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Do you think the Classification of Economic Activities into Primary, Secondary, and Tertiary is useful? Explain how.

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  • Last Updated : 03 Nov, 2022
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Economic activity refers to the human endeavors that produce income. Economic activity enables us to develop income in the form of a wage or salary that can be further used to fulfill our necessities including paying rent, purchasing food, and purchasing any luxury items. These activities are further divided into three sectors that are:

  1. Primary sector
  2. Secondary sector
  3. Tertiary sector
  • Primary Sector: This sector involves all the activities that are done through the extraction and production of raw materials. It includes economic activities like subsistence and commercial agriculture, forestry, fishing, hunting, grazing, etc. Now, this sector is expanding and will include the processing and packaging of raw materials. 
  • Secondary sector: This sector of economic activity includes the manufacturing and processing of raw materials. It includes the manufacturing of automobiles, aerospace equipment, chemicals, construction and energy utilities, etc.
  • Tertiary Sector: This sector can also be called as service industry or service sector. This sector includes the sales and marketing of goods and services that are generated by the secondary sector to the general public and companies that are included in all five sectors. It includes wholesale, restaurants, banking, tourism, medical treatment, etc.

Classification of economic activities into Primary, Secondary, and Tertiary

It helps to classify the various jobs of people in the country that are engaged and how much each sector contributes to the growth of the country. 

By classifying the sectors, one could know which they belong to which sector. For instance, Farmers will know that they belong to the primary sector, factory workers will know that they belong to the secondary sector and bankers will know that they belong to the tertiary sector. By knowing their profession one can examine how much they contribute to the growth of our country. For example, we are all aware that how much farmers, factory workers, and bankers contribute to the growth of the country.

It also aids in assessing the relative importance of the GDP growth of the economy.

By classification of these sectors, we can examine the contribution of different sectors towards the GDP. For example, 

  • Agriculture which comes under the primary sector contributes 14% of India.
  • The automobile industry which comes under the secondary sector contributes 7.1% of India’s GDP and 49% of its manufacturing GDP.
  • The tourism sector which comes under the tertiary sector contributes 6.8% of India.

It is crucial for determining which industries have the greatest potential for growth in terms of employment and national income, as well as which industries contribute the most to the GDP.

Through the classification of sectors, we can determine which sector contributes greatly to the GDP. For example,

  • The tertiary sector contributes 60% of the GDP of India.
  •  The secondary sector contributes 28% of the GDP of India.
  • The primary sector contributes 12% of the GDP of India.

It aids in determining the number of goods and services produced in each sector.

By classifying these sectors, one can examine the number of goods and services produces in each sector. For example, 

  • The primary sector includes the production and extraction of raw materials.
  • The secondary sector involves the processing and manufacturing of raw materials.
  • The tertiary sector involves service providers like banking, tourism, etc. to the general public and other sectors.

It also helps in the identification of the number of workers in each sector.

By classifying the economic activities, we can know about the number of workers in each sector. For example, 

  • The number of farmers in India is 95.8 million which is less than 8% of the population.
  • The number of workers in the manufacturing industry is 7 billion in India.

FAQs on Sectors of Economy

Question 1: Which sector of economic activity deals with the treatment of patients?

Answer:

The tertiary sector in economic activity deals with the treatment of patients.

Question 2: Define primary, secondary, and tertiary sectors.

Answer:

  1. The sector that deals which the extraction and production of raw materials are known as the primary sector.
  2. The sector that deals which the manufacturing and processing of raw materials are known as the secondary sector.
  3. The sector which provides service directly to the consumers or other sectors is known as the tertiary sector.

Question 3: Why it is crucial to divide economic activities into different sectors?

Answer:

It is crucial to divide economic activities into different sectors:

  1. It is useful because it helps classify the various jobs people in the country engage in and how much each sector contributes to the growth of the country. 
  2. It also aids in assessing the relative importance of the GDP growth of the economy.
  3. It is crucial for determining which industries have the greatest potential for growth in terms of employment and national income, as well as which industries contribute the most to the GDP.
  4. It aids in determining the number of goods and services produced and the number of workers in each sector.

Question 4: Write two examples of primary, secondary, and tertiary sectors.

Answer:

  1. Primary sector- fishing and gathering.
  2. Secondary sector- the manufacture of automobiles, and textiles.
  3. Tertiary sector- banking and tourism.

Question 5: Which of the following sectors contribute more towards the GDP in India?

Answer:

The tertiary sector contributes 60% of the GDP of India, the secondary sector contributes 28% of the GDP of India and the primary sector contributes 12% of the GDP of India.

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