Sectors of Indian Economy Questions and Answers
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Book Exercises
1. Fill in the blanks using the correct option given in the bracket:
(i) Employment in the service sector has not increased to the same extent as production. (has/has not)
(ii) Workers in the tertiary sector do not produce goods. (tertiary/agricultural)
(iii) Most of the workers in the sector organised enjoy job security. (organised/unorganised)
(iv) A large proportion of labourers in India are working in the unorganised sector. (large/small)
(v) Cotton is a natural product and cloth is a manufactured product. (natural /manufactured)
(vi) The activities in primary, secondary, and tertiary sectors are interdependent. (independent/interdependent)
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2. Choose the most appropriate answer.
(a) The sectors are classified into public and private sector on the basis of
(i) employment conditions
(ii) the nature of economic activity
(iii) ownership of enterprises
(iv) number of workers employed in the enterprise
Ans: (iii) ownership of enterprises
(b) Production of a commodity, mostly through the natural process, is an activity in——————sector.
(i) primary
(ii) secondary
(iii) tertiary
(iv) information technology
Ans: (i) primary
(c) GDP is the total value of———— produced during a particular year.
(i) all goods and services
(ii) all final goods and services
(iii) all intermediate goods and services
(iv) all intermediate and final goods and services
Ans: (ii) all final goods and services.
(d) In terms of GDP the share of the tertiary sector in 2013-14 is between————— per cent.
(i) 20 to 30 percent
(ii) 30 to 40 percent
(iii) 50 to 60 percent
(iv) 60 to 70 percent
Ans: (iii) 50 to 60 percent
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3. Match the following:
| Problems faced by farming sector | Some possible measures |
| 1. Unirrigated land | (a) Setting up agro-based mills |
| 2. Low prices for crops | (b) Cooperative marketing societies |
| 3. Debt burden | (c) Procurement of food grains by government |
| 4. No job in the off season | (d) Construction of canals by the government |
| 5. Compelled to sell their grains to the local traders soon after harvest | (e) Banks to provide credit with low interest |
Ans:
| Problems faced by farming sector | Some possible measures |
| 1. Unirrigated land | (d) Construction of canals by the government |
| 2. Low prices for crops | (c) Procurement of food grains by government |
| 3. Debt burden | (e) Banks to provide credit with low interest |
| 4. No job in the off season | (a) Setting up agro-based mills |
| 5. Compelled to sell their grains to the local traders soon after harvest | b) Cooperative marketing societies |
4. Find the odd one out and say why.
(i) Tourist guide, dhobi, tailor, potter
Ans: Tourist Guide is the odd one out because he or she comes under organised sector and follow the rules and regulations while another fall under unorganised sector. Tourist guide is appointed by the Government Department but tailor, dhobi, and potter own their private work.
(ii) Teacher, doctor, vegetable vendor, lawyer
Ans: Vegetable vendor is the odd one out because he works in the primary sector and come under unorganised sector, while other jobs came under organised sector like teacher, lawyer and doctor and also come under the tertiary sector.
(iii) Postman, cobbler, soldier, police constable
Ans: Cobbler is the out one out because he works in the private sector/service sector as he provides personal service while the postman, soldier, and police constable work for the public sector or the organised sector.
(iv) MTNL Indian Railways, Air India, Jet Airways, All India Radio
Ans: Jet Airways is the odd one out because it is owned by a private company and MTNL, Indian Railways, Air India, and All India Radio are owned by the Government of India.
5. A research scholar looked at the working people in the city of Surat and found the following.
| Place of work | Nature of employment | Percentage of working people |
| In offices and factories registered with the government | organised | 15 |
| Own shops, office, and clinics in marketplaces with formal license | 15 | |
| People working on the street, construction workers, domestic workers | 20 | |
| Working in small workshops usually not registered with the government |
Complete the table. What is the percentage of workers in the unorganised sector in this city?
Ans:
| Place of work | Nature of employment | Percentage of working people |
| In offices and factories registered with the government | organised | 15 |
| Own shops, office, clinics in marketplaces with formal license | Organised/ service sector | 15 |
| People working on the street, construction workers, domestic workers | unorganised | 20 |
| Working in small workshops usually not registered with the government | Unorganised/secondary sector | 50 |
*** The percentage of workers in the unorganised sector is 70% (50+20)
6. Do you think the classification of economic activities into primary, secondary and tertiary is useful? Explain how.
Ans: The classification of economic activities into primary, secondary and tertiary is useful as it helps to classify the different occupations that are taken up by the people in the country and how much each sector contributes to the growth of the country. It is also important because it helps in asserting which sector contributes the most to the GDP and which sector has the scope to employ more people and increase the National Income.
7. For each of the sectors that we came across in this chapter why should one focus on employment and GDP? Could there be other issues that should be examined? Discuss.
Ans: Employment and GDP are two of the most important factors in the development of a country. Employment and GDP are used to calculate the overall productivity and National income of a country. If a country has a high employment rate, its GDP, National Income and per capita income will automatically increase. The growth of GDP and full employment are the common goals of our five-year plans.
Yes, Other issues which should be examined are as follows:
- Modernaisation of Health facilities
- Education
- Alleviation of Poverty
- Food Production
- Regional development
8. Make a long list of all kinds of work that you find adults around you doing for a living. In what way can you classify them? Explain your choice.
Ans: The activities performed by human beings for a living are classified into three sectors: primary, secondary, and tertiary. When we see people around us, we can classify their employment sector in either of the three classifications.
Following is the list of all kinds of work that adults are doing for a living:
Teacher, doctor, engineer, electrician, cattle rearer, shopkeeper, washerman, milk vendor, farmer, insurance manager, government employees, sweeper, domestic worker, factory owner, vegetable grower, work at a construction site.
| (i) Primary Sector | Farmer, fruit and flower growers, vegetable grower and cattle rearers. |
| (ii) Secondary Sector | Work at a construction site,factory owner. |
| (iii) Tertiary Sector | Engineer, doctor, electrician, teacher, shopkeeper, washerman, insurance manager, government employees, domestic worker, sweeper. |
| (iv) Organised Sector | Doctor, engineer. |
| (v) Unorganised Sector | Shopkeeper, electrician, washerman, sweeper, domestic work and insurance manager. |
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9. How is the tertiary sector different from other sectors? Illustrate with a few examples.
Ans: There are activities that help in the development of the primary and secondary sectors are called tertiary activities. These activities are different from the primary and secondary sector activities. These activities, by themselves, do not produce a good but they are an aid or support for the production process.
For example, goods that are produced in the primary or secondary sector would need to be transported by trucks or trains and then sold in wholesale and retail shops. These transportation facilities and shopkeepers come under the tertiary sector. They do not produce goods but play a very important role in selling and bringing those goods to the market.
10. What do you understand by disguised unemployment? Explain with an example each from the urban and rural areas.
Ans: The situation of underemployment, where people are apparently working but all of them are made to work less than their potential is called disguised unemployment. In this case, the person considers himself employed but is actually not working.
In rural areas, where agriculture is the main source of income, this kind of unemployment can be seen often. If a piece of land requires only three people to work on it and instead five people are working on it, then the two extra people are said to be in a situation of disguised unemployment. In urban areas, disguised unemployment is seen when painters, plumbers, and electricians are unable to find work on a daily basis and work way less than their potential.
11. Distinguish between open unemployment and disguised unemployment.
Ans:
| open unemployment | disguised unemployment | |
| (i) | Open unemployment is a situation in which a person who is able (or fit) and willing to work at the existing wage rate cannot get work. This type of unemployment exists due to the lack of resources. | Disguised unemployment is a situation in which more people are engaged in an activity than the required one. The absence of alternative employment opportunities leads to this situation. |
| (ii) | Open unemployment exists among the educated unemployed. Generally, this type of unemployment can be seen in urban areas. | On the other hand, disguised unemployment exists generally in the agricultural sector and mostly among the rural people. |
12. “Tertiary sector is not playing any significant role in the development of the Indian economy.” Do you agree? Give reasons in support of your answer.
Ans: No, I do not agree with this statement because of the reasons mentioned below:
(i) The primary and secondary sectors can only flourish if the tertiary sector is there to support them.
(ii) The tertiary sector adds up a lot to the National income of the country.
(iii) Education, which is the basis of everything comes under the tertiary sector. A person working as a teacher comes under the tertiary sector.
(iv) This sector provides the maximum employment opportunities to the people in the country.
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13. Service sector in India employs two different kinds of people. Who are these?
Ans: The service sector in India employs two different types of people. These people are:
(i) Highly Skilled labour, which includes teachers, bankers, IT officials, etc. These people are permanently employed.
(ii) Unskilled Labour, which includes vendors, electricians, plumbers, etc. These people are not permanently employed.
14. Workers are exploited in the unorganised sector. Do you agree with this view? Give reasons in support of your answer.
Ans: yes, I agree with this view that workers are exploited in the unorganised sector. The unorganised sector is characterised by small and scattered units which are largely outside the control of the government. There are rules and regulations but these are not followed. Jobs here are low-paid and not regular. Hence it is correct to say that workers are exploited in the unorganised sector because more work is taken from them in comparison to what they are paid. They have no provisions or extra pay for overtime and no medical benefits. The biggest problem in working in this sector is that there is no job security.
15. How are the activities in the economy classified on the basis of employment conditions?
Ans: On the basis of the employment conditions, the economy can be classified into two sectors:
(i) Organised Sector: Enterprises registered under the Government of India, have an employee- friendly environment and are provided with various facilities including high wages.
(ii) Unorganised Sector: Small and scattered units which are temporary and employees in this sector are paid less.
16. Compare the employment conditions prevailing in the organised and unorganised sectors.
Ans: In the organised sector, the employees are given higher wages, medical facilities, a healthy working environment and their jobs are permanent. They are not liable to look for a new source of income each day.
In the unorganised sector, the wages are low, the employees are exploited, no extra income for extra time is given, no medical facilities are provided and the work environment is unhealthy.
17. Explain the objective of implementing the NREGA 2005.
Ans: The objective of implementing the NREGA 2005:
(i) the NREGA 2005, was introduced with an aim to ensure guaranteed 100 days of employment in a year to all those who are in need of work.
(ii) If the government fails in its duty to provide employment, it will give unemployment allowances to the people.
(iii) The types of work that would in future help to increase the production from land will be given preference under the Act.
18. Using examples from your area compare and contrast that activities and functions of private and public sectors.
Ans: In the private sector, the assets and industries are owned by individuals and in the public sectors industries and enterprises are owned by the Government. Private sector works to earn profits and the public sector works to provide facilities to the public and to earn profits. The common examples of public sector that we can see around us are Government Banks, Post Offices, municipal hospital and Indian railways. The common examples of private sector that we can see around us are IT companies, malls and multiplexes, etc.
19. Discuss and fill the following table giving one example each from your area.
| Well Managed Organisation | Badly Managed Organisation | |
| Public Sector | ||
| Private Sector |
Ans:
| Well Managed Organisation | Badly Managed Organisation | |
| Public Sector | Kolkata Metro Rail Organisation | Calcutta Tramways Company (CTC) |
| Private Sector | Tata Consultancy Services | Rahul Trading Co. |
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20. Give a few examples of public sector activities and explain why the government has taken them up.
Ans: The public sector activities are set for the betterment of the public itself. The reason government has taken up the public sector is so that proper facilities can be provided to the people of the country. Banks, transport, irrigation, electricity, water and all the basic things that are necessary for people, come under the public sector and proving these facilities to its citizens is the responsibility of the Government.
21. Explain how public sector contributes to the economic development of a nation.
Ans: The public sector is the sector that comes under the government of India. The reason for the government to take responsibility of this sector is because the basic necessities of people including water, electricity, irrigation, all fall under this category and if these departments are left unattended it will result in the downfall of the economy of a country because the growth of the country would stop. The economic development of a country depends upon the development of the people and if people are deprived of the basic necessities, the country’s economic development would be affected. Government encourages small and large industry to flourish and provides employment under this section.
22. The workers in the unorganised sector need protection on the following issues: wages, safety and health. Explain with examples.
Ans: The unorganised sector is characterised by small and scattered units which are largely outside the control of the government. There are rules and regulations but these are not followed. The workers in the unorganised sector need protection:
Wages: the income of the workers in the unorganised sector is not fixed and they are barely able to meet the needs to lead a decent livelihood. Hence proper and fixed wages should be given to these workers so that they can grow and contribute to the growth of the country. For example – a painter only gets paid the wages for the days he works and the other days he is jobless and is able to eam nothing.
Safety: No safety is provided to the workers working in the unorganised sector. There is no job security and anyone can be fired and removed from their work as per the requirement of the labourers. For example – A labour working in the construction of a building is left with no work once the construction is complete and has no guarantee of getting work again.
Health: Health is a very important factor for the growth and development of the country. The unorganised sector is given no medical security and if any accident occurs while they are working, the employer is not responsible for their health. For example – there is no sick leave for labourers working on daily wages.
23. A study in Ahmedabad found that out of 15,00,000 workers in the city, 11,00,000 worked in the unorganised sector. The total income of the city in this year (1997-1998) was Rs 60,000 million. Out of this Rs 32,000 million was generated in the organised sector. Present this data as a table. What kind of ways should be thought of for generating more employment in the city?
Ans:
| Total Workers | Workers in Unorganised Sector | Total Income of City (1997-1998) | Income generated by organised sector | Income generated by unorganised sector |
| 15,00,000 | 11,00,000 | 60,000 million | 32,000 million | 28,000 million |
The table clearly shows that the income generated in the unorganised sector is close to 50% of the total income of Ahmedabad. In order to increase employment opportunities for the people more industries should be set up, proper education must be provided to all, proper facilities under the public sector must be provided to all.
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24. The following table gives the GDP in Rupees (Crores) by the three sectors:
| Year | Primary | Secondary | Tertiary |
| 2000 | 52,000 | 48,500 | 1,33,500 |
| 2013 | 8,00,500 | 10,74,000 | 38,68,000 |
(i) Calculate the share of the three sectors in GDP for 2000 and 2013
(ii) Show the data as a bar diagram similar to Graph 2 in the chapter.
(iii) What conclusions can we draw from the bar graph?
Ans: (i)
| Year | Primary | Secondary | Tertiary |
| 2000 | 22.22% | 20.73% | 57.04 |
| 2013 | 13.94% | 18.70% | 67.36% |
(ii) Data – Share of Sectors in GDP (%)
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(iii) We can draw the conclusion that the share of the tertiary sector in the GDP has increased by 10%, while that of the primary sector has almost halved. The secondary sector has grown by about 2% in the last 13 years.
Additional Questions and Answers
A. Multiple choice question
1. Economy activities means
a) production, distribution, and consumption in exchange for money
b) Buying and selling of commodities
c) providing various services to satisfy day-to-day needs
d) commodities are exchange for money
Options
a) statement a &b
b) statement c &d
c) statement a &d
d) all the statements
Ans: d) all the statements
2. How many sectors are in Indian economic sectors?
a) 3
b) 4
c) 2
d) None of these
Ans: a) 3
3.Primary Sectors is also know as
a) agriculture sectors
b) related sector
c) both a & b
d) none of them
Ans: c) both a and b
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4. Primary sectors depend on
a) Primary Sector
b) Secondary Sector
c) Tertiary Sector
d) all of the above
Ans: b) secondary sector
5. The calculation of GDP in India is undertaken by
a) the Central Government Ministry
b) the union territory ministry
c) Both a & b
d) None of the above
Ans: a) the central government minister
6. Secondary Sectors is also known as
a) agriculture sectors
b) related sector
c) industry sector
d) all of the above
Ans: c) industry sector
7. GDP includes
a) all final goods and services
b) raw materials
c) both a & b
d) none of them
Ans: a) all final goods and services
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B. Short question and answer
8. Define economic activities.
Ans: Buying and selling commodities, and providing various services to satisfy day-to-day needs in exchange for money are known as economic activities.
9. How many sectors are there in Indian economic sectors?
Ans: Based on the nature of the activity, Indian economy sectors are classified into three sectors.
- Primary Sector
- Secondary Sector
- Tertiary Sector
10. How does the Primary sector depend on the secondary sector?
Ans: The primary sector depends on the secondary sector for – fertilizers, Tractors, HYV (High Yield Variety seeds), and modern tools for agriculture.
The secondary sector creates the demand for primary sector raw materials
11. Describe the classification of all sector occupations.
Ans: Primary Sector – Flower Cultivator, Fisherman, Gardner, Potter
Secondary Sector – Basket weaver, workers in a match factory, Bee-keeper.
Tertiary Sector – Tailor, Priest, Milk Vendor, Astronaut, Courier, Call Centre employee, Moneylender.
12. What is a GDP?
Ans: Gross domestic product (GDP) is the standard measure of the production of goods and services from all three sectors in a country during a particular period.
13. How GDP is calculated?
Ans: Ways to calculate GDP.
Production approach – the sum of the “value-added” (total sales minus the value of intermediate inputs) at each stage of production.
Expenditure approach – the sum of purchases made by final users.
Income approach – the sum of the incomes generated by production subjects.
14. Why should not we include the value of intermediate goods?
Ans: The value of intermediate goods is not included while calculating the GDP of the country, as they are already included in the value of final goods. And if we add it further, then it will inflate the GDP, due to double counting.
15. Who calculates the GDP of India?
Ans: The calculation of GDP in India is undertaken by the Central Government Ministry. They collect information from all states and Union Territories.
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C. Long answer
16. What is the primary sector of the Indian economy? Describe the factors of the primary sector.
Ans: primary sector – When we produce goods by exploiting natural resources, is called the primary sector.
It includes agriculture, dairy, fishing, forestry, animal livestock, mining, iron ore, and other similar minerals.
This sector is also called the agriculture and related sectors.
Factors of Primary Sectors
This sector mainly depends on natural factors Like rainfall, types of soil, and suitable climate for agriculture.
Also, depending on the biological processes of animals.
17. ’primary sector’ was the most important sector of economic activity at the initial stage of development. Evaluate the statement.
or
Describe secondary sectors briefly.
Ans: In this sector, raw materials obtained from the primary sectors are manufactured, in factories or industries by using different tools and methods and converting the raw materials into finished goods.
It is also called the industry sector.
For example Sugarcane is the raw material (obtained from the primary sector) used to make sugar in Sugar mill Factories (secondary sector).
Wheat is a raw material (obtained from the primary sector) used to make biscuits, cookies, and bread in factories.
This sector is completely dependent on the primary sector for Raw materials.
18. What is a territory sector?
Ans: The tertiary sector comes after the primary and secondary sectors which helps in the development of both sectors. This sector does not produce goods. They provide aid or support to the finished goods.
Example: Transport – The goods produced in the primary or secondary sector need transporting by truck or trains to distribute to various places or to store in godown or to send in wholesale and retail shops to sell.
Communication – We also may need to talk to other vendors and parties for giving or taking orders, over the telephone, or sending letters or cheques.
Banking – The banking system which helps to develop the primary and secondary sectors comes under the Tertiary sector.
19. What is a service sector? How does it help in the territory sector?
Ans: The service sector also includes some essential services that may not directly help in the production of goods but helps in personal and skill development.
They sell services rather than goods.
Teachers – skill development
Doctor – Health
Personal services – washermen, barbers, cobblers, lawyers,
Technology – internet cafes, ATM booths, call centers, software companies.
After reading the above example you got the point that this sector provides services instead of the production of goods.
Thus, this sector is also known as the service sector.
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20. Which goods come under GDP?
Ans:
GDP includes only the final goods and services.
- A farmer sells wheat to a flour mill for Rs 20 per kg.
- The mill grinds the wheat and sells the flour to a biscuit company for Rs 25 per kg.
- The biscuit company uses flour and things such as sugar and oil to make four packets of biscuits.
- It sells biscuits in the market to consumers for Rs 80 (Rs 20 per packet).
- Biscuits are the final goods, i.e., goods that reach the consumers.
21. Tertiary sector activities help in the development of the primary and secondary sectors. Evaluate the statement.
Ans: After primary and secondary, there is a third category of activities that comes under the tertiary sector. It is different from the primary and secondary sectors. Tertiary sector help in the development of the primary and secondary sector. The tertiary sector doesn’t produce goods, it helps in the process of production. For example, goods are produced in the primary and secondary sectors but they need help to transport goods from one place to another for selling the goods to wholesalers and retailers. Sometimes It is necessary to store goods in the godown. Tertiary sector help in development. Without tertiary sector activities, the development of primary and secondary sectors can’t be possible. So, we can say that Tertiary sector activities help in the development of the primary and secondary sectors.
22. Describe Reasons for the Rising tertiary Sector in Production.
Ans: Over the forty years between 1973-74 and 2013-14, while production in all three sectors has increased, it has increased the most in the tertiary sector. As a result, in the year 2013-14, the tertiary sector emerged as the largest producing sector in India replacing the primary sector.
- In any country, several services such as hospitals, educational institutions, post and telegraph services, police stations, courts, village administrative offices, municipal corporations, defense, transport, banks, insurance companies, etc. are required. These can be considered basic services. In a developing country, the government has to take responsibility for the provision of these services.
- The development of agriculture and industry leads to the development of services such as transport, trade, storage, and the like, as we have already seen. The greater the development of the primary and secondary sectors more would be the demand for such services.
- As income levels rise, certain sections of people start demanding many more services like eating out, tourism, shopping, private hospitals, private schools, professional training, etc. You can see this change quite sharply in cities, especially in big cities.
- Over the past decade or so, certain new services such as those based on information and communication technology have become essential. The production of these services has been rising rapidly
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