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Activities of 3 Main Sectors of Indian Economy

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  • Difficulty Level : Hard
  • Last Updated : 22 Sep, 2021

The recent data from IMF shows when ranked by nominal GDP, India has risen to become the world’s fifth-largest economy. The Indian economy is separated into organized and unorganized sectors in terms of operations. When it comes to ownership, the public and private sectors are separated. According to Allan Fisher, Colin Clark, and Jean Fourastie, on the basis of activity, economics divides into three sectors:

  • Primary sector; extraction of raw materials
  • Secondary sector;  manufacturing or modification and  
  • The tertiary sector; exist to assist the transportation, distribution, and sale of commodities generated in the secondary sector

In the three-sector model, all the sectors are interlinked, the raw materials shift from the primary, through the secondary, and finally to the tertiary sector. The growth of agriculture and industry leads to the development of services such as transportation, commerce, and storage. The need for such services would increase as the primary and secondary sectors developed.

1. Primary sector

Activities in the primary sector of the economy are carried out by utilizing natural resources directly. Agriculture, mining, fishing, forestry, dairy, and other industries fall into this category. It is thus named because it serves as the foundation for all other items. It is also known as the Agriculture and Allied Sector since agriculture, dairy, forestry, and fishing provide the majority of the natural items we consume.

Any industry engaged in the extraction and production of raw materials, such as farming, logging, hunting, fishing, and mining, falls within the primary sector of the economy. When compared to hand-picking and -planting in poorer nations, the primary sector in wealthy countries has grown more technologically sophisticated, allowing for the mechanization of farming, for example. In the United States corns belt, for example, combine harvesters pick the corn while sprayers spray enormous amounts of pesticides, herbicides, and fungicides, resulting in a greater yield than is feasible with less capital-intensive approaches. Because technical advancements and investment allow the primary sector to employ a smaller workforce, industrialized nations have a lower percentage of their workforce engaged in primary activities and a larger percentage in secondary and tertiary activities.

In the Indian economy, Agriculture, combined with fisheries and forestry, contributes one-third of the country’s GDP and is the single greatest contributor. Currently, the primary sector accounts for 18.20% of GDP.

Some Revolutions in the Primary Sectors:

India’s economy has always been built on agriculture. Besides this India is the world’s greatest milk producer and the world’s second-largest producer of wheat, sugar, freshwater fish, and groundnuts. It is a major tea, cashew, sugar, ginger, turmeric, and black pepper producer. The Indian agricultural sector was able to achieve this astounding feat as a result of multiple simultaneous revolutions launched by the Indian government.

  • The Green Revolution: It enhanced agricultural output by using high-yielding seed types, altering farm equipment, and significantly increasing the usage of chemical fertilizers. The Indian revolution began in 1967/68 with a concentration on wheat, which was later expanded to include other crops, thus, India achieved self-sufficiency in wheat production.
  • White Revolution: The goal of Operation Flood (1970), often known as the white revolution, was to increase milk production. As a result, India has surpassed the United States in milk production. This was realized by the National Dairy Development Board (NDDB), which organized dairy development through cooperative groups.
  • Blue Revolution: The goal of the Blue Revolution was to enhance fish and marine product production. The Indian Blue Revolution began in 1970 when the Central Government funded the Fish Farmers Development Agency as part of the Fifth Five-Year Plan (FFDA). The Turkish Water Fish Farms Development Agency was established as a result to promote aquaculture. Aquaculture has improved as a result of the Blue Revolution’s adoption of innovative techniques for fish breeding, raising, marketing, and export.
  • The silver revolution: It was an era in which the output of eggs was greatly enhanced, thanks to medical technology and more protein-rich food for the chickens. More than three million people are working in poultry production, either directly or indirectly.
  • The yellow revolution:  Increased yield in oilseeds. The Yellow Revolution catalyzed the growth, development, and adoption of new types of oilseeds and supporting technologies, which nearly doubled oilseed production.
  • The Red Revolution: Used to describe technological advancements in the meat and tomato industries.
  • The Pink Revolution: Increased output of onions, prawns, and pharmaceuticals. In recent years, the pink revolution has also applied to India’s meat and poultry processing industry.
  • Other significant revolutions in India’s primary sector include the Black Revolution, which saw the production of petroleum, and the Brown Revolution, which saw the production of leather/non-conventional/cocoa.
    • Jute Production – The Golden Fiber Revolution
    • Fruits/Overall Horticulture development/Honey Production – Golden Revolution
    • Potato production- Round Revolution  
    • Fertilizer- Grey Revolution  
    • Cotton- Silver Fiber Revolution  

2. Secondary sector

In the three-sector theory, the secondary sector of the economy is an economic sector that explains the function of manufacturing. It includes businesses that make a finished, useable product or work in construction. This sector takes the primary sector’s production (i.e. raw materials) and turns it into completed items that may be sold to domestic enterprises or consumers, as well as exported (via distribution through the tertiary sector). Many of these sectors require huge amounts of energy, factories, and machinery, and they are frequently categorized as light or heavy depending on these factors. This also generates waste materials and waste heat, both of which have the potential to harm the environment.

Manufacturing is a critical component of economic growth and development. Exporting manufactured goods leads to higher marginal GDP growth, which supports higher wages and, as a result, higher marginal tax revenue needed to pay government expenditures like health care and infrastructure. It is a significant source of well-paying occupations for the middle class in industrialized nations (e.g., engineering), allowing for higher social mobility for succeeding generations in the economy. For the raw resources needed for production, the secondary sector is reliant on the primary sector. Those Countries which predominantly produce agricultural and other raw materials, grow slower than the developed country. The value-added via the translation of raw resources into completed commodities consistently provides more profitability, which explains why developed economies are growing quickly.

The final output of both of these industries is consumer consumption. Almost 14% of India’s total workforce is employed in this area. In addition, the secondary sector accounts for over a quarter of GDP. This industry is the backbone of the Indian economy, and it will continue to expand and flourish in the foreseeable future. Mining and quarrying, registered and unregistered manufacturing, gas, power, building, and water supply are all part of this business. This is also known as the economy’s secondary sector. In 2018-19, it is expected to contribute roughly 29.6% of India’s GDP.

3. Tertiary sector

The service sector refers to the tertiary sector. In the three-sector theory, the tertiary sector is the last of three economic sectors. The primary sector (which is similar to manufacturing) and the secondary sector (which is similar to manufacturing) are the other two (raw materials). Instead of producing finished goods, the service industry produces services. Attention, guidance, access, experience, and emotional labor are examples of services (sometimes known as “Intangible Products). The tertiary sector of the industry is responsible for providing services to both other firms and end-users. In wholesaling and retailing pest control, or entertainment, services may include the transportation, distribution, and sale of commodities from a producer to a customer. As in the restaurant business, the items may be changed in the process of giving the service. However, rather than altering tangible things, the focus is on people through connecting with them and servicing the consumer.

Following primary and secondary education, there is a third group of activities that comes within the tertiary sector and is distinct from the previous two. These are activities that aid the elementary and secondary sectors’ growth. These actions do not generate a good for themselves, but they help or assist the manufacturing process.

Some important services that do not directly contribute to the creation of commodities are included in the service sector. Teachers, physicians, and individuals who offer personal services like barbers, cobblers, attorneys, and professionals who conduct administrative and accounting work, for example, are all required. In recent years, new information technology-based businesses such as internet cafes, ATM booths, contact centers, and software firms have grown in importance. The tertiary sector is sometimes known as the service sector since these businesses create services rather than products. These actions do not generate a good in and of itself but they help or assist the manufacturing process. Goods manufactured in the primary or secondary sectors, for example, would need to be carried by trucks or trains before being sold in wholesale and retail stores. All service industries, such as IT services, consultancy, and so on, are examples of this sector. This industry accounts for over 59 percent of the total GDP of India’s economy.

Conclusion

Consumer and business economic activity is classified into sectors, which are divided into groups based on the type of commercial activity. Each sector indicates a particular stage of economic activity in terms of how closely that activity is linked to natural resource extraction or not. The total production of each sector for a given year is determined by the value of final products and services produced in that sector during that year. The aggregate of production in the three sectors is referred to as a country’s Gross Domestic Product (GDP). It is the total value of all final products and services produced in a country over a year. The Gross Domestic Product (GDP) is a metric for determining the size of a country’s economy.

To sum up, the tertiary sector of the Indian economy is the most powerful because it contributes the most to the country’s GDP. Regardless of this, the government is concerned about the declining share of the allied and agriculture industries in the nation’s GDP. While the primary sector provides a source of income for an estimated 53% of the population, its economic impact is decreasing year after year.


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