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 cost