Sectors of the Indian Economy — Practice

Question 1

To which sector does banking belong?

Accepted Answer

The tertiary (service) sector.

✦ Answer: tertiary sector.

Question 2

What does GDP stand for and measure?

Accepted Answer

Gross Domestic Product — the value of all final goods and services produced in a country in a year.

✦ Answer: value of final goods and services produced in a year.

Question 3

How many days of work does MGNREGA guarantee?

Accepted Answer

100 days of wage employment per rural household per year.

✦ Answer: 100 days.

Question 4

Differentiate the primary and secondary sectors with an example each.

Accepted Answer

Step 1 — Primary uses natural resources directly (e.g. farming).

Step 2 — Secondary processes primary products into goods (e.g. making cloth in a factory).

✦ Answer: primary = natural-resource activity (farming); secondary = manufacturing (cloth).

Question 5

How does the importance of sectors change as a country develops?

Accepted Answer

Step 1 — Initially the primary sector dominates.

Step 2 — With industrialisation the secondary grows, and in advanced economies the tertiary becomes the largest.

✦ Answer: primary → secondary → tertiary dominance with development.

Question 6

Give two reasons for the rising importance of the tertiary sector in India.

Accepted Answer

Step 1 — Basic services (health, education, banking, administration) are essential and expanding.

Step 2 — Rising incomes and the IT boom increase demand for services.

✦ Answer: essential services expand and IT/rising incomes drive service demand.

Question 7

What is disguised unemployment? Give an example.

Accepted Answer

Step 1 — It is a situation where more people are engaged in work than are actually needed.

Step 2 — Example: a family farm where five people do work that three could do.

Step 3 — Removing the extra workers would not reduce output — they are underemployed.

✦ Answer: hidden unemployment where surplus workers add nothing to output.

Question 8

Differentiate the organised and unorganised sectors.

Accepted Answer

Step 1 — Organised: registered, follows rules, offers regular salary, job security and benefits.

Step 2 — Unorganised: unregistered, scattered, low-paid, insecure, without benefits.

Step 3 — Most Indian workers are in the unorganised sector and need protection.

✦ Answer: organised = secure/regulated; unorganised = insecure/unregulated.

Question 9

How does MGNREGA help reduce underemployment?

Accepted Answer

Step 1 — It guarantees 100 days of wage work a year to rural households.

Step 2 — This provides productive employment and income; if work isn't given, an allowance is paid.

✦ Answer: it guarantees paid rural work, absorbing surplus labour.

Practice — Sectors of the Indian Economy

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