Q.1 Why is NREGA also called the Right to work? Explain the objectives of National Rural Employment Guarantee Act 2005. (2015, 2014, 2013)
Answer:
Every state or region in India has potential for increasing the income and employment in that area.
Recognising this, the Central Government in India has passed an act called the National Rural Employment Guarantee Act 2005,
Main objectives of the NREGA 2005 are:

• to implement the Right to Work in 200 districts of India.
• to guarantee 100 days of employment in a year by the Government. In case the Government fails, it offers unemployment allowance.
• to give preference to the type of work that will help increase the production from land.

Q 2
With the example of sugarcane, explain the interdependence of all the three sectors of the economy. (2012)
Answer:
The primary sector involves production at the most basic level, i.e., through exploitation of natural resources. Cultivation of sugarcane is an agricultural activity which comes under the primary sector. Raw materials from the primary sector are converted into processed goods through manufacturing in the secondary sector. Using sugarcane as raw material, jaggery and sugar is made in the factories. The tertiary or service sector provides support to the process of production. It includes transportation, storage, marketing and sale of products. For instance, transportation of sugarcane from the fields to the sugar mills. Further on, the transportation of jaggery and sugar from factories and sugar mills to the markets.

The farmer (Primary sector) also needs fertilisers and seeds which are processed in some factory (Secondary sector) and which will be delivered to his doorstep by some means of transportation (Tertiary sector). In this way, for every little process there is interdependence of the three sectors of the economy on each other.

Q.3
“The problem of underemployment is not confined only to agriculture”. Support the statement with examples. (2013)
Answer:
The problem of underemployment is not confined only to agriculture. It can also happen in other sectors.

• For example, there are thousands of casual workers in the service sector in urban areas who search for daily employment. They are employed as painters, plumbers, repair persons and other odd jobs. Many of them don’t find work everyday.
• Similarly, we see other people of the service sector on the street pushing a cart or selling something where they may spend the whole day but earn very little. They are doing such work only due to the lack of better employment opportunities.
• The unorganised sector includes small and scattered units outside the government control. Employment is not secure. People can be asked to leave without any reason. When there is less work, such as during some seasons, some people may be asked to leave.

Q.4
What are final goods and intermediate goods? How do they help in calculating (GDP) Gross Domestic Product? (2013)
Answer:
Final goods are goods that are ultimately consumed by the consumer rather than used in the production of another good.
Intermediate goods are goods used as inputs in the production of final goods and services. For example, a car sold to a consumer is a final good; components such as a tyre sold to the car manufacturer is an intermediate good. The value of final goods already includes the value of all intermediate goods that are used in making the final good.

The value of final goods and services produced in each sector during a particular year provides the total production of the sector for that year. And the sum of production in the three sectors gives the Gross Domestic Product (GDP) of a country. It is the value of all final goods and services produced within a country during a particular year.

Q.5
Explain any three ways to solve the problem of underemployment. (2013)
Answer:
There are people who are capable of better work and earning more than what they are getting. The reason for this is that better jobs for which they are qualified are not available. Such people are termed as underemployed, e.g., a graduate teacher driving a taxi. Underemployment is most prevalent in the primary or agricultural sector.

Three ways to solve the problem of underemployment:

1. Provision of loans may help in creating jobs for disguised unemployed and underemployed workers.
   The loan money can be used for the promotion of economic activity of the family adding to the family’s earning or for setting up a cottage industry.
2. Another way is to promote and locate industries and services in semi-rural areas where a large number of people may be employed.
   Example, Setting up a dal mill, opening a cold storage, starting or promoting honey collection.
3. If local banks give credit to farmers at a reasonable rate of interest, they will be able to buy agricultural inputs and increase productivity.
4. Centres for vegetables and fruit processing, health centres, educational institutions, tourism and IT centres will certainly help in creating jobs.

Q.6
Why didn’t shift out of primary sector happen in case of employment although there has been a change in the share of the three sectors in GDP? (2013)
Answer:
A remarkable fact about India is that while there has been a change in the share of the three sectors in GDP, a similar shift has not taken place in employment.

1. A similar shift out of primary sector did not happen in case of employment because not enough jobs were created in the secondary and tertiary sectors.
2. Even though industrial output or the production of goods went up by eight times during the period, employment in the industry went up by only 2.5 times.
3. While production in the service sector rose by 11 times, employment in the service sector rose less than three times.
   As a result, more than half of the workers in the country are working in the primary sector, mainly in agriculture, producing only a quarter of the GDP.

Q.7
Classify the economic sectors on the basis of nature of activities. Mention the main feature of each. (2014)
Answer:
On the basis of nature of activities, economic sectors are classified into:

1. Primary sector
2. Secondary sector
3. Tertiary sector

Primary sector forms the base for all other products that we subsequently make. Since most of the natural products we get, are from agriculture, dairy, fishing, forestry, this sector is also called sector for agriculture and related activities (stone quarrying, animal husbandry, etc.).

Secondary sector covers activities in which natural products are changed into other forms through ways of manufacturing. It can take place in a factory, workshop or at home.
Examples:
(a) Spinning yam from cotton fibre from plants.
(b) Making sugar from sugarcane.
It is also called the Industrial sector.

Tertiary sector. Activities in this sector do not produce any goods. This sector produces services that act as aid and support to the Primary and Secondary sectors. Services like administration, police, army, transport, hospitals, educational institutions, post and telegraph, courts, municipal corporation, insurance companies, storage, trade communication and banking are some of the examples of activities of the Tertiary sector. This sector is also known as Service sector.

Q.8
What is meant by Gross Domestic Product (GDP)? How is GDP measured in India? (2015)
Answer:
Gross Domestic Product (GDP) of a country is the value of all the final goods and services produced in each sector within a country during a particular year. This indicates how big the country’s economy is. GDP is measured by the Central Government Ministry. This Ministry, with the help of all the Indian States and Union Territories, collects information relating to total volume of goods and services and their prices and then makes an estimate of the GDP.

Long Answer Questions (LA)

Q.9
Describe the importance of Primary sector in the Indian economy.
Answer:
Importance of Primary sector:

1. Primary Sector provides the basic needs of economy for food and mineral ores.
2. It produces some of the raw materials (like jute, cotton, coal extracted from mines) for the industrial sector.
3. The Primary sector continued to be the largest employer in the economy even in the year 2000, the reason being that Secondary and Tertiary sectors still do not create enough jobs.
4. The agricultural population in the Primary sector provides a very large market of consumers for the Secondary sector (for buying finished products like clothes, goods of daily need, fertilizers, etc.).

Q 10
How can we create more employment in secondary and tertiary sectors in rural India? (2012)
Answer:

1. Investing in basic agricultural infrastructure like construction of dams and canals for irrigation can lead to a lot of employment generation within the agricultural sector itself reducing the problem of under employment.
2. If the government invests some money in the storage and transportation of crops, or makes better rural roads so that mini-trucks reach everywhere, several farmers can continue to grow and sell these crops throughout the year. This activity can provide productive employment to not just farmers but also others such as those in services like transport or trade.
3. Providing credit at a reasonable rate of interest to help farmers buy seeds, fertilisers, agricultural equipments, pumpsets etc. can generate employment in rural banking.
4. The government/banks can provide loans at cheap rates to the small farmers to improve their irrigational facilities like constructing a well so that they can irrigate their land well and get two to three crops a year instead of one. Thus more people can be employed in the same field.
5. Another way is to promote and locate industries and services in semi-rural areas where a large number of people may be employed. For example, setting up a dal mill, opening a cold storage, starting or promoting honey collection, etc.

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Important Link

Quick Revision Notes : Sectors of the Indian Economy

NCERT Solution : Sectors of the Indian Economy

MCQs: Sectors of the Indian Economy

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