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Class 10 Economics Chapter 2

NCERT Solutions for Class 10 Economics Chapter 2: Sectors of the Indian Economy

Chapter 2 of Economics explores the three main sectors of the Indian economy: Primary, Secondary, and Tertiary. It analyzes their contribution to GDP and employment, detailing how the tertiary sector has become the largest contributor to production while the primary sector remains the largest employer. The chapter also classifies economic activities based on work conditions (Organized and Unorganized) and ownership (Public and Private).

NCERT Questions & Answers + Important Extra Questions


NCERT Textbook Questions

Q1. Fill in the blanks using the correct option

(i) Employment in the service sector _____ between 1973 and 2003. — increased

(ii) Workers in the _____ sector do not produce goods. — tertiary (service)

(iii) Most of the workers in the _____ sector enjoy job security. — organised

(iv) A _____ proportion of labourers in India are working in the unorganised sector. — large

Q2. Choose the most appropriate answer

(i) The__( reason why the primary sector is called primary sector is because:

(a) It employs the most people (b) It forms the base for all other products (c) It contributes the most to GDP (d) It was the first sector to develop

Ans: (b) — Primary sector activities form the foundation by providing raw materials and food for other sectors.

Q3

Distinguish between Primary, Secondary, and Tertiary sectors with examples.

Answer

Primary sector: Activities that involve extraction/production of natural resources directly from nature. Also called the agricultural sector. Workers depend on nature. Examples: farming, fishing, mining, forestry, animal husbandry, dairying.

Secondary sector: Activities that involve processing/manufacturing of raw materials into finished goods. Also called the industrial sector. Examples: making cloth from cotton, steel from iron ore, sugar from sugarcane, manufacturing cars, processing food.

Tertiary sector: Activities that provide services rather than produce goods. Also called the service sector. Services support and help in the development of primary and secondary sectors. Examples: transport, banking, insurance, communication, trade, teaching, healthcare, IT services, government services.

Q4

What is the difference between the organised and unorganised sectors?

Answer

Organised sector: (i) Registered with the government and follows rules and regulations (Factories Act, Shops Act). (ii) Workers have job security — cannot be fired without proper procedures. (iii) Workers get regular wages, paid leave, provident fund, gratuity, medical benefits. (iv) Working hours are fixed (usually 8 hours). Overtime must be paid. (v) Examples: government departments, banks, schools, registered factories, IT companies.

Unorganised sector: (i) Enterprises are small and scattered, not registered. Rules are not followed. (ii) Workers have no job security — can be fired at any time without compensation. (iii) Workers get low wages with no extra benefits — no PF, no leave, no medical insurance. (iv) Working hours are long and irregular. (v) Workers have no one to turn to for protection. (vi) Examples: small shopkeepers, street vendors, domestic workers, construction labourers, daily wage earners, home-based workers.

About 93% of India's workforce is in the unorganised sector, making it the most critical challenge for Indian labour policy.

Q5

How is the tertiary sector different from other sectors? Illustrate with a few examples.

Answer

The tertiary sector is different because it does not produce goods but provides services that support production and trade. These services are essential for the functioning of the economy.

Examples: (i) Transport: Trucks carry agricultural produce from farms to markets, and raw materials from mines to factories. Without transport, production is useless. (ii) Banking: Farmers need loans for seeds and fertilisers, businesses need loans for expansion. Banks enable economic activity by providing credit. (iii) Communication: Telephones, internet, and postal services enable businesses to coordinate, take orders, and deliver services across the country. (iv) Trade: Shopkeepers, wholesalers, and e-commerce platforms connect producers to consumers. (v) Government services: Defence, police, judiciary, and administration provide the law and order necessary for economic activity. (vi) IT and software: India's IT sector exports services worth $150+ billion annually, showing how services have become the dominant sector.

Q6

What are the various ways the government can create employment?

Answer

The government can create employment through:

(i) Investment in infrastructure: Building roads, bridges, dams, canals, and irrigation systems creates jobs in construction and stimulates further economic activity.

(ii) MGNREGA (2005): The Mahatma Gandhi National Rural Employment Guarantee Act guarantees 100 days of employment per year to every rural household willing to do manual work at minimum wage. If employment is not provided within 15 days, the government pays an unemployment allowance. This has been India's most important employment programme.

(iii) Promoting small and cottage industries: Providing loans, subsidies, and marketing support to small enterprises (MUDRA loans, Startup India).

(iv) Investing in education and health: Building schools, hospitals, and training centres creates jobs for teachers, doctors, nurses, and administrators while improving human capital.

(v) Tourism development: Investing in tourism infrastructure and promotion creates jobs in hospitality, transport, handicrafts, and services.

(vi) Industrial policy: Special Economic Zones, industrial parks, and tax incentives attract private investment that creates manufacturing jobs.


Important Extra Questions

Q1

Why has the tertiary sector become the most important sector in India?

Answer

The tertiary sector has overtaken primary and secondary sectors in GDP contribution (over 50% of India's GDP) for several reasons:

(i) Basic services expand with development: As the economy grows, demand for transport, banking, communication, trade, and education increases automatically.

(ii) Urbanisation: Growing cities need more services — hospitals, schools, restaurants, entertainment, e-commerce, delivery services.

(iii) IT and software revolution: India's IT sector has grown enormously since the 1990s, contributing massively to GDP and exports. Bengaluru, Hyderabad, Pune, and Chennai are global IT hubs.

(iv) New services: Modern life has created demand for services that didn't exist before — call centres, digital payments, app-based delivery, online education, streaming entertainment.

(v) Government services: Expanding government programmes (education, health, welfare) have created millions of service sector jobs.

However, the paradox is that while the tertiary sector leads in GDP, the primary sector still employs the most people (about 42%). This shows disguised unemployment in agriculture — too many people producing too little.

Q2

What is disguised unemployment? Give an example.

Answer

Disguised unemployment (hidden unemployment) is a situation where more people are employed in an activity than required. If some workers were removed, total production would not decrease.

Example: A small farm that can be managed by 3 workers has 8 family members working on it. The 5 extra workers add nothing to production — if they were removed, the same amount of crop would be produced. These 5 are disguisedly unemployed — they appear employed but are actually unproductive.

Why it happens: (i) In Indian agriculture, land is divided into tiny plots due to population growth and inheritance laws. (ii) There are no alternative jobs in rural areas, so all family members work on the same small farm. (iii) It is also found in the urban service sector — small shops with more helpers than needed.

Solution: Creating non-farm jobs (manufacturing, services) in rural areas would absorb these surplus workers and increase overall productivity.

Q3

What are public and private sectors? Give examples.

Answer

Public sector: The government owns and operates the enterprise. The main objective is public welfare, not profit. The government raises money through taxes and provides services at affordable rates (sometimes even at a loss). Examples: Indian Railways, BSNL, Air India (before divestment), SBI, NTPC, defence production, government hospitals, government schools, MGNREGA.

Private sector: Individuals or companies own and operate the enterprise. The main objective is earning profit. They operate based on market demand. Examples: Tata Steel, Reliance Industries, Infosys, private hospitals, private schools, Flipkart, Zomato, private banks like HDFC and ICICI.

Mixed economy: India follows a mixed economy model where both public and private sectors coexist. The government provides essential services (defence, railways, education, health) while the private sector drives growth in manufacturing, IT, and services. Since 1991 (liberalisation), the private sector's role has grown significantly through privatisation and deregulation.

Frequently Asked Questions

What is Class 10 Economics Chapter 2 (Sectors of the Indian Economy) about?

Chapter 2 of Economics explores the three main sectors of the Indian economy: Primary, Secondary, and Tertiary. It analyzes their contribution to GDP and employment, detailing how the tertiary sector has become the largest contributor to production while the primary sector remains the largest employer. The chapter also classifies economic activities based on work conditions (Organized and Unorganized) and ownership (Public and Private).

What do these NCERT solutions for Class 10 Economics Chapter 2 (Sectors of the Indian Economy) cover?

All 7 questions from the latest NCERT textbook for this chapter are answered step by step, organised as NCERT Questions & Answers + Important Extra Questions, NCERT Textbook Questions and Important Extra Questions.

Are these solutions based on the new NCERT syllabus?

Yes. The answers follow the current NCERT textbook for Class 10 Economics and the latest CBSE syllabus, so the question numbers and wording match the book you use in class.

How should I use these solutions to prepare for exams?

Attempt each question on your own first, then compare your working with the answer here. Note the steps or keywords you missed, and revise the chapter notes before taking a chapter-wise MCQ test to check your understanding.

Are the NCERT solutions for Class 10 Economics Chapter 2 (Sectors of the Indian Economy) free?

Yes. All Circle of Learning NCERT solutions and chapter notes are free to read online, with no sign-up needed.