D.A.V.

SCHOOL
SREE NANDEESWARAR CAMPUS,
ADAMBAKKAM. CHENNAI 600 08.
STD: 10 SUB:ECONOMICS
L.NO.2 SECTORS OF THE INDIAN ECONOMY
I.ANSWER THE FOLOWING:
1. What is an economic activity?
ANS: Any activity which gives income in return is called an
economic activity.
2. What is an economy?
ANS: It is the sum total of all economic activities of the people
in the society of a country.
3. What are primary activities? Give examples.
ANS: Primary activities are those activities that are undertaken
by using natural resources either directly and indirectly .
e.g., Farming, mining, fishing etc.
4. What are secondary activities? Give examples.
ANS: Secondary activities are those activities in which natural
products or primary goods are used to produce some other goods
through the process of manufacturing.
e.g., Mining of iron ore is a primary activity and manufacturing
of steel is a secondary activity.
5.What are tertiary activities? Give examples.
ANS: These are activities that help in the development of the
primary and secondary sectors. These activities by themselves, do
not produce a good but they are an aid or support for the
production process.
e.g., Banking, transport, storage, communication, etc.
6. What are final goods? Give examples.
ANS: Final goods are those goods which are used for final
consumption and they are not resold. They have crossed the
boundary line of production and are ready to be used by the final
user.
e.g., Television, refrigerator, etc
7. What are intermediate goods? Give examples.
ANS: All goods which are used as raw material for further
production of goods, or for resale in the same year are known as
intermediate goods.
For example, wheat flour which will be used for
production of the bread . So, wheat flour is an intermediate
product.
8. What is Gross Domestic Product? Who is responsible for
collecting the data of GDP?
ANS: Gross Domestic Product is the final value of goods and
services which are produced within a country during the period of
one year
 a .In India, the mammoth task of measuring GDP is undertaken
by the Central Government Ministry(Ministry of Trade and
Commerce).
b. This Ministry, with the help of various government
departments of all the Indian States and union territories, collects
information relating to total volume of goods and services and their
prices and then estimates the GDP.
9. How is tertiary sector different from other sectors? Give
examples.
ANS: The activities of the tertiary sector are different as these
are the activities that help in the development of the primary and
secondary sectors.
a. These activities by themselves do not produce any good but
they provide an aid or support for the production process.
b. For example, goods that are produced in the primary and
secondary sector would need to be transported by truck or trains
and then sold in wholesale and retail shops.
c. we also may need to talk to others over the phone or
borrow money from banks to enhance production and trade.
d. Transport , storage, communication, banking and trade are
some of the examples of tertiary activities.
Since these activities generate services rather than producing
goods, the tertiary sector is also called the service sector.
10. "Final goods and services are only considered and not the
intermediate goods for the estimation of GDP". Explain.
ANS: Value of only final goods and services should be included
and its reason is that the value of intermediate goods is already
included in the value of final goods.
a. E.g., Value of biscuit already includes the values of wheat
flour, milk, sugar etc.
b. If we include the value of intermediate goods along with the
value of final goods, it will lead to a problem of double counting,
meaning that counting the value of the same products more than
once.
c. Hence, to avoid this problem, the value of intermediate
goods are not included in the estimation of GDP.
11. What does the history of developed country indicate the shift
that have taken place among the sectors?

ANS: a. Initially, the primary sector was the most important

sector of economic activity.
b. As the method of farming changed and agriculture
sector began to prosper, people began to take up other activities
like trade, administration, army etc.
c. New methods of manufacturing were introduced,
factories came up and started expanding.
d. The secondary sector gradually became the most
important sector in total production and employment over a long
period of time.
e. There was a shift from primary to secondary sector as
more factories were started.
 f. In developed countries, a further shift from secondary
to tertiary sector is observed in the past 100 years.
g. Major portion of the working population is engaged in
the service sector. In developed country's economy, tertiary sector
gains important position.

12. Do you think the classification of economic activities into

primary, secondary and tertiary is useful? Explain how?

ANS: a. Yes, the classification of economic activities into

primary, secondary and tertiary sector is useful as it helps in
calculating or estimating the relative importance in the growth of
GDP of the country.
b. Classifying in such a way helps in calculating how much
goods and services are produced by each sector and the total
number of people working in each sector.
c. In India, the tertiary sector is growing at very fast speed
which implies that the country is moving towards a developed
country, helps in comparing the level of growth in different
countries.

13. Explain the reason behind the growing importance of tertiary

sector? (OR)
Give reason why tertiary sector has become so important in India?

ANS:
1.BASIC SERVICES:
a. 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.
b. These can be considered as basic services.
c. In a developing country, the government has to take
responsibility for the provision of these services.
2. DEVELOPMENT OF AGRICULTURE AND INDUSTRIAL SECTOR:
Development of agriculture and industrial sector leads to the
development of services such as transport, trade, storage, etc.
which comes under the service sector.
3. MORE INCOME MORE SERVICES:
As income level rises, certain sections of people start
demanding more services like eating out, tourism, shopping, private
hospitals, professional training centres, etc.
4. NEW SERVICES:
a. With modernization and globalisation some new services
based on information and communication technology have become
most important and essential.
b. Liberalisation of finance is provided as investment for the
faster growth of the country.

14. "All of the service sector is not growing equally well in India".
Justify the statement with three arguments.

ANS: (a) Service sector in India employs many different kinds of

people. However, there are a limited number of services that
employ highly skilled and educated such as managers, lawyers,
accounts, etc.
(b) Also, there are a very large number of workers
engaged in services, such as small shopkeepers, repair persons,
transport persons. These people barely manage to earn a living and
yet perform these services.
(c) There is no alternative opportunity for them. Only a
part of this sector is growing rapidly.

15." Tertiary sector is not playing any significant role in the

development of the Indian economy". Do you agree? Give reason in
support of your answer.

ANS: (a) Yes, I agree with the statement that the tertiary sector
is not playing any significant role in the development of the Indian
economy because, from 1974 to 2014 production in the service
sector rose by 14 times but employment went up around five times
only.
(b) As a result, more than half of the workers in the
country are working in the primary sector mainly in agriculture.

16. Suggest some ways and measures which can be helpful in

creating employment in rural areas.

ANS:
 DIVERSIFICATION OF AGRICULTURE:
a. More than 60% of our workers are employed in
agriculture but our farmers produce only limited crops.
b. There is a need to diversify agriculture and farmers
should be encouraged to adopt horticulture, animal rearing,
along with the cultivation of crops.
 CHEAP CREDIT:
 a. Most of the farmers depend on sources of credit from
moneylenders, traders, relatives, etc., who charge a very high
rate of interest.
b. Government should encourage commercial banks to
provide loans to the farmers at a low rate of interest.
 PROVISION OF BASIC FACILITIES:
a. Our rural areas lack basic facilities like roads,
transportation, banking, warehousing, marketing, etc.
b. Government should invest money on these sectors so
that the Indian villages can be linked to other markets.
c. This activity provides productive employment opportunities,
not only to farmers but also to others who are in trade and
transport.
 PROMOTION OF LOCAL INDUSTRIES AND OTHER ACTIVITIES:
a. Another way to tackle this problem is to identify, promote, and
locate industries especially cottage and small scale industries.
b. It also includes setting up a mill or opening a cold storage, etc.
c. In villages near forest areas, honey collection centres can be
started where farmers can come and sell wild honey.

17. Explain the measures that can be adopted to remove disguised

unemployment in agricultural sectors.

ANS: MEASURES CAN BE ADOPTED TO REMOVE DISGUISED

UNEMPLOYMENT IN AGRICULTURAL SECTOR.
a. Emphasis on cottage and small scale industries.
b. Emphasis should be on training rural youth for self-
employment.
c. Emphasis should be on vocationalisation of education.
d. Mobility of labour should be increased.
 e .Employment exchanges should be opened in the rural areas
to inform the villagers about employment opportunities in the
urban areas.

18. In what ways employment can be increased in urban areas?

ANS:
a. Reform of educational system to make it vocational at the
school stage.
b. Concrete action will have to be taken to promote
decentralization and disposal of industrial effluents.
c. Promotion of small scale industries and encouragement to
self-employment by banks.
d. Developed techniques of production can be taken up with
low capital formation.

19. Explain the objective of implementing NREGA in 2005.

ANS:
a. The central government in India made a law implementing
the right to work in 625 districts of India.
b. It is called Mahatma Gandhi National Rural Employment
Guarantee Act 2005. (MGNREGA).
c. Under MGNREGA 2005, all those who are able to, and are in
need of, work are guaranteed 100 days of employment in a year by
the government.
d. One-third of the jobs are reserved for women.
e. If the government fails in its duty to provide employment, it
will give unemployment allowances to the people.
 f. This type of work that would in future help to increase the
production from land will be given preference under the Act.

20. Compare the employment conditions prevailing in the organised

and unorganised sector.

ANS:
 EMPLOYMENT CONDITIONS IN THE ORGANISED SECTOR:
a. They are registered by the government.
b. Follow rules and regulations given in various laws such as
the Factories Act, Minimum Wages Act, Payment of Gratuity Act,
etc.
c. It has some formal processes and procedures.
d. Workers enjoy security of employment.
e. Working hours are fixed and payment for extra hours of
work.
f. Workers get benefits like paid leave, paid holiday, provident
fund, gratuity, medical benefits etc.
 EMPLOYMENT CONDITIONS IN THE UNORGANISED SECTOR:
a. Unorganised sector is characterised by small and scattered
units which are largely outside the control of the government.
b. There are rules and regulations but these are not followed.
c. Jobs here are low paid and irregular, high degree of
insecurity.
d. No provision for overtime, paid leave, paid holiday, leave
due to sickness, etc.
21. "Workers are exploited in the unorganised sector". Do you
agree with the statement? Explain reasons in support of your
answer.

ANS:
Yes, workers are exploited in the unorganised sector. Reasons
are as follows:
a. There are no rules and regulations followed.
b. Jobs are low paid and often not regular.
c. No provision of overtime is there and no paid holidays or
leave is given.
d. Employment is no secure. People can be asked to leave
without reason.
e. Some kind of work is seasonal in nature and temporary
workers are employed. They become unemployed after the season
is over.
f. No other facilities like provident fund, Gratuity or sick leave
are given.
g. Working conditions are often poor. No allowances are given.
h. No medical benefit is given.

22. "Workers in the unorganised sector face social discrimination".

Explain.

ANS:
a. The statement is true that majority of workers in
unorganised sector belongs to Scheduled Caste, Scheduled Tribe,
and other backward classes.
b. In rural areas, the unorganised sector mostly comprises of
landless agricultural labourers and in urban areas, the casual
workers in small industries, construction and transport workers also
face social discrimination.
c. Protection and support to the unorganised sector workers is
thus necessary for both economic and social development.

23. The workers in the unorganised sector need protection on the

following issues: wages, safety and health. Explain with examples.

ANS:
The workers is the unorganised sector need protection:
A. WAGES:
Labourers who are employed as repair persons, vendor, etc.,
do not have fixed income. They nearly manage to earn their living.
They are not employed all through the year.
B. SAFETY:
Workers in unorganised sector are not provided with safe
drinking water or clean environment, e.g., working in mining ,
chemical industries is hazardous.
C. HEALTH:
Leave not granted in case of sickness. Medical facilities are not
offered, e.g., construction workers.

24. Explain how the workers in the unorganised sector can be

protected?

ANS:
MEASURES TAKEN BY THE GOVERNMENT:
a. Farmers should be supported through adequate facilities for
timely delivery of seeds, agricultural inputs, marketing outlets,
credit and storage facilities.
 b. Small industries must be supported for procuring raw
materials from other industries and market their output which
would help the casual workers.
c. Steps should be taken so that workers from SCs, STs, and
other backward classes do not face social discrimination.
d. Protection and support to the unorganised sector workers is
thus necessary for economic and social welfare.

25. What do you understand by disguised unemployment? Explain

with an example each from the urban and rural areas?

ANS
Disguised Unemployment is a situation where the number of
workers engaged in a job is much more than required.
If some of them withdrawn from the job, the total production
will not fall.
a. In rural areas, this type of unemployment is generally found
in agricultural sector like in a family of nine people, all are engaged
in the same agricultural plot. But if four people are withdrawn from
it there will be no reduction in output. So, these four people are
actually disguisedly unemployed.
b. In urban areas, this type of unemployment can be seen
mostly in service sectors such as in a family all members are
engaged in one petty shop or a small business which can be
managed by less number of persons.
26. Distinguish between open unemployment and disguised un
employment.

ANS:

S.NO. OPEN UNEMPLOYMENT DISGUISED UNEMPLOYMENT

1. When a country's labour This is a kind of unemployment
force does not get in which there are people who
opportunities for adequate are people who are visibly
employment, this situation employed but actually they
is called open don't have full employment. In
unemployment. such a situation more people
are engaged in a work than
required.
2. This type of unemployment This type of unemployment is
is generally found in the generally found in unorganised
Industrial sector of our sector where either work is not
country, also found among constantly available or too
the landless agricultural many people are employed for
labourers in rural areas. the same work that does not
require so many hands.

27.Differentiate between Public and Private sector enterprises.

ANS:
PUBLIC SECTOR:
a. Owned and controlled by the government.
b. It aims at welfare of the people.
c. Only authority to impose and collect tax.
d. It can mobilize huge capital to carry out welfare projects of
the people.
e.g., Construction of dams.
 e. Public sector provides basic services at a reasonable cost.
e.g., BSNL, ONGC, Indian Railways, etc.

PRIVATE SECTOR:
a. Owned, controlled and managed by individuals or group of
individuals.
b. Mainly aims at profit making.
c. No authority to impose and collect tax.
d. Cannot mobilize huge capital, so big welfare projects are not
shown interest by the private sector.
e.g., Tata Iron and Steel Company Limited (TISCO).
e. Private sector does not provide services at a reasonable cost.

28. Give a few examples of public sector activities and explain why
the government has taken them up.

ANS:
DEVELOPMENT OF INFRASTRUCTURE:
a. Pace of industrial development cannot be accelerated
without the establishment of infrastructure.
b. Development requires a huge capital which cannot be
mobilized by the private sector, moreover these projects do not
promise huge profits.
e.g., construction of roads, bridges, etc.
BASIC FACILITIES:
a. There are large number of activities which are the primary
responsibility of the government.
b. The government must spend on providing health and
educational facilities particularly elementary education is the
primary duty of the government.
 OTHER PROBLEMS:
a. There are many other problems like malnutrition, high Infant
Mortality Rate, safe drinking water, housing facilities for the poor
and food and malnutrition which needs special attention .
b. All these problems can be solved only with the help of the
government.

29.Is it necessary to have a Public Sector? Substantiate your answer

examining the role of the government.

ANS:
Yes, it is necessary to have Public Sector due to the
contribution to the economic development of India.
ROLE OF PUBLIC SECTOR IN ECONOMIC DEVELOPMENT:
a. It ensures rapid economic development.
b. It promotes redistribution of income and wealth.
c. It develops industries which require high investment.
d. It ensures balanced regional growth.
e. It generates resources for development.
f. It prevents the concentration of economic power.
g. It promotes import institutions.
h. It generates employment.
i. It aims at the development of small scale industries.
30. Explain how public sector contributes to the economic
development of the country?

ANS:
Public sector contributes to the economic development of a
nation in the following ways:
a. It develops the infrastructure requirement of nation like
construction of roads, bridges, railway tracks, dams, etc.
b. It provides huge amount of employment to the people of
the nation and also job security to them.
c. It provides secured environment to the people and industry
by investing in defence, law and order, machinery etc.
d. It provides revenue to the government which can be used
for the development of social infrastructure like health, education,
rural employment, subsidy for farmers, etc.

31. Explain the demerits of private sector.

ANS:
a. Activities in the private sector are guided by only the motive
to earn profit.
b. There are several things needed by the society as the whole
but the private sector will not provide at the reasonable cost.
c. Private sector does not invest generally in those activities
which are related to the welfare of the society.

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