CH2 ECONOMICS

SECTORS OF INDIAN ECONOMY

ECONOMIC ACTIVITIES
 Activities that involve money or exchange of product and service. These activities
generate income are called economic activities.
PRIMARY SECTOR
 When we produce a good by exploiting natural resources, these activities are included
in Primary Sector.
 For Example- Agriculture, dairy, fishing, forestry etc.
 It is also known as agriculture sector.
SECONDARY SECTOR-
 When natural products are changed into other forms through ways of manufacturing;
these activities are included into Secondary Sector.
 For Example- production of yarn from cotton, bread from wheat, Sugar from sugarcane
etc.
 It is also known as Industrial Sector.
TERTIARY SECTOR-
 This sector do not produce a good but they support for the production process. It help
development of primary and secondary sector.
 For Example- Goods produced in primary and secondary sector need to transport,
storage, banking & communication services. All these activities are included in Tertiary
Sector.
 It is also known as Service Sector.
Q1. Name the sector that is the largest employer in India. Why does this sector `
produced only quarter of the National GDP?
The primary sector also known as agriculture sector is the largest employer in India.
Nearly 51% of the population depends on it. However, its share in GDP is very less
because
1. The average size of land holding with person in very low.
2. Less use of modern farming method, knowledge on crop productivity.
3. Farmers are depend on informal source of credit.
4. Absence of alternate income generation activities.
Q2. "Primary sector was the most important sector of economic activity at initial stage
of development." Evaluate the statement.
1. Primary sector is the backbone of the economy.
2. It includes extraction of raw material like agriculture, fishing dairy, forestry,
mining, etc.
3. It provide employment to a large population.
4. As the methods of farming changed and agriculture sector began to prosper. The
secondary sector gradually became more prosper.
Q3. Explain the interdependence of all three sectors giving examples from
transportation system.
Primary Sector: Extraction of Iron ore and production of goods.
Secondary Sector: Iron ore is changed in sheets and then into spare parts & vehicles.
Tertiary sector: Transportation of Iron ore into factories for processing it into iron
sheets and to another factory for making vehicles.
- Transportation of vehicles and its parts to various markets.
- Sale of vehicles and other parts by wholesalers and retailers.
1. The process starts with the extraction of Iron ore. Since extraction of mineral is part of
primary activity, it comes in the primary sector.
2. After the extraction, the ore is changed in iron and sheets/parts/vehicles in the factories,
which is an industrial process and thus comes in the secondary sector.
3. After which, the spare parts and vehicles are transported to various markets, where it
is sold retailers and wholesalers which is part of tertiary sector. The service sector also
help in the form of engineers, electrician, insurance, banking, communication in this
process.
In this way, all the three sectors are interdependent.
Or With the example of sugarcane, explain the independence of all the three
sector of economy.
Primary Sector: Cultivation of sugar cane
Secondary Sector: Processing of sugar cane to make sugar
Tertiary sector: Transportation of sugar cane into factories for processing it into sugar
- Transportation of sugar packs to various markets.
- Sale of sugar by wholesalers and retailers.
1. The process starts when the sugar is cultivated. Since cultivation is part of agriculture,
it comes in the primary sector.
2. After the cultivation, the sugar cane is processed to make sugar in the factories, which
is an industrial process and thus comes in the secondary sector.
3. After which, the sugar is transported to various markets, where it is sold retailers and
wholesalers which is part of tertiary sector. The service sector also help in the form of
engineers, electrician, insurance, banking, communication in this process.
In this way, all the three sectors are interdependent.
NOTE- If these type of question asked for 5 marks, add definition of primary, secondary
and tertiary sector.
Q4. How does service sector help in development of primary and secondary sector?
Explain with examples.
Or "Tertiary sector activity help in the development of the primary and
secondary sector." Evaluate the statement.
 After primary and secondary sectors, there is a third sector called the service sector
also known as tertiary sector.
 Activities that fall under the service sector help in the development of the primary
and secondary sectors by not directly producing a good but helping these sectors
by activities that are an aid or a support for the production process.
For example
1. Goods that are produced in the primary or secondary sector would need to be
transported by trucks / trains and then sold in wholesale and retail shops.
 2. We need to store these goods in godowns.
3. It need services like communication, banking, insurance to help production and
trade.
4. Services like education institutions, health care are also plays important role in it.
5. Services of engineers, electricians, construction workers help in generating
infrastructure like factories, godowns, roads, transportation, communication, etc.
Since these activities generate services rather than goods, they promote primary and
secondary sectors for its development.
Q5. How do we count gross domestic product (GDP) of a country?
GDP is value of all final goods and services produced with in a country during a
particular year.
It shows how big the economy is. A sum of production of all the three sectors gives the
GDP.
Q6. Give five reason for the rising importance of tertiary sector in production.
Or Why is the 'tertiary sector' becoming important in India? Explain.
Or Analyse the role of tertiary sector in the Indian economy.
1. In a modern welfare state basic services, like- hospital, educational institutions,
transportation, Police, Post, Courts etc. are necessary.
2. Development of agriculture and industry leads to development of transport, storage,
trade, communication, banking Insurance, Police, Lawyers etc.
3. With the increase in income level, more services such as restaurant, tourism, Shopping
malls, Private Schools and Hospitals have been in demand.
4. The development of information technology giving importance to highly skilled and
educated workers.
5. A large number of workers engaged in service sector, such as small shopkeepers, repair
shops, rickshaw puller, but these people barely manage to earn a living.
Q7. Explain disguised unemployment with two examples, one from urban areas and
other from rural areas.
Disguised unemployment is a situation in which more people are engaged in an activity
than the required ones. Under this unemployment even if the surplus people are removed
from work, the production does not suffer. For Examples:
(i) Rural areas: In rural areas whole family is employed in agriculture. Even if some
members can be removed, the production will not be affected.
(ii) Urban areas: There are thousands of casual workers in the service sector in urban
areas who search for daily employment. They are employed as painters and
plumbers etc. Many of them do not find work everyday. They may spend the
whole day but earn very little.
Q8. Suggest ways to create more employment in the ruler sector.
1. Construction of dams and canals to irrigate fields may create new jobs in rural sector.
2. Construction of roads, storage units, cold storage etc.
3. Promote local industries like food processing units, dairy farming, dal mills etc.
4. Open new healthcare centres and schools in rural arears.
5. Promote regional craft.
Q9. How did MANREGA 2005 bring upliftment of the ruler people? Explain.
Or Describe the provisions of the Mahatma Gandhi National Rural
Employment Guaranteed Act 2005.
MGNREGA- Mahatma Gandhi National Rural Employment Guarantee Act 2005
1. Guaranteed Employment- The objective of MGNREGA 2005 is to implement the
right to work. Initially it is implemented in 200 districts. Every rural household is
entitled to 100 days of employment in a year.
2. Guaranteed Wage- Government will provide timely fixed wage.
3. Unemployment allowance- If the government fails in its duty to provide employment,
it will give unemployment allowance to the people.
Q10. Suggest ways to create more employment in the urban sector or cities.
1. Electricity should be provided to the factories regularly and at cheap rate especially to
the small units. Government should bear part of the cost.
2. Adequate land should be given to people to set up factories or small units.
3. Financial assistance should be given at less rate of interest.
4. Raw materials should be made available to the factory owners and other small unit
holders.
5. Transport and other facilities should be made available.
Q11. Distinguish the service condition of organised sector with unorganised sector.
Or Explain the working condition of workers in organised sector.
ORGANISED SECTOR UNORGANISED SECTOR
Employment  They enjoy security of employment  They do not enjoy security of job.
Procedure  Work on regular basis  Work on the need of the employer.
 Formal appointment letters issued.  Formal appointment letter not issued.
Wages  They get regular and fixed salary.  Salary is not fixed and regular.
 Got facilities such as PF, Gratuity  No facilities provided such as PF, Gratuity
Working  They have fixed working hours.  They do not fixed working hours.
conditions  They get paid if they work overtime.  They are not paid for over time.
Facilities  Paid holidays and Medical leaves  No paid holidays no medical leaves.
 Save working Condition  Not necessary
Protection Various laws such as Wages Act, Not necessary
by Law Payment of Gratuity Act followed.

Q12. How do workers in the unorganised sector get protection?

PROBLEMS & PROTECTION OF WORKERS IN UNORGANISED SECTOR
Wages: The workers in the unorganised sector do not get minimum wage fixed by the govt.
The government should implement minimum wage act strictly.
Govt. should also fix working hours.
Government should arrange training programme.
Safety: No safety measures are taken in the factories for the protection of the workers.
This results in injuries or death in the factory in case of fire or accident.
The government should set basic safety standards.
The government must punish on its violation.
Health: The workers in this sector are not provided any medical facilities.
The working conditions are not hygienic.
 Lack of medical facilities affect their health and efficiency.
Government should provide cheap healthcare and education facilities.
Discrimination: Workers in the unorganised sector face discrimination and unequal
treatment.
The government should protect them by implement laws strictly.
The workers must educate with professional and social training sessions.

Q13. Which are the two sectors based on the ownership of resources. Explain them.
Or Compare the economic activities of private sector with that of public sector.
PRIVATE SECTOR PUBLIC SECTOR
The ownership of assets and delivery of service is in Government owns most of the assets and provide all
the hands of private individuals or companies. services.
Owner or manager of company takes the decision. Government takes the decision.
This sector provides consumer goods like vegetable, This sector provides basic facilities like Railways,
grocery, sweets, etc. education, food security to people.
The aim is to gain maximum profit. The aim is to provide service to people either free or
TISCO and RIL are few example of private sector. at cheap rate. For Example
1. Electricity-production and distribution.
2. Indian railways, DTC in Delhi.
3. Govt. schools and Hospitals.
The source of investment is private saving or loans. The government raises money through taxes

Q14. How far is it correct to say that services which cannot be provided by private sector
can be provided by the public sector? Explain.
Or Explain with suitable examples how public sector contributes to the
economic development of the nation.
Or How does public sector contribute to the economic development to the
nation? Explain.
CONTRIBUTION OF PUBLIC SECTOR IN ECONOMIC DEVELOPMENT
 In public sector the government provides services such as Railways for the welfare of
the people, traders and industrialists.
 Public sector helps in development by creating infrastructure.
 It ensures easy availability of goods at moderate rates.
 Selling electricity at the costs of generation push production of goods.
 The government purchase wheat and rice from farmers at MSP and sell it to poor people
at very affordable price.
 Government provide health care facilities and education at very affordable price.
 It contributes to the Human Development Index via health and educational facilities.