Sectors of the Indian Economy: Primary, Secondary and Tertiary
This domain tests the three-sector classification, the difference between a sector's share in output and its share in employment, and the organised/unorganised and public/private divisions.
The three sectors
- Primary: extraction from nature - farming, fishing, forestry, mining.
- Secondary: manufacturing and construction - sugar, cloth, steel, buildings.
- Tertiary: services - trade, transport, banking, education, health, IT, administration.
Structural change
In India services contribute roughly 55 per cent of gross value added, industry about 27 per cent and agriculture about 18 per cent, yet agriculture still employs around 45 per cent of workers. This gap is the core of the development problem: a large workforce producing a small output means low output per worker. In Bihar the imbalance is sharper, with around 70 per cent of workers in agriculture while services supply the largest share of GSDP.
Other classifications
Organised sector (registered, regular wages, social security) versus unorganised (casual, no protection - the majority of Indian workers). Public sector (government ownership) versus private sector.
Worked example
An economy's value added: primary ₹18 lakh crore, secondary ₹27 lakh crore, tertiary ₹55 lakh crore, total ₹100 lakh crore. Shares: 18%, 27% and 55%. If 45 per cent of its workers are in the primary sector, output per worker there is lowest. Reasoning: divide each sector's output by its own workforce, then compare - the sector with a small output share and a large workforce must have the lowest productivity, which explains low farm incomes and disguised unemployment.
Traps that cost marks
Placing mining in the secondary sector (it is primary) or construction in the tertiary sector (it is secondary); writing that services employ the largest workforce in India (agriculture still does); confusing a sector's GDP share with its employment share.