Secondary Sector

All human operations transforming raw materials into finished goods are considered part of the secondary sector. Manufacturing industries within the secondary sector include automobiles, electrical equipment, chemicals and energy, metallurgical and construction industries, and food and glass industries (all consumables). Production in the secondary sector may be divided into two categories: small-scale units and large-scale units. Shoe factories, textile mills, printing presses, glassblowers, and furniture manufacturers are just a few examples of small-scale businesses. Automobiles and other large-scale manufacturing businesses are examples of large-scale manufacturing. 

Although the tertiary or service sector dominates in most industrialised nations, the secondary sector still contributes significantly to GDP, provides value (goods), and is the driving force behind economic expansion. As a result of the increasing need for commodities and food, the secondary sector has grown. Even though it is necessary, there is a natural limit to how much may be pulled from the primary industry. New farming practices and industrialisation take hold as the economy goes into the secondary sector, where the products may be converted into items of human use, disseminated, and sold.

The Indian economy is the world’s seventh-largest in nominal GDP and third-largest in PPP terms (PPP). Over the last two decades, the nation has been characterised as a newly industrialised country, a member of the G-20, and a developing economy with an average growth rate of roughly 7%. According to the CIA, the following sectors made up India’s GDP in 2014: Services (24.2 per cent), Industry (17.9%), and Agriculture (57.9 percent). India’s industrial GDP is $495.62 billion, ranking it 12th globally. According to the International Monetary Fund and the CIA World Factbook, 2015, India ranks sixth in industrial production with a total output of 559 billion USD, after China, the United States, and Japan. The graph shows that the primary sector, which mainly consists of agriculture, declines. In contrast, the expansion of the secondary industry in India has been very modest, which indicates that there is a lot of room for growth in the secondary sector.

Second-Sector Job Creation Rate

The secondary sector has been a significant contributor to the country’s economic growth and job creation. Even in India, the rate of development in this industry fluctuates, with distinct patterns emerging at various times. The rise of the secondary sector in India has been unusual, both in terms of structural change and the effect on employment that this change has had.

Agriculture’s percentage of total production began to decline after independence, while industry’s part grew in the wake of the socialisation of democracy. This progress, however, came to an abrupt stop with the liberalisation of the economy. As a whole, employment growth has been relatively strong in the secondary sector of the economy; in fact, it outpaces the expansion of the other two sectors. Overall job growth in the United States slowed in 2004-05/2009-10, although secondary sector employment rose at around 3.5%. 

Construction generated 65 percent of the secondary sector’s new jobs between 1994 and 2012. Thus, the construction industry has become one of the largest employers in the country. Slowly but gradually, manufacturing’s employment share grew throughout liberalisation, contributing 33% of the new jobs created. There were no noticeable changes in utilities, whereas job growth in mining has decreased steadily since 1993-94. There’s no arguing that the secondary sector building sub-sector has grown significantly from 1972–83, rising from 2.1 to 9.61 per cent in 2005–12. Growth in the manufacturing sector has also slowed down.

On the other hand, mining and utilities have declined during the previous four decades. NSS 66th Round, Employment and Unemployment Survey, 2009-10 shows that all states in India have a secondary sector employment share of over 13%, compared to the national average of 11%. Construction employs 21% of the state’s workforce, mining and quarrying employ 2.4%, and the combined rural and urban workforce makes up 1.6% of all secondary-sector workers in Jharkhand (6.2 percent). (0.7 percent), manufacturing (11.4%), power, gas, and water supply (0.3 percent), and construction (0.4 percent) make up Karnataka’s part of secondary employment (6.9 percent ). Karnataka has an 18.3 percent share of secondary sector employment, compared to 31.6% for Jharkhand’s total. More than a third of workers in Karnataka’s metropolitan cities and rural areas rely on the secondary industry for their livelihoods.

Boosting Secondary Sectors: Policy Options

An entrepreneur needs a steady flow of money to start and run a firm and upgrade and modernise it regularly. The Government (Central and Local) has taken this step to satisfy this obligation.

Several initiatives have been taken by the government, such as establishing banks and other financial institutions and formulating different plans. These actions aim to promote and enhance the Secondary Sector’s growth.

The industrial sector relies heavily on the financial support provided by public sector banks. Credit assistance is provided in loans, advance payments, discounted bills, project financing, term loans, export financing, and the businesses they work with. Some examples of financial assistance provided by banks include:

A capital subsidy of up to 20% in Special Economic Zones (SEZs) and 25% outside of SEZs is provided to electronics manufacturing companies under the Modified Special Incentive Package Scheme (M-SIPS). In addition, capital equipment for non-SEZ entities may be reimbursed for CVD/excise costs.

Examples of Subsidiary Industries

Often referred to as the second or mid-phase, the secondary sector comes after the primary sector, which begins with raw materials mined from the earth and ends with finished goods sold to customers.

Here are a few notable instances of secondary sector examples.

• Cotton is grown in the primary sector of the economy, which then passes it on to the secondary industry, which converts it into fashionable apparel following a series of essential steps.
• Agriculture produces wheat and rice, which bakers use to make baked goods; cows’ milk is used to make cheese, cream cheese, and butter; crude steel is used to make tubing; scrap iron is used to make cars, and merino wool is used to make clothing and shoes; tree branches are used to make excellent tables and chairs for our schools and workplaces, and vegetables are used to make recipes and compote.

Conclusion

Secondary sector development is generally referred to as the development of industrial regions, which is sometimes referred to as the production sector from time to time. Intermediate items, agricultural production, textiles, and a wide range of other products may be found in this industry.

So, what is the secondary sector? The manufacturing industry is part of the secondary sector. Its primary duty is to prepare raw materials supplied by the primary industry for use in the production of commodities and services. Additional processes are items that have already been segmented into market segments based on specialised sectors.