Sectors of The Indian Economy, Chapter2, Economics, Class 10, CBSE Exam Notes, (20 Plus Questions)
Overview
Studying Various Sectors of The Indian economy is the best way to understand Indian Economy. Sectors of The Indian Economy, Chapter2, Economics, Class 10, CBSE Exam Notes, discusses three types of sectoral classification for understanding Indian Economy : (1) Primary, Secondary and, Tertiary sectors; (2) Organised and Unorganised sectors; (3) Public and Private sectors. This post titled Sectors of The Indian Economy, Chapter2, Economics, Class 10, CBSE Exam Notes, also discusses few other fundamental concepts such as Gross Domestic Product, Employment etc.
Sectors of Economic Activities
Q. Explain ‘Primary Sector’ of economy.
Ans. When we produce a good by exploiting natural resources it is an activity of ‘primary sector.’ It is called primary because it forms the base for all other products that we subsequently make.
Since most of the natural products we get are from agricultural, dairy, fishing, forestry, this sector is also called ‘Agriculture and related sector.’
Example of primary sector include : cultivation of crop, dairy and animal husbandry, fishing, forestry, mineral and ores (Quarrying) etc.
Q.2. Explain ‘Secondary Sector’ of economy.
Ans. The ‘secondary sector’ covers activities in which natural products are changed in to other forms through ways of manufacturing that we associate with industrial activity.
Examples of secondary sector include : spinning yarn and weaving cloth using cotton, production of sugar or jaggery by using sugarcane, or, making bricks from earth.
Since this sector gradually became associated with the different kind of industries, it is also called Industrial sector.
Q.3. Explain the Tertiary Sector of economy.
Ans. Tertiary sector are the activities that help in the development of the primary and secondary sector.
These activities themselves do not produce a good, but they are an aid or support or help for the production of goods.
For example, activities like transportation, storage, communication, banking, trade etc. are called tertiary activities which help grow the industries.
Since these activities generate services rather than goods, the Tertiary Sector is also called “Service Sector.”
“Service Sector” also includes some essential services that may not directly help in production of goods. For example : teachers, doctors, lawyers, accountants, washerman, barbers, cobblers, etc. Many new services based on Information Technology have been evolved, such as : internet cafe, ATM booths, Call Centres, Software companies.
Note : Primary, Secondary and Tertiary sectors are highly interdependent.
Q.4 What are the benefits of classification of economy in primary, secondary and tertiary sectors?
Ans. Classification of economy in primary, secondary and tertiary sectors has following benefits :
(1) Almost all major economic activities are covered under these three broad categories.
(2) On the basis of these sectors, it is easy to analyse the pattern, trends and size of employment in each sector.
(3) It is also helpful in making assessment of goods and services produced by each sector in an year. This helps ascertaining the size of economy.
(4)It also helps in finding out which sector has dominant role in economy.
(5) It also helps in sensing the vulnerability of various sectors in terms of performance.
Q.5. Explain GDP (Gross Domestic Product) of a country.
Ans. The value of final goods and services produced in each sector during a particular year, provides the total production of the sector for that year. Sum of production in the three sectors gives Gross Domestic Product (GDP) of a country.
Thus, GDP is the value of all final goods and services produced with in a country during a particular year. GDP shows how big the economy is.
Q.6. How do we count the various goods and services in country in an year ?
Ans. Economists suggest that in place of adding the actual numbers of various goods and services, it is more logical to add the values of goods and services produced in primary, secondary and tertiary sectors in a country in a year.
Another related precaution is that not every good or service that is produced or sold needs to be counted. In stead, it makes sense to include the final goods and services and exclude the intermediate goods. (Because the final goods already include the values of intermediate goods.)
Q.7. In India how does the mechanism of GDP calculation works ?
Ans. In India the mammoth task of measuring GDP is undertaken by a central government ministry.
This ministry with the help of various government departments at state and union level, collect the information relating to total volume of goods and services and their prices and then estimates the GDP.
Q.8. What does the history of developed countries indicate about the shifts that have taken place between sectors ?
Ans. If we view the economic history of developed countries, we find the following facts –
(1) At initial stages of development, primary sector was the most important sector of economic activity. Most of the goods produced by the primary sector were natural products. Most people were also employed in this sector. Surplus food production led to many new activities like : crafts making, trading, transportation etc.
(2) In the next hundred years, new methods of manufacturing came to existence. Factories came up and started expanding. Many of earlier primary sector workers began to work in factories. People began to consume more goods that were produced in factories at more cheaper rates. Thus in next hundred years, Secondary Sector grew vigorously in terms of production and employment, leaving behind the primary sector in developed countries.
(3) In the past hundred 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 and employment.
Primary, secondary And Tertiary sectors In India.
Note: A remarkable fact about India is that while there has been a change in share of the three sectors in GDP, a similar shift has not taken place in employment.
Note: In India, the primary sector continues to be the largest employer even now. It is because not enough jobs were created in the secondary and tertiary sectors of economy.
Q.9. Why is the tertiary sector becoming so important in India ?
Ans. In the last forty years between1973 to2013, the Tertiary Sector of Indian economy has emerged as the largest producing sector. The reason behind this growth are :
(1) In a developing country like India, it is the responsibility of the government for the provision of basic services such as – education, health care, post & telegraph, transport, banks, insurance, courts, administrative offices etc. which constitute Tertiary Sector.
(2) It is to be noted that during last 40 – 50 years, India witnessed tremendous growth in agriculture and industries. This led to increase in income level. With increase in income level, people started demanding for more services such as – restaurants, hotels, tourism, shopping, private school, private hospitals, professional training etc. This further added to the growth of Tertiary Sector in India.
(3) Over the past decade or so, certain new services such as those based on Information Technology have become important and essential.
Note: However, not all the segments of service sector (Tertiary Sector), is growing equally well. Very large number of workers are engaged in such services, where they barely manage to earn a living. Ex- small shopkeepers, repair persons , transport persons, health services volunteers.
Note : Greater the development of primary and secondary sectors, more would be the demand of services.
Q.10. What do you mean by underemployment ( Or, hidden unemployment or, disguised employment )? Explain it in context of India.
Ans. underemployment ( Or, hidden unemployment or, disguised employment ) is a situation where people are apparently working but all of them are made to work less than their potential.
Situation of underemployment is also known as hidden or disguised unemployment, because it is not visible as compared to a completely jobless person.
In the situation of underemployment, no one remains idle, but in actual fact their labour effort gets divided i.e. remains underutilised. In this situation, each one is doing some work, but no one is fully employed.
In India, more than half of the workers work in primary sector but contribute to only one sixth of GDP i.e. they produce only 16.67% of GDP in India. This is because of the situation of underemployment in agriculture sector (Primary sector) in India.
Q.11. In India, why there is severe unemployment in agriculture sector (primary sector) ?
Ans. During 1977-78 to 2017-18, industrial output (secondary sector) in India went up by more than 9 times, but employment in this sector, went up only around three times.
Similarly, again, during the period 1977-78 to 2017-18, production in the service sector (tertiary sector) rose by 14 times, while the employment in the service sector rose around by 5 times.
Thus, we can see that during 1977-2017, not enough jobs were created in secondary and tertiary sectors in India. As a result, more than half of the workers of the country are working below potential in the primary sector, mainly agricultural sector. This has caused the situation of severe underemployment in primary sector in India.
Note : Apart from primary sector, situation of underemployment can happen in other sectors as well. For example, casual workers in the service sector (tertiary sector) in urban areas, don’t find work everyday.
Note: You may find a person belonging to tertiary sector, pushing a cart on the street, or selling something on the street, where they spend the whole day but earn very little. They are doing this work because they don’t have better opportunities. This is also a situation of underemployment.
Q.12. Compare and contrast the changes in India with the pattern that was observed for developed countries. What kind of changes between sectors were desired but did not happen in India ?
Ans. Hint: See the answer of Q.8. along with discussion on “underemployment” in Q.10.
Q.13.What measures should government take to provide increased productive employment in agriculture sector in rural areas ?
Or, Q. How would income and employment increase if farmers were provided with irrigation and marketing facilities ?
Ans. Small and poor farmers having unirrigated lands face the problem of unemployment and poor income.
Irrigation facilities like wells, tube wells, dams and canals not only encourage multiple cropping but also bring more land area under cultivation. All this results in providing productive employment generation in farming and agriculture. Extension of agriculture to new lands reduces the cases of under employment in primary sector.
Pace of agriculture production and employment generation in agriculture sector, is sustained only when following facilities are also developed.
(1) Cheap agricultural credit to farmers to buy various inputs.
(2) Development of road connectivity with the market to sell the products.
(3) Development of storage facilities like godowns, cold storage etc.
(4) Development of food processing industries and agro based industries in semi rural areas. These industries buy agricultural produce as raw and also provide employment to local people.
Many institutional reforms like land consolidation, land tenancy reforms and promotion of cooperatives have also helped in enhancing the agriculture production and productive employment generation or reduction of underemployment.
Q.14. Discuss the employment potential of education sector and health sector in India in near future.
Ans. In India, about 60% of the population belongs to the age group of 5-29 years. Only about 51% of this are attending educational institutions. Rest others spend time at home or work as child labourer. If these are to attend schools; more schools, teachers, school staffs would be needed. As per Niti Aayog, nearly 20 Lakh jobs can be created in education sector alone.
Again there is much to do in the health sector also, which if done, would also create mass scale jobs in health sector. Because we would need many more doctors, nurses, health workers etc. to work and operate in rural areas in India.
Related Q.15. Suggest some ways by which jobs can be created in India.
Ans. (Hint : combine the points of answers of Q.13 and Q.14.)
(1) Construction of new dam and digging of canals brings large tracts of uncultivated land under cultivation. This leads to expansion in agriculture and increase in employment.
(2) Construction of better rural roads to villages and development of storage and transport facilities boosts the sale of agriculture of agriculture produce. This activity generates employment to not just farmers but also to those who work in tertiary sector especially transport and trade.
(2) Bank credit at reasonable rate of interest to farmers is essential to support and sustain the growth of agriculture sector so that the employment scenario may remain progressive.
(3) We can identify promote and locate industries and services in semi rural areas where a large number of people may be employed. Ex – Daal mill, cold storage, milk collection centre, honey collection centre, food processing industries.
(4) According to Niti Aayog, about 20 Lakh jobs can be created in education sector alone to serve our eligible population with better education.
(6) According to Niti Aayog, many jobs can be created in health sector to provide minimum health service to each person in society.
(7) Tourism, local craft based industry, local cuisine shops, provide ample job opportunities. According to Planning Commission, if tourism as a sector is improved, it can give additional employment to nearly 35 Lakh people every year.
(8) Expansion of IT based services have great potential to generate jobs in semi rural areas.
Q.16. Why do you think MGNREGA’2005 is referred to as Right to Work ?
Or, Q. Write a brief note on MGNREGA’2005.
Ans. Many of the suggestion to increase the income and employment of people in rural area are long term approach. Short term measures should also be found out to achieve quick results. Recognising this fact, the Central Government of India made a law implementing the Right to Work in about 625 districts of India. This is named as Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA).
Under MGNREGA’2005, all those who are able to and are in need of work in rural areas, are guaranteed 100 days of employment in a year by the government. If the government fails in its duty to provide employment , it will give unemployment allowances to the eligible people.
Under MGNREGA’2005, such works are given preference that would in future help to increase the production from land.
Division of Sectors As Organised And Unorganised
Q.17. How would you distinguish between Organised and Unorganised sectors ?
Or, Q. Why organised sector jobs are most sought after ?
Ans. Another way of classifying economic activities is to divide them in to Organised and Unorganised Sectors. This classification takes care of ways the people are employed, and also considers their working conditions.
Organised Sector:
- Organised sector covers those enterprises or place of work where the terms of employment are regular and therefore, people have assured work.
- In Organised Sector, employees are registered with the government and have to follow its rules and regulations which are guided by various laws such as : Factories Act, Minimum Wages Act, Payment of Gratuity Act, Shop and Establishment Act etc.
- It is called Organised Sector, because it has some formal processes and procedures.
- Workers of this sectors get – overtime payment, Paid leave / holidays, provident fund / gratuity, medical benefits, pensions at retirement, facilities at work place for hygiene and safety.
- In this sector it is possible that a person is doing his own work but he too has to register himself with government and follow the rules and regulations.
- Worker in Organised Sector enjoys the security of employment.
- in Organised Sector, number of working hour is fixed.
Unorganised Sector
- Unorganised sector activities are characterised by small and scattered units which are largely outside the control of the government.
- There are rules and regulations in this sector also, but these are not followed.
- In this sector jobs are low paid and often not regular.
- In this sector there is no provision for overtime, paid leave, holidays, leave due to sickness etc. A lot depends on whims of employer regarding working hours and amount of overtime payments.
- Employment in Unorganised Sector is not secure.
- This sector includes a large number of people who are self employed, doing small jobs.
Note : Farmers working on their own and hiring labourers as and when required, is also example of unorganised sector economic activity.
Note : Employment opportunities in organised sector are expanding very slowly.
Note: It is common to find many Organised Sector enterprises in the Unorganised Sector.
Note : Organised Sector jobs are most sought after job.
Q.18. Why a large number of workers are forced to enter the unorganised sector jobs ?
Ans. Many enterprises of Organised Sector, adopt such strategies to evade taxes and refuse to follow laws that protect labourers.
As a result, a large number of workers are forced to have unorganised sector jobs which pay a very low salary and exploite the labourers.
Since 1990s, it is common to see a large number of workers losing their jobs in organised sector. These workers are forced to take up jobs in the unorganised sector, with low earnings.
Q.19. Discuss the issues related to the condition of workforce/ workers involved in Unorganised Sector in India.
Ans. In the rural areas, the work force involved in Unorganised Sector are : landless labourers, small and marginal farmers, share croppers, and artisans such as weaver, blacksmiths, carpenters, goldsmiths etc.
Small and marginal farmers, who comprise nearly 80% of rural households in India, need to be supported through various institutional reforms and providing them with infrastructural facilities and techno financial help.
In urban areas, Unorganised Sector workforce comprises mainly of :
- workers in SSIs (Small Scale Industries)
- casual workers in construction
- casual workers in trade and transport
- street vendors
- headload workers
- rag pickers etc.
Good health of SSIs is essential for wellbeing of its workers. Government should support SSIs in procuring raw material and marketing of their produce.
Similarly, casual workers of both rural and urban areas need to be protected.
Since majority of workers belong to SC, ST and other backward communities in Unorganised Sector, their economic interest and social dignity must be protected.
Sectors In Terms Of Ownership : Public And Private Sectors
Q.20. Compare the activities and functions of public sector and private sector activities.
Or, Q. Divide the economic activities in a country like India on the basis of ownership of organisation or work place.
Ans. Another way of classifying economic activities in to sectors, could be on the basis of who own assets and is responsible for the delivery of services.
Public Sector :
- In the public sector, the government earns most of the assets and provides all the services. Ex- Railways, Post Offices.
- The purpose of the public sector is not just to earn the profits.
- Governments raise money through taxes and through other ways to meet the expenses on the services rendered by it.
Private Sector :
- In private sector, ownership of assets and delivery of services is in the hands of private individuals or companies. Ex- TISCO, RIL etc.
- Activities in private sector are guided by the motive to earn profits.
- To get the services of private sector, we have to pay money to individuals and companies.
Q.21. Explain how public sector contributes to the economic development of a nation.
Ans. There are several things needed by the society as a whole, which the private sector may not provide at affordable prices. This is because of the fact that some of these things and services need very heavy investment which is beyond the capacity of the private sector.
Also, the collection of money from thousands of individuals who use these facilities is not an easy task for private sector owners. Examples include : construction of roads, bridges, railways, harbours, electricity generation, dams, canals, etc.
Thus public sector units are required to undertake such heavy spending and ensure that these facilities are available to everyone. Government has massive machinery to look for tax collection and address law and order issues.
Even private sector may not survive and flourish if government does not encourage them by providing good infrastructure facilities. All these infrastructural facilities are created mainly by public sector.
Though in recent years, in India, stress is being given to encourage private sector units to enter in to public sector activities as well, the role of public sector in its economic development has been very important.
Q.22. Give a few examples of few public sector activities and explain why the government has taken them up?
Or, Q. “There are some economic activities which the government has to support.” Support this statement with suitable examples.
Ans. Government has to intervene and support such economic activities which have either important role in creating base for growth of other economic activities, or, which support farmers and protect consumers.
For example, selling electricity at the cost of generation may push up the cost of production of goods in many industries. Also, many units especially small scale units might have to shut down.
Government here, steps in, by producing and supplying electricity at rates which these industries can afford. Government has also to bear the part of cost.
Similarly, Government of India buys wheat and rice from farmers at fair price or minimum support price (MSP). These food grains are then stored in government warehouses and then are sold at a lower price to consumers through ration shops. In this way, here, government supports both farmers as well as consumers.
Thus we see here very clearly that there some economic activities, which the government has to support.
Q.23. “There are large number of economic activities which are the primary responsibility of the governments; and governments must spend on these.” Explain it.
Or, Q. Recognise such ignored areas of public life where government should make large expenditure.
Ans. There are large number of economic activities which are the primary responsibility of the governments; and governments must spend on these. A few of them are as follows :
- It should be noted that India’s size of illiterate population is one of the largest in the world. Running proper schools and providing quality education, particularly elementary education, is the duty of the government and requires government expenditure to improve this situation.
- Nearly half of India’s children are malnourished and a quarter of them are critically ill. The IMR (Infant Mortality Rate) of Odhisa, Chhatisgarh and Madhya Pradesh is one of the highest in the world. Thus, India needs to heavily invest in developing good health care facilities for its children.
- Availability of safe drinking water, housing facilities for the poor, food and nutrition – are important aspects of human development. Out of 189 countries, India ranks 130 in year 2018, in Human Development Index (HDI) ranking. We have to improve our position in this ranking list by making appropriate expenditure in this sector.
- It is also the duty of government to take care of the poorest and most ignored regions of the country through increased spending in such areas.
