NCERT SECTORS OF INDIAN ECONOMY

Department of Social Science

ECONOMICS(X)

CHAPTER 02

SECTORS OF INDIAN ECONOMY

NCERT TEXTBOOK QUESTIONS

Q.1. GDP is the total money value of the following produced during a particular year.

Ans. (b) All final goods and Services.

Q.2. Fill in the blanks using correct option given in bracket. (REFER TEXT BOOK)

Ans. (i) Has not    (ii) Tertiary     (iii) Organised    (iv) Large   (v) Natural, Manufactured   (vi) Interdependent

Q.3. “Tertiary sector is not playing any significant role in the development of Indian Economy.” Do you agree? Give reasons in support of you answer.

Ans. No, tertiary sector is playing an important role in the development of Indian economy. It helps primary and secondary sectors to develop by providing services such as transportation, communication, banking, infrastructure etc. This leads to more employment opportunities. Further, this enhances the income level. With the rise in income people start demanding more services like tourism, shopping, eating out, private hospitals etc. Certain new services based on information technology have been rising rapidly.

As we know, all the three sectors are dependent on one another. Development of one sector

Leads to the development of other sectors.

Q.4. Explain the objectives of implementing the National Rural Employment Guarantee Act or NREGA (2005).

Ans. The main objective of this act is to provide employment to one person per family for at least 100 days in a year. If government fails to provide employment, it will give unemployment allowance to the people.

In 2005, Government made a law implementing the Right to Work in 200 districts in India

Under this act. Now it has been extended to whole of the country. One third of works reserved for women .It has helped in reducing the Unemployed population of India

Q.5. Distinguish between open unemployment and disguised unemployment.

Ans. Open unemployment and disguised employment: In agriculture sector a large group of

Landless labourers seek wage employment on farms. But many people fail to get employment

And hence remain unemployed. Since they openly search for employment and their

Unemployment is not hidden, this is called open unemployment.

Disguised unemployment/Hidden Unemployment is a situation in which more persons are employed on a job than

are optimally required. If a part of labour force is withdrawn and the total production remains

Unchanged, this withdrawn labour is known as disguised unemployment.

Q.6. Explain how a shift has taken place between sectors in developed countries?

Ans. About more than 100 years ago new methods of manufacturing and technological revolution took place. People who worked in farms began working in factories in large numbers in new

Urban centres. Secondary sector gradually became the most important in terms of production

And employment. Hence, over a time, a shift had taken place from primary to secondary sector.

In the past 100 years there has been a further shift from secondary to tertiary sector in

Developed countries. The service sector has become the most important in terms of total

Production. Most of the working people are currently employed in the service sector. This is

the general pattern observed in developed countries.

Q.7. The following table gives the GDP in Rupees (crores) in the three sectors.

Year	Primary Sector	Secondary Sector	Tertiary Sector
1950	80,000	19,000	39,000
2011	8,18,000	12,49,000	28,18,000

(i) Calculate the share of each sector in GDP for 1950 and 2011.

(ii) Show the data as bar diagrams similar to Graph 2.

(iii) What conclusions can we draw from bar graph?

Answers ii & iii

Q.8. What do you understand by disguised unemployment? Explain with the help of an Example.

Ans. Disguised unemployment is a situation where the number of workers engaged in a job is much more than required. If some of them are withdrawn from the job, the total production will not fall. It means that marginal productivity of such workers is zero.

Let us understand it with the help of an example – Laxmi owning about 2 hectares of land is

Growing crops. All the five members of the family work on the plot throughout the year.

Suppose they produce 20 quintals of food grains. Now suppose instead of 5 only 3 members

Work next year and the output is still 20 quintals. It means that three members were enough

to work. The other two members are then said to be disguisedly unemployed.

Q.9. Distinguish between Public sector and Private sector.?

Public sector:

• It is controlled and managed by the government.
• The main aim of the sector is public welfare. To serve the citizens of the country.
• The sector provides basic facilities like education, health, food and security to the people. For Example: Railways, Post office, BSNL.
• They raise money from public revenue like tax, penalty, duty etc.
• Their basis of promotion is seniority. People have job security and liability.

Private sector:

• It is controlled and managed by an individual or a group.
• The main aim of the sector is to earn profits.
• Private sector does not provide any service at a reasonable rate. For example: Tatas, Birlas, Reliance.
• They raise money from issuing shares and debentures or by taking loan.
• Their (people’s) basis of promotion is merit. People have less job security and no job stability

Q.10. Explain how public sector contributes to the economic development of a nation.

Ans. There are some industries whose development is absolutely essential for the growth of

Economy. Such industries include power, transport, petroleum, irrigation, iron and steel,

Fertilisers, heavy industries etc. These industries require large investments which may be

Beyond the means of private entrepreneurs and are not sufficiently profitable for private

Sectors. Hence all such activities which are essential for the country’s development are carried

Into by the public sector.

Q 11. In which sector are most of the people employed and why (IN INDIA)?

Ans. Most of the workers are employed in Primary Sector, because:—

(i)  Not enough jobs have been created in the secondary and tertiary sectors.

(ii) More than half of the workers in the country are working in the primary sector although

      Primary sector contributes only one third of G.D.P.

Q.12. Explain the difference in employment condition in organised and unorganised sectors?

ORGANIZED SECTOR	UN ORGANIZED SECTOR
·         The sector is registered by the government.	·         The sector is not registered by the government.
·          The terms of employment are regular.	·         The terms of employment are not regular.
·         There is job security	·         There is No job security
·         There is extra benefits like Pension, Paid leave etc.	·         Nov extra benefits, No Paid leaves, No medical Facilities
·         The sector is governed by various laws such as the Factories Act, Minimum Wages Act, etc.	·         The sector is not governed by any act.
·         This sector includes banks, hospitals, schools, etc.	·         This sector includes a large number of people who are employed on their own doing small jobs, etc.

Q.13. Explain the primary, secondary and tertiary sectors by giving examples of each.

Ans. Primary Sector: - All those economic activities that are undertaken by directly using natural resources are included in primary sector. For example, mining, forestry, fishing, poultry etc.

Secondary sector: - It cover activities in which natural products are changed into other forms through ways of manufacturing that we generally associate with industrial activities. For example, after obtaining a crop, say cotton, we need machines to change it into yarn and cloth.

Tertiary Sector: - These are the activities that help in the development of the primary and

Secondary sectors. These activities, by themselves do not produce any good but they are an aid or a support for the production process. For example, any good produced in primary or

Secondary sector need to be transported to the market. That will be done by tertiary sector. It is also called service sector.

Q.14. Describe any three problems faced by workers in the unorganised sector.

Ans. The workers of unorganised sector face following problems:–

v  They are not paid according to government rules. They are underpaid.

v  They are not given other facilities like holidays, medical facility, gratuity, etc.

v  They can be asked to leave without any reason.

v  There is no job security. Workers are hired as and when  needed  and then asked to leave job

without any compensation.

Q.15. Explain the term GDP. Why are only ‘final goods and services’ counted in GDP?

Ans. GDP means Gross Domestic Product of a country. It is the value of all final goods and services produced within a country during a particular year.

Only the final goods and services are counted in the GDP. For example, if wheat is sold at

Rs.8 per kg. To floor mill, which sells flour to Biscuit Company which then uses flour to make

Biscuits. Then the value of biscuits would be counted, not the value of flour. The value of

Biscuits contains the value of intermediate products are already counted in the final products and if this is again counted it will lead to double counting, causing an error in the estimation of GDP.

Q.16. Why is the tertiary sector becoming more important than other sectors in India? Give four reasons.

Ans. Tertiary sector has become important in India due to

(i) Basic services like hospitals, education, post and telegraph, courts etc. are the

     Responsibility of the government.

(ii) Demand for services such as transport, trade, storage has increased with the development of primary

      and secondary sectors.

(iii) Demand for tourism, shopping, private schools, private hospitals etc. increased with the

       Increase in the level of income.

(iv) Rapid growth of service sector also benefited from external demand such as software

       Industry and call centre services.

Q.17.What are the various ways to provide employment opportunities in rural areas?

• The government can spend some money or banks can provide a loan, to construct wells for irrigation.
• Dams can be constructed along with canals, which will lead to a lot of employment generation.
• Government can invest some money on the construction of roads for running mini trucks and providing jobs opportunity in transportation.
• Local banks can provide credit at reasonable interest to the farmers for their farming to improve.
• Identify, promote and locate industries and services in semi-rural areas where a large number of people may be employed.
• Setting up of dal mills, opening cold storage's, honey collection centres and industries to process vegetables and other agricultural products, which can be sold in outside markets.
• More and more schools should be opened which would create about 20 lakhs jobs in the education sector alone.
• To improve the health situation, we need more doctors, nurses, health workers, etc. to work in the rural areas.
• If tourism as a sector is improved every year, we can give additional employment to more than 35 lakh people

Q.18.Why is the tertiary sector becoming important in India? 

• In any country, several services such as hospitals, educational institutions, post and telegraph services, police stations, courts, village administrative offices, municipal corporations, defence, transport, banks, insurance companies, etc., are required. These can be considered as basic services.
• The development of agriculture and industry leads to the development of service such as transport, trade, storage, etc. Greater the development of the primary and secondary sector, 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 institutes, etc. These changes can be seen in big cities.
• Over the past decade or so, certain new services such as those based on information and communication technology have become important and essential. Therefore, production of these services has been rising rapidly.