NCERT Notes Class 10 Social Science Economics Chapter 2 Sectors of Indian Economy
Chapter 02: Sectors of Indian Economy - Study Notes, Questions and Answers / NCERT CBSE TextBooks Solutions Class 10 Economics Chapter 02 Sectors of Indian Economy
* Introduction:
Sectors are groups that perform various activities that involve producing goods or services. Economic activities are those activities that generate income and profit. For example, a farmer is a harvesting crop to sell and make money; an industry is generating goods or services for people and earning profit from it.
* DIFFERENT SECTORS OF THE INDIAN ECONOMY
1. Primary sector: This sector is otherwise known as the agricultural sector. When the goods are produced from natural resources and form the base for other products, those are considered as a primary sector. Some natural products include agriculture, fishing, dairy, forestry, etc.
2. Secondary sector: The sectors where natural products are changed to various forms through different ways of manufacturing are known as the
secondary sector. These include sugar (sugarcane is the raw material), bricks (earth is the raw material), various forms of oils (raw materials can be from
seeds or excavation or minerals, etc).
3. Tertiary sector: The sector that helps in the development of both the primary and secondary sectors is known as the tertiary sector. The activities include transportation of the primary and secondary sector products through trains, trucks etc. This sector also included various services provided by bankers, traders, teachers, doctors, etc. It’s also known as the service sector.
* DIFFERENCE BETWEEN THE THREE SECTORS OF THE ECONOMY
All the three sectors; primary, secondary, and tertiary are interdependent and interrelated with each other in performing various economic activities in day to day life. It makes it almost impossible to count all the activities that are included to get the final goods or services.
Gross Domestic Product (GDP): The total sum of all the final goods and services that are produced from the three sectors in a country in a particular year is known as Gross Domestic Product (GDP). It provides clear information about the economic system of the country. In India GDP is governed by the ministry of the Central Government.
* Where are most of the people employed?
During the 1970s, the primary sector was the largest emerging sector as there were fewer job opportunities in secondary and tertiary sectors as they used to give four-fifths of the result but employ fewer people. So, most of the workers
were dependent on primary sector jobs such as agriculture, poultry, weaving,
etc. Over the past few decades, people are employed in the tertiary sector as it
is becoming the largest producing sector and new innovative services and ideas
are increasing day by day.
The tertiary sector has surfaced as the largest sector in India over the primary sector. This sector has become most important in India due to the following reasons:
● The growth of industry and agriculture had developed transport, storage, and trading services.
● Demands for shopping malls, schools, hospitals, tourism, restaurants, hotels, etc are developing due to the growth of income of people.
● The growth of communication and information technology has become essential.
● Basic necessary services for the people such as hospitals, courts, police stations, municipal corporations, banks, corporate companies, administrative services, educational institutes, etc are provided.
* Historical changes in sectors
● The primary sector was an important sector of the economy during the initial period of development, and now with the innovative farming techniques, the agricultural sector is producing more benefits.
● People have started working in small scale industries, textile, and food processing industries, etc. So, the secondary sector is becoming the next most important sector in terms of economy and employment.
● Due to the increase of primary and secondary sectors, services such as banking education health etc. had come ahead in terms of production and
employment.
* DIFFERENT SECTORS IN TERMS OF OWNERSHIP
1. Public sector
● In the public sector, the assets and services are provided by the government.
● The main aim is to serve the public.
● Examples- post office, police station, railways, etc.
2. Private sector
● In the private sector, the assets and services are provided by an individual or a company
● The main aim is to earn profits.
● Examples- Reliance industries limited, Airtel, Vodafone, Tata Iron, and Steel company limited, etc
* How employment is created?
More employment can be created by:
● Giving importance to education and training facilities.
● Increase in transport, trade, and storage services.
● Offering loans at a low rate of interest.
● Promoting man-made products and small scale industries.
● Identifying a developed area.
● Generating government schemes for the welfare of people such as making schools, hospitals, providing electricity, irrigation services, etc.
* MGNREGA
● In 2005, the Central Government of India implemented a scheme in 625 districts of India for the right to work which was known as Mahatma Gandhi national rural employment guarantee act.
● It is a labour scheme that aims to guarantee the “right to work” to unemployed people.
● It is mostly implemented for the people living in rural areas that are able and need work. MGNREGA provides at least 100 days of employment to rural
households who have voluntarily agreed to do unskilled work every year.
● Any Indian citizen above the age of 18 years and residing in a rural area can apply for the MGNREGA scheme.
● If the government fails to offer employment, then it will be bound to provide unemployment allowances to the people.
● Another aim of the MGNREGA act is to provide durable assets to rural areas such as roads, wells, ponds, etc.
● It also states that jobs must be provided to the applicant within 5kms from his residence with minimum wages.
● It is implemented in gram panchayats without the involvement of contractors or agents.
● This law helps in protecting the village environment, rural women empowerment, encouraging social equality, reducing migration to urban areas,
providing basic facilities, and more.
* DIFFERENT SECTORS IN TERMS OF OPERATIONS
1. Organized sector
● The sector that provides fixed and secured employment and provides work for a limited period to their employees according to their will-power and qualification are known as organized sectors.
● These sectors follow the rules and regulations of the government.
● Employees work for fixed hours regularly and get paid for it. They get the bonus, overtime payments, and other services.
● Workers get payment during leave and holidays, medical benefits, gift vouchers, provident fund, etc.
● Examples of organized sectors are banks, Government employees, government registered industrial workers, Anganwadi workers, etc.
2. Unorganized sector
● The sector that is scattered in small units and doesn’t provide job security is known as the unorganized sector.
● The unorganized sector doesn’t have any control by the government and they don’t follow any rules and regulations.
● Employees get Low payment as the jobs are irregular.
● Workers don’t get any facilities such as overtime payments, sickness leave, holidays, etc.
● Examples of Unorganized sectors includes labouring, farming, shopkeepers, domestic workers, etc Protection of workers in the unorganized sector
● The government should provide loans at a low-interest rate to self-employed
people.
● The government should fix the minimum working hour and wages rate.
● The government should provide affordable basic amenities such as food, health services, education, etc. to the workers.
● The government can make new laws for different provisions such a sickness leave, paid leave, etc.
* TextBook Exercises
1. Fill in the blanks using the correct option given in the bracket:
(i) Employment in the service sector _________ increased to the same extent as production. (has / has not)
(ii) Workers in the _________ sector do not produce goods.
(tertiary / agricultural)
(iii) Most of the workers in the _________ sector enjoy job security.
(organised / unorganised)
(iv) A _________ proportion of labourers in India are working in the unorganised sector.
(large / small)
(v) Cotton is a _________ product and cloth is a _________ product.
(natural / manufactured)
(vi) The activities in primary, secondary and tertiary sectors are _________. (independent /interdependent)
Answer:
(i) has not
(ii) tertiary
(iii) organised
(iv) large
(v) natural
(vi) interdependent
2. Choose the most appropriate answer.
(a) The sectors are classified into public and private sector on the basis of:
(i) employment conditions
(ii) the nature of economic activity
(iii) ownership of enterprises
(iv) number of workers employed in the enterprise
Answer: (iii) ownership of enterprises
(b) Production of a commodity, mostly through the natural process, is an activity in ______________ sector.
(i) primary
(ii) secondary
(iii) tertiary
(iv) information technology
Answer: (i) primary
(c) GDP is the total value of _____________ produced during a particular year.
(i) all goods and services
(ii) all final goods and services
(iii) all intermediate goods and services
(iv) all intermediate and final goods and services
Answer: (ii) all final goods and services
(d) In terms of GDP the share of tertiary sector in 2003 is _________
(i) between 20 per cent to 30 per cent
(ii) between 30 per cent to 40 per cent
(iii) between 50 per cent to 60 per cent
(iv) 70 per cent
Answer: (iii) between 50 per cent to 60 per cent
3. Match the following:
4. Find the odd one out and say why. 
The percentage of workers in the unorganised sector in this city is 70%.
It is clear that while a larger portion of workers is working in the unorganized sector, the per capita earning of those in the organized sector is more. The government should encourage the entrepreneurs in the unorganized sector to change them into the organized sector. Moreover, government should introduce some incentives so that more industries could be opened up in the organized sector.
(i) Calculate the share of the three sectors in GDP for 1950 and 2000.
(i) Tourist guide, dhobi, tailor, potter
(ii) Teacher, doctor, vegetable vendor, lawyer
(iii) Postman, cobbler, soldier, police constable
(iv) MTNL, Indian Railways, Air India, SAHARA Airlines, All India Radio
Answer:
(i) Tourist guide
He is appointed by the government, while dhobi, tailor and potter belong to the private sector.
(ii) Vegetable vendor
His is the only profession that does not require formal education.
(iii) Cobbler
The rest are workers in the public sector, while his profession is part of the private sector.
(iv) SAHARA Airlines
It is a private enterprise, while the rest are government undertakings.
5. A research scholar looked at the working people in the city of Surat and found the following.
Complete the table. What is the percentage of workers in the unorganised sector in this city?
The percentage of workers in the unorganised sector in this city is 70%.
6. Do you think the classification of economic activities into primary, secondary and tertiary is useful? Explain how.
Answer: The classification of economic activities into primary, tertiary and secondary is useful on account of the information it provides on how and where the people of a country are employed. also, this helps in ascertaining to which sector of economic activity contributes more or less to the country’s GDP and per capita income. If the tertiary sector is developing much faster than the primary sector, then it implies that agriculture is depleting, and the government must take measures to rectify this. The knowledge that the agricultural profession is becoming unpopular or regressive can only come if we know which sector it belongs to. Hence it is necessary to classify economic activities into these there sectors for smooth economic administration and development.
7. For each of the sectors that we came across in this chapter why should one focus on employment and GDP? Could there be other issues that should be examined? Discuss.
Answer: For each of the sectors that we came across in this chapter, one should focus on employment and GDP because these determine the size of a country’s economy. A focus on employment and GDP helps determine two important things- per capita income and productivity. Hence, in each of the three sectors, employment rate and status as well as its contribution to the GDP help us understand how that particular sector is functioning and what needs to be done to initiate further growth in it.
Yes, the other issues which should be examined are –
• Balanced regional development
• Equality in income and wealth among the people of the country.
• How to eradicate poverty
• Modernization of technology
• Self-reliance of the country
• How to achieve surplus food production in the country.
9. How is the tertiary sector different from other sectors? Illustrate with a few examples.
Answer: The tertiary sector different from the other two sectors. This is because the other two sectors produce goods but, this sector does not produce goods by itself. But the activities under this sector help in the development of the primary and secondary sectors. These activities are an aid or support for the production process. For example, transport, communication, storage, banking, insurance, trade activities etc. For this reason, this sector is also known as the service sector.
10. What do you understand by disguised unemployment? Explain with an example each from the urban and rural areas.
Answer:
Disguised Unemployment is a kind of unemployment in which there are people who are visibly employed but are actually unemployed. This situation is also known as Hidden Unemployment. In such a situation more people are engaged in work than required.
For example:
• In rural areas, this type of unemployment is generally found in an agricultural sector like – in a family of 9 people all are engaged in the same agricultural plot. But if 4 people are withdrawn from it there will be no reduction in output. So, these 4 people are actually disguisedly employed.
• 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.
11. Distinguish between open unemployment and disguised unemployment.
• Open Unemployment
When a country’s labour force do not get opportunities for adequate employment, this situation is called open unemployment.
This type of unemployment is generally found in the industrial sector of our country. This is also found among the landless agricultural labourers in rural areas.
• Disguised unemployment
This is a kind of unemployment in which there are people who are visibly employed but actually they don’t have full employment. In such a situation more people are engaged in work than required.
This type of unemployment is generally found in an unorganized sector where either work is not constantly available or too many people are employed for the same work that does not require so many hands.
12. “Tertiary sector is not playing any significant role in the development of Indian economy.” Do you agree? Give reasons in support of your answer.
Answer:
No, I do not agree with the statement that the tertiary sector is not playing any significant role in the development of the Indian economy. The tertiary sector has contributed vastly to the Indian economy, especially in the last two decades. In the last decade, the field of information technology has grown, and consequently, the GDP share of the tertiary sector has grown from around 40% in 1973 to more than 50% in 2003.
13. Service sector in India employs two different kinds of people. Who are these?
Answer:
The service sector in India employs the following two different kinds of people. They are:
• The people involved in the services that may directly help in the production of
goods. For example, people involved in transportation, storage, communication,
finance etc.
• The people involved in such services that may not directly help in the production of goods e.g. teachers, doctors, barbers, cobblers lawyers etc. They may be termed as ancillary workers mean those who give services to the primary service providers.
14. Workers are exploited in the unorganised sector. Do you agree with this view? Give reasons in support of your answer.
Answer:
Yes, workers are exploited in the unorganized sector. This would be clear from the following points:
• There is no fixed number of working hours. The workers normally work 10 – 12 hours without paying overtime.
• They do not get other allowances apart from the daily wages.
• Government rules and regulations to protect the labourers are not followed there.
• There is no job security.
• Jobs are low paid the workers in this sector are generally illiterate, ignorant and unorganized. So they are not in a position to bargain or secure good wages.
• Being very poor they are always heavily in debt. So, they can be easily made to accept lower wages.
15. How are the activities in the economy classified on the basis of employment conditions?
Answer:
On the basis of employment conditions, the activities in the economy are classified into organized and unorganized sectors.
• Organized Sector This sector covers those enterprises which are registered by the government and have to follow its rules and regulations. For example, Reliance Industries Ltd., GAIL etc.
• Unorganized Sector It includes those small and scattered units which are largely outside the control of the government. Though there are rules and regulations these are never followed here. For example, casual workers in construction, shops etc. In this sector, there is no job security and the conditions of employment are also very tough.
16. Compare the employment conditions prevailing in the organised and unorganised sectors.
Answer:
The employment conditions prevailing in the organised and unorganised sectors are vastly different. The organised sector has companies registered with the government and hence, it offers job security, paid holidays, pensions, health and other benefits, fixed working hours and extra pay for overtime work. On the other hand, the unorganised sector is a host of opposites. There is no job security, no paid holidays or pensions on retirement, no benefits of provident fund or health insurance, unfixed working hours and no guarantee of safe work
environment.
17. Explain the objective of implementing the NREGA 2005.
Answer:
The objective of implementing the NREGA 2005 are:
• To increase the income and employment of people.
• Every state/region can develop tourism, regional craft, IT etc. for additional
employment.
• The central government made a law implementing the right to work in 200 districts.
• NREGA aims to provide employment of 100 days. If it fails to do so, it will give
unemployment allowances to the people.
20. Give a few examples of public sector activities and explain why the government has taken them up.
Answer:
A few examples of public sector activities are the provision of water, electricity and some modes of transport. The government has taken these up because water and power are needed by everyone. If the work of providing electricity and water is left to private enterprises, the latter might exploit this opportunity and sell these at rates which the masses cannot afford. Hence, to ensure that basic amenities like water and power are available for all, the government supplies these at low and affordable rates.
21. Explain how the public sector contributes to the economic development of a nation.
Answer:
In the following ways Public sector contributes to the economic development of a nation:
• It promotes rapid economic development through the creation and expansion of
infrastructure.
• It creates employment opportunities.
• It generates financial resources for development.
• It is ensuring equality of income, wealth and thus, a balanced regional development.
• It encourages the development of small, medium and cottage industries.
• It ensures easy availability of goods at moderate rates.
• Contributes to community development i.e. to the Human Development Index (HDI) via health and educational services.
22. The workers in the unorganised sector need protection on the following issues: wages, safety and health. Explain with examples.
Answer:
The workers in the unorganised sector need protection:→ Wages: Labourers who are employed as a repair person, vendor etc. do not have fixed income. They nearly managed to earn their living. They are not employed all through the year.
• Safety: Workers in the unorganized sector are not provided with safe drinking water or a clean environment. Eg., Working in mining, chemical industries is hazardous.
• Health: Leave not granted in case of sickness. Medical facilities are not offered, Eg., Construction workers.
23. A study in Ahmedabad found that out of 15,00,000 workers in the city, 11,00,000 worked in the unorganised sector. The total income of the city in this year (1997-1998) was Rs 60,000 million. Out of this Rs 32,000 million was generated in the organised sector. Present this data as a table. What kind of ways should be thought of for generating more employment in the city?
24. The following table gives the GDP in Rupees (Crores) by the three sectors:
(ii) Show the data as a bar diagram similar to Graph 2 in the chapter.
(iii) What conclusions can we draw from the bar graph?
Answer:
(i) In 1950, primary sector = 57.97%, secondary sector = 13.77%, tertiary sector = 28.26% In 2000,
primary sector = 27.33%, secondary sector = 24.37%, tertiary sector = 48.30%(ii) 
(iii) We can draw the conclusion that the share of the tertiary sector in the GDP has almost doubled, while that of the primary sector has almost halved. The secondary sector has grown by about 10% in the last five years.
* Important Questions and Answers
1.What is a static and dynamic economy?
Answer: When there are no certain changes felt in an economy are referred to as a static economy. For example, before independence economic factors like
population size, capital availability, production method, and the type of organization remain unchanged and when there is any drastic or continuous change in the
economy takes place then it is known as a dynamic
economy. After independence, economic factors such as
population size, capital availability, production method,
and the type of organization changes from time to time.
2.Which sector contributes to maximum GDP after 2015?
Answer: The tertiary or service sector contributed the highest GDP after 2015 and till now overpowers the primary sector. In 2018-19, the tertiary sector
contributed 54.3% of the nation's GDP. This sector includes public services, trade, transport, hotels, tourism, communication, financial services, real estate and professional services, broadcasting services, etc. Due to the development of the economy, the focus is shifted to tertiary sectors from primary and secondary sectors. Nation’s economy grows and develops more due to the service sectors.
3.What is disguised unemployment?
Answer: The phenomenon where more people are employed for small work than the actual people required is known as disguised unemployment. It occurs
when the workers have no jobs or work redundantly resulting in zero productivity of the workforce. This problem mostly occurs in developed countries with more
population and generates a surplus labour force. There are three types of disguised unemployment Underemployment – people who seek full-time jobs but are involved in part-time work.
Sick or disabled- people who are sick and partially disable who can do jobs but are getting temporary and no jobs due to their physical problems.
No longer looking for jobs- this includes the person who is literate and is searching for a job but later considers themselves unemployed due to the unemployment rate.
4.What are the problems faced in the agricultural sectors?
Answer: Various problems faced by the farmers are:
● minimal prices of crops
● unirrigated land
● burden of debt
● insufficient water for irrigation
● no work in the offseason
● Lack of education for the development of agriculture.
4.What is the GDP of different sectors in 2020?
Answer: In 2020, the tertiary sector provided a GDP of 53.66% whereas the primary sector contributed less than 16% and the secondary sector contributed more than 31% GDP.
6.Why is NREGA 2005 otherwise known as the right to work?
Answer: According to NREGA 2005, the Central Government of India implemented a law of the right to work in 200 districts of the country, and the remaining 130 districts of the rural areas added to this act from 1st April 2008. If
the government fails to provide work to the unemployed rural people then it will provide unemployment allowances.
7.In what ways employment can be increased in urban areas?
Answer: Employment in urban areas can be increased with the increase of education, health services, vocational training and awareness programs, improvement of tertiary activities, providing cheap credits, introducing social safety programs like NREGA, NRLM, etc.
8.Why are agriculture and unorganized sector activity?
Answer: Agriculture is referred to as an unorganized sector activity because:
● Most farmers are low paid.
● The agricultural sector faces an underemployment problem.
● During the irrigation period, attention is paid towards agricultural workers of different services, training, or programs by the government or else not.
● Farmers are dependent on loans and money lenders as they are low paid and the cost of crops is low.
9.What are the different types of unemployment in India?
Answer:
● Seasonal unemployment happens for a certain season in a year.
● Disguised unemployment where more people work than needed.
● Structural unemployment where the mismatch of jobs and skills of workers happens in the market.
● Technological unemployment where the job is lost due to the technology change.
● Frictional unemployment is the lag of time between searching and switching of the job by the individual.
● Cyclical unemployment happens due the profit and loss in business.
10.How does the public sector contribute to the economic development of the nation?
Answer: Public sector contributes to the economic development of the country in the following ways:
● Different services such as shipping, railways, metro, and aeroplane facilities are undertaken by the government to ensure that all these facilities are
● Government raises money through taxes and other services like railways, roads, etc for the betterment of the people of India.
● Government buys crops at a nominal price from farmers and sells them to consumers at a very fair price through ration shops. In this way, the government helps both the farmers and the customers.
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