Question

what is meant by a sector? how are sector classified on the basis of ownership.

Answer 1

A sector is an area of the economy in which businesses share the same or a related product or service. It can also be thought of as an industry or market that shares common operating characteristics. Dividing an economy into different pieces allows for more in-depth analysis of the economy as a whole.
On the basis of ownership of assets and delivery of services, the economic activities are classified as—
Public sector
Private sector
The economic activities can be classified as those in the public sector and in the private sector, on the basis of ownership of assets and responsibility of delivery of services.
 
In the public sector, the government owns the assets and provides services to the nation. Enterprises such as Indian Railways, Steel Authority of India Limited, Hindustan Aeronautics Limited, Air India etc. are owned and operated by the government agencies. In the private sector, the assets and services are controlled by private individuals or companies. Reliance Industries Limited, Tata Steel, Mahindra and Mahindra, Jet Airways, etc. are some examples of private sector enterprises in India.
 
The private sector activities are mainly profit-driven, whereas the public sector enterprises raise money from taxes paid by the citizens and provide services which are not always profit-driven. Government takes up large-scale activities for infrastructural development. This requires huge capital investment to serve the people. Providing electricity at a reasonable price, buying agricultural products from the farmers at the minimum support price, operating schools in rural areas in its campaign to spread literacy, providing cheap housing and healthcare facility to the economically-backward sections of the society are some of the services provided by the government in the public sector. Public sector undertakings cater to employment opportunities through large-scale infrastructure development work and by encouraging small-scale and cottage industries.