CH 2

Sectors of Indian Economy

Q1. Why do you think NREGA 2005 is referred to as right to work?
आप को क्ोों लगता है कक एनआरईजीए 2005 को काम करने का अकिकार कहा जाता है ?
Q2. Compare the changes in India with the pattern that was observed for developed countries.
वववववव ववववव वव ववव वववव वव वववववव वव ववव वववव ववव ववववववव वव
ववववव ववववव
Q3. Give some examples of activities of unorganized sector?
ववववववव ववववववव वव वववववववववव वव ववव वववववव ववव?
Q4. In what ways can employment be increased in rural areas?
ववववववव वववववव ववव वववववव ववव वववववव ववव वववव वव?
Q5. How is the tertiary sector different from other sectors of Indian economy?
वववववव ववववववव वववववव वववववववववववव वव वववव ववववववववव वव ववव
वववव वव ?
Q6. Distinguish between open unemployment and disguised employment?
वववव ववववववववव वव वववव ववव वववववव वव ववव वववव बताइए ?
Q7. How are workers exploited in the unorganized sector? Give reasons in support of your answer?
ववववववव ववववववव ववव वववववववव वव वववव वववव वववव वववव वव ?
वववव ववववव वव वववववव ववव वववव ववव?
Q8. How can the workers of unorganized sector be protected?
ववववववव ववववववव वव वववववववव वव वववव वववववववव वववव वव
वववव वव?
Q9. Explain the objectives of NREGA 2005?
वववववववव 2005 वव वववववववववव वव वववववववव वववव?
Q10. What is the rationale before naming the primary sector as primary?
वववववववव ववववववव वव वववववववव वव ववव ववव ववव वववव वव वववव
वववव वववव वव?
Q11. Why does disguised unemployment not help to enhance the productivity of the country?
वववव ववव ववववववववव ववव वव ववववववववव वववववव ववव ववव ववववव
वववव वववव वव?
Q12. Do you agree that agriculture in India takes place in the unorganized sector? Give five points.
वववव वव वववव ववव वव वववव ववव वववव ववववववव ववववववव ववव
वववव वव? वववव कारण वववव
Q13. Explain any five reasons for the growth of service sector in India?
वववव ववव वववव ववववववव वव ववववव वव ववव वव ववव वववव वववव ववववव?
Q14. What steps should be taken to increase employment in the country?
ववव ववव वववववव वववववव वव ववव वववव ववव वववव वववव ववववव?
Q15. Explain how public sector contributes to the development of India?
वववववव वव वववव ववववववववव ववववववव वववव वव ववववव ववव वववववव
वववव वव?

ANSWERS
A1. NREGA, 2005 is a law which is implemented by government of India in 200 districts of
India. It is referred to as ‘Right to Work’ because it guarantees 100 days of employment in a year
by the government to all those who can work and in case of failure unemployment allowances
will be given.

A2. In India both the secondary and tertiary sectors are increasing at the expense of the primary
sector. But the tertiary sector is increasing more, in contrast of it in the developed countries the
secondary sector increases more. India also needs to expand its secondary sector more to be in
line with the developed nations.

A3. Examples of Unorganized Sector:-

1) Shop keeping
2) Rickshaw pulling
3) Hotel Management
4) Domestic workers
5) Farming
6) Laboring

A4. The steps that should he taken to increase employment can he

(i) Education and health sector can create massive employment in urban as well as rural areas.
Proper planning needs to strengthen these sectors.
Vocational training also creates massive employment.
(ii) Allied activities like horticulture, pisciculture should be promoted through financial
assistance, awareness programmes which will create employment in rural areas.
(iii) Promotion of small scale industries and self-help groups will create employment in urban
areas.
(iv) Tertiary activities like inclusive banking, promotion of market etc can penetrate service
sector to rural areas and induce mobilisation and growth in Primary sector and ultimately create
employment.
(v) Cheap credit for creation of new enterprises and encouraging foreign investment can also
create employment in both rural and urban areas.
(vi) Social safety programmes like NREGA, NRLM (National Rural Livelihood Mission) etc
generate massive employment in rural and urban areas respectively.

A5. The tertiary sector different from other two sectors. This is because 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 service sector.

A6. The major differences between Open unemployment and Disguised unemployment are as
under:
Open Unemployment Disguised unemployment
(i) Open employment refers to the (i) Disguised unemployment refers to the situation in which
situation in which an individual has people work at a place where there is no more people are
no job and unable to earn his requird. The situation in which people are apparently
livelihood. working but all of them are made to work less then their
potential.
(ii) This unemployment is clearly
(ii) This unemployment is hidden.
visible.
(ii) People's unemployment won't affect the production of
(iii) People's unemployment will
goods and services because here already more than
affect the production of goods and
requirement of people are working so if they leave that's not
services in an economy.
a big deal.

A7. Yes workers are exploited in the unorganised sector due to the following reasons:
1. In the unorganised sector workers are employed on a daily basis and get only wages.
Hence they don’t have job security and their working conditions are poor.
2. Workers are made to work for long hours and are not paid for overtime.
3. The workers are largely poor. They are not in a position to argue with the employer.
Therefore the employer easily exploits them.

A8.The workers in the unorganised sector can be protected by adopting the following means:
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.
(iv) Government can frame new laws which can provide provision for overtime, paid leave, leave
due to sickness, etc.

A9. The major objectives of implementing NREGA 2005 are:

Its main objective was to provide employment to the unemployed.
According to NREGA, all those who are able to and are in need of work would be 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 people.

A10. The Primary sector includes activities related to agriculture, forestry, mining, quarrying and
fishing. These activities form the base for all other products that are manufactured. An example
is of a carpenter making wooden furniture.
For this Secondary activity, he will need wood as a raw material, which is obtained through the
forestry activity. Similarly, jeans are made from cotton, which is provided by agriculture. This is
the reason why the word ‘Primary’ is used for these activities.

A11. Disguised unemployment does not help to enhance the productivity of the country because
these additional workers are actually not required for the work, without they being there the
productivity would be the same, they are not employed instead as the name suggests they are
disguised employees. We can see a good example of disguised unemployment mostly in family
business where additional members of the family keep joining the home business but do not
productively add to the business because they join it for the convenience sake and not on the
basis of need.
A12. Yes. Agriculture in India is an activity of the unorganised sector.
(i) Most of the workers working in agriculture are ill paid.
(ii) Agriculture sector faces the problem of under employment.
(iii) Most of the workers working in agriculture are employed only during harvesting and sowing
season.
(iv) Most of the farmers are dependent on moneylenders and relatives for their loan
requirements.

A13. Tertiary sector in India has been growing rapidly for a number of reasons :
(i) In a developing country, the government has to take the responsibility for the provision of
basic services for example, hospitals, educational institutions, post and telegraph services, police
stations, courts, village administrative offices, municipal corporations, defence, transport, banks,
insurance companies etc.
(ii) The development of agriculture and industry leads to the development of services such as
trade, transport, storage etc. Greater the development of the primary and secondary sectors, more
would be the demand for such services.
(iii) As income levels rise, certain sections of people start demanding many more services, such
as eating out, tourism, shopping, private hospitals; private schools, professional training etc. This
change was quite sharp in cities, especially in big cities.
(iv) Over the past decade or so, certain new services, such as those based on information and
communication technology have become important and essential.
(v) Government policy of privatisation has also led to growth of this sector.
(vi) A large number of workers are engaged in services, such as small shopkeepers, repair
persons, transport persons etc.
(vii) However, the entire sector has not grown. Large numbers of people engaged as construction
workers, maid, peons, small shopkeepers etc. do not find any change in their life.

A14. The various steps taken to increase employment are as under:

1) Increase training and education availability to minorities.
2) Set up job centers to distribute information about jobs to citizens -- nobody will start working
if they don 't know the job is available.
3) Partnerships with local businesses to offer a certain number of jobs to disadvantaged people.
4.) Investing more in tourism and creating more employment in this sector .
5.) More employment in health and medical field.

A15. Rapid industrialization of a developing country like India depends upon the presence and
creation of more basic infrastructure such as power, transportation, communication, irrigation,
education, technical training etc. Most of the public sector enterprises were set-up in these
industries. The growth of the public sector in the field of iron and steel, petroleum and natural
gas, coal, heavy engineering, heavy electrical machinery etc has created a strong industrial base.
Some public enterprises like STC and MMTC have contributed to export products from India
substantially.
To reduce regional disparities in industrial development, public sector industries have been set-
up in undeveloped and underdeveloped regions of the country. All these activities contribute to
the economic development of India.
 Sectors of Indian Economy
Q1. Describe the diverse ways in which economic activities can be classified?
उन किकिन्न तरीकोों का िणणन करें कजनमें आकथण क गकतकिकियोों को िगीकृत ककया जा सकता है ?
Q2. What is Tertiary sector?
तृतीयक क्षे त्र क्ा है ?
Q3. Define NSSO?
एनएसएसओ को पररिाकित करें ?
Q4. Write a brief note on GDP?
सकल घरे लू उत्पाद पर एक सोंकक्षप्त नोट कलखें?
Q5. Which group of activities is directly associated with the natural resources?
गकतकिकियोों का कौनसा समू ह सीिे प्राकृकतक सोंसािनोों से जु डा हुआ है ?
Q6. Give an example to show the interdependence of the various sectors?
किकिन्न क्षे त्रोों के परस्पर कनिण रता कदखाने के कलए एक उदाहरण दें ?
Q7. Write a brief note on the employment of people in different sectors of the economy?
अथण व्यिस्था के किकिन्न क्षेत्रोों में लोगोों के रोजगार पर एक सोंकक्षप्त नोट कलखें?
Q8. What is under employment?
बेरोजगारी क्ा है?
Q9. What is bank credit?
बैंक क्रेकिट क्ा है ?
Q10. Explain the various sectors of economy with example?
उदाहरण के साथ अथणव्यिस्था के किकिन्न क्षे त्रोों की व्याख्या करें ?
Q11. Explain the several types of unemployment with example?
उदाहरण के साथ कई प्रकार की बेरोजगारी समझाओ?
Q12. Distinguish between private and public sectors of the economy.
अथण व्यिस्था के कनजी और सािणजाकनक क्षेत्रोों के बीच अोंतर करें ।
Q13. Differentiate between organized and unorganized sector?
सोंगकित और असोंगकित क्षे त्र के बीच अोंतर करें ?
Q14. How can the rights of the workers in unorganized sector be protected?
असोंगकित क्षे त्र में श्रकमकोों के अकिकारोों को कैसे सोंरकक्षत ककया जा सकता है ?
Q15. What are the profit motive of the various sectors of the economy?
अथण व्यिस्था के किकिन्न क्षे त्रोों के लाि उद्दे श्य क्ा हैं ?

ANSWERS

A1. In terms of the national economy, a basic classification of economic sectors, broken into four
basic sectors is used: Raw Materials (Primary Sector) Manufacturing and Industry (Secondary
Sector) Service Sector (Tertiary Sector)
A2. The tertiary sector consists of industries which provide a service, such as transport and
finance.
A3. NSSO stands for national sample survey organization. It is the organization under the
ministry of statistics of the government of India.
A4. Gross Domestic Product (GDP) is a monetary measure of the market value of all the final
goods and services produced in a period of time, often yearly or quarterly.
A5.Primary activities such as farming, agriculture, fish breeding etc.
A6. The various sectors of the economy i.e. the primary, secondary and the tertiary sectors are
interdependent upon each other and one cannot function in the absence of the other.

The goods produced in the primary sector needs to be processed by the secondary sector and then
distributed in the market and brought to the end consumers by the tertiary sector.

For example: Cotton is produced by the primary sector, processed and made into cloth by the
secondary sector, brought to the market by means of distributions system and transportation by
the tertiary sector. Herein, if the primary sector is not present, the secondary sector will not get
any raw material for processing or will the tertiary sector can thrive in the absence for
transporting such items.
A7. The employment in the three sectors of the economy can be explained as follows :-
Around 60% of the people of the nation are employed in primary sector, mainly agriculture
producing only 25% of GDP. The secondary sector share has increased in last 30 years to around
16%, The tertiary sector has seen a remarkable improvement in its employment in recent years.
Around 25% of the people are employed in tertiary sector.75% of the output is produced by
secondary and tertiary sector only.
A8. The condition in which people in a labor force are employed at less than full-time or regular
jobs or at jobs inadequate with respect to their training or economic needs.
A9. Bank credit is an agreement between banks and borrowers where banks trust a borrower to
repay funds plus interest for a loan, credit card or line of credit at a later date. It is money banks
lend or have already lent to customers. Bank credit is the total borrowing capacity banks provide
to borrowers.
A10. Human activities which generate income are known as economic activities.
Economic activities are broadly grouped into primary, secondary, tertiary activities. Higher
services under tertiary activities are again classified into quaternary and quandary activities.
Primary activities are directly dependent on environment as these refer to utilization of earth’s
resources such as land, water, vegetation, building materials and minerals. It, thus includes,
hunting and gathering, pastoral activities, fishing, forestry, agriculture, and mining and
quarrying.
Secondary activities add value to natural resources by transforming raw materials into valuable
products. Secondary activities, therefore, are concerned with manufacturing, processing
and construction (infrastructure) industries.
Tertiary activities include both production and exchange. The production involves
the ‘provision’ of services that are ‘consumed. Exchange, involves trade, transport and
communication facilities that are used to overcome distance.
A11. In economics unemployment is a situation whereby in a country or society there are a
number of people within the working age(might differ between countries) who are able and
willing to work but cannot find work at the current wage level. Types of unemployment include:

 Frictional Unemployment: There is always some level of unemployment that prevail in

the country or economy among workers who have voluntarily quit their previous jobs and
are searching for new better ones. In this case the amount of time spent in transition from
the current to the next job, even if it's an hour the individual is considered to be
unemployed. Also those that are looking for employment for the first time that are not
able to get one immediately because of lack of perfect information about availability of
jobs and lack of perfect mobility on the path of workers. In such a case most workers
spend some time engaging in job search, just as most firms spend time searching for a
new person to fill a job opening.
 Structural Unemployment: This unemployment arise as a result of mismatch between the
job skills of workers and the requirement of jobs. Shifting patterns in the demand for
various commodities of industries is also responsible for structural unemployment.
Structural unemployment tends to last for longer periods because workers need time to
learn and acquire the new skill.
 Cyclical Unemployment : This exist as a result of cyclical fluctuations in the economy.
When the economy moves into recession, many industries find their sales falling and as a
result cut down their production, as production falls they start laying off workers. This
type of unemployment is due to the fact that total effective demand of the community is
not sufficient enough to absorb the entire production of goods that can be produced with
the available stock of capital.
 Seasonal Unemployment: This refers to unemployment due to factors such as weather
variations or other calendar related event that affect some type of works. For example
most people who engage in agricultural activities will be in active employment between
the planting and harvesting period and will remain idle after harvesting period.

A12. The private sector comprises of business which is owned, managed and controlled by
individuals. On the contrary, public sector comprises of various business enterprises owned and
managed by Government.

A13.

Basis for Comparison Organised Sector Unorganised Sector

The sector in which the employment
Meaning terms are fixed and employees have
assured work is Organised sector.
Various acts like Factories Act,
Governed by
Bonus Act, PF Act, Minimum Wages
The sector that comprises of small
scale emterprises or units and are
not registered with the government.
Not governed by any act.
Basis for Comparison Organised Sector Unorganised Sector
Act etc.
Government rules Strictly followed Not followed
Remuneration Regular monthly salary. Daily wages
Job security Yes No
Working hours Fixed Not fixed
Workers are paid remuneration for
Overtime No provision for overtime.
overtime.
Less than the salary prescribed by
Salary of workers As prescribed by the government.
the government.
Contribution to
Provident fund by the Yes No
employer
Increment in salary Once in a while Rarely
Employees get add-on benefits like
Benefits and
medical facilities, pension, leave Not provided.
perquisites
travel compensation, etc.

A14. A8.The workers in the unorganised sector can be protected by adopting the following
means:

i. Government can fix the minimum wages rate and working hours.
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.
(iv) Government can frame new laws which can provide provision for overtime, paid
leave, leave due to sickness, etc.
A15. The different profit motives are as under:
1. Private sector: Maximum Profit Accumulation
2. Public Sector: Public Welfare not profit accumulation is the main motive.