Sectors of the Indian Economy – Class 10 Social Science notes, important questions and MCQs

Chapter overview

Economic activities are grouped into primary, secondary and tertiary sectors, and also into organised and unorganised, and public and private sectors. Over time the tertiary sector has become the largest producing sector in India, but most workers are still in the primary sector, where there is disguised unemployment.

Primary, secondary and tertiary sectors

• Primary sector: activities using natural resources directly, such as agriculture, dairy, fishing and forestry.
• Secondary sector: natural products are changed into other forms through manufacturing, such as making cloth from cotton.
• Tertiary (service) sector: activities that support the other two, such as transport, banking, trade, communication and also IT services.
• GDP is the value of all final goods and services produced within a country in a year; counting only final goods avoids double counting.

Changes in India's sectors

• The tertiary sector became the largest producing sector in India, replacing the primary sector.
• More than half of workers still work in the primary sector, which produces only about a quarter of GDP.
• Disguised unemployment: more people work than are needed, so some can be removed without reducing output.
• MGNREGA (2005) guarantees 100 days of employment in a year to rural households; if work is not given, an unemployment allowance is paid.

Organised and unorganised, public and private

• Organised sector: registered enterprises with regular jobs, fixed hours, paid leave, provident fund and job security.
• Unorganised sector: small, scattered units with low pay, no job security and no benefits; workers need protection.
• Public sector: the government owns most assets and provides services (railways, post); private sector: assets owned by individuals or companies, run for profit.

Key terms

Gross Domestic Product

the value of all final goods and services produced within a country in a year

Disguised unemployment

a situation where more people are working than needed, so their marginal productivity is zero

Intermediate goods

goods used up in producing final goods and services

Organised sector

enterprises registered with the government, with regular terms of employment

Important questions with answers

Quick revision

• Primary = nature; secondary = manufacturing; tertiary = services.
• Tertiary is the largest producing sector; primary is the largest employer.
• MGNREGA 2005 = 100 days of work.
• Organised = regular job with benefits; unorganised = no security.

Exam tips

• Use the 'cotton to cloth' example to explain how the three sectors are linked.
• For disguised unemployment, use the example of five family members working on a plot that needs only three.

Practice MCQs

1. Fishing belongs to the

   1. tertiary sector
   2. secondary sector
   3. primary sector
   4. organised sector only
   Show answer

   Answer: (c) primary sector. It directly uses natural resources.

2. Making sugar from sugarcane is an activity of the

   1. primary sector
   2. secondary sector
   3. tertiary sector
   4. public sector
   Show answer

   Answer: (b) secondary sector. Natural products are processed into new forms.

3. Banking is a

   1. tertiary activity
   2. secondary activity
   3. primary activity
   4. unorganised activity always
   Show answer

   Answer: (a) tertiary activity. It is a service.

4. GDP includes the value of

   1. intermediate goods only
   2. exports only
   3. final goods and services only
   4. imports
   Show answer

   Answer: (c) final goods and services only. Counting intermediate goods would cause double counting.

5. The largest producing sector in India today is the

   1. tertiary sector
   2. secondary sector
   3. primary sector
   4. unorganised sector
   Show answer

   Answer: (a) tertiary sector. Services contribute the largest share of GDP.

6. MGNREGA guarantees rural households work for

   1. 50 days
   2. 100 days
   3. 150 days
   4. 365 days
   Show answer

   Answer: (b) 100 days. It was passed in 2005.

7. Five members of a family work on a plot that needs only three. This is an example of

   1. seasonal unemployment
   2. disguised unemployment
   3. educated unemployment
   4. frictional unemployment
   Show answer

   Answer: (b) disguised unemployment. Removing two members would not reduce output.

8. Which feature belongs to the unorganised sector

   1. paid leave and provident fund
   2. low wages and no job security
   3. job security and fixed hours
   4. registration under government rules
   Show answer

   Answer: (b) low wages and no job security. Workers in small, scattered units lack protection.