Chapter 2: Sectors of the Indian economy

Question 1

What is the primary sector also known as

Answer 1

The agriculture and related sector

Question 2

What qualifies to be in the primary sector?

Answer 2

When we produce a good by exploiting natural resources, it is an activity of the primary sector. eg agriculture, dairy, fishing and forestry

Question 3

What qualifies to be in the secondary sector?

Answer 3

Covers activities in which natural products are changed into other forms through ways of manufacturing. eg sugarcane as raw material and make sugar

Question 4

What is the secondary sector also known as

Answer 4

industrial sector

Question 5

What is the tertiary sector also known as

Answer 5

service sector

Question 6

What qualifies to be in the tertiary sector?

Answer 6

These are the activities that help in the development of the primary & secondary sector, they don’t themselves produce good but they are an aid and support to the production process. eg transport, storage, trade and banking

Question 7

Why are only the final goods and services counted?

Answer 7

Intermediate goods are used up in producing final goods and services. The value of the final goods already includes the value of all the intermediate goods used in making it.

Question 8

Full form of GDP

Answer 8

Gross Domestic Product

Question 9

GDP

Answer 9

• It is the value of all final goods and services produced within a country during a particular year, it shows how big an economy is
• This task is taken up by the central government ministry

Question 10

What is a sector?

Answer 10

Classifying the activities into groups with some common characteristics is called a sector

Question 11

What are economic activities?

Answer 11

Activities which help to earn income or livelihood e.g. producing goods and services

Question 12

Why Tertiary sector is gaining importance?

Answer 12

• Basic services like hospital, courts and transport are required in a country
• The development of the primary sector and the secondary sector brought demand for tertiary activities
• More demand for such services as income levels rise
• The services on technology and communication have gotten more essential thus opening more job opportunities

Question 13

Why didn’t a similar shift out of primary sector happen in case of employment?

Answer 13

• Not enough jobs were created in the secondary and tertiary sectors
• The production of goods went up by more than nine times during the period, employment in the industry went up by around three times
• The production in the service sector rose by 14 times, employment in the service sector rose only around five times.

Question 14

How is the tertiary sector not growing equally?

Answer 14

At one end there are a limited number of services that employ highly skilled and educated workers, such as managers, lawyers, accountants, etc. At the other end, there are a very large number of workers engaged in services, such as small shopkeepers, repair persons, transport persons.

Question 15

Underemployment

Answer 15

• People employed are more than required, production will not be affected if few people will be removed.
• Labour efforts gets divided. Each one is doing the work but no one is fully employed, this is the situation of underemployment.
• Hidden unemployment, Disguised unemployment.

Question 16

Why should we worry about underemployment

Answer 16

We should worry about underemployment as due to this, the earning capacity of a person is reduced, resulting in a poor standard of living. Ultimately this can also lead to poverty.

Question 17

How to create more employment options

Answer 17

• Construction of dams and canals
• Investment in transport and storage
• Easy availability of credit
• Promote and locate industries and services
• Opening up of schools and hospitals in rural areas
• Tourism industry to be promoted
• Right to work-NREGA,2005

Question 18

MGNREGA 2005

Answer 18

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 to do so, it will provide unemployment allowances to the people. This implemented in 625 districts of India

Question 19

Organised Sector

Answer 19

• The terms of employment are regular and therefore, people have assured work
• They are registered by the government and have to follow its rules and regulations
• Workers in the organised sector enjoy security of employment
• 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 get paid leave, payment during holidays, provident fund, pensions etc
• They are supposed to get medical benefits and, under the laws, the factory manager has to ensure facilities like drinking water and a safe working environment.

Question 20

Unorganised sector

Answer 20

• The unorganised sector is characterised by small and scattered units which are largely outside the control of the government
• There are rules and regulations but these are not followed
• Jobs here are low-paid and often not regular
• There is no provision for overtime, paid leave, holidays, leave due to sickness etc
• Employment is not secure. People can be asked to leave without any reason
• This sector includes a large number of people who are employed on their own doing small jobs.

Question 21

Why do the workers who work under the unorganised sector need protection?

Answer 21

• Less job opportunities in organised sector
• Many organised enterprises are working on the pattern of unorganised sector
• People losing their jobs in organised sector

Question 22

How to protect the workers working under the unorganised sector?

Answer 22

• Vulnerable People in rural areas needs too be protected by providing them timely delivery of seeds, agriculture inputs, credit and storage and marketing outlets
• In urban areas, government support for raw material and marketing of output
• Removing social discrimination for social development of the country as most of the SCs/STs/Dalits working in unorganised sector.

Question 23

Public Sector

Answer 23

• In the public sector, the government own smost of the assets and provides all the services
• Railways or post office is an example of the public sector
• The purpose of the public sector is not just to earn profits. But also, welfareof the people
• Governments raise money through taxes and other ways to meet expenses on the services rendered by it

Question 24

Private Sector

Answer 24

• In the private sector, ownership of assets and delivery of services is in the hands of private individuals or companies
• Companies like Tata Iron and Steel Company Limited (TISCO) or Reliance Industries Limited (RIL) are privately owned
• Activities in the private sector are guided by the motive to earn profits
• To get such services we have to pay money to these individuals and companies.

Question 25

Why is the public sector essential?

Answer 25

• There are several things needed by the society as a whole but which the private sector will not provide at a reasonable cost
• Beyond the capacity of the private sector (money)
• Task of collecting money from people not easy
• Even if they do provide these things they would charge a high rate for their use
• Examples are construction of roads, bridges, railways etc
• Thus, governments have to undertake such heavy spending and ensure that these facilities are available for everyone

Question 26

Role of Public sector in economic development of a nation

Answer 26

• Government support requires to encourage private sector. Example-Electricity
• Ensures food security and supports both farmers as well as consumers
• Running proper schools and providing quality education, particularly elementary education
• Better healthcare facilities
• Availability of safe drinking water, housing facilities for the poor and food and nutrition
• To take care of the poorest and most ignored regions of the country