Sectoral Aspects Of Indian Economy

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We do different activities based on our skills, education, tradition and culture to earn livelihood. All these activities can be classified into three major groups we call them as sectors of the economy. Every activity comes under any one of these sectors. These sectors are

  1. Primary Sector

  2. Secondary Sector

  3. Tertiary Sector

Primary Sector:

All those economic activities where there is direct use of natural resources come under Primary Sector.

Primary Sector Activities:

  • Agriculture: Around 70% of Indian rural population depends on agricultural activities. They are known as Farmers and the occupation is known as agriculture. They direct natural resources like land, water, rainfall and climate etc. to produce. Farmers produce different crops. They can be classified into two categories – those are

    • Food items – Crops like paddy, pulses, cereals, fruits and vegetables etc.

    • Non-food items – Crops like cotton, jute etc.

      Allied sector activities: Which are closely associated with agricultural activities. They include animal production, dairy farms, poultry etc.

  • Forestry: Many people in India are earning their livelihood from forests and forest products. Forest products include- timber, firewood, herbal medicines etc. Forest people used to sell these products in nearby markets to earn their livelihood.

  • Mining: Mining is the activity of extracting minerals from ores. This involves more risk but many people earn their livelihood based on this activity. In some countries mining considered as manufacturing activity but India it is considered as primary activity as we are extracting natural resources which can be processed further.

  • Fishery: In India fishing is a major industry employing over 14 million people (as per 2017-18). Also seafood exports are significant in number.

Role and Importance of Primary Sector:

India has huge population with more rural population. Most of the rural population depends on agriculture and agriculture related activities to earn livelihood. Primary sector not only supports rural population which also supports Indian Economy by providing food and raw materials.

Primary Sector Contribution in Indian Economy:

  • Share in National Income: Earlier India was an Agrarian Economy (Primary sector contribution is more than 50% in total India GDP). Now India is no more an Agrarian Economy but it is contributing around 17% in GDP.

  • Providing employment to largest section of population: Around 60% of total work force is working in primary sector. At the time of independence about 70 percent of our population depended on agriculture and allied activities to earn their livelihood.

  • Providing Food to Millions: Food is the most basic requirement of life. No farmer no food. India is trying to implement advanced technologies in order to food requirements. In 2017-18 India witnessed a record production of all major crops like Rice (112.91 MT), wheat (99.70 MT), coarse cereals (46.99 MT) and pulses (25.23 MT) etc.

  • Providing raw materials to industries: Every manufacturing industry depends on primary sector for raw materials. Industries such as sugar, jute, cotton textiles, vanaspati etc. get their raw materials from agriculture. Ex: Manufacturing of steel need iron ores which are extracted by mining process.

Secondary Sector:

Secondary sector is also called as the manufacturing sector, which uses the produce of the primary sector as its raw materials.

This sector includes the following production activities

(a) Manufacturing (b) Construction (c) Gas, water and electricity supply

Manufacturing: Production of goods is called Manufacturing. Based on size and expenditure manufacturing unit can be classified into different industries. Those are micro, small, medium and large industries. Manufacturing industries are defined in terms of investment in Plant and Machinery. As per MSMED Act, 2006

Micro Enterprise: Investment in plant and machinery does not exceed 25L rupees. Ex: paper plates manufacturing by individuals etc.

Small Enterprise: Investment in plant and machinery is more than twenty 25L rupees but does not exceed 5 crore rupees. Ex: Dying industry, textile industry etc.

Medium Enterprise: Investment in plant and machinery is more than 5 crore rupees but does not exceed 10 crore rupees. Ex: cement factories

Large Enterprise: Investment in plant and machinery is more than 10 cr. Ex: Steel plants, automobile companies etc.

Construction: Construction is the process of making household buildings, roads, dams, airports, bridges and hospitals etc. This provides more employment in urban areas. Construction is important for infrastructure development.

Role and Importance of Secondary Sector:

India is lagging behind due to the lack of advanced technologies in Manufacturing Sector. Government is implementing many ways to improve manufacturing industry. After independence this sector is shown significant growth.

Secondary Sector Contribution in Indian Economy:

  • Share in national income: The contribution of industrial sector to Indian Economy is increasing slowly over time. At the time of independence it was 14% and it is around 30% (as per 2016 data). The increase is due to increase in number of manufacturing units and increase in industrial production.

  • Employment generation: 22% of the total work force is depending on secondary sector for employment. Most of the GDP is contributed by small scale enterprises.

  • Creation of Infrastructure: Infrastructure development is possible only because of secondary sector. Existence of roads, highways, railways, airways, dams, buildings, Radio and Telephone towers all are part of infrastructure.

  • Provision of consumer goods: We use many products most of them either created domestically or imported from foreign countries. All these products are existing because of secondary sector.

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