Chapter 14 Economic Activities Around Us

Introduction

As discussed in Chapter 13, economic activities are those actions that generate monetary value (value that can be measured in terms of money). These activities are crucial for the prosperity and growth of any society.

Over time, the range and complexity of economic activities have grown significantly. From early activities like farming, livestock rearing, and basic crafts, the economic landscape now includes diverse fields such as manufacturing advanced technology, providing banking and healthcare services, transportation, software development, and repair services.

To better understand this wide array of activities and how they relate to each other, economic activities are grouped or classified into broader categories known as economic sectors. These sectors help in analyzing the structure and functioning of an economy.

The Classification Of Economic Activities Into Economic Sectors

Economic activities are broadly classified into three main sectors based on the nature of the work involved:

Primary Activities

The primary sector includes economic activities that involve the direct extraction or harvesting of resources from nature. People engaged in primary activities rely directly on the natural environment to produce goods.

Examples of primary sector activities:

• Agriculture: Cultivating crops like grains, vegetables, fruits.
• Mining: Extracting minerals such as coal, iron ore, bauxite.
• Fishing: Catching fish from oceans, rivers, or fish farms (fisheries).
• Raising Livestock: Rearing animals like cows, goats, poultry for milk, meat, eggs, etc.
• Forestry: Harvesting timber, collecting forest produce.

These activities form the foundation of the economy by providing the basic raw materials needed by other sectors.

Secondary Activities

The secondary sector encompasses economic activities that take the raw materials produced in the primary sector and transform them into finished or semi-finished goods. This involves processing, manufacturing, and construction.

Examples of secondary sector activities:

• Manufacturing:
  • Converting grains into flour in mills.
  • Extracting oil from oilseeds like groundnut.
  • Processing tea leaves to make tea.
  • Turning wood into furniture or paper.
  • Using cotton to manufacture textiles and clothing.
  • Processing iron ore into steel for making automobiles (cars, trucks) and other machinery.
  • Production of pharmaceuticals, electronics, etc.
• Construction: Building houses, factories, roads, bridges, etc.
• Utilities: Providing essential services like water supply, electricity generation, and gas distribution.

The secondary sector adds value to raw materials by changing their form and making them useful for consumption or further processing.

Tertiary Activities

The tertiary sector, also known as the service sector, includes economic activities that provide services rather than tangible goods. These services support or complement the activities of the primary and secondary sectors and directly serve consumers.

Examples of tertiary sector activities:

• Transportation: Moving goods (by trucks, trains, ships, planes) and people.
• Trade and Logistics: Buying and selling goods (retail and wholesale), storage in warehouses.
• Communication: Services like mobile networks, internet, postal services.
• Banking and Finance: Providing financial services, loans, money transfer.
• Healthcare: Services provided by doctors, nurses, hospitals.
• Education: Services provided by teachers, schools, colleges.
• Other Services: Legal services (lawyers), repair services (mechanics, electricians, technicians), software development, hospitality (hotels, restaurants), airport services, government administration, etc.

The tertiary sector facilitates economic activity and provides essential services that improve the quality of life.

Interdependence Among Sectors

The three economic sectors – primary, secondary, and tertiary – are not isolated but are deeply interconnected and interdependent. They rely on each other to function effectively and create a complete economic cycle from raw materials to finished products and services.

Dairy Cooperative: From Farm To Plate

The story of AMUL (Anand Milk Union Limited), a successful dairy cooperative in Gujarat, is a prime example illustrating the interdependence of the three sectors:

• Primary Sector: Farmers raise livestock (cows, buffaloes) and produce milk. This is a primary activity as the product (milk) is derived directly from a natural source.
• Secondary Sector: The collected milk is then transported to processing plants and factories. Here, the milk undergoes processes like pasteurization (heating to kill bacteria) and is transformed into various products like milk powder, butter, ghee, cheese, and ice cream. Manufacturing these products involves transforming the raw material (milk) into different forms, which falls under secondary activities.
• Tertiary Sector: The finished dairy products are then transported from factories to various markets, including retail shops (both small and large) and warehouses, across India and even for export to other countries. The cooperative utilizes various transportation services (trucks, trains, air, shipping), engages in trade (selling wholesale and retail), and manages logistics (storage in warehouses). These activities of providing support services (transport, trade, retail) are part of the tertiary sector.

This example shows how milk from the primary sector is processed by the secondary sector, and then distributed and sold with the help of the tertiary sector, reaching the final consumer. The farmers (primary) depend on the processing plants (secondary) and the transport and sales networks (tertiary). The processing plants (secondary) depend on the farmers for milk (primary) and the transport and sales networks (tertiary) to sell their products. The transport and sales networks (tertiary) depend on the production from the primary and secondary sectors to have goods to transport and sell.

This illustrates a complete value chain involving all three sectors working together.

Cooperative: A group of people who voluntarily come together to collectively own and operate a business or organization to meet common economic and social needs. Decisions are made jointly by the members.

Middlemen: Individuals who act as intermediaries between producers (like farmers) and consumers, buying goods in bulk from producers and selling them to consumers or retailers, often charging a fee for their service.

Pasteurisation: A heat treatment process used to kill harmful microorganisms in milk and other liquids, extending their shelf life and making them safer for consumption.

Factory: A building or group of buildings where goods are manufactured or assembled using machinery and labor.

Retail: The sale of goods in small quantities directly to the final consumers for their own use.

Export: Goods or services produced in one country and sold to buyers or consumers in another country.

The Production Of Books

The process of producing something as common as a textbook also involves the interdependence of all three economic sectors. Let's trace the steps involved:

Answer:

Recycling plays an important role in sustainable practices, especially in paper production. Recycling used paper saves natural resources (trees), reduces landfill waste, and consumes less energy and water compared to producing new paper from raw wood pulp. Being mindful of paper usage and promoting recycling are ways to contribute to environmental conservation.

The numerous examples of economic activities around us highlight their diversity and the intricate ways in which the primary, secondary, and tertiary sectors interact and depend on each other to drive the economy and support our daily lives.