Sectors of the indian ecnomy-2 Flashcards
how do we calcalute the various goods made in each sector and know the total prodcution
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.
what precaution is to be taken
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 the valeu of the final goods 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 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.
what is the total production of a sector
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.
define gdp? how to calculate
It is the
value of all final goods and services
produced within a country during a
particular year.
gdp= sum of total production of all 3 sectors
who calculates gdp in india
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.
employment during the first phase of development of countyr
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 craftpersons 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.
how did importance shift to secondary 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.
how did importance shift to tertiary sector
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
