Question

"Primary sector was the most important sector of economic activity at initial stages of development." Evaluate the statement.

Answer 1

Dear Student

The Indian economy, on the basis of activities, is divided into three sectors:
1. Primary Sector: includes agriculture and allied activities
2. Secondary Sector: includes manufacturig and industries
3. Tertiary Sector: provides service to the other sectors such as transportation, banking, education etc.

​​​​India has always been an agriculturist economy and the primary sector dominated the Indian economy till independence.
After Independence, with the adoption of Nehruvian model of socialism, the focus shifted to industries. All the policies and programmes of the government were drafted in order to promote industrialisation. During 1990s, India had to face the foreign exchange crisis which was followed by the adoption of Liberalisation, Globalisation and Privatisation. With the passage of time, the services sector started growing which was jump from primary to tertiary in the Indian economy. Indian economy has been labor intensive and with the growth in capital formation it eventually led to unemployment as most of the workers are unskilled and lack technical knowledge of handling machinery. Therefore, leading to a shift from labour intensive to capital intensive.
Today, the service sector contributes most to the GDP of India despite of the fact that the employment here is the lowest. The primary sector continues to hold the large chunk of Indian population and yet their contribution to the economy is lowest. Almost 90% of the labor force are unskilled and are agricultural labor and hence, the primary sector was and is important in the Indian economy. The only difference is that initially it contributed the most and now it is the sector to be worked upon the most.

Regards