4 Factors of Production – Indian Economy UPSC Notes

The four factors of production are the essential resources used to produce goods and services in an economy. These factors are combined in various ways by firms to create products and contribute to economic growth. The four factors of production are: 1. Land : Definition : Land refers to all natural resources that are used in the production of goods and services. This includes not only physical land but also the resources found in nature, such as minerals, water, forests, and agricultural resources. Characteristics : Natural Resources : Includes resources that come from the earth, such as land for farming, forests, minerals, oil, and water. Inexhaustible vs. Exhaustible : Some natural resources (like solar energy) are inexhaustible, while others (like fossil fuels or minerals) are exhaustible. Examples : Agricultural land for growing crops. Natural resources like coal, oil, and timber. Water bodies used for irrigation, energy production, or fishing. 2. Labor : Definition : Labor refers to the human eff…