Chapter : 2. Sectors of the Indian Economy

Primary, Secondary and Tertiary Sector

People in society are engaged in various economic activities. Some produce goods where as some produce services. In order to understand these activities people are divided into groups. These groups are called sector or activity.
I. Primary sector :
(a) Those occupations which are closely related to man’s natural environment. Hunting, fishing, lumbering, animal rearing, farming and mining are important example of primary activity.
(b) This sector is also called agricultural and related sector.
(c) Primary products are the base for all other products that we subsequently make.
II. Secondary sector :
(a) The occupation which produce finished goods by using the product of primary activity as raw materials are included in secondary activity. e.g. Manufacturing of cloth from cotton, sugar from sugarcane and steel from iron ore etc.
(b) This sector is related to industries and hence can be called industrial sector.
(c) The product is not produced by nature.
III. Tertiary sector :
(a) These are activities that help in the development of primary and secondary sector.
(b) These activities by themselves do not produce a good but they are an aid or a support for the production process.
(c) Since these activities generate services rather than goods. They are called service sector. e.g. Transport, storage communication, Banking etc.
(d) In this sector services may be classified in two groups.
(i) Commercial services : It includes Banking, Insurance, Packing, Advertising, Communications, Transport, Railways, Internet cafe. ATM, Call centers etc.
(ii) Personal services : It includes Teaching, Nursing, Police, Medical, Entertainment, Barber, Cobblers, and Lawyers etc.
The contribution of Tertiary sector to G.D.P. is 49.1%, 22.7% of the working population continues to be engaged in Tertiary sector.

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