Chapter 2 Sectors of the Indian Economy Important Questions Class 10 Economics

Chapter 2 Sectors of the Indian Economy Important Questions Class 10 Economics can help students to identify areas of weakness and identify which topics need more practice. This helps students to think in a better way and boosts their confidence.

Practising extra questions can also help to develop the skills needed to answer questions quickly and accurately. Chapter 2 Class 10 Economics Extra Questions is an essential part of a student’s academic journey and can have a significant impact on their future success.

Chapter 2 Sectors of the Indian Economy Important Questions and Answers Class 10 Economics

Chapter 2 Sectors of the Indian Economy Very Short Answer Questions (1 Mark)

1. What is meant by economic activity?

Solution

The activities that result in the production of goods and services and add value to the national income are called economic activities.

2. Why is the tertiary sector also called service sector?

Solution

Since tertiary sector activities generate services rather than goods, the tertiary sector is also called the service sector.

3. Why is the primary sector also called as agriculture and related sector?

Solution

Since most of the natural products we get are from agriculture, dairy, fishing, forestry, this sector is also called agriculture and related sector.

4. What is meant by the ‘Primary Sector’?

Solution

When we produce a good by exploiting natural resources, it is an activity of the primary sector. This is because it forms the base for all other products that we subsequently make. e.g. the cultivation of cotton.

5. What does double counting mean?

Solution

The value of final goods already includes the value of all the intermediate goods, so count the value of intermediate goods and final goods separately will be double counting.

6. Why are only ‘final goods and services’ counted while computing total production?

Solution

The value of final goods and services already includes the value of all the intermediate goods and services that are used in making the final good.

7. Name the sector of economy that does not produce any goods.

Solution

Tertiary sector does not produce any goods. It provides services.

8. Mention the advantage of accounting final goods in calculation of GDP.

Solution

Final goods includes the values of all raw material and intermediate goods. So, accounting these we can avoid multiple counting of intermediate goods.

9. What is the most important reason for labour abundance in Primary sector in India?

Solution

Secondary sector and Tertiary sector could not produce adequate employment.

10. What does underemployment mean?

Solution

People are apparently working but all of them are made to work less than their potential.

11. What does MGNREGA mean?

Solution

It is Mahatma Gandhi National Rural Employment Guarantee Act 2005.

12. What is disguised unemployment?

Solution

A situation where more than required people are working and even if some people are removed from the work, it won’t be affected.

Chapter 2 Sectors of the Indian Economy Short Answer Questions (3 Marks)

1. Define Primary sector. Why it is known as primary sector? Give examples.

Solution

(i) The sector engaged in production of natural product or extraction of natural resources such as crops, cotton, milk, oil, minerals and ores (or) activities that are undertaken by directly using natural resources is known as primary sector.
(ii) It is known as primary sector because it forms the base for all other products that we subsequently make.
(iii) Since most of the natural products we get are from agriculture, dairy, fishing, forestry, this sector is also called agriculture and related sector.

2. What are steps involved in the estimation of GDP? Who conducts this process?

Solution

(i) First, the total production of each sector is calculated by adding the values of final goods and services produced in that sector in a year.
(ii) Then the production of all the three sector is added, the sum of which is called the Gross Domestic Product. (GDP).
(iii) Estimation of GDP in India is measured by central government ministry with the help of various governments of states and union territories. It collects information about the total volume (number) of goods and services and their prices and then estimates the GDP.

3. Explain the concept of ‘Final goods and services’ with examples. Why are only ‘final goods and services’ counted?

Solution

(i) The goods that reach the consumers to fulfil their final wants are known as final goods.
(ii) Take, for instance, a farmer who sells wheat to a flour mill for Rs 8 per kg. The mill grinds the wheat and sells the flour to a biscuit company for Rs 10 per kg. The biscuit company uses the flour and things such as sugar and oil to make four packets of biscuits. It sells biscuits in the market to the consumers for Rs 60 (Rs 15 per packet). Biscuits are the final goods.
(iii) Goods such as wheat and the wheat flour in this example are intermediate goods.
(iv) The value of final goods already includes the value of all the intermediate goods that are used in making the final good. So, only final goods and services are counted and not the intermediate goods.

4. Explain the objectives of implementing the NREGA 2005.

Solution

(i) To provide work to those who are able and are in need of work, in rural areas.
(ii) They are to be provided guaranteed 100 days of employment in a year.
(iii) If government fails in its duty to provide employment, it will give unemployment allowance to the worker.
(iv) The types of work that would in future help to increase agricultural production will be given preference under the Act.

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

Solution

(i) In any country, basic 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. In a developing country the government has to take responsibility for the provision of these services.
(ii) Second, the development of agriculture and industry leads to the development of services such as transport, trade, storage. Greater the development of the primary and secondary sectors, more would be the demand for such services.
(iii) Third, 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.
(iv) Fourth, certain new services such as those based on information and communication technology have become important and essential. The production of these services has been rising rapidly.

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

Solution

(i) They are not paid according to government rules. They are underpaid.
(ii) They are not given other facilities like holidays, medical facility, gratuity, etc.
(iii) They can be asked to leave without any reason. There is no job security. Workers are hired as and when needed and then asked to leave job without any compensation.

7. Service sector in India employs two different kinds of people. Who are these?

Solution

Service sector in India employs many different kinds of people.
(i) At one end there are a limited number of services that employ highly skilled and educated workers.
(ii) At the other end, there are a very large number of workers engaged in services such as small
shopkeepers, repair persons, transport persons, etc. These people barely manage to earn a living and yet they perform these services because no alternative opportunities for work are available to them. Hence, only a part of this sector is growing in importance.

8. Explain underemployment in agricultural sector in India.

Solution

(i) Workers in the agricultural sector are underemployed. It means that there are more people in
agriculture than is necessary. So, even if we move a few people out, production will not be affected.
(ii) Each one is doing some work but no one is fully employed. Their labour effort gets divided.
(iii) This kind of underemployment is hidden in contrast to someone who does not have a job and is clearly visible as unemployed. Hence, it is also called disguised unemployment.

9. Explain what is meant by disguised unemployment? Give examples from rural and urban areas where disguised unemployment exists.

Solution

(i) Disguised employment is a hidden unemployment. It means a person seems to be doing a job but actually he is not required there. If he is taken out of the job, no difference in the productivity would be felt.
(ii) In rural areas all family members work on the agricultural field but all the work can be done only by one person alone. Rest are just engaged.
(iii) In urban areas, casual workers do petty jobs. They are not employed adequately.

10. Suggest any three ways to create more employment avenues in Urban sector.

Solution

(i) Developing private sector industries by giving more incentives
(ii) Creating Special Economic Zones in urban areas.
(iii) Laying more emphasis on export of goods.
(iv) Developing new sectors like tourism-promoting regional craft industry.
(v) Expanding IT sector.

11. Why is agriculture an activity of unorganised sector in India?

Solution

Agriculture is a sector unregulated by the government since land belongs to individuals. As a result, the farmer or whoever owns the property hires labour as needed. As a result, the government cannot intervene in recruiting or regulating working conditions. Agriculture is entirely dependent on natural elements, which are beyond the control of any human individual or government. Also, the majority of the fields are tiny and scattered, cultivated by small and marginal farmers. Agriculture cannot be included in the organised sector.

12. How can government protect workers in unorganised sector?

Solution

(i) Government can fix the minimum wages rate and working hours.
(ii) Government can provide cheap loans to the self employed people.
(iii) Government can provide cheap and affordable basic services like education, health, food to these workers.

13. Why there are more workers under unorganized sector? Why there is need of protection for the workers in unorganized sectors?

Solution

(i) The employment opportunities in the organised sector have been expanding very slowly.
(ii) It is also common to find many organised sector enterprises in the unorganised sector. They 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 enter the unorganised sector jobs, which pay a very low salary.
(iii) Since the 1990s, it is also common to see a large number of workers losing their jobs in the organized sector. These workers are forced to take up jobs in the unorganized sector with low earnings.
(iv) Hence, besides the need for more work, there is also a need for protection and support of the workers in the unorganised sector.

Chapter 2 Sectors of the Indian Economy Long Answer Questions (5 Marks)

1. What does the history of developed countries indicate about the shifts that have taken place between sectors?

Solution

(i) At initial stages of development, primary sector was the most important sector of economic activity. As the methods of farming changed and agriculture sector began to prosper, it produced much more food than before.
(ii) Many people could now take up other activities. Number of craft persons and traders, transporters, administrators, army etc. increased.
(iii) Then new methods of manufacturing were introduced, factories came up and started expanding. Those people who had earlier worked on farms now began to work in factories in large numbers.
(iv) Secondary sector gradually became the most important in total production and employment. Hence, over time, a shift had taken place.
(v) 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 also employed in the service sector.

2. Why does the primary sector continue to be the largest employer in India?

Solution

(i) The primary sector continues to be the largest employer because enough jobs have not been created in the secondary and tertiary sectors.
(ii) Industrial production of goods has increased by more than nine times, but the employment in the industry has increased by three times only.
(iii) The production in tertiary sector, has increased by 14 times but the employment has increased only around five times.
(iv) The primary sector still employs about more than half of the workers in the country.
(v) Both the secondary and the tertiary sectors offer a limited number of services which employ highly-skilled and educated workers. Not all are able to get employment in these sectors. Hence, they retain in the primary sector which requires less skills and no education.

3. Why is service sector or tertiary sector the most important sector in our country?

Solution

(i) Basic services like educational institutions, hospitals, post office, police stations are necessary for the betterment of the people in a country. The government should provide all these facilities.
(i) The development of primary and secondary sector leads to the development of tertiary sector services like transport, trade, storage.
(i) When people’s income levels increases, they demand many more services like eating out, tourism, shopping, private hospitals, private schools, professional training, etc.
(i) Development of information technology has added some services like, call centres, internet cafes, etc.
(i) Globalisation has also increased the importance of tertiary sector.

4. Differentiate between unemployment and Disguised unemployment.

Solution

Unemployment	Disguised unemployment
When a person has no job and does not earn anything, then it is called unemployment.	When people seems to be working but are not made to work to their full potential. Then it is called disguised unemployment.
It is open.	It is hidden.
This type of unemployment is found in industrial sector. When a factory or an industry is closed down.	This type of unemployment is seen in agriculture and unorganised sectors where more people are working than required.

5. Who are the vulnerable people who need protection from unorganised sector?

Solution

In the rural areas,
(i) The unorganised sector mostly comprises of landless agricultural labourers, small and marginal farmers, sharecroppers and artisans (such as weavers, blacksmiths, carpenters and goldsmiths).
(ii) Nearly 80 per cent of rural households in India are in small and marginal farmer category. These farmers need to be supported through adequate facility for timely delivery of seeds, agricultural inputs, credit, storage facilities and marketing outlets.

In the urban areas,
(i) unorganised sector comprises mainly of workers in small-scale industry, casual workers in construction, trade and transport etc., and those who work as street vendors, head load workers, garment makers, rag pickers etc.
(ii) Small-scale industry also needs government’s support for procuring raw material and marketing of output. The casual workers in both rural and urban areas need to be protected.

The majority of workers from scheduled castes, tribes and backward communities find themselves in the unorganised sector. Besides getting the irregular and low paid work, these workers also face social discrimination.

6. Distinguish between Organised and unorganised sectors.

Solution

Organised Sectors	Unorganised sectors
They are registered by the government and have to follow its rules and regulations which are given in various laws such as the Factories Act, Minimum Wages Act, Payment of Gratuity Act, Shops and Establishments Act etc.	The unorganised sector is characterised by small and scattered units which are largely outside the control of the government.
It has some formal processes and procedures and follow the rules and regulations.	There are rules and regulations but these are not followed.
Workers in the organised sector enjoy security of employment.	Employment is not secure. People can be asked to leave without any reason.
They are expected to work only a fixed number of hours. If they work more, they have to be paid overtime by the employer.	They are expected to work for long hours. There is no provision for overtime.
They get paid leave, payment during holidays, provident fund, gratuity, medical benefits and facilities like drinking water and a safe working environment.	There is no provision for overtime, paid leave, holidays, leave due to sickness etc. Jobs here are low-paid and often not regular.
Some of these people may not be employed by anyone but may work on their own but they too have to register themselves with the government and follow the rules and regulations.	This sector includes a large number of people who are employed on their own doing small jobs such as selling on the street or doing repair work. Similarly, farmers work on their own and hire labourers as and when they require

7. Distinguish between Public sector and Private sector.

Solution

Public sector	Private sector
It is controlled and managed by the government.	It is controlled and managed by an individual or a group.
The main aim of the sector is public welfare. To serve the citizens of the country.	The main aim of the sector is to earn profits.
The sector provides basic facilities like education, health, food and security to the people. For Example: Railways, Post office, BSNL.	Private sector does not provide any service at a reasonable rate. For example: Tatas, Birlas, Reliance.
They raise money from public revenue like tax, penalty, duty etc.	They raise money from from issuing shares and debentures or by taking loan.
Their basis of promotion is seniority. People have job security and liability.	Their basis of promotion is merit. People have less job security and no job stability.