Primary Sector
- This sector includes all those economic activities where there is the direct use of natural resources as agriculture, forestry, fishing, fuels, metals, minerals, etc.
- In some of the economies, mining activities are considered as part of the secondary sector, though we see direct use of natural resources here.
- Broadly, such economies term their agricultural sector as the primary sector. This is the case in India.
Secondary Sector
- This sector is rightly called the manufacturing sector, which uses the produce of the primary sector as its raw materials.
- Since manufacturing is done by the industries, this sector is also called the industrial sector—examples are production of bread and biscuits, cakes, automobiles, textiles, etc
Tertiary Sector
- This sector includes all economic activities where different ‘services’ are produced such as education, banking, insurance, transportation, tourism, etc. This sector is also known as the services sector.
Agrarian Economy
- An economy is called agrarian if its share of the primary sector is 50 per cent or more in the total output (the GDP) of the economy.
- At the time of Independence, India was such an economy. But now it shows the symptom of a service economy with the primary sector’s contribution falling to almost 18 per cent of its total produce, while almost 49 per cent of the population depends on the primary sector for their livelihood.
- Thus, in monetary terms India is no more an agrarian economy, however the dependency ratio makes it so—India being the first such example in the economic history of the world.
Industrial Economy
- If the secondary sector contributes 50 per cent or more to the total produce value of an economy, it is an industrial economy. Higher the contribution, higher is the level of industrialisation.
- The western economies which went for early industrialization earning faster income and developing early are known as developed economies.
- Most of these economies have crossed this phase once the process of industrialisation saturated.
Service Economy
- An economy where 50 per cent or more of the produced value comes from the tertiary sector is known as the service economy.