On the basis of economic activities, the economy of any country can be divided into three sectors.

1. Primary Sector:
Simply speaking primary sector refers to that sector of the economy which uses natural resource to produce goods.

Classification of Economic Activities

Natural factors play crucial role in the production process. Agriculture and allied activities like mining, fishery, forestry, diary and poultry are included in this sector.

Primary sector dominates in under-developed countries.

2. Secondary Sector:
Secondary sector is also called as manufacturing sector or industrial sector. The primary sector cannot satisfy all human requirements. We need certain industrial goods to make our lives comfortable. The sector which transforms one physical good into another is called secondary sector. The manufacturing, electricity, gas, water supply etc. are included in this sector.

3. Tertiary Sector:

The service sector of the economy is called tertiary sector. Services of various kinds like education, health, banking, insurance, trade and transport are included in this sector. In advanced countries, the contribution of tertiary sector to national income is the highest.

Sector wise Rates of Growth of GDP:
Central Statistical Organisation (CSO) divides the Indian Economy into six sectors for the purpose of estimating national income.

These are:

(a)Primary sector
(b)Secondary sector
(c) Trade, transport and communication
(d) Banking and Insurance
(e) Community and personal services
(f) Foreign Trade.

When total production in each sector of the economy is added together, v/e get Gross National Product (GNP).

To calculate Gross Domestic Product (GDP), the income of rest of the world sector (external sectors) is excluded. The following table presents the rates of growth of GDP.Rates of Growth of GDP by Industrial Origin at Factor c

Economic Activities and Their Classification into Different Sectors

Economic activities can be classified into different sectors based on the type of goods or services produced. These sectors are a way to categorize and analyze the overall economy of a country or region. The classification helps in understanding the distribution of resources, identifying areas of growth, and formulating effective policies. The three main sectors are the primary sector, the secondary sector, and the tertiary sector.




1. Primary Sector:
The primary sector involves activities related to the extraction and production of raw materials. It is also known as the agricultural and extractive sector. Activities in this sector are directly dependent on natural resources and include:

- Agriculture: Crop cultivation, animal rearing, and fishing are part of this sub-sector.
- Mining and Quarrying: Extraction of minerals, oil, gas, and other resources falls under this category.
- Forestry: Logging, timber production, and other activities related to woodland management are included in this sub-sector.

The primary sector plays a crucial role in providing raw materials for the secondary sector and serves as a source of income for a significant portion of the population in many countries.




2. Secondary Sector:
The secondary sector involves activities that transform raw materials into finished products. It is also referred to as the manufacturing sector. This sector adds value to the raw materials obtained from the primary sector. Key activities in the secondary sector include:

- Manufacturing: The production of goods using various processes and techniques.
- Construction: Building infrastructure, residential and commercial structures, and other related activities.
- Energy Production: Generation and distribution of electricity, oil refining, and other energy-related activities.

The secondary sector is vital for economic development as it creates employment opportunities and contributes to the overall GDP of a country.




3. Tertiary Sector:
The tertiary sector comprises activities that provide services to individuals, businesses, and other sectors of the economy. It is also known as the service sector. This sector focuses on intangible outputs and includes:

- Retail and Wholesale Trade: Sale and distribution of goods to consumers and businesses.
- Transportation and Communication: Movement of people and goods, along with communication services.
- Financial Services: Banking, insurance, investment, and other financial activities.
- Healthcare, Education, and Hospitality: Services related to healthcare, education, tourism, and hospitality fall under this category.

The tertiary sector is the largest and fastest-growing sector in many economies, playing a crucial role in the overall economic development and providing employment opportunities.




In conclusion, the classification of economic activities into different sectors helps in analyzing the overall structure of the economy. The primary sector provides raw materials, the secondary sector transforms them into finished products, and the tertiary sector offers services. Each sector is interconnected and contributes to the overall economic growth and development of a country or region.