SECTORS OF THE INDIAN ECONOMY

The three sectors are primary, secondary, and tertiary. The primary sector involves activities like agriculture, mining, and fishing, directly using natural resources. The secondary sector includes manufacturing and construction, transforming raw materials into goods. The tertiary sector provides services like transport, banking, and education, supporting the other two sectors.

GDP is the sum of the value of all final goods and services produced in the three sectors during a year. For example, if wheat is sold for Rs 20 per kg, and 10,000 kgs are sold, the value is Rs 2,00,000. Only final goods are counted to avoid double-counting intermediate goods like flour used in making biscuits.

The organized sector has formal employment terms, follows government regulations, and offers benefits like paid leave and pensions. Examples include government jobs and registered companies. The unorganized sector lacks job security, benefits, and regulation, with examples like street vendors and daily wage laborers.

The tertiary sector's growth is due to increased demand for services like education, healthcare, and IT, alongside the development of primary and secondary sectors requiring support services. Rising incomes also drive demand for services like tourism and private healthcare, making this sector dominant in GDP contribution.

Disguised unemployment occurs when more people are employed than needed, making their contribution marginal. In rural areas, five family members working on a small farm is an example, as removing a few wouldn't reduce output. In urban areas, it includes street vendors earning very little despite working full-time.

Employment can be increased by improving irrigation facilities, providing credit and marketing support, and promoting agro-based industries. For example, constructing canals and cold storage can create jobs in farming and related activities, reducing underemployment.

MGNREGA aims to guarantee 100 days of wage employment per year to rural households, enhancing livelihood security. It focuses on creating durable assets like roads and canals, and if employment isn't provided, unemployment allowance is given. This helps reduce rural poverty and underemployment.

The public sector, owned by the government, offers job security, pensions, and fixed working hours, like in railways. The private sector, driven by profit, may lack job security and benefits, with conditions varying by employer, such as in private factories or shops.

The government supports agriculture through subsidies, fair price procurement, and irrigation projects to ensure food security and stable farmer incomes. For example, buying wheat at MSP (Minimum Support Price) protects farmers from market fluctuations and ensures affordable food for consumers.

The unorganized sector employs a large portion of the workforce, especially in rural and informal urban jobs, contributing significantly to livelihoods. However, workers face low wages, no job security, and poor conditions, necessitating government intervention for protection and support.

The sectors are interdependent; for example, agriculture (primary) provides raw materials to industries (secondary), which produce goods transported and sold by the tertiary sector. Services like banking and transport support both sectors, illustrating how growth in one sector boosts the others.

Workers face irregular income, lack of social security, and exploitative conditions. For instance, a daily wage laborer may not get paid leave or overtime, and a street vendor has no protection against income loss during crises, highlighting the need for labor laws and support systems.

The public sector provides essential services like education, healthcare, and infrastructure, which private sectors may neglect due to low profits. For example, building roads and schools fosters long-term growth by improving accessibility and human capital, benefiting the entire economy.

The secondary sector adds value to raw materials through manufacturing, creating goods like textiles and machinery. It generates employment and boosts exports, contributing to GDP. Industrial growth also stimulates demand for services, linking it to the tertiary sector's expansion.

Protection is crucial as these workers form the majority but lack job security and fair wages. For example, landless laborers and street vendors need policies like minimum wages and health benefits to prevent exploitation and ensure equitable economic growth.

Urban employment can be boosted by promoting small-scale industries, improving skill training, and enhancing infrastructure. For instance, setting up food processing units or IT hubs creates jobs, while better transport systems facilitate access to employment opportunities.

Historically, the primary sector dominated, but now the tertiary sector leads due to service growth. In 2013-14, services contributed over 50% of GDP, while agriculture's share declined. This shift reflects industrialization and increased demand for education, health, and IT services.

Intermediate goods like wheat and flour are used to produce final goods like biscuits. Excluding them avoids double-counting, as their value is already included in the final product's price. GDP only counts final goods to accurately measure economic output.

Underemployment in urban areas includes graduates working as delivery personnel, not utilizing their skills fully. Another example is a cobbler working sporadically, earning less than potential. Both cases show labor underutilization despite apparent employment.

Investing in health and education improves human capital, essential for long-term growth. For example, educated workers boost productivity, and healthy populations reduce economic losses from illness. These sectors also ensure equitable access, which private providers may not prioritize.

Open unemployment is visible, where individuals actively seek work but find none, like urban job seekers. Disguised unemployment is hidden, where people appear employed but contribute minimally, like extra farm laborers. Both reflect labor market inefficiencies but differ in visibility.

Classification helps identify sectoral contributions and challenges, guiding targeted policies. For example, recognizing agriculture's high employment but low GDP share can prompt support measures like irrigation projects, while tertiary sector growth may inspire IT infrastructure investments.

The organized sector offers stable income, job security, and benefits like pensions and health insurance, as seen in government jobs. In contrast, the unorganized sector lacks these, with irregular wages and no social security, making workers vulnerable to economic shocks.

Despite its declining GDP share, agriculture remains the largest employer due to limited job creation in other sectors and lack of skills for industrial jobs. Many rely on farming as a fallback, leading to underemployment and low productivity in this sector.

MGNREGA guarantees 100 days of wage employment annually to rural households, focusing on asset creation like roads and ponds. It ensures livelihood security and mandates equal wages for women. If employment isn't provided, an unemployment allowance is paid, safeguarding rural incomes.