not produced by nature
but has to be made and therefore
some process of manufacturing is
essential. This could be in a factory, a
workshop or at home.  For example,
using cotton fibre from the plant, we
spin yarn and weave cloth. Using
sugarcane as a raw material, we make
sugar or gur. We convert earth into
bricks and use bricks to make houses
and buildings. Since this sector
gradually became associated with the
different kinds of industries that came
up, it is also called as industrial sector.
After primary and secondary, there
is a third category of activities that falls
under tertiary sector and is different
from the above two. These are
activities that help in the development
of the primary and secondary sectors.
These activities, by themselves, do not
produce a good but they are an aid
or a support for the production
process. For example, goods that are
produced in the primary or 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 in
godowns. We also may need to talk to
others over telephone or send letters
(communication) or borrow money
from banks (banking) to help
production and trade. Transport,
storage, communication, banking,
trade are some examples of tertiary
activities. Since these activities
generate services rather than goods,
the tertiary sector is also called the
service sector.
Service sector also includes some
essential services that may not directly
help in the production of goods. For
example, we require teachers, doctors,
and those who provide personal
services such as washermen, barbers,
cobblers, lawyers, and people to do
administrative and accounting works.
In recent times, certain new services
based on information technology such
as internet cafe, ATM booths, call
centres, software companies etc have
become important.
Tertiary
(Service)
Sector
Primary
(Agriculture)
Sector
Secondary
(Industrial)
Sector
produces
natural
goods
produces
manufactured
goods
helps to develop
other sectors
We begin by looking at different
kind of economic activities.
Rationalised 2023-24
S S S S SECTORS ECTORS ECTORS ECTORS ECTORS     OF OF OF OF OF     THE THE THE THE THE I I I I INDIAN NDIAN NDIAN NDIAN NDIAN E E E E ECONOMY CONOMY CONOMY CONOMY CONOMY
21 21 21 21 21
EXAMPLE
Imagine what would happen if farmers
refuse to sell sugarcane to a particular
sugar mill. The mill will have to shut
down.
Imagine what would happen to cotton
cultivation if companies decide not to
buy from the Indian market and import
all cotton they need from other
countries. Indian cotton cultivation will
become less profitable and the farmers
may even go bankrupt, if they cannot
quickly switch to other crops. Cotton
prices will fall.
Farmers buy many goods such as
tractors, pumpsets, electricity,
pesticides and fertilisers. Imagine what
would happen if the price of fertilisers
or pumpsets go up. Cost of cultivation
of the farmers will rise and their profits
will be reduced.
People working in industrial and service
sectors need food. Imagine what would
happen if there is a strike by
transporters and lorries refuse to take
vegetables, milk, etc. from rural areas.
Food will become scarce in urban areas
whereas farmers will be unable to sell
their products.
1. Complete the above table to show how sectors are dependent on each other.
2. Explain the difference between primary, secondary and tertiary sectors using
examples other than those mentioned in the text.
3. Classify the following list of occupations under primary, secondary and tertiary sectors:
LET’S WORK THESE OUT
WHAT DOES THIS SHOW?
This is an example of the secondary or
industrial sector being dependent on
the primary.
• Tailor
• Basket weaver
• Flower cultivator
• Milk vendor
• Fishermen
• Priest
• Courier
• Workers in match factory
• Moneylender
• Gardener
• Potter
• Bee-keeper
• Astronaut
• Call centre employee
4. Students in a school are often classified into primary and secondary or junior and
senior. What is the criterion that is used? Do you think this is a useful classification?
Discuss.
TABLE 2.1 EXAMPLES OF ECONOMIC ACTIVITIES
Economic activities, though, are grouped into three different categories,
are highly interdependent. Let us look at some examples.
Rationalised 2023-24
Page 4


SECTORS
OF THE INDIAN ECONOMY
CHAPTER 2
SECTORS OF ECONOMIC ACTIVITIES
Let us look at these pictures. You will find that people are
engaged in various economic activities. Some of these are
activities producing goods. Some others are producing
services. These activities are happening around us every
minute even as we speak.  How do we understand these
activities? One way of doing this is to group them (classify
them) using some important criterion. These groups are also
called sectors.
Rationalised 2023-24
     U U U U UNDERST NDERST NDERST NDERST NDERSTANDING ANDING ANDING ANDING ANDING E E E E ECONOMIC CONOMIC CONOMIC CONOMIC CONOMIC D D D D DEVEL EVEL EVEL EVEL EVELOPMENT OPMENT OPMENT OPMENT OPMENT
20 20 20 20 20
There are many activities that are
undertaken by directly using
natural resources. Take, for
example, the cultivation of cotton. It
takes place within a crop season. For
the growth of the cotton plant, we
depend mainly, but not entirely,
on natural factors like rainfall,
sunshine and climate. The product
of this activity, cotton, is a natural
product. Similarly, in the case of an
activity like dairy, we are dependent
on the biological process of
the animals and availability
of fodder etc. The product
here, milk, also is a natural
product. Similarly, minerals
and ores are also natural
products. When we produce
a good by exploiting natural
resources, it is an activity of
the primary sector. Why
primary? This is because it
forms the base for all
other products that we
subsequently make. Since
most of the natural
products we get are from
agriculture, dairy, fishing,
forestry, this sector is also
called agriculture and related
sector.
The secondary sector covers
activities in which natural products
are changed into other forms through
ways of manufacturing that we
associate with industrial activity. It is
the next step after primary. The
product is not produced by nature
but has to be made and therefore
some process of manufacturing is
essential. This could be in a factory, a
workshop or at home.  For example,
using cotton fibre from the plant, we
spin yarn and weave cloth. Using
sugarcane as a raw material, we make
sugar or gur. We convert earth into
bricks and use bricks to make houses
and buildings. Since this sector
gradually became associated with the
different kinds of industries that came
up, it is also called as industrial sector.
After primary and secondary, there
is a third category of activities that falls
under tertiary sector and is different
from the above two. These are
activities that help in the development
of the primary and secondary sectors.
These activities, by themselves, do not
produce a good but they are an aid
or a support for the production
process. For example, goods that are
produced in the primary or 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 in
godowns. We also may need to talk to
others over telephone or send letters
(communication) or borrow money
from banks (banking) to help
production and trade. Transport,
storage, communication, banking,
trade are some examples of tertiary
activities. Since these activities
generate services rather than goods,
the tertiary sector is also called the
service sector.
Service sector also includes some
essential services that may not directly
help in the production of goods. For
example, we require teachers, doctors,
and those who provide personal
services such as washermen, barbers,
cobblers, lawyers, and people to do
administrative and accounting works.
In recent times, certain new services
based on information technology such
as internet cafe, ATM booths, call
centres, software companies etc have
become important.
Tertiary
(Service)
Sector
Primary
(Agriculture)
Sector
Secondary
(Industrial)
Sector
produces
natural
goods
produces
manufactured
goods
helps to develop
other sectors
We begin by looking at different
kind of economic activities.
Rationalised 2023-24
S S S S SECTORS ECTORS ECTORS ECTORS ECTORS     OF OF OF OF OF     THE THE THE THE THE I I I I INDIAN NDIAN NDIAN NDIAN NDIAN E E E E ECONOMY CONOMY CONOMY CONOMY CONOMY
21 21 21 21 21
EXAMPLE
Imagine what would happen if farmers
refuse to sell sugarcane to a particular
sugar mill. The mill will have to shut
down.
Imagine what would happen to cotton
cultivation if companies decide not to
buy from the Indian market and import
all cotton they need from other
countries. Indian cotton cultivation will
become less profitable and the farmers
may even go bankrupt, if they cannot
quickly switch to other crops. Cotton
prices will fall.
Farmers buy many goods such as
tractors, pumpsets, electricity,
pesticides and fertilisers. Imagine what
would happen if the price of fertilisers
or pumpsets go up. Cost of cultivation
of the farmers will rise and their profits
will be reduced.
People working in industrial and service
sectors need food. Imagine what would
happen if there is a strike by
transporters and lorries refuse to take
vegetables, milk, etc. from rural areas.
Food will become scarce in urban areas
whereas farmers will be unable to sell
their products.
1. Complete the above table to show how sectors are dependent on each other.
2. Explain the difference between primary, secondary and tertiary sectors using
examples other than those mentioned in the text.
3. Classify the following list of occupations under primary, secondary and tertiary sectors:
LET’S WORK THESE OUT
WHAT DOES THIS SHOW?
This is an example of the secondary or
industrial sector being dependent on
the primary.
• Tailor
• Basket weaver
• Flower cultivator
• Milk vendor
• Fishermen
• Priest
• Courier
• Workers in match factory
• Moneylender
• Gardener
• Potter
• Bee-keeper
• Astronaut
• Call centre employee
4. Students in a school are often classified into primary and secondary or junior and
senior. What is the criterion that is used? Do you think this is a useful classification?
Discuss.
TABLE 2.1 EXAMPLES OF ECONOMIC ACTIVITIES
Economic activities, though, are grouped into three different categories,
are highly interdependent. Let us look at some examples.
Rationalised 2023-24
     U U U U UNDERST NDERST NDERST NDERST NDERSTANDING ANDING ANDING ANDING ANDING E E E E ECONOMIC CONOMIC CONOMIC CONOMIC CONOMIC D D D D DEVEL EVEL EVEL EVEL EVELOPMENT OPMENT OPMENT OPMENT OPMENT
22 22 22 22 22
The various production activities in the primary, secondary
and tertiary sectors produce a very large number of goods
and services. Also, the three sectors have a large number of
people working in them to produce these goods and services.
The next step, therefore, is to see how much goods and services
are produced and how many people work in each sector. 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 count the various goods and
services and know the total production in
each sector?
With so many thousands of goods and services produced,
you might think this is an impossible task! Not only would
the task be enormous, you might also wonder how we can
add up cars and computers and nails and furniture. It won’t
make sense!!!
You are right in thinking so. To get around this problem,
economists suggest that the values of goods and services
should be used rather than adding up the actual numbers.
For example, if 10,000 kgs of wheat is sold at Rs 20 per kg,
the value of wheat will be Rs 2,00,000. The value of 5000
coconuts at Rs 15 per coconut will be Rs 75,000. Similarly,
the value of goods and services in the three sectors are
calculated, and then added up.
Remember, there is one precaution one has to take. Not
every good (or service) that is produced and sold needs to be
counted. It makes sense only to include the final goods and
services. Take, for instance, a farmer who sells wheat to a
flour mill for Rs 20 per kg. The mill grinds the wheat and sells
the flour to a biscuit company for Rs 25 per kg. The biscuit
company uses the flour and things such as sugar and oil to
make four packets of biscuits. It sells biscuits in the market to
the consumers for Rs 80 (Rs 20 per packet). Biscuits are the
final goods, i.e., goods that reach the consumers.
Why are only ‘final goods and services’ counted? In
contrast to final goods, goods such as wheat and the wheat
flour in this example are intermediate goods.  Intermediate
goods 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
good. Hence, the value of Rs 80 for the biscuits (final good)
already includes the value of flour (Rs 25). Similarly, the
value of all other intermediate goods would have been
included. To count the value of the flour and wheat
COMPARING THE THREE SECTORS
...BUT I SHOULD BE PAID THE
FULL VALUE OF THE WHEAT
THAT I PRODUCE !
Rationalised 2023-24
Page 5


SECTORS
OF THE INDIAN ECONOMY
CHAPTER 2
SECTORS OF ECONOMIC ACTIVITIES
Let us look at these pictures. You will find that people are
engaged in various economic activities. Some of these are
activities producing goods. Some others are producing
services. These activities are happening around us every
minute even as we speak.  How do we understand these
activities? One way of doing this is to group them (classify
them) using some important criterion. These groups are also
called sectors.
Rationalised 2023-24
     U U U U UNDERST NDERST NDERST NDERST NDERSTANDING ANDING ANDING ANDING ANDING E E E E ECONOMIC CONOMIC CONOMIC CONOMIC CONOMIC D D D D DEVEL EVEL EVEL EVEL EVELOPMENT OPMENT OPMENT OPMENT OPMENT
20 20 20 20 20
There are many activities that are
undertaken by directly using
natural resources. Take, for
example, the cultivation of cotton. It
takes place within a crop season. For
the growth of the cotton plant, we
depend mainly, but not entirely,
on natural factors like rainfall,
sunshine and climate. The product
of this activity, cotton, is a natural
product. Similarly, in the case of an
activity like dairy, we are dependent
on the biological process of
the animals and availability
of fodder etc. The product
here, milk, also is a natural
product. Similarly, minerals
and ores are also natural
products. When we produce
a good by exploiting natural
resources, it is an activity of
the primary sector. Why
primary? This is because it
forms the base for all
other products that we
subsequently make. Since
most of the natural
products we get are from
agriculture, dairy, fishing,
forestry, this sector is also
called agriculture and related
sector.
The secondary sector covers
activities in which natural products
are changed into other forms through
ways of manufacturing that we
associate with industrial activity. It is
the next step after primary. The
product is not produced by nature
but has to be made and therefore
some process of manufacturing is
essential. This could be in a factory, a
workshop or at home.  For example,
using cotton fibre from the plant, we
spin yarn and weave cloth. Using
sugarcane as a raw material, we make
sugar or gur. We convert earth into
bricks and use bricks to make houses
and buildings. Since this sector
gradually became associated with the
different kinds of industries that came
up, it is also called as industrial sector.
After primary and secondary, there
is a third category of activities that falls
under tertiary sector and is different
from the above two. These are
activities that help in the development
of the primary and secondary sectors.
These activities, by themselves, do not
produce a good but they are an aid
or a support for the production
process. For example, goods that are
produced in the primary or 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 in
godowns. We also may need to talk to
others over telephone or send letters
(communication) or borrow money
from banks (banking) to help
production and trade. Transport,
storage, communication, banking,
trade are some examples of tertiary
activities. Since these activities
generate services rather than goods,
the tertiary sector is also called the
service sector.
Service sector also includes some
essential services that may not directly
help in the production of goods. For
example, we require teachers, doctors,
and those who provide personal
services such as washermen, barbers,
cobblers, lawyers, and people to do
administrative and accounting works.
In recent times, certain new services
based on information technology such
as internet cafe, ATM booths, call
centres, software companies etc have
become important.
Tertiary
(Service)
Sector
Primary
(Agriculture)
Sector
Secondary
(Industrial)
Sector
produces
natural
goods
produces
manufactured
goods
helps to develop
other sectors
We begin by looking at different
kind of economic activities.
Rationalised 2023-24
S S S S SECTORS ECTORS ECTORS ECTORS ECTORS     OF OF OF OF OF     THE THE THE THE THE I I I I INDIAN NDIAN NDIAN NDIAN NDIAN E E E E ECONOMY CONOMY CONOMY CONOMY CONOMY
21 21 21 21 21
EXAMPLE
Imagine what would happen if farmers
refuse to sell sugarcane to a particular
sugar mill. The mill will have to shut
down.
Imagine what would happen to cotton
cultivation if companies decide not to
buy from the Indian market and import
all cotton they need from other
countries. Indian cotton cultivation will
become less profitable and the farmers
may even go bankrupt, if they cannot
quickly switch to other crops. Cotton
prices will fall.
Farmers buy many goods such as
tractors, pumpsets, electricity,
pesticides and fertilisers. Imagine what
would happen if the price of fertilisers
or pumpsets go up. Cost of cultivation
of the farmers will rise and their profits
will be reduced.
People working in industrial and service
sectors need food. Imagine what would
happen if there is a strike by
transporters and lorries refuse to take
vegetables, milk, etc. from rural areas.
Food will become scarce in urban areas
whereas farmers will be unable to sell
their products.
1. Complete the above table to show how sectors are dependent on each other.
2. Explain the difference between primary, secondary and tertiary sectors using
examples other than those mentioned in the text.
3. Classify the following list of occupations under primary, secondary and tertiary sectors:
LET’S WORK THESE OUT
WHAT DOES THIS SHOW?
This is an example of the secondary or
industrial sector being dependent on
the primary.
• Tailor
• Basket weaver
• Flower cultivator
• Milk vendor
• Fishermen
• Priest
• Courier
• Workers in match factory
• Moneylender
• Gardener
• Potter
• Bee-keeper
• Astronaut
• Call centre employee
4. Students in a school are often classified into primary and secondary or junior and
senior. What is the criterion that is used? Do you think this is a useful classification?
Discuss.
TABLE 2.1 EXAMPLES OF ECONOMIC ACTIVITIES
Economic activities, though, are grouped into three different categories,
are highly interdependent. Let us look at some examples.
Rationalised 2023-24
     U U U U UNDERST NDERST NDERST NDERST NDERSTANDING ANDING ANDING ANDING ANDING E E E E ECONOMIC CONOMIC CONOMIC CONOMIC CONOMIC D D D D DEVEL EVEL EVEL EVEL EVELOPMENT OPMENT OPMENT OPMENT OPMENT
22 22 22 22 22
The various production activities in the primary, secondary
and tertiary sectors produce a very large number of goods
and services. Also, the three sectors have a large number of
people working in them to produce these goods and services.
The next step, therefore, is to see how much goods and services
are produced and how many people work in each sector. 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 count the various goods and
services and know the total production in
each sector?
With so many thousands of goods and services produced,
you might think this is an impossible task! Not only would
the task be enormous, you might also wonder how we can
add up cars and computers and nails and furniture. It won’t
make sense!!!
You are right in thinking so. To get around this problem,
economists suggest that the values of goods and services
should be used rather than adding up the actual numbers.
For example, if 10,000 kgs of wheat is sold at Rs 20 per kg,
the value of wheat will be Rs 2,00,000. The value of 5000
coconuts at Rs 15 per coconut will be Rs 75,000. Similarly,
the value of goods and services in the three sectors are
calculated, and then added up.
Remember, there is one precaution one has to take. Not
every good (or service) that is produced and sold needs to be
counted. It makes sense only to include the final goods and
services. Take, for instance, a farmer who sells wheat to a
flour mill for Rs 20 per kg. The mill grinds the wheat and sells
the flour to a biscuit company for Rs 25 per kg. The biscuit
company uses the flour and things such as sugar and oil to
make four packets of biscuits. It sells biscuits in the market to
the consumers for Rs 80 (Rs 20 per packet). Biscuits are the
final goods, i.e., goods that reach the consumers.
Why are only ‘final goods and services’ counted? In
contrast to final goods, goods such as wheat and the wheat
flour in this example are intermediate goods.  Intermediate
goods 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
good. Hence, the value of Rs 80 for the biscuits (final good)
already includes the value of flour (Rs 25). Similarly, the
value of all other intermediate goods would have been
included. To count the value of the flour and wheat
COMPARING THE THREE SECTORS
...BUT I SHOULD BE PAID THE
FULL VALUE OF THE WHEAT
THAT I PRODUCE !
Rationalised 2023-24
S S S S SECTORS ECTORS ECTORS ECTORS ECTORS     OF OF OF OF OF     THE THE THE THE THE I I I I INDIAN NDIAN NDIAN NDIAN NDIAN E E E E ECONOMY CONOMY CONOMY CONOMY CONOMY
23 23 23 23 23
separately is therefore 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.
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. And the sum of
production in the three sectors gives
what is called the Gross Domestic
Product (GDP) of a country.  It is the
value of all final goods and services
produced within a country during a
particular year. GDP shows how big
the economy is.
In India, the mammoth task of
measuring GDP is undertaken by a
central government ministry. This
Ministry, with the help of various
government departments of all the
Indian states and union territories,
collects information relating to total
volume of goods and services and their
prices and then estimates the GDP.
Historical Change in Sectors
Generally, it has been noted from the
histories of many, now developed,
countries that at initial stages of
development, primary sector was the
most important sector of economic
activity.
As the methods of farming
changed and agriculture sector began
to prosper, it produced much more
food than before. Many people could
now take up other activities. There
were increasing number of craft-
persons and traders. Buying and
selling activities increased many times.
Besides, there were also transporters,
administrators, army etc. However, at
this stage, most of the goods produced
were natural products from the
primary sector and most people were
also employed in this sector.
Over a long time (more than
hundred years), and especially
because new methods of
manufacturing were introduced,
factories came up and started
expanding. Those people who had
earlier worked on farms now began
to work in factories in large numbers.
They were forced to do so as you read
in history chapters. 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. Hence, over time, a
shift had taken place. This means that
the importance of the sectors had
changed.
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.
Most of the working people are also
employed in the service sector. This is
the general pattern observed in
developed countries.
What is the total production and
employment in the three sectors in
India? Over the years have there been
changes similar to the pattern
observed for the developed countries?
We shall see in the next section.
1. What does the history of developed countries indicate
about the shifts that have taken place between sectors?
2. Correct and arrange the important aspects for calculating
GDP from this Jumble.
To count goods and services we add the numbers that
are produced. We count all those that were produced in
the last five years. Since we shouldn’t leave out anything
we add up all these goods and services.
3. Discuss with your teacher how you could calculate the
total value of a good or service by using the method of
value added at each stage.
LET’S WORK THESE OUT
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