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BAL BHARATI PUBLIC SCHOOL, PITAMPURA, DELHI – 110034

CLASS – X
SUBJECT - ECONOMICS
TERM - I
SECTORS OF THE INDIAN ECONOMY

Q1 Mention the 3 different classifications on the basis of which we divide the sectors Indian economy.
A1 a) Primary, Secondary & Tertiary sector
b) Private & Public sector
c) Organized & unorganized sector

Q2 Classify industries on the basis of their economic activities with examples

A2 PRIMARY SECTOR:
This sector consists of activities that are undertaken by directly using the natural resources. This sector is called
primary as it forms the base for all other products to be subsequently produced.
Example: In activities like dairy, we are dependent on the biological process of the animals & availability of
fodder; cultivation of co on which depends on the availability natural factors like rainfall, sunshine etc.
SECONDARY SECTOR:
It covers activities in which natural products are changed into other forms through ways of manufacturing that
we associate with industrial activity. The product is not produced by nature but has to be made & thus some
process of manufacturing is important. This could be done in a factory, workshop or at home. Since this sector
gradually become associated with the different kinds of industries, it is also called industrial sector.
Example: Using sugarcane as a raw material, we make sugar or gur; using wood to make furniture etc.
TERTIARY SECTOR:
This sector consists of activities that do not produce goods but they are an aid in the production process. Since
these activities generate services than goods, it is also called service sector.
Example: Goods produced in primary or secondary need to be transported by trains or trucks to be able to
reach the final consumers; making use of banking service to borrow loan from banks to help production &
trade.

Q3 Why the Primary sector is also called ‘agriculture & related sector’?
A3 Since most of the natural products we get are from agriculture, dairy, fishing, forestry, this sector is also
called ‘agriculture & related sector’.

Q4 What changes have been bought about in the primary, secondary & tertiary sectors over a period of
me?
A4 PRIMARY SECTOR:
a) Noted from the histories of many (now developed) countries, primary sector was the most
important sector of economic activity at initial stages of development.
b) As the methods of farming changed & agricultural sector began to prosper, it produced much more
food than before.
c) Many people could now take up other activities. Buying & selling activities increased many times.
d) However, at this stage most of the goods produced were natural products from primary sector &
most people were also employed in this sector.
SECONDARY SECTOR:
a) Over a long me & specially because new methods of manufacturing were introduced, factories
came up & started expanding
b) Those people who had earlier worked on farms now began to work in factories in large numbers.
People began to use goods that were produced in factories at cheaper rates.
c) This sector gradually became important in the total production & employment.
d) Hence, over time, a shift had taken place. This means that the importance of sectors had changed.
TERTIARY SECTOR:
a) In the past 100 years, there has been a further shift from secondary to tertiary sector in developed
countries.
b) The service sector has become very important in terms of the total production.

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c) Most of the working people are also employed in the service sector. This is the general pattern
observed in developed countries.
Q5 “Tertiary sector has emerged as the largest producing sector in India replacing the primary sector”.
Explain why is the tertiary sector becoming so important in India?
A5 Following factors can be attributed for the rising importance of the tertiary sector:
First, in any country, several services like hospitals, banks, insurance, police station, courts etc are required.
These can be said as basic services which are the responsibility of government in a developing country.
Second, the development of agriculture & industry leads to the development of services such as transport,
trade, storage & the like. Thus, greater the development of primary & secondary sectors more would be the
demand of such services.
Third, as income level rise, certain sections of people start demanding more services like eating out, shopping,
private schools or hospitals etc.
Fourth, over the past decade or so, certain new services like those based on information & communication
technology have become important. The production of these services has been rising rapidly.

Q6 “Not the en re service sector is growing equally well.” Do you agree with this statement? Give reason(s)
for your answer.
A6 Yes, not the en re service sector is growing equally well. This is because the service sector in India
employs different kinds of people. At the one end, there are a limited number of services that employ highly
skilled & educated workers. At the other end, there are a very large number of workers engaged in services like
small shopkeepers, repair persons, transport persons etc these people barely manage to earn a living & yet they
perform these services as no alternative work is available to them. Hence, only a part of this sector is growing in
importance.

Q7 How do we calculate the GDP of a country?

A7 GDP is the Gross Domes c Product which is calculated by having the sum of production in the 3 sectors.
GDP is the value of all final goods & services produced within a country during a particular year. In India, the
task of measuring GDP is undertaken by central ministry which collects information relating to total volume of
goods & services & their prices & then estimates the GDP.

Q8 Why are only ‘final goods & services’ counted in the GDP? Explain with the help of an example.
A8 This is because the value of final goods already includes the value of all intermediate goods that are used
in making the final good.
For example, a farmer sells wheat to a flour mill for Rs 8 per Kg. The flour mill grinds the wheat & sells the
flour to a biscuit company for Rs 10 per Kg. The biscuits company in turn uses flour & other things to make
biscuit & sells it in the market for Rs 60. Here, the value of Rs 60 for biscuit (final good) already includes the
value of flour (Rs 10).

Q9 “More than half of the workers in the country are working in the primary sector, mainly in agriculture,
produce only a quarter of GDP.” Does this statement mean that the workers in agriculture are not producing as
much as they could? Give reasons.
A9 It is not that the workers in agriculture are not producing as much as they could but the real problem is
that there are more people in agriculture than is necessary. So, even if a few people are pulled out from here,
production will not be affected. Thus, workers in agriculture sector are said to be underemployed. Also, the rate
at which these primary products are sold in the market is less because of which their contribution to the GDP is
also less.

Q10 Why is the problem of underemployment hidden in nature?

A10 The problem of underemployment is hidden in nature as people are apparently working but all of them
are made to work less than their potential or some people are even made to work more but are not paid
accordingly & are thereby exploited. This is in contrast to someone who does not have a job & is clearly visible
as unemployed.

Q11 Does the problem of underemployment happen in others sectors also, apart from agriculture?
Substantiate with example(s).
A11 Yes, the problem of disguised unemployment happens in other sectors as well. For example, there are
thousands of casual workers in the service sector in the urban area who search for daily employment. They are

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employed as painter, plumber etc. Many of them do not find work every day. Similarly, we see other people in
the service sector where they may spend the whole day but earn very little.
Q12 Why do you think NREGA is referred to as ‘Right to work’?
A12 The central government in India recently made a law implementing the Right to Work in 200 districts of India. It
is called National Rural Employment Guarantee Act 2005. It is referred to as ‘Right to Work’ as all those who are
able to & are in need of work have been guaranteed 100 days of employment in a year by the govt. if the govt
fails in its duty to provide employment, it will give unemployment allowance to the people.

Q13 What is an organized sector of economy?

A13 Organized sector covers those enterprises or places of work where the terms of employment are regular
& therefore people have assured work.

Q14 Why is the organized sector of economy so called?

A14 This sector is called Organized because it has some formal processes & procedures. They are registered
by the government & have to follow its rules & regulations which are given in various laws such as the Factories Act,
Minimum Wages Act, Payment of Gratuity Act etc.

Q15 What are the benefits that are enjoyed by the people working in the organized sector?
A15 a) Workers in this sector enjoy security of employment
b) They are expected to work only a fixed number of hours & if they work more, they are paid
over me by the employer.
c) They enjoy benefits like paid leaves, payment during holidays, provident fund, gratuity etc
d) They are supposed to get medical benefits & under the laws, the factory manager has to ensure
facilities like drinking water & safe working environment.
e) On retirement, the workers are even entitled to pensions as well.

Q16 What is unorganized sector of economy?

A16 This sector is characterized by small & scattered units which are largely outside the control of the govt.
There are rules & regulations but which are not followed. Jobs here are low paid & even not regular.

Q17 What are the disadvantages that people have to suffer in the Unorganized Sector?
A17 a) There is no job security as a lot depends on the whims of the employer & some people may be asked
to leave.
b) There is no provision for over me, paid leave, holidays, leave due to sickness etc.

Q18 In the rural areas, who are the vulnerable people in the unorganized sector who need protection by the
government?
A18 In the rural areas, the unorganized sector mostly comprises of landless agricultural laborers, small &
marginal farmers, sharecroppers & artisans (such as weavers, carpenters, goldsmiths etc). Nearly 80% of
the rural household in India is in small & marginal farmer category. These farmers need to be supported
through adequate facilities for timely delivery of seeds, agricultural inputs, credit, storage facility &
marketing outlets.

Q19 In the urban areas, who are the vulnerable people in the unorganized sector who need protection by the
government?
A19 In the urban areas, unorganized sector comprises mainly of the workers in small scale industries, casual
workers in construction, trade & transport etc & those who work as street vendors, head load porters,
rag pickers etc. Small scale industries also need government’s support for processing raw material & for
marketing the output. Similarly, the casual workers also need protection in their jobs & wages.

Q20 How do we classify the sectors of Indian economy in terms of ownership?

A20 In terms of ownership, we can classify the sectors as Private & Public sectors. In the Public sector, govt
owns most of the assets & provides all the services. Example: Railways or post office.
In Private sector, ownership of assets & delivery of services is in the hands of private individuals or
companies. Example: Reliance Industries Ltd (RIL), Tata Iron & Steel Company Ltd (TISCO).

Q21 Why do we need to have Public sector in a society when we have the Private sector providing quality

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services? Give reasons for your answer.
A21 We need to have Public Sector for the following reasons:
a) Advances in a private sector are guided by the motive to earn profits. However, the purpose of the
public sector is not to earn profits but to provide services to the people.
b) There are several things needed by the society as a whole but which the private sector will not
provide at a reasonable cost as these need spending large sums of money which is beyond the capacity
of the private sector.
c) Also, collecting money from thousands of people who use these facilities is not easy. Even if the
private sector provides these things, they would charge a high rate for their use.
Thus, governments have to undertake such heavy spending & ensure these facilities are available
to all.

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