SECTOR
OF THE INDIAN ECONOMY
Chapter- 2
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)
Answer: has not.
(ii) Workers in the _________ sector do not produce goods.
(tertiary / agricultural)
Answer: tertiary
(iii) Most of the workers in the _________ sector enjoy job security.
(organised / unorganised)
Answer: organised
(iv) A _________ proportion of labourers in India are working in the unorganised
sector. (large / small)
Answer: large
(v) Cotton is a _________ product and cloth is a manufactured product.
[natural /manufactured]
Answer: natural
(vi) The activities in primary, secondary and tertiary sectors are_________
[independent / interdependent]
Answer: 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 2013-14 is between
_________ per cent.
(i) 20 to 30
(ii) 30 to 40
(iii) 50 to 60
(iv) 60 to 70
Answer: (iii) 50 to 60
4. Find the odd one out and say why.
Answer:
• Tourist guide, dhobi, tailor, potter.
• Teacher, doctor, vegetable vendor, lawyer.
• Postman, cobbler, soldier, police constable.
• MTNL, Indian Railways, Air India, Sahara Airlines, All India Radio.
• Potter, because only the potter relates to the secondary sector.
• Vegetable vendor, since only this directly helps in the production of goods.
• Cobbler because the only cobbler falls in the private sector.
• Sahara Airlines, as this is only a private sector company in the group.
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, secondary, and tertiary sectors is helpful as mentioned below :
• it provides information on how and where people in a country are recruited. For example, in India in 2000, the primary sector accounted for about 60 per cent of employment, higher than other sectors.
• It helps to ascertain which sector of economic activity contributes more or less to the country’s GDP and per capita income.
• If the tertiary sector is developing faster than the primary sector, it means that agriculture is in decline and the government must take measures to correct this.
• The knowledge that the agricultural profession has become unpopular or reactionary can only come if we know to which sector it belongs.
• It provides us with information about the status of recruitment in various sectors. In India, for example, the primary sector is facing a pseudo-unemployment problem. In this case, more people are employed and even if some were removed, production would not be affected.
• It provides us with information about progress in various areas. For example, the importance of the third sector has increased due to the advent of various factors required for basic services and information technology services.
In view of the above factors, economic activities need to be classified into three 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 which should be
examined? Discuss.
Answer:
(1) For each sector, we focus on employment and GDP for the following reasons:
To find out the number of people employed in that sector. For example, in 2000, the share of the primary sector in recruitment was higher than that of the secondary and tertiary sectors.
To know the share of each sector in GDP. For example, in 2000, the share of the tertiary sector in GDP was higher than that of the agricultural sector and the secondary sector.
By focusing on GDP and employment, we can make decisions about creating new employment opportunities in various sectors and take necessary steps accordingly.
We find out the conditions of employment for workers like in the unorganized sector and take necessary steps to improve their conditions. so that workers are not exploited.
(2) Focus should be laid on other issues such as conditions of work, profit motive, efficiency, public welfare, environmentally friendly.
• Conditions of work should be in the favour of workers.
• The employment should be regular and the employer should follow various laws such as Factories Act, Minimum Wages Act etc.
• The production must be for the welfare of the people who should not be exploited by raising prices or creating a scarcity of goods in the market. Thus, such issues must be examined while discussing the role of different sectors in the economy of the country.
8. Make a long list of all kinds of work that you find adults around you doing for a
living. In what way can you classify them? Explain your choice.
Answer:
9. How is the tertiary sector different from other sectors? Illustrate with a few
examples.
Answer: Section III differs from other sections as follows:
• Tertiary sector activities support the development of the primary and secondary sectors.
• These activities do not, by themselves, produce a good, but they are an aid or support to the production process. For example, transportation systems help move goods from factories to markets for sale or storage in warehouses.
• It provides businesses with telephones and other equipment for communication. Banks provide money to support production and trade.
• Thus, transportation, storage, and communication are not tertiary activities. The primary sector, on the other hand, forms the basis of all the products we subsequently manufacture. Minerals and ores are natural materials that are converted into other forms by manufacturing. Sugar is made from corn.
10. What do you understand by disguised unemployment? Explain with an example
each from the urban and rural areas.
Answer: Pseudo unemployment is a type of unemployment where there are people who are visibly employed but are actually unemployed. This situation is also known as hidden unemployment. In such situations, more people are employed than necessary.
For example, in rural areas, this type of unemployment is usually found in the agricultural sector ie – in a family of 9 people everyone is employed on the same agricultural land. But if 4 people are withdrawn from it, there will be no reduction in production. Therefore, these 4 people are actually recruited in disguise.
In urban areas, this type of unemployment is mostly seen in the service sector such as a family where all members are employed in a small shop or small business that can be run by a small number of people.
11. Distinguish between open unemployment and disguised unemployment.
Answer: Pseudo unemployment is a type of unemployment where there are people who are visibly employed but are actually unemployed. This situation is also known as hidden unemployment. In such situations, more people are employed than necessary.
For example, in rural areas, this type of unemployment is usually found in the agricultural sector ie – in a family of 9 people everyone is employed on the same agricultural land. But if 4 people are withdrawn from it, there will be no reduction in production. Therefore, these 4 people are actually recruited in disguise.
In urban areas, this type of unemployment is mostly seen in the service sector such as a family where all members are employed in a small shop or small business that can be run by a small number of people.
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:
"The tertiary sector has not played a significant role in the development of the Indian economy" is partially correct for the following reasons:
The share of the third sector in terms of employment has not increased in proportion to its output growth. In 2000, manufacturing in the service sector grew 11 times, while employment has grown less than threefold. Therefore, more than half of the country's workers are still working in the primary sector.
New services based on information technology are becoming important, but not all services in the service sector are growing well. At one end there are highly skilled and educated workers but at the other end, there are substantial numbers of workers engaged in services such as small shopkeepers, maintenance firemen, and transport persons. These individuals somehow manage to earn a living and yet they perform these services because there are no alternative opportunities for work available to them. Such persons can not play any important role in the development of the Indian economy. It is this part of service sector that is not growing in importance.
13. Service sector in India employs two different kinds of people. Who are these?
Answer:
The following two different types of people are employed in the service sector in India. They are:
(a) People involved in services that can directly assist in the production of goods. For example, people involved in transportation, savings, communication, finance, etc.
(b) Persons involved in services that may not directly assist in the production of goods such as teachers, doctors, barbers, barbers, lawyers, etc. They may be called ancillary workers i.e. those who provide services to 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 will be evident from the following:
1. There is no set number of working hours. Workers typically work 10-12 hours unpaid.
2. They receive no allowances other than daily wages.
3. Government rules and regulations are not followed there to protect the workers.
4. No job security.
5. Jobs are low paid Workers in this sector are generally illiterate, ignorant and unorganized. So they are not in a position to bargain or secure good wages.
6. Being very poor, they are always heavily in debt. therefore, they can easily be prepared to accept lower wages.
15. How are the activities in the economy classified on the basis of employment
conditions?
Answer:
Based on employment status, activities in the economy are classified into organized and unorganized sectors.
Organized Sector This sector covers those industries which are registered by the government and are required to follow its rules and regulations. For example, Reliance Industries Limited, GAIL etc.
Unorganized Sector It includes those small and dispersed groups which are mainly outside the control of the government. Although there are rules and regulations but these are never followed here. For example, casual workers in construction, shops, etc. There is no job security in this field and the conditions of employment are very difficult.
16. Compare the employment conditions prevailing in the organised and unorganised
sectors.
Answer: The recruitment scenario existing in the organized and unorganized sectors is quite different. The organized sector consists of companies registered with the government and therefore, provides job security, paid holidays, pensions, health and other benefits, scheduled working hours and additional pay for overtime work. The unorganized sector, on the other hand, is much the opposite. No job security, no paid time off or pension in retirement, no future fund or health insurance benefits, no guarantee of indefinite working hours and a safe working environment.
17. Explain the objective of implementing the NREGA 2005.
Answer:
• The NREGA 2005 i.e. the National Rural Employment Guarantee Act 2005. The purpose of implementation is to implement the right to work.
• The law will be implemented in 200 districts.
• Under the Act, the government guarantees 100 days of employment in a year to those who are able, and need, to work.
• If the government fails in its duty to provide employment, it will provide unemployment allowance to the people.
• Priority will be given under this Act to the types of works that will help in increasing the production from the land in the future.
18. Using examples from your area compare and contrast that activities and functions
of private and public sectors.
Answer:
20. Give a few examples of public sector activities and explain why the government
has taken them up.
Answer:
Examples are:
Railways: The Government has adopted it for the following reasons –
1. Only the government can invest large amounts of money in public projects with long gestation periods.
2. To secure and provide transportation at cheap rates.
NTPC: The government has accepted it for supplying electricity at a rate lower than the actual cost of production. Its purpose is to protect and encourage the private sector, especially small enterprises.
AIIMS: The main objective of the government was to provide quality health services at reasonably affordable rates.
21. Explain how 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 supports rapid economic growth through the creation and expansion of infrastructure.
It creates recruitment opportunities.
It creates financial resources for development.
It has ensured the balance of income, wealth and thus a balanced regional development.
It stimulates the development of small, medium and cottage industries.
It ensures easy availability of products at medium rates.
Contributes to collective development ie through health and education services in the Human Development Index (HDI).
22. The workers in the unorganised sector need protection on the following issues :
wages, safety and health. Explain with examples.
Answer: Workers in the unorganized sector need protection on: wages, safety and health. In the construction sector, workers are employed on a daily basis. therefore, they have no job security. Here, wages also differ from time to time. Consequently, the government has established a minimum wage law to protect such workers from economic exploitation.
The same problem exists with miners working for private mining companies. Their safety is secondary to company profits, and as a consequence, many miners suffer serious injuries (and many times, even death) due to inadequate safety equipment and regulations. Governments in most nations now have stringent regulations for private enterprises to ensure worker safety.
Most companies in the unorganized sector do not provide health insurance to their employees. some of which may be associated with hazardous factory production which may harm worker health in the long term. These workers need to be protected against the tyranny of the employer, and it is here that the government steps in.
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?
Answer:
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