Economic Activities Overview

Economic Activities

• Economic activities are grouped into three main categories: primary, secondary, and tertiary.
• Primary sector: Activities that directly use natural resources (e.g., agriculture, fishing, forestry).
• Secondary sector: Activities that transform natural resources into finished products (e.g., manufacturing, construction).
• Tertiary sector: Activities that provide services (e.g., transportation, trade, communication).

Primary Sector

• This sector involves the direct use of natural resources.
• Activities include agriculture, dairy, fishing, and forestry.
• Natural products are the main output of this sector.
• These activities form the base for all other production.

Secondary Sector

• This sector transforms natural products into manufactured goods.
• Activities relate to industries, workshops, and factories.
• It involves industrial processes to change inputs.
• It is the next step after the primary sector.

Tertiary Sector

• This sector provides services that assist in the primary and secondary sectors.
• Activities include transport, trade, communication, and finance.
• It helps in the distribution and sale of goods.
• This is also known as the service sector.

Dependence Among Sectors

• Sectors are interdependent.
• The primary sector provides raw materials for the secondary sector.
• The secondary sector produces finished goods that the tertiary sector distributes.
• The tertiary sector provides essential services that support all sectors.

Economic Activities Example

• Imagine farmers refusing to sell sugarcane to a sugar mill. The mill would shut down, showing the primary sector's dependence on the secondary sector.
• Consider what happens when cotton farmers cannot sell as much due to import competition. This highlights the interconnectedness of the primary and secondary sectors.

Sectoral Shifts

• Historically, the primary sector has been most important in early stages of development.
• The secondary sector grows as countries develop industries.
• The tertiary sector grows as countries become more developed, increasing in relative importance.
• India's growth pattern in the share of GDP for each sector shows increases over time.

Employment in Sectors

• The share of employment in each sector changes over time.
• The primary sector often remains the largest employer, even as its share of GDP declines.
• The tertiary sector is growing, but the shifts in employment have not matched the changes in production as seen in developed countries.
• Underemployment in the primary sector occurs when people available to work have insufficient work and/or employment opportunities.
• Understanding underemployment, its reasons, consequences, and the ways to deal with it, are crucial for efficient economic development.

Organised and Unorganised Sectors

• The organised sector has formal employment structures (e.g., government regulations, rules, and procedures).
• The unorganised sector has informal and largely unregulated employment arrangements.
• Workers in the organised sector often have better benefits, security, and working conditions than unorganised sector workers.

Protecting Workers in the Unorganised Sector

• Workers in the unorganised sector often lack the protections and employment benefits that are typical of the organised sector.
• Protecting their rights is vital for overall economic and social progress.

How to measure the total output (GDP) in each sector?

• Economists use final goods and services' value to measure a sector's output.
• Intermediate goods are not included.