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India’s population is the second-largest in the world after China. Hence, the Indian economy is also among one of the largest. The economy is fast growing and has a high potential to catch up, even though currently, the per capita income of the Indian economy is low. There are various sectors of the Indian economy that contribute to the economy.
The sectors of the Indian economy are divided into three types: The primary sector, the secondary sector, and the tertiary sector. Each of these sectors is made up of different economic activities with different contributions to the economy.
The Indian Economy
The Indian economy is regarded as fast-growing and is among the most influential and largest economies. There are various sectors of the Indian economy. And there are various factors that impact these sectors of the Indian economy. Those factors are the high population growth rate, low income per capita, and unemployment rate.
The covid pandemic also has had an adverse impact on the primary sector of the Indian economy as well as the secondary and tertiary sectors.
The GDP of India took a deep hit after covid due to an increased unemployment rate, reduced consumer purchases, and a reduction in the revenue of the government. Let us take a look at various sectors of the Indian economy.
The Sectors of the Indian Economy
Generally, the sector of the Indian Economy is divided into three sectors: the primary sector, the secondary sector, and the ternary sector.
The primary sector of the Indian economy includes the industries which are involved in the extraction and production of raw materials, such as farming, logging, hunting, fishing, forestry and mining. Primary economic activities aren’t as profitable as secondary and ternary activities.
The secondary economic activities involve the manufacturing of finished products from raw materials. The tertiary sector includes service-based activities.
Let’s take a look at these sectors of the Indian economy.
The Primary Sector
The Indian economy is largely dependent on the primary sector. The primary sectors include those factors which make use of natural resources in order to manufacture goods and execute various resources. Agriculture is the most important primary sector activity of the Indian economy.
Other primary sector activities include fishing, forestry, cattle breeding, etc. They are together termed as the agriculture and allied sectors. About 54 % of the Indians depend upon agriculture and allied activity for their livelihood. However, the contribution of agriculture and allied sectors to the Indian economy is only about a quarter.
So even though agriculture is the main occupation of Indians, it does not support the economy well. The people engaged in primary sector activities earn a lot less as compared to the other two sectors. This is because the primary sector activities are not very profitable, plus most people turn to this activity because of unemployment. Hence, the primary sector in India has not reached its full potential.
The Secondary Sector
The secondary sector of the Indian economy contributes to about 27.6 % of the total GDP. However, only about 17% of the total workforce is engaged in secondary sector activities. This means the secondary sector economic activities are not more profitable than the primary sector economic activities.
The activities that come under the secondary sector involve manufacturing processes. The raw material is taken and made into a finished product.
India is leading in the market, such as steel engineering electronics and software. The contribution of the secondary sector to the Indian economy is substantial and more focus should be put on the development of the secondary sector for economic growth.
The secondary sector is also called the industrial sector. For example, the sugarcane Industries fall under the secondary sector, which involves processing the raw material sugarcane into finished product sugar.
Other Examples of Secondary sector include Building Companies, Car manufacturers, food production, construction companies, and others.
The Tertiary Sector
The tertiary sector activities include supporting the activities in the primary sector and the secondary sector. The tertiary sector is not involved in the manufacturing of goods on its own, but they support activities that lead to the manufacturing of products. The value added to a product they provide is the same as the secondary sector.
The tertiary sector is also called the service sector. This is because the tertiary sector includes providing services instead of manufacturing or using natural resources. The jobs in the tertiary sector are also called White-collar jobs.
Examples of Tertiary Sectors include the following:
- Jobs such as teachers, barbers, cobblers also fall under the tertiary sector.
- Hospitals also come under the tertiary sector as they do not produce anything but provide Medical Services to patients.
Conclusion
The Indian economy is regarded as one of the largest economies in the world due to its large population. The economy of India is divided into three sectors, the primary sector, the secondary sector. The primary sector is regarded as the backbone of the Indian economy.
This is because half of the Indian population depends upon the primary sector for livelihood. The secondary sector activities include sugarcane production, textile industries, car manufacturing, etc. The contribution of the secondary sector to the economy as well. The sector includes service-based activities such as insurance banking, financial activities, and hospital services.
