Sectors of the Indian Economy
Three sectors of the economy
Classify activities into the three sectors and show how they depend on each other.
Sorting work into sectors. Around us, people produce goods (things you can touch and store) and services (things done for you). To understand all this activity, we group it using some criterion. These groups are called sectors.
Primary sector: straight from nature. Activities that produce goods by directly using natural resources. Cotton grows with rain, sunshine and climate; milk comes from animals; minerals come from the earth. These are natural products. Why 'primary'? Because it is the base for everything we make later. Since most natural products come from farming, dairy, fishing and forestry, it is also called the agriculture and related sector.
Secondary sector: making things. Here natural products are changed into other forms by manufacturing, in a factory, a workshop or even at home:
- cotton fibre is spun into yarn and woven into cloth;
- sugarcane becomes sugar or gur;
- earth becomes bricks, and bricks become houses.
Because it became linked with industries, it is also called the industrial sector.
Tertiary sector: services. These activities do not produce a good themselves but support production:
- transport (trucks, trains), storage (godowns), trade (wholesale and retail shops), communication (phones, letters), banking (loans).
It also includes services that do not directly help make goods: teachers, doctors, washermen, barbers, cobblers, lawyers, accountants. Newer IT services like call centres, ATM booths and software companies belong here too. Since it produces services, it is also called the service sector.
The sectors depend on each other.
- If cane growers stop selling to a sugar mill, the mill must shut down (secondary depends on primary).
- If the price of fertilisers or pumpsets goes up, farmers' costs rise and profits fall (primary depends on secondary).
- If transporters strike and lorries stop carrying vegetables and milk from villages, food becomes scarce in cities and farmers cannot sell (everyone depends on services).
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