End-of-Chapter Exercises | Key Terms Summary | Practice Questions with Answers
Key Terms — Sectors of the Indian Economy Chapter 2 Revision
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Primary Sector
Activities that directly use natural resources — agriculture, dairy, fishing, mining, forestry.
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Secondary Sector
Manufacturing and industrial activities that transform natural products into finished goods.
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Tertiary Sector
Service sector — transport, banking, trade, communication, education, health, IT.
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GDP / GVA
GDP = total value of all final goods and services produced within a country in a year. GVA adjusts for taxes and subsidies.
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Disguised Unemployment
People appear employed but contribute less than their potential. Removing some workers would not reduce output.
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Organised / Unorganised
Organised = registered, follows labour laws, job security. Unorganised = informal, no security, low wages, 80%+ of workers.
NCERT Exercise Questions with Answers — Sectors of Indian Economy
Exercise 1 — Fill in the Blanks
L3 Apply
Employment in the service sector _________ increased to the same extent as production. (has / has not)
Workers in the _________ sector do not produce goods. (tertiary / agricultural)
Most of the workers in the _________ sector enjoy job security. (organised / unorganised)
A _________ proportion of labourers in India are working in the unorganised sector. (large / small)
Cotton is a _________ product and cloth is a _________ product. (natural / manufactured)
The activities in primary, secondary and tertiary sectors are _________. (independent / interdependent)
Answers
(i) has not (ii) tertiary (iii) organised (iv) large (v) natural; manufactured (vi) interdependent
Exercise 2 — Multiple Choice Questions
L3 Apply
Q2(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
Q2(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
Q2(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 — Only final goods are counted to avoid double counting.
Q2(d)
In terms of GVA, the share of tertiary sector in 2017-18 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 — The tertiary sector contributed approximately 54-56% of total GVA in 2017-18.
Exercise 3 — Match the Following
L3 Apply
Problems Faced by Farming Sector
Some Possible Measures
1.
Unirrigated land
(a) Setting up agro-based mills
2.
Low prices for crops
(b) Cooperative marketing societies
3.
Debt burden
(c) Procurement of food grains by government
4.
No job in the off season
(d) Construction of canals by the government
5.
Compelled to sell grains to local traders soon after harvest
(e) Banks to provide credit with low interest
Answers
1 — (d) Construction of canals by the government
2 — (c) Procurement of food grains by government
3 — (e) Banks to provide credit with low interest
4 — (a) Setting up agro-based mills
5 — (b) Cooperative marketing societies
Exercise 4 — Find the Odd One Out
L4 Analyse
Tourist guide, dhobi, tailor, potter
Teacher, doctor, vegetable vendor, lawyer
Postman, cobbler, soldier, police constable
MTNL, Indian Railways, Air India, Jet Airways, All India Radio
Answers
(i) Tourist guide — provides a service (tertiary), while others produce/transform goods (secondary).
(ii) Vegetable vendor — works in trade/selling (may be unorganised), while others are typically organised sector professionals.
(iii) Cobbler — private/unorganised, while postman, soldier, police constable are government (public sector) employees.
(iv) Jet Airways — private sector, while MTNL, Indian Railways, Air India, and All India Radio are public sector enterprises.
Short Answer and Discussion Questions — CBSE Board Preparation
Exercise 5 — Data Analysis (Surat Workers)
A research scholar studied working people in Surat and found the following data. Complete the table and find the percentage of unorganised sector workers.
%
Nature
Place of Work
15
Organised
Offices and factories registered with government
15
Organised
Own shops, offices, clinics with formal license
20
Unorganised
Street work, construction, domestic work
50
Unorganised
Small workshops usually not registered
Organised sector: 15% + 15% = 30%. Unorganised sector: 20% + 50% = 70%. A large majority (70%) of Surat's workers are in the unorganised sector, consistent with the national pattern.
Exercise 6
Do you think the classification of economic activities into primary, secondary and tertiary is useful? Explain how.
Yes, this classification is extremely useful. It helps us understand which sectors dominate in terms of production and employment, identify imbalances (e.g., agriculture employs the most but contributes least to GVA), track historical shifts, and design policies (e.g., promoting industries to absorb surplus agricultural workers). Without such classification, analysing economic patterns and planning solutions would be difficult.
Exercise 9
How is the tertiary sector different from other sectors? Illustrate with a few examples.
The tertiary sector is distinct because it does not produce tangible goods — it provides services that support the production and distribution process. Examples: (1) Transport companies move farm produce and manufactured goods to markets. (2) Banks provide credit to farmers and industrialists. (3) Telecommunication networks enable business communication. (4) Teachers and doctors provide essential human development services. Unlike the primary sector (which extracts from nature) or the secondary sector (which manufactures), the tertiary sector facilitates and aids the functioning of the entire economy.
Exercise 10
What do you understand by disguised unemployment? Explain with an example each from the urban and rural areas.
Disguised unemployment occurs when more people are employed in an activity than are actually needed — removing some would not reduce total output.
Rural example: A small farmer's family of five works on a 2-hectare plot. The land needs only 3 workers. The other 2 appear busy but add nothing to production — they are disguised unemployed.
Urban example: A family runs a small grocery shop. The shop needs only 2 people, but 4 family members sit there all day. If 2 left, the shop would function just as well. The extra 2 are disguised unemployed in the urban service sector.
Exercise 11
Distinguish between open unemployment and disguised unemployment.
Open unemployment: A person is willing and able to work but cannot find a job. The unemployment is clearly visible — the person has no work at all.
Disguised unemployment: A person appears to be working but is contributing less than their potential. The unemployment is hidden — everyone seems busy, but the total work could be done by fewer people without any drop in output. It is common in agriculture where more family members work on small plots than necessary.
Exercise 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.
No, this statement is incorrect. The tertiary sector plays a critical role: (1) It is the largest contributor to GVA, accounting for over 50% of India's total production. (2) It provides basic services — hospitals, schools, banks, transport, police, courts — essential for a functioning society. (3) It supports primary and secondary sectors through trade, transport, storage, and banking. (4) ICT-based services like software and BPOs have made India globally competitive. (5) Sectors like tourism, education, and health have immense potential for employment generation.
Exercise 17
Explain the objective of implementing the MGNREGA 2005.
MGNREGA 2005 aims to: (1) Guarantee 100 days of employment per year to every rural household willing to do unskilled manual work. (2) Provide a legal right to work — if the government fails to provide employment, it must pay unemployment allowances. (3) Prioritise work that increases land productivity (building canals, check dams, roads). (4) Reduce rural poverty and underemployment by providing a safety net. (5) Ensure inclusive development across approximately 625 districts of India.
Exercise 20
Give a few examples of public sector activities and explain why the government has taken them up.
Examples and reasons:
(1) Indian Railways — requires enormous capital investment; private firms cannot provide affordable nationwide rail connectivity.
(2) Government schools and hospitals — education and healthcare are fundamental rights; private providers often charge unaffordable rates.
(3) Electricity generation (NTPC, state utilities) — selling power at market rates would make small industries unviable; government subsidises rates.
(4) Food procurement and PDS — government buys grain at fair prices from farmers and sells through ration shops at subsidised rates, supporting both producers and poor consumers.
(5) Defence services — national security cannot be left to profit-driven private entities.
Exercise 24 — GVA Data Visualisation
The following chart visualises the GVA data from Exercise 24 for 2000 and 2013.
Share of sectors in 2000: Primary = 30.6%, Secondary = 24.6%, Tertiary = 44.2% (Total GVA = Rs 40,85,000 crores). Share of sectors in 2013: Primary = 20.2%, Secondary = 27.8%, Tertiary = 52.3% (Total GVA = Rs 88,76,000 crores). Conclusion: The tertiary sector's share grew from 44% to 52%, confirming its increasing dominance. The primary sector's share declined from 31% to 20%, while the secondary sector grew modestly. The overall economy more than doubled in size.
📚 Competency-Based Questions — Chapter Revision
Scenario: A district in central India has the following profile: 70% of workers are in agriculture (mostly small farms), a few registered factories employ 10% of workers, and the remaining 20% work as street vendors, rickshaw pullers, and domestic helpers. The district's total production shows that agriculture contributes 25%, industry 35%, and services 40%.
Q1. The mismatch between employment share and production share in the primary sector indicates:
L4 Analyse
(a) Agriculture is the most productive sector
(b) There is significant disguised unemployment in agriculture
(c) Workers prefer farming over factory jobs
(d) The tertiary sector is declining
Answer: (b) — When 70% of workers produce only 25% of output, it means productivity per worker is very low, indicating disguised unemployment — more workers are engaged than necessary.
Q2. The 20% of workers who are street vendors, rickshaw pullers, and domestic helpers most likely belong to:
L3 Apply
(a) Organised sector, tertiary activities
(b) Unorganised sector, tertiary activities
(c) Organised sector, primary activities
(d) Public sector, secondary activities
Answer: (b) — Street vending, rickshaw pulling, and domestic work are service activities (tertiary) that are informal, irregular, and lack legal protections — hallmarks of the unorganised sector.
Q3. Evaluate which of the following policies would be MOST effective in reducing disguised unemployment in this district.
L5 Evaluate
(a) Increasing the number of government offices in the district
(b) Building irrigation infrastructure combined with setting up agro-processing units
(c) Reducing the number of registered factories
(d) Encouraging more workers to become street vendors
Answer: (b) — Irrigation enables more crops and absorbs some surplus workers in agriculture itself, while agro-processing units (dal mills, food processing) create secondary sector jobs that pull excess workers out of farming into productive industrial employment.
Q4 (HOT). As the District Magistrate, draft a three-point action plan to improve the economic condition of the 20% unorganised service sector workers in this district.
L6 Create
Guidance: (1) Registration and social security: Register all informal workers on the e-Shram portal to provide accident insurance, health coverage, and old-age pension. (2) Skill development: Set up a district skill centre offering free courses in driving, plumbing, electrical work, and digital literacy to help workers access better-paying jobs. (3) Market infrastructure: Designate vending zones with basic facilities (water, shade, toilets) for street vendors, and organise weekly markets to boost their earnings while ensuring dignity of work.
⚖ Assertion–Reason Questions — Chapter Revision
Assertion (A): The classification of economic activities into primary, secondary, and tertiary is based on the nature of the activity performed. Reason (R): The classification into organised and unorganised sectors is based on the ownership of enterprises.
(a) Both A and R are true, and R is the correct explanation of A
(b) Both A and R are true, but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
Answer: (c) — The assertion is true (primary/secondary/tertiary is based on nature of activity). The reason is false — the organised/unorganised classification is based on employment conditions, not ownership. Ownership is the criterion for public/private classification.
Assertion (A): In India, the tertiary sector has the largest share in GVA but the primary sector has the largest share in employment. Reason (R): Sufficient jobs were not created in the secondary and tertiary sectors to absorb workers moving out of agriculture.
(a) Both A and R are true, and R is the correct explanation of A
(b) Both A and R are true, but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
Answer: (a) — Both are correct. The reason precisely explains the paradox: while production shifted to services, employment remained stuck in agriculture because industry and services did not create enough jobs.
Frequently Asked Questions — Sectors of Indian Economy Exercises
What are important questions from Chapter 2 Economics Class 10?
Important questions include: explain the three sectors with examples, why the tertiary sector is largest producing sector in India, distinguish organised and unorganised sectors, explain disguised unemployment, discuss government role in public sector, and compare employment vs GDP contribution across sectors. These frequently appear in CBSE board exams.
How to answer questions on GDP and sectors?
Define GDP as the total value of all final goods and services produced in a country during a year. Explain each sector's contribution: primary (agriculture), secondary (manufacturing), tertiary (services). Use data showing the tertiary sector contributes over 50 percent of GDP. Mention that GDP excludes intermediate goods to avoid double counting and compare sector shares over decades.
What is the difference between final goods and intermediate goods?
Final goods are sold to end consumers and not used as raw materials for further production. Intermediate goods are used as inputs in producing other goods. For example, wheat sold to a consumer is a final good, but wheat sold to a flour mill is intermediate. Only final goods are counted in GDP to avoid double counting.
How to write long answers on employment in sectors?
Start with historical context showing agriculture employed most workers at independence. Present current data showing primary sector still employs most workers despite contributing less to GDP. Explain the GDP-employment mismatch and disguised unemployment. Discuss NREGA and other measures. Conclude with suggestions for creating more employment in secondary and tertiary sectors.
What key terms should I learn for Chapter 2 Economics?
Key terms include: primary sector, secondary sector, tertiary sector, GDP, underemployment, disguised unemployment, organised sector, unorganised sector, public sector, private sector, NREGA/MGNREGA, intermediate goods, final goods, economic activities, and seasonal unemployment. Understanding each with examples is essential for CBSE board exams.
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