📚 Lesson 3.2: Sectoral Composition Over Time
Class 10 Economics – Chapter 3: Money and Credit
🎯 Learning Objectives
- Analyze sectoral contribution to GDP over decades
- Understand trends in employment patterns
- Evaluate the shift from agriculture to services
- Assess the implications of structural changes
🔄 Understanding Sectoral Composition
What is Sectoral Composition?
Sectoral composition refers to the relative contribution of different economic sectors (primary, secondary, tertiary) to a country’s total economic output and employment over time. It’s like looking at how different ingredients contribute to a recipe – some ingredients dominate, others play supporting roles, and the proportions change as the recipe evolves.
Simple Definition:
Sectoral composition shows what percentage of a country’s economy comes from agriculture, manufacturing, and services, and how these percentages have changed over the years.
👶 Real-Life Analogy:
Think of sectoral composition like a family budget that changes over time:
- Young Couple: 60% income from jobs, 30% from parents, 10% savings
- Established Family: 70% from careers, 20% investments, 10% business
- Retirement Years: 40% pension, 40% investments, 20% rental income
Similarly, countries’ economic “budgets” shift from agriculture-dominated to service-dominated over decades.
Key Characteristics of Sectoral Evolution:
- Sequential Development: Follows a general pattern across societies
- Technology Driven: Advances in technology enable sectoral shifts
- Population Growth: Increasing population creates demand for new sectors
- Urbanization: Movement from rural to urban areas changes economic focus
- Wealth Accumulation: Economic growth enables investment in new sectors
🌾 Analyzing Sectoral Contribution to GDP Over Decades
The Global Pattern of Sectoral Shift
Stage 1: Agricultural Economy (Pre-1800s)
- Primary Sector: 70-80% of GDP
- Secondary Sector: 15-20% of GDP
- Tertiary Sector: 10-15% of GDP
Stage 2: Industrial Economy (1800s-1950s)
- Primary Sector: 30-40% of GDP
- Secondary Sector: 35-45% of GDP
- Tertiary Sector: 20-25% of GDP
Stage 3: Service Economy (1950s-Present)
- Primary Sector: 2-5% of GDP
- Secondary Sector: 20-30% of GDP
- Tertiary Sector: 65-75% of GDP
India’s Unique Sectoral Journey
1950-51: Early Independence Period
- Primary Sector: 55.5% of GDP
- Secondary Sector: 15.3% of GDP
- Tertiary Sector: 29.2% of GDP
1990-91: Pre-Reform Period
- Primary Sector: 34.9% of GDP
- Secondary Sector: 24.5% of GDP
- Tertiary Sector: 40.6% of GDP
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