Sectors of Indian Economy

Topics: Economy, Tertiary sector of the economy, Public sector Pages: 5 (1210 words) Published: March 2, 2011
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Primary Sector Secondary Sector Interdependency Tertiary Sector Growth of Different Sectors Employment Generation Other Classifications ©2009 send your queries to

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SECTORS Primary Sector When the economic activity depends mainly on exploitation of natural resources then that activity comes under the primary sector. Agriculture and agriculture related activities are the primary sectors of economy. Secondary Sector When the main activity involves manufacturing then it is the secondary sector. All industrial production where physical goods are produced come under the secondary sector. Tertiary Sector When the activity involves providing intangible goods like services then this is part of the tertiary sector. Financial services, management consultancy, telephony and IT are good examples of service sector. Evolution of an Economy from Primary Sector Based to Tertiary Sector Based During early civilization all economic activity was in primary sector. When the food production became surplus people’s need for other products increased. This led to the development of secondary sector. The growth of secondary sector spread its influence during industrial revolution in nineteenth century. After growth of economic activity a support system was the need to facilitate the industrial activity. Certain sectors like transport and finance play an important role in supporting the industrial activity. Moreover, more shops were needed to provide goods in people’s neighbourhood. Ultimately, other services like tuition, administrative support developed. Interdependency of Sectors: To understand this interdependency, let us take an example of a cold drink. A cold drink contains water, sugar and artificial flavour. Suppose if there is no sugarcane production then procuring sugar will become difficult and costly for the cold drink manufacturer. Now to transport sugarcane to sugar mills and sugar to the cold drink plant needs the services of a transporter. A person or system of persons is required to maintain and monitor all these movements of goods from farm to factory to shop in different locations. That is where role of administrative staffs comes. Let us go back to the farmer. He also needs feritlisers and seeds which is processed in some factory and which will be delivered to his doorstep by some means of transportation. To top it all at every step of these activities we require the proper monetary and banking system. So, in a nutshell this describes how interrelated all sectors of an economy are. ©2009 send your queries to

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Growth and Status of Different Sectors in India.

Value of Sectors in Indian Economy
Rs. Crore
250000 200000 150000 100000 50000 0 1973 2003 Tertiary Sector Secondary Sector Primary Sector

Share of Sectors in GDP
120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% 1973 2003
45% 25% 35% 55%


Tertiary Sector Secondary Sector Primary Sector

20% ©2009 send your queries to

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Share of Sectors in Employment
120.00% 100.00%
15% 22%

80.00% 60.00% 40.00% 20.00% 0.00%

10% 18%

Tertiary Sector Secondary Sector Primary Sector

75% 60%



Closely observe the given graphs. The first graph shows the rupeewise turnover of various sectors in 1973 and 2003. The second graph shows the share of three sectors in the GDP during these 20 years and last graph shows share in providing employment. The first graph shows a massive increase in turnover for all these sectors during 20 years, which shows the way our economy grew. The second graph shows that share of agriculture decreased substantially and that of industry remained static and share of services grew. Particularly the growth of share of services sector was phenomenal from 35% to 55%. Now the third...
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