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Home Articles

Difference Between Primary, Secondary, and Tertiary Sectors

by Juwairiya Mahin
July 29, 2022
in Articles, General Knowledge
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Table of Contents

  • Classification of Indian Economy with Examples
  • What is GDP (Gross Domestic Product)?
  • The Increasing Importance of Tertiary Sector in Indian Economy
  • Organized and Unorganized Sectors
  • Key Differences Between Primary, Secondary and Tertiary Sector

India is one of the fastest-growing economies in the world and it is expected that by 2050, it will become the second-largest economy in the world. There are many elements that contribute to the economy. As of 2018, the Nominal (current) Gross Domestic Product (GDP) of the country is 2.72 lakh crores USD. The estimated nominal GDP of 2020 is USD 3.202 trillion (as per Wikipedia).

One might be anxious to know about the factors that contribute to the Indian economy. The different sectors of the Indian economy are explained here in detail. There are three sectors of the Indian economy: the primary sector, the secondary sector, and the tertiary sector.

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Classification of Indian Economy with Examples

1. Primary sector

To keep the daily operations going, this sector’s services are fully dependent on the availability of natural resources. Eg. Agriculture, Mining, Fishing, Forestry, Dairy etc. Agriculture, along with fisheries and forestry, results for one-third of India’s GDP and is the only most important contributor. 18.20% of GDP contributes to the primary sector. Agriculture has long been the backbone of India’s economy. Apart from that, India is the world’s largest producer of milk and the second-largest producer of wheat, sugar, freshwater fish, and groundnuts. It is an important producer of tea, cashews, sugar, ginger, turmeric, and black pepper.

The Indian agricultural sector was able to achieve this sensational achievement as a result of the Indian government’s many simultaneous revolutions. The Black Revolution, which saw the production of petroleum, and the Brown Revolution, which saw the production of leather/non-conventional/cocoa, were both important revolutions in India’s primary sector. Underemployment and disguised employment are two main problems that this sector faces.

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2. Secondary sector

This economics of the sector is based on natural materials that are used to produce the services and goods that are given, and which are then used. This sector changes primary sector products (raw materials) into finished goods that can be traded to domestic businesses or consumers, also exported (via distribution through the tertiary sector). Many of these industries require large amounts of energy, factories, and machinery, and they are often differentiated as light or heavy based on these factors.

This sector is the best in terms of adding value to products and services. Transportation and industry are two of the most significant examples of this sector. This sector give job to more than a quarter of India’s total workforce. Moreover, the secondary industry contributes nearly a quarter of GDP. This business is the backbone of the Indian economy and will continue to develop and flourish.

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3. Tertiary sector

The tertiary sector is known as the service sector. The service business makes services more than finished items. Services (also known as “Intangible Products”) contains things like attention, direction, access, experience, and emotional labour. The industry’s tertiary sector is in charge of providing services to both businesses and customers. Instead of changing physical objects, the aim is on people by connecting with them and delivering customer service.

The service industry involves certain important services that do not directly contribute to the creation of products. Goods manufactured in the primary or secondary sectors, for example, would have to be carried by logistics before being sold in wholesale or retail shops. This sector includes all service businesses, such as IT services, consulting, and so on. This industry accounts for more than 59 per cent of India’s overall GDP. Individuals who provide personal services, such as teachers, physicians, and others also include in this sector.

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What is GDP (Gross Domestic Product)?

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    The value of final products and services produced in a country during a particular year is known as GDP. In simple words, the total production of any sector for a particular year is equal to the value of final products and services produced in that sector for that same year. And the country’s Gross Domestic Product—GDP—is computed as the sum of production in three sectors.

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    The Increasing Importance of Tertiary Sector in Indian Economy

    The tertiary industry beat the primary sector as India’s largest producing sector in 2013-14. In India, the tertiary sector has developed in importance for the following reasons:

    • Among the most important services for all people are hospitals and schools as well as post and telegraph services. There are many crucial services that have been added as essential services in the list.
    • Services like transportation, trade, and storage rises along with agriculture and industry.
    • As people’s incomes increase, they require more services like dining out, travel, shopping, private hospitals, schools, and professional training.
    • Over the last 10 years, new information and communication technology-based services have become crucial.

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    Organized and Unorganized Sectors

    Primary, secondary, and tertiary sectors of the economy are the most common sectors in the Indian Economy. These are again classified into organised and unorganised sectors based on employment conditions.

    The organised sector is made up of businesses where the terms of employment are established and predictable. As a result, people are ensured of employment.

    Small and dispersed units that the government does not control ends up the unorganised sector; as a result, there are rules and regulations in place, but they are not followed.

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    Differences Between Organized Sector and Unorganized Sector

    Below are a few of the differences between the two:

    Organized Sector Unorganized Sector
    It’s a field where job terms are predetermined and consistent, and people are promised work. Tiny, dispersed units distinguish the unorganised sector, which operates mostly outside of official jurisdiction.
    They must register with the government and follow the rules and regulations established in various laws such as the Factories Act, the Minimum Wage Act, the Payment of Gratuity Act, the Shops and Establishments Act, etc. Although there are rules and regulations in place, they are not followed because they are not registered with the government.
    The job is stable, and there are set working hours. Employees are compensated for more hours worked if they work longer hours. The majority of jobs are low-paying and inconsistent.
    Job security is advantageous to employees. There is no guarantee of employment. Someone may be asked to leave for no apparent reason.
    Employers in the organised sector provide several supplementary benefits to their employees, such as paid leave, holiday pay, a provident fund, and a gratuity, among other things. Over time, paid leave, holidays, and sick leave, among other things, are not provided.
    People have a right to medical treatment. These employees will earn pensions when they retire. Such facilities do not exist in the unorganised sector.

    Key Differences Between Primary, Secondary and Tertiary Sector

    This part will highlight the key differences between the Primary, Secondary and Tertiary sectors.

    • Primary Sector (Agriculture and related sector): When we form a good by exploiting the natural resources, it is known as the primary sector.
    • Secondary Sector (Industrial sector): It involves the activities in which natural products are changed into other useful forms through ways of producing that we connect them with industrial activity.
    • Tertiary Sector (Service sector): This sector supports the development of primary and secondary sectors.

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    I’ve decided to provide you with the key differences between primary, secondary and tertiary sector and put them all in the tabular format.
    Primary Sector Secondary Sector Tertiary Sector
    It is also known as agriculture or related or allied sector services. It is also known as manufacturing or industrial sector. It is also known as service sector.
    This sector provides raw material i.e. base product for goods and services. This sector converts natural products into other useful forms through manufacturing. This sector provides useful services for the primary and secondary.
    The primary sector is an unorganized sector. The secondary sector is an organized sector. This sector is well organized.
    This sector also uses traditional techniques for production. This sector uses better methods of production than primary. This sector uses modern day logistics techniques for performing tasks.
    Activities in this sector consist of agriculture, forestry and mining. It includes manufacturing units, small scale units, large firms and multinational corporations. Banking, communication, trade are included in this sector.
    In developing countries, like India, this sector contains a large section of the workforce as employed, compared to developed nations. The employment rate in this sector is equilibrium as a specialized set of skills is required to find employment. This sector’s employment share has raised in the ensuring years (from 2003).
    For example, for making sugar we take sugarcane from the field as raw material. For example, sugarcane is changed into sugar or gur. For example, transportation of sugar to godowns.

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    Juwairiya Mahin

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