Chapter 1- Type and sectors of Indian Economy
Economy is nothing but a set of instructions or a setup under which all the economic activities being done like Investment, Production etc. An economy is combination of all transactions carried out related to consumption of goods, services, trading etc.
There are many types of economy exists;
- Traditional economy: In this economy, no government involvement is being done. Decisions are based on rituals, traditions etc.
- Free Market Economy: Little bit Govt. involvement involved. Decisions are based on market principles.
- Capital Economy: This economy totally depends upon the market condition. All decisions taken by the Industrialist which depends upon the demand and supply. USA is the best example of this economy.
- Socialist Economy: Decisions taken by the Govt. which depends upon the consumption and production of goods or services. In India, Decisions related to agricultural product taken by this economy.
- Mixed Economy: This is combination of Public and private sector units. It is basically Incorporate Govt. Involvement in market based economy.
- Green Economy: Economy which improved the human well-being and decrease environmental risks.
Till now, we learn about the types of economy. Now, let’s take a look of different sectors of Economy.
Economies are basically divided into following 3 sectors;
- Primary Sector
- Secondary Sector
- Tertiary sector
Primary Sector: Sector which involves mining, forestry, agriculture type of activities referred as Primary Sector.
Secondary Sector: Sector which involves manufacturing, production type of activities referred as Secondary Sector.
Tertiary Sector: This is basically service sector. Banking, Tourism, Transport, Retail type of activities are referred as Tertiary Sector.
How to measure Economic development:
Every year, surveys take place to measure economic development. But, we always wonder how they measure development; do they check out everyone’s individual growth, do they check out total borrowing etc. There are some measures which is used to measure economic development of any country. Terms related to measure Development are listed Below:
- Purchasing Power parity Method ( PPP)
- Human Development Index (HDI)
- Net economic welfare
- National Prosperity Index
- Poverty Index etc.
Lots of terms are used to measure economic development. We will let you know each one of them one by one in next articles.