Sectors of Economic Activities
All activities that give an income in return are called economic activities. Example: People
going for work in factories, banks, schools, etc.
Economic activities can be classified into different sectors on the basis of:
The nature of work
Ownership
Working conditions
Primary Sector
Goods which are produced by exploiting natural resources come under the category of the primary sector.
This sector is also called as agriculture and related sector.
Example: Cotton
Secondary Sector
Transformation of one good into another comes under the category of the secondary sector.
Manufacturing is one of the important components of this sector.
Example: Transformation of sugarcane into sugar.
Tertiary Sector
All production units producing services that help in the development of primary and secondary sectors
come under the tertiary sector category. This is also known as the service sector.
Example: Services given by doctors, teachers, lawyers etc.
Comparing the three Sectors
These three sectors are highly interdependent on one another. This can be explained with the help of an
example:
Farmers buy goods such as tractors, pump sets, fertilizers (manufacturing sector) to produce agricultural
goods (primary sector). This shows the dependence of the primary sector on the secondary sector. Now
farmers want to sell their output. For this, they need transport facilities. It shows the dependence of the
primary sector on the tertiary sector.
The Dependency of 3 Sectors on Each Other
There are thousands of goods and services produced in an economy. We cannot add different types of goods
in practice. So, the value of these goods and services should be used rather than adding up the actual
numbers. Comparison can be done among these three sectors on the basis of the value of final goods and
services produced. Gross Domestic Product (GDP)
The value of final goods and services produced in each sector during a particular year provides the total
production of the sector for that year. The sum of production in these sectors gives us the gross domestic
product (GDP) of a country.
Tertiary sector has emerged as the largest sector because it helps in the development of primary and
secondary sectors. Several services such as hospitals, banks, insurance companies, transport, and
educational institutions are the basic services required by primary and secondary sectors for their normal
functioning.
Division of Sectors as Organised and Unorganised
Organized Sector
Organized Sector covers those enterprises or places of work where the terms of employment are
regular. They are registered by the government and have to follow its rules and [Link],
people have job security.
Unorganized Sector
Unorganized Sector covers small and scattered units that are largely outside the control of the
government.
There are rules and regulations, but they are generally not being implemented by the unorganized sector.
Employment is not secure in the unorganized sector.
How to Protect Workers in the Unorganised Sector?
In the unorganized sector, protection and support are required for the workers for their economic and social
development. Besides getting irregular and low paid work, they also face social discrimination.
Sectors in terms of Ownership
Public sector- Owned, controlled, and managed by the government. Activities in the government sector
are guided by the motive of social welfare and not to earn the profit.
Private sector- Ownership of production units is in the hands of private individuals. Activities in the
private sector are mainly guided by the motive to earn profit. Example: TISCO and RIL
Employment is an activity from which a person earns the means of living, i.e. income in cash or in kind.
Unemployment refers to a situation where the persons who are able to work and are willing to work, fail
to secure work.
Underemployment is a situation in which a worker gets work for less time than the time he can work. In
other words, he remains unemployed for some months in a year or some hours every day.
Government can create more employment opportunities by providing better: Infrastructure such as roads,
dams, canals etc.
Further, this can be enhanced by providing services like banks, transport and communication.
Set up industries that process vegetables and agricultural products like potatoes, rice, wheat, tomato, fruits
which can be sold in outside markets.
NREGA -This will provide employment in industries located in semi-rural areas. Mahatma Gandhi
National Rural Employment Guarantee Act-2005 (NREGA -2005) 1. This act is implemented as “Right to
Work” in all the 604 districts of India. Under this act, all those who are able to work and are in need of
work have been guaranteed 100 days of employment in a year by the government. However, only one
person per family is entitled to this benefit.