14

CHAPTER
Economic Activities
Around Us
The root of prosperity is economic activity, the lack of it
brings material distress. The absence of fruitful economic
activity endangers both current prosperity and future growth.
— Kauṭilya’s Arthaśhāstra

1. How are economic activities

The Big classified?
Questions 2. What differentiates these
activities to be grouped into
sectors?
3. How are the three sectors
interconnected?

Introduction
In Chapter 13, we learnt about two types of activities – Monetary
economic and non- economic. Activities that create monetary value: Value
of something
value are called economic activities. We also learnt about that can be
the importance of non-economic activities. To understand measured
in terms of
these activities better we will learn how economic activities money.
are classified and what differentiates them in this chapter.
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 Over the decades, the number of economic activities has
increased tremendously. For example, earlier most people
were involved in activities such as agriculture, livestock
rearing, production of tools, pottery and weaving cloth.
As societies progressed, the number of economic activities
through which people earn their livelihoods increased
vastly.
Today, there are diverse economic activities such as
manufacturing computers, mobile phones and drones;
working in banks, schools and hotels; driving various types
of vehicles for transportation; making furniture; tailoring
clothes using machines; creating software; repairing
refrigerators and washing machines; etc. Classifying all
these activities helps us to understand how they function
and the links they have with each other.

The Classification of Economic Activities

Economic into Economic Sectors
Sectors:
Broad Some economic activities share similar characteristics and
groups that
include
based on this, they can be grouped together or classified
various into broader groups called economic sectors. The three
activities
that help
main types of economic sectors are primary, secondary and
with the tertiary economic sectors.
economic
prosperity The illustration on the facing page maps out the broad
of a nation. activities under these categories.
Exploring Society: India and Beyond

A. Primary activities
Those economic activities in which people are directly
Economic Life Around Us

dependent on nature to produce goods are known as

primary activities or primary sector economic activities.

Primary sector:
The group of activities that involves extraction of raw materials directly from
nature such as farming, fishing, forestry, etc.
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 Classification of economic activities
into economic sectors

Primary sector Secondary sector Tertiary sector

Agriculture Construction Healthcare

Mining Manufacturing Trade and logistics

Fishing Water supply Communication

14 ― Economic Activities Around Us

Raising livestock Solar power Banking

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Forestry Electricity production Transportation

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 For example, work involving cultivation of grains and
vegetables from agricultural farms, collecting wood from
the forests, extracting coal from mines, fish from fisheries,
eggs from poultry farms, etc., are all primary sector
economic activities.
The most common primary activities are agriculture,
mining, fishing, raising livestock, forestry, etc. Below are
some of the types of activities within the primary sectors.

Greenhouse farming Mining

Fish farming (fishery) Forestry

Exploring Society: India and Beyond
Economic Life Around Us

Raising livestock
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 THINK ABOUT IT
Can you think of any primary activities that you may have
seen in the past? What are the natural resources used
in these activities? Name two of them and discuss your
experiences with your classmates.
1.
2.

B. Secondary activities Secondary

sector:
Economic activities in which people are dependent on The group
outputs of the primary sector and transform them to of activities
that involves
produce goods are known as secondary activities or processing of
secondary sector economic activities. The secondary sector raw materials
derived from
includes the construction of buildings, roads, etc., and primary sector
providing utilities like water, electricity, gas and other such into products
for sale or
necessities. It also includes the manufacturing of products consumption.
in factories and production units to process raw material
from the primary sector into some other form that can be
further sold or consumed. Some examples of secondary
sector activities include the processing of grains obtained
from agricultural fields to make flour in mills, extraction of
oil from groundnut and processing of tea leaves to derive
tea. Similarly, wood from the forest is converted into
furniture and paper, cotton is used to make clothes, and
steel from iron ore is used to make automobiles like cars, 14 ― Economic Activities Around Us

trucks, etc.

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 Pharmaceutical factory Furniture production unit

DON’T MISS OUT

No. of units produced in

Types of Automobiles
India in 2022

Passenger vehicles like cars 45 lakhs

Commercial vehicles like trucks 10.3 lakhs

Three wheelers 8.6 lakhs

Two wheelers 2 crores

(Source: Society of Indian Automobile Manufacturers,

https://www.siam.in/statistics.aspx?mpgid=8&pgidtrail=13 )
Exploring Society: India and Beyond

LET’S EXPLORE
Now that we have seen some examples of secondary sector
Economic Life Around Us

activities, can you name two more economic activities in the

secondary sector?
1.
2.

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 C. Tertiary activities
All those economic activities that provide support to people Tertiary Sector:
The group of
involved in primary and secondary activities are called activities that
tertiary activities or tertiary sector economic activities. involves the
provision of
These include services that we may not be able to see but services which
which still play a very important role. For example, the complement
both primary
driver of a truck transports grains and vegetables from the and secondary
farm to a factory or the market. sectors, such as
transportation,
The fruit or vegetable vendors sell the farm produce banking, and
management of
to household consumers. Similarly, doctors, nurses,
business.
teachers, lawyers and pilots provide their services to
those who need them. There are technicians who repair
and service electronic items including mobile phones and
televisions, mechanics who repair vehicles like cars and
tractors, and electricians who ensure regular supply of
electricity. Their services make our lives easier. Similarly, Warehouses:
communication services through mobile and internet, Large buildings
used for storing
software development, and services at hotels, restaurants, products before
banks, schools, hospitals, airports, shops, warehouses, etc. they are sold,
used or rented
are all examples of tertiary sector economic activities. This out to shops.
sector is also called the service sector.

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Software development Services at restaurant

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 Services at airports Retail stores

Interdependence Among Sectors

The three types of economic activities or economic sectors
play an important role in the process of conversion of
natural raw materials into finished products for final
consumption. Let us go on an imaginary excursion to a
village in Anand district of Gujarat to study an interesting
example where we will understand how the three sectors
are interconnected and support each other.

Dairy cooperative: from farm to plate

These days, farmers in Gujarat greet the day with the
clinking of milk pails and the happy moos of their best
friends, their cows or buffaloes! Cows have a special place
in the lives of the farmers and their families. The farmers
Exploring Society: India and Beyond

Dairy:
A place
milk the cows and sell their milk to the dairy nearby. At the
where
milk is end of the month, they get paid for the milk based on its
Economic Life Around Us

collected
quantity and quality. However, this was not the case about
and
stored. 50 years ago.
This is the amazing story of a milk cooperative named Anand
Milk Union Limited (AMUL). In the early 1940s, farmers in
Anand district would sell milk to the neighbouring villages.
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 They would have to cycle or walk to nearby villages to sell
the milk under scorching heat. As you know, milk spoils or
curdles very fast in hot weather. The farmers had to sell the
milk quickly before it could spoil. This was a lot of effort
for the small amount of money they would earn. So, they
depended on people called middlemen, who would buy the Cooperative:
A group of
milk in bulk at meagre prices from the farmers and sell it people who
in the market. Many times, the farmers felt cheated and voluntarily
come
harassed by the middlemen. together to
One day, the farmers collectively meet their
economic
approached Sardar Vallabhbhai Patel, and social
a prominent national leader, with their needs in a
formal way.
problems. He advised them to form a They own the
cooperative to become independent cooperative
and decisions
and stop relying on the middlemen. As Sardar Vallabhbhai are taken by
a cooperative, the farmers would be able to buy and sell
Patel the members
collectively.
milk as a group, taking care of the entire operation of milk
collection, processing and distribution themselves. The
Middlemen:
farmers took Sardar Patel’s advice.
Persons
AMUL was set up in 1946 under the leadership of who buy
goods from
Tribhuvandas Patel (lawyer and freedom fighter) and Dr. producers
Varghese Kurien (an engineer who was working at a dairy and sell
them to
factory in Mumbai). consumers.
The
middlemen
charge a
fee for this
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service.

Varghese Kurien (left) and Tribhuvandas Patel (right)

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 This initiative brought farmers, including women, together
and gave them control over the production and sale of
Pasteurisation: milk. The milk producers collectively made their own
A process by
which milk decisions on all matters such as production, pasteurisation
is preserved
and sale of milk. The tasks were shared by everyone, which
through heating
to a specific helped raise their income gradually. They did not need the
temperature
middlemen anymore and became like one big family!
to kill harmful
bacteria. As more and more farmers
began to see the benefits
of the cooperative, it
Factory: Building continued to grow. The
or group of quantity of milk that was
buildings where
goods are being collected was so
manufactured, huge that the farmers
or various
components are decided to make other
put together, products out of it. They set
to make a final
product. up a factory in Anand, and
began to produce butter and
milk powder.
Retail: The
sale of goods Today, the cooperative has a
in small
quantities wide range of products made
for use by at many milk processing
the end
consumer plants and factories all
rather than over India. Can you name a
for resale.
few? The products are then
transported and sold in both
Exploring Society: India and Beyond

Export:
Goods and small and large retail shops
services all over the country. In fact, they also export the products to
that are
Economic Life Around Us

produced several countries around the world. Is it not amazing?

in one
country
In this fascinating story, the farmers of this cooperative
and sold to milk their cows to sell the milk later. This kind of economic
buyers or
consumers
activity is called a primary sector economic activity because
in another the product (milk) is derived directly from a natural source
country.
(cows/livestock).
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 Milk is then processed and converted from one form (liquid)
into another — milk powder, ghee, cheese, butter and many
others in the factories. These economic activities are called
secondary sector economic activities.

What does AMUL do with all the products it makes? It sells

them in various places. AMUL uses lorries and trucks, as
well as railway, air and shipping services, to transport its
products. It has set up retail stores and supplies milk and
milk products to other shops in towns, cities and villages
all over Gujarat, as well as in different states across India.
Here, transportation, trading and retail is a tertiary activity.
14 ― Economic Activities Around Us

DON’T MISS OUT

Just like AMUL, there are many other milk cooperatives under
brands such as Nandini from Karnataka, Mother Dairy from
Delhi-NCR, Aavin from Tamil Nadu, Vijaya from Andhra
Pradesh, Kevi from Nagaland, Sudha from Bihar, Verka from
Punjab, etc. Can you name one cooperative around you that
has helped groups like farmers, persons with disabilities, and
women, to come together and has brought prosperity to their
lives?
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 With the help of the images below, let’s see how the books
you study are made. The images show the transformation
of pulp (wooden fibre of a tree) into paper and, after
printing, into textbooks.
Exploring Society: India and Beyond
Economic Life Around Us

Fig. 14.1

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 None of the activities that were part of the process – from
extracting pulp from the trees to making paper and finally
producing the books would have been possible, had it not
been for all three sectors working together.

THINK ABOUT IT
Observe the different stages of the process shown in Fig. 14.1
on page 206 and discuss them with your fellow classmates.

LET’S EXPLORE
Label the pictures in the illustration shown in Fig. 14.1 on
page 206 as:
1. Primary sector
2. Secondary sector
3. Tertiary sector

DON’T MISS OUT

These days, used paper is recycled to make new paper.
Recycling just one tonne of paper saves 17 trees as well as 2.5
cubic metres of landfill space, where waste is dumped. It also
takes 70 per cent less energy and water to recycle paper than
to make new paper from wood pulp.

What are the different ways

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through which we can judiciously

use paper in the classrooms and
offices of your school?

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 LET’S EXPLORE
List the economic activities in your neighbourhood and label
them appropriately as primary, secondary or tertiary. Draw
arrows to show how they are connected to each other. In what
ways are they dependent on each other? What would happen
if one of the activities ceased to exist?

Before we move on...

Æ In this chapter, we learnt about the three sectors of economic
activities.
Æ The various examples and illustrations helped to understand
the difference as well as the interdependence between the
three types of economic activities or sectors — primary,
secondary and tertiary.

Questions, activities and projects

1. What is the primary sector? How is it different from

the secondary sector? Give two examples.
2. How does the secondary sector depend on the tertiary
sector? Illustrate with a few examples.
3. Give an example of interdependence between
primary, secondary and tertiary sectors. Show it using a
flow diagram.
Exploring Society: India and Beyond
Economic Life Around Us

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