SECTORS OF INDIAN ECONOMY
Classification of Sectors of Indian economy on the basis of nature of activities –
● Primary
● Secondary
● Tertiary
Primary Sector -
a. The economic activities which are connected with the extraction and production of natural resources. E.g - agriculture,
fishing, mining, etc., falls under primary sector.
b. It is also called the Agriculture and Related Sector.
Secondary Sector-
a. The economic activities which are related to the manufacturing process. E.g - manufacturing of steel, falls under
secondary sector.
b. It is also called the Industrial Sector.
Tertiary Sector-
a. The economic activities that are mostly those that help in the development of the primary and secondary sectors like
transportation, communication, banking, insurance, etc.
b. Essential services that help in the development of the society are also included in this sector. Examples – education,
healthcare, hotels & restaurants, laundry, lawyers etc.
c. It is also called the Service Sector.
Calculating Gross Domestic Product -
a. The sum of the value of the final goods and services produced in all three sectors within a country during a particular
year provides the GDP.
b. The GDP shows how big the economy is.
Intermediary Goods -
a. Not every good or service that is produced and sold needs to be counted.
b. We need to include only the final goods and services.
c. The value of the intermediate goods are not counted as they are already included in the value of the final products.
● Example: The value of steel/aluminium/plastics/glass/rubber etc used to make a car do not count. Only the value of the
entire car and not its parts, is counted.
Rising Importance of the Tertiary Sector in Production -
a. Need for basic services like hospitals, educational institutions, communication services, police stations, courts, defence,
banks, transport, insurance, etc.
b. Development of agriculture and industry leads to need for services like transport, storage, trade, etc.
c. With rising incomes, people's demand for services like restaurants, hotels, tourism, shopping, schools, etc also increase.
d. New services like the ones based on IT and Communication Tech. have become important in the modern world.
Nature of Tertiary Employment -
Classification of Sectors of Indian economy on the basis of nature of activities –
● Primary
● Secondary
● Tertiary
Primary Sector -
a. The economic activities which are connected with the extraction and production of natural resources. E.g - agriculture,
fishing, mining, etc., falls under primary sector.
b. It is also called the Agriculture and Related Sector.
Secondary Sector-
a. The economic activities which are related to the manufacturing process. E.g - manufacturing of steel, falls under
secondary sector.
b. It is also called the Industrial Sector.
Tertiary Sector-
a. The economic activities that are mostly those that help in the development of the primary and secondary sectors like
transportation, communication, banking, insurance, etc.
b. Essential services that help in the development of the society are also included in this sector. Examples – education,
healthcare, hotels & restaurants, laundry, lawyers etc.
c. It is also called the Service Sector.
Calculating Gross Domestic Product -
a. The sum of the value of the final goods and services produced in all three sectors within a country during a particular
year provides the GDP.
b. The GDP shows how big the economy is.
Intermediary Goods -
a. Not every good or service that is produced and sold needs to be counted.
b. We need to include only the final goods and services.
c. The value of the intermediate goods are not counted as they are already included in the value of the final products.
● Example: The value of steel/aluminium/plastics/glass/rubber etc used to make a car do not count. Only the value of the
entire car and not its parts, is counted.
Rising Importance of the Tertiary Sector in Production -
a. Need for basic services like hospitals, educational institutions, communication services, police stations, courts, defence,
banks, transport, insurance, etc.
b. Development of agriculture and industry leads to need for services like transport, storage, trade, etc.
c. With rising incomes, people's demand for services like restaurants, hotels, tourism, shopping, schools, etc also increase.
d. New services like the ones based on IT and Communication Tech. have become important in the modern world.
Nature of Tertiary Employment -
