Sectors of Indian Economy

 Understanding the Sectors of the Indian Economy: A closer Look at India's Economic Engine 

Sectors of Indian Economy- The economy of India is a huge and dynamic tapestry made up of many different sectors, each of which is essential to the growth and development of the country. The Indian economy combines innovation and tradition in everything from traditional farming methods to state-of-the-art internet services.
Understanding India's three primary, secondary, and tertiary sectors is essential to understanding the country's economic operations. 

Sectors of Indian Economy

Introduction

• With a huge population, favorable demographics, and a great potential for catch-up because of its initially low GDP per capita, India has the fastest-growing big economy in the world.

• With a GDP of USD 2.59 trillion in 2017, India overtook France as the sixth largest economy. according to World Bank figures.
• According to a forecast by the international consulting firm PwC, India is expected to overtake the UK in the ranks of the world's largest economies in 2019.
• The IMF's World Economic Outlook report projects that India's GDP would expand by 7.5% during the 2019-20 fiscal year, continuing its upward trajectory as the rest of the world experiences a downturn.
• According to the paper, "India's economy is poised to pick up in 2019, benefiting from lower oil prices and a slower pace of monetary tightening than previously expected, as inflation pressure eases," according to the report.
• According to the Ministry of Statistics and Programme Implementation's Central Statistics Office (CSO), the GDP is expected to expand by 7.2 percent in 2018-19, up from 6.7% in 2017-18.

Economic sectors

• Goods and services are produced as a result of economic activity, and sectors are groups of economic activity categorized according to certain standards.

• Based on ownership, labor conditions, and the type of activity, the Indian economy can be divided into several sectors.

• In early civilization, all economic activity took place in the primary sector.

• The secondary sector developed as a result of people's increasing demand for other goods following the surplus production of food.

• During the nineteenth-century industrial revolution, the expansion of the secondary sector expanded its sphere of influence.

• To assist the industrial operations, a support system was required. The industrial activity was supported in large part by some industries, such as finance and transportation.

Primary Sector 

• In the primary sector of the economy, activities are undertaken by directly using natural resources. Agriculture, mining, fishing, forestry, dairy, etc., are some examples of this sector.

• It is called so because it  forms the base for all other products. Since most of the natural products we get are from agriculture, dairy, forestry, and fishing, it is also called the agriculture and allied sector.

•  People engaged in primary activities are called red-collar workers due to the outdoor nature of their work.
• Sectors of Indian Economy

Secondary Sector 

• It includes the industries where finished products are made from natural materials produced in the primary sector. Industrial production, cotton, fabric, sugarcane production, etc., activities come under this sector.
• Therefore, it is the sector of a nation's economy that produces goods as opposed to raw materials.
• This sector is also known as the industrial sector because it is linked to several industries.
• Blue-collar workers are those who perform auxiliary tasks.
• Sectors of Indian Economy

Examples of the manufacturing sector:

• Artisan production, small workshops making pots.
• Steel, chemical, plastic, and automobile factories, as well as mills that produce textiles. 
• Food processing and production, including brewing facilities.
• An oil refinery.

Core Industries

Electricity, steel, fertilizers, coal, crude oil, cement, natural gas, and refinery goods are the eight core industries. A lead indication of the monthly industrial performance, the Index of Eight Core Industries is a monthly production index. Monthly production data from the source agencies is used to create the Index of Eight Core Industries.

Tertiary Sector/Service Sector

• The primary and secondary sectors benefit from the activity of this sector.

• Economic activities in the tertiary sector help or assist production rather than producing things on their own.

• The industry includes things like banking, insurance, finance, and goods that are transported by trucks or railroads.

•  Similar to the secondary sector, it adds value to a product.

• White-collar jobs are those in this industry.

Pink Collar Worker

• A person who works in an occupation that is often associated with women is known as a "pink-collar worker." Pink-collar workers were distinguished from blue-collar workers, who performed manual labor, and white-collar workers, who were educated or professional and worked in office settings.

• Compared to white-collar occupations, pink-collar workers may not need as much professional training. They are not given the same status or income.

• The majority of pink-collar workers are female.

• Pink-collar jobs are rarely held by men. Nurses, daycare providers, florists, and babysitters are a few examples of pink-collar jobs.
• The pink-collar worker has recently received training or education.

• Pink-collar workers must always aim for job improvement and receive education through training seminars or workshops.

• These days, males work in traditionally feminine pink-collar positions, while women have more chances in traditionally male white-collar jobs.

Sunrise Industry

• Sunrise industry is a term used for a sector that is just in its infancy but shows promise of a rapid boom.

• High growth rates and a high level of innovation are typical characteristics of the business. Additionally, investors are drawn to the sector due to its long-term growth potential and generally high levels of public awareness.

• However, a rival industry sector that is currently in decline may be threatened by the sunrise industry's quick rise. Such a sector is known as a sunset industry due to its bleak long-term prospects

• The following current Indian industries can be referred to as sunrise sectors and are probably going to be excellent for us going forward in terms of creating jobs and expanding businesses:

• Information Technology

• Telecom sector

• Healthcare

• Infrastructure Sector 

• Retail Sector

• Food Processing Industries

• Fisheries

Why did India shift from the primary sector to the services sector and not the secondary sector?

• A nation's economy naturally transitions from an agrarian to an industrial to a service economy, but India has achieved this transition faster than others.
• 
  
• A noteworthy aspect of India's recent expansion has been its diversification into the services sector, which now accounts for the majority of GDP. 
• 
  
• India's proportion in global services exports increased from 0.6% in 1990 to 3.3% in 2013, demonstrating the country's success in software and IT-enabled services (ITeS) exports.
• 
  
• Additional factors contributing to the nation's service sector's explosive expansion include highly educated and abundant human resources, fluency in English, and the availability of inexpensive labor. Conversely, the secondary sector's poor growth might be ascribed to:

• The license Raj

• Restrictions on foreign investment 

• Lack of measures to promote private industry

• Power Deficit

• Stringent Labour laws

• Lack of skilled labour

• Delays in Land Acquisition and environmental clearances

• Import of cheap manufactured goods etc.

• Despite having a low per capita income, India's GDP share of services is getting close to the world average. Surprisingly, though, services' employment contribution was far less than the global average.

• A renewed focus on manufacturing through initiatives like "Make in India" will help to rectify this anomaly and increase employment in line with GDP growth because the manufacturing sector is typically labor-intensive.

Quaternary Activities

These are specialized tertiary activities in the 'knowledge sector,' which demands a separate classification.

The quaternary sector is the intellectual aspect of the economy. It is the process that enables entrepreneurs to innovate and improve the quality of services offered in the economy.

Personnel working in office buildings, elementary schools and university classrooms, hospitals and doctor's offices, theaters, and accounting and brokerage firms belong to this category of services.

Like other tertiary functions, quaternary activities can also be outsourced.

Quinary Activities 

1.Decisions at the highest levels of the economy are taken in the quinary sector. This also applies to the government, which enacts laws.

2.It also includes the leading decision-makers in business, industry, and education.

3.These services concentrate on data interpretation, the application and assessment of new technology, and the development, reorganization, and interpretation of both new and preexisting concepts.

4.These professions, which are sometimes referred to as "gold collar" professions, are another subset of the tertiary sector that reflect the specialized and highly compensated talents of government officials, financial and legal advisors, research scientists, and top company executives, among others.

Organised Sector

Employees in this industry are guaranteed employment and social security, and their terms of employment are regular and set.

Another way to describe it is as a sector that has government registration and is subject to several laws. The organized sector includes hospitals and schools.

Employees in the organized sector have job security. They are only supposed to work a certain number of hours. The employer must pay overtime if they put in more hours.

Unorganised Sector

• An unorganized worker is a home-based worker, a self-employed worker, or a wage worker in the unorganized sector and includes a worker in the organized sector who is not covered by any of the Acts pertaining to welfare schemes as mentioned in Schedule-II of the Unorganized Workers Social Security Act, 2008.

• Because of the sporadic locations of businesses and the seasonal and informal nature of employment, wage-paid labor in this sector is primarily non-unionized.

• Low pay, erratic and irregular work, and a lack of legal or trade union protection are characteristics of the industry.

• The unorganized sector primarly employs indigenous technologies and labor-intensive processes. Because the unorganized sector's workforce is so dispersed, the law's application is woefully insufficient and ineffectual. In this industry, there are very few unions that can serve as watchdogs.

• In contrast to the organized sector, the unorganized sector makes a significant contribution to the national income. Depending on the industry, the organized sector contributes over half of the national income, whereas it accounts for over 60%.

The Public Sector 

In the Sector, government owns most of the assets and it is the part of the economy concerned with providing various governmnetal services.

The Purpose of the public sector is not just to earn profits. Governments raise money through taxes and other ways to meet expenses on the services rendered by it.

Classification of Central Public Sector Enterprises (CPSEs)

• CPSEs are divided into three groups: Miniratna, Navratna, and Maharatna, There are currently seven Maharatna, sixteen Navratna, and seventy-one Miniratna CPSEs.

• In order to enable major CPSEs to grow and become global giants the Maharatna Scheme was implemented for Central Public Sector Enterprises (CPSEs) on May 19, 2010.

• Indian Oil Corporation Limited, Coal India Limited, GAIL (India) Limited, Bharat Heavy Electricals Limited, NTPC Limited, Oil & Natural Gas  Corporation Limited, and Steel Authority of india Limited are the seven "Maharatna" CPSEs that now exist.

• CPSEs that meet the following requirements can be considered for Maharatna status:

• The status of Navratna.

• In accordance with SEBI requirements, listed on the Indian stock exchange with a minimum specified public shareholding.

• Over the past three years, the average yearly turnover has exceeded Rs. 25,000 crore.
• during Rs. 15,000 crore in net worth on average per year during the last three years.

• Over the past three years, the average yearly net profit after taxes has exceeded Rs. 5,000 crore.

• International businesses and a substantial worlwide presence are essential.
• Criteria for grant of Navratna status
• The Miniratna Category- I and Schedule 'A' CPSEs, which have  obtained 'excellent' or 'very good' rating under the Memorandum of Understanding system in three of the last five years, and have composite score of 60 or above in the six selected performance parameters, namely, 

• net profit to net worth, 
• manpower cost to total cost of production/services,
• profit before depreciation, interest and taxes to capital employed,
• prof
• it before interest and taxes to turnover, earning per share and 
• inter-sectoral performance.

'Miniratna' Scheme: In October 1997, the Government had also decided to grant enhanced autonomy and delegation of financial powers to some other profit making companies subject to certain eligibility conditions and guidelines to make them efficient and competitive. These  companies called 'Miniratnas,' are in two Category-II. The eligibility conditions and criteria are:

category -I CPSEs should have made profit in the last three years continuously, the pre-tax profit should have been Rs. 30 crore or more in at least one of the three years and should have a positive net worth.

Category-II CPSEs should have made profit for the last three years continuously and should have a positive net worth. 

These CPSEs shall be eligible for the enhanced delegated powers provided they have not defaulted in the repayment of loans/interest  payment on any loans due to the Government.

The Private Sector

• In the private sector, ownership of assets and delivery of services is in the hands of private individuals or companies.

• It is sometimes  referred as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled but regulate by the State.

• Activities in the Private sector are guided by the motive to earn profits. To get such services we have to pay money to these individuals and companies.

Sectors Of Indian Economy

PPP (Public Private Partnership)

• PPPs are agreements between the public and private sectors for the supply of public resources and/or services.

• In this kind of collaboration, the private sector firm makes investments for a predetermined amount of time.

• PPP does not equate to privatization because it retains the government's entire responsibility for delivery the services.

• The division of risk between the public and private sectors is well established.

• The private entity receives performance-linked rewards and is selected through open competitive bidding.