NCERT Notes For Class 10 Economics Chapter 2 Sectors Of The Indian Economy

Class 10 Economics Chapter 2 Sectors Of The Indian Economy

NCERT Notes For Class 10 Economics Chapter 2 Sectors Of The Indian Economy, in this step-by-step answer guide. In some of State Boards and CBSE schools, students are taught thru NCERT books. As the chapter comes to an end, students are requested few questions in an exercising to evaluate their expertise of the chapter.

In this chapter, three types of classification are discussed: primary/secondary/tertiary; organised/ unorganised; and public/private. The students may need to be familiarised with a few fundamental concepts such as gross Domestic Product, Employment etc.

Students should solve those exercises carefully as questions withinside the final exams are requested from those, so these exercises immediately have an impact on students’ final score. Find all NCERT Notes for Class ten Economics below and prepare in your tests easily.

NCERT Notes For Class 10 Economics Chapter 2 Sectors Of The Indian Economy

Class 10 Economics Chapter 2 Sectors Of The Indian Economy

Sectors Of The Indian Economy

Sectors of Economic Activities

  1. Those activities which generates some income are known as economic activities.
  2. Sector defines a large segment of the economy in which businesses share the same or a related product or service.
  3. For example, a computer engineer creating software for profit is making money from his work.

Division of Economic Activities:

  1. Primary sectors: related to farming activities.
  1. When we produce a good by extraction and collection of natural resources, it is known as

the primary sector. Eg: Farming, forestry, hunting, fishing and mining.

  1. The secondary sector covers activities in which natural products are changed into other forms through ways of manufacturing.
  2. It is the next step after primary.
  3. Some manufacturing processes are required here.
  4. It is also called the industrial sector.
  5. For example, using cotton fibre from the plant, weave spin yarn and weave cloth. Using sugarcane as raw material, we make sugar or gur.

Tertiary sector: provide support to other two sectors.

  1. Tertiary sector includes activities that help in the development of the primary and secondary sectors.
  2. These activities, by themselves, do not produce a good but they are an aid or support for the production process.
  3. It is also called the service sector.
  4. Example: Teachers, doctors, washermen, barbers, cobblers, lawyers, call centres, software companies, etc.

Comparison of three sectors of the Economy (Through productivity and population)

  1. As thousands of economic activities going around in all three sectors, it makes almost impossible to take account of every such activities.

We check only final goods and services.

for example:

  1. A farmer who sells wheat to a flour mill for Rs 8 per kg.
  2. The mill grinds the wheat and sells the flour to a biscuit company for Rs 10 per kg.
  3. The biscuit company uses the flour and things such as sugar and oil to make four packets of biscuits.
  4. It sells biscuits in the market to the consumers for Rs 60 (Rs 15 per packet).
  5. Biscuits are the final goods, i.e., goods that reach the consumers.

Gross Domestic Product (GDP)

  1. The value of final goods and services produced in all three sectors during a particular year provides the total production of the sector for that year is called the Gross Domestic Product (GDP) of a country.
  2. The sum of production in the three sectors gives Gross Domestic Product (GDP) of a country.
  3. GDP is the value of all final goods and services produced within a country during a particular year.
  4. It shows how big the economy is.
  5. In India, the task of measuring GDP is undertaken by a central government ministry
  6. More the GDP, more bigger the economy of the country is.

Historical Changes in sectors

  1. At initial stages of development, primary sector was the most important sector of economic activity in a country.
  2. With the innovation in farming methods, agriculture sector began to produced much more food than before.
  3. People started working in industries.
  4. Some people also get involved in transportation.
  5. Gradually, Secondary sector became the most important in economy and providing employment.
  6. Different industries related to food processing, equipment’s making, textiles coming in large numbers.
  7. This lead to start of services such as banking, health, education etc.
  8. The service sector has become the most important sector in terms of total production and started employing more people.

Primary, secondary and tertiary sectors in india

Contribution in GDP

  1. In the period of 1973-74, the primary sector has contributed maximum to the GDP
  2. In the year 2013-14, the tertiary sector emerged as the largest producing sector in India, replacing the primary sector. The tertiary sector has become important in India because of the following reasons:

Factors behind the shift in contribution in GDP

  1. Services such as hospitals, educational institutions, post and telegraph services, police stations, courts, village administrative offices, municipal corporations, defence, transport, banks, insurance companies, etc.
  2. Are considered as basic services and are necessary for all people.
  3. The development of agriculture and industry leads to the development of services such as transport, trade, storage, etc.
  4. With the rise in the income of people, they start demanding more services like eating out, tourism, shopping, private hospitals, private schools, professional training, etc.
  5. Over the past decade, certain new services based on information and communication technology have become important and essential.
  6. The production of these services has been rising rapidly.

Where are most of the people employed?

  1. In the period during 1973-74, 40% is contributed by the primary sector in GDP of the country.
  2. More than half of the workers in India are working in the primary sector, mainly in agriculture.
  3. Secondary sector contributed only 12% and 48% is contributed by the tertiary sector.
  4. These sectors employ less than half the people as compared to the primary sector.
  5. Employment percent during the period of 1972-73, 74% people of India are engaged in primary sector while only 15% are involved in tertiary sector.
  6. In 2013-14, the percent of contribution of tertiary sector in GDP of the country increased and reached to 67% .
  7. The primary sector reduced to only 12%.
  8. The primary sector continues to be the largest employer during 2011-12.

Disguised Unemployment

More people engaged in agriculture than the necessity.

This kind of underemployment is hidden in contrast to someone who does not have a job and is clearly visible as unemployed, it is also called disguised unemployment.

How to create employment?

  1. Employment can be given to people by identifying, promoting and locating industries and services in semi-rural areas.
  2. Every state or region has the potential for increasing the income and employment for people in that area.
  3. It can be done by:
  4. Granting Loans at lower interest Rate
  5. Investing in infrastructure such as Building a dam at suitable place.
  6. Increasing efficiency of transportation and Storage.
  7. Promoting small scale Industries such as mills, honey collection centers.
  8. Emphasis on Education and training center.
  9. Identifying Potential of an area. For example, an area can be developed as tourist site.
  10. Government Welfare Schemes like making well or pump near farms, providing electricity, building hospitals.

A study conducted by the Planning Commission (known as NITI Aayog) estimates that nearly 20 lakh jobs can be created in the education sector alone.


  1.  central government in India made a law implementing the Right to Work in 625 districts called Mahatma Gandhi National Rural Employment Guarantee Act 2005 known as MGNREGA 2005.

Under MGNREGA 2005:

  1. In rural areas, all those who are able to, and are in need of work are guaranteed 100 days of employment in a year by the government. 
  2. If the government fails in its duty to provide employment, it will give unemployment allowances to the people.

Division of sectors as organised and unorganised

Difference between Organised and unorganised sectors

Organised SectorUnorganised Sector
It is a sector where the employment terms are fixed and regular, and the employees get assured work.The unorganised sector is characterised by small and scattered units, which are largely outside the control of the government.
They are registered by the government and have to follow its rules and regulations, which are given in various laws such as the Factories Act, Minimum Wages Act, Payment of Gratuity Act, Shops and Establishments Act, etc.There are rules and regulations but these are not followed since they are not registered with the government.
The job is regular and has fixed working hours. If people work more, they get paid for the overtime by the employer.Jobs are low-paid and often not regular.
Workers enjoy the security of employment.Employment is not secure. People can be asked to leave without any reason.
People working in the organised sector get several other benefits from the employers such as paid leave, payment during holidays, provident fund, gratuity, etc.There is no provision for overtime, paid leave, holidays, leave due to sickness, etc.
People get medical benefits. The factory manager has to ensure facilities like drinking water and a safe working environment. When they retire, these workers get pensions as well.There are no such facilities in the unorganised sector.
Examples of the organised sectors are Government employees, registered industrial workers, Anganwadi workers, village health workers, etc.Examples of the unorganised sectors are Shopkeeping, Farming, Domestic works, Labouring, Rickshaw pulling, etc.

How to Protect Workers in Unorganised Sector

  1. There is a need for protection and support of the workers in the unorganised sector. Here are a few points which will help in doing so.
  2. The government can fix the minimum wages rate and working hours.
  3. The government can provide cheap loans to self-employed people.
  4. Government can provide cheap and affordable basic services like education, health, food to these workers.
  5. The government can frame new laws which can provide provision for overtime, paid leave, leave due to sickness, etc.

Sectors in Term of Ownership: Public and Private Sectors

Public SectorPrivate Sector
In the public sector, the government owns most of the assets and provides all the services.In the private sector, ownership of assets and delivery of services is in the hands of private individuals or companies.
Railways or post office is an example of the public sector.Companies like Tata Iron and Steel Company Limited (TISCO) or Reliance Industries Limited (RIL) are privately owned companies.
The purpose of the public sector is not just to earn profits. Its main aim is public welfare.Activities in the private sector are guided by the motive to earn profits.

Responsibilities of Government

  1. There are a large number of activities which are the primary responsibility of the government. Here, we have listed a few of them:
  2. Government raises money through taxes and other ways to meet expenses on the services rendered by it.
  3. Governments have to undertake heavy spending such as the construction of roads, bridges, railways, harbours, generating electricity, providing irrigation through dams, etc. Also, it has to ensure that these facilities are available for everyone.
  4. There are some activities, which the government has to support to encourage the private sector to continue their production or business.
  5. The government in India buys wheat and rice from farmers at a ‘fair price’ and sells at a lower price to consumers through ration shops. In this way, it supports both farmers and consumers.
  6. Running proper schools and providing quality education, health and education facilities for all are some of the duties of the government.
  7. Government also needs to pay attention to aspects of human development such as availability of safe drinking water, housing facilities for the poor and food and nutrition, taking care of the poorest and most ignored regions of the country.

Benefits of NCERT Notes

NCERT’s Class 10 Notes contains extremely important points, and for each chapter, each concept has been simplified to make it easier to remember and increase your chances of achieving excellent exam results. Exam Preparation References Here are some tips on how these Notes can help you prepare for the exam.

  1. This helps students solve many of the problems in each chapter and encourages them to make their concepts more meaningful.
  2. NCERT Notes for Class 10 encourage you to update your knowledge and refine your concepts so that you can get good results in the exam.
  3. These Notes are the best exam materials, allowing you to learn more about your week and your strengths. To get good results in the exam, it is important to overcome your weaknesses.
  4. Most of the questions in the exam are formulated in a similar way to NCERT textbooks. Therefore, students should review the solutions in each chapter in order to better understand the topic.
  5. It is free of cost.

Tips & Strategies for Class 10 Exam Preparation

  1. Plan your course and syllabus and make time for revision
  2. Please refer to the NCERT solution available on the cbsestudyguru website to clarify your concepts every time you prepare for the exam.
  3. Use the cbsestudyguru learning app to start learning to successfully pass the exam. Provide complete teaching materials, including resolved and unresolved tasks.
  4. It is important to clear all your doubts before the exam with your teachers or Alex (an Al study Bot). 
  5. When you read or study a chapter, write down algorithm formulas, theorems, etc., and review them quickly before the exam.
  6. Practice an ample number of question papers to make your concepts stronger. 
  7. Take rest and a proper meal.  Don’t stress too much. 

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