CBSE Class X | Economics | Sectors of the Indian Economy | Max Marks: 80
KENDRIYA VIDYALAYA / CBSE BOARD EXAMINATION
Understanding Economic Development
SECTORS OF THE INDIAN ECONOMY
Chapter 2 | Class X — Social Science (Economics)
Name: ___________________________ Roll No.: ___________ Section: _______
General Instructions
- This question paper contains 30 questions. All questions are compulsory.
- Section A (Q1–Q10): Multiple Choice Questions — 1 mark each. (10 Marks)
- Section B (Q11–Q16): Short Answer Questions I — 3 marks each. (18 Marks)
- Section C (Q17–Q24): Short Answer Questions II — 4 marks each. (32 Marks)
- Section D (Q25–Q30): Long Answer / Map-based Questions — 5 marks each. (20 Marks)
- Write answers in clear, legible handwriting.
- Draw diagrams wherever necessary.
- Use of calculator is NOT allowed.
Section A
Multiple Choice Questions
10 × 1 = 10 Marks
Choose the most appropriate option from the given alternatives.
Q1.
Which of the following is an activity of the Primary Sector?
[1 Mark]
Q2.
The Secondary Sector is also known as the:
[1 Mark]
Q3.
Gross Domestic Product (GDP) is the total value of:
[1 Mark]
Q4.
Which of the following is an example of disguised unemployment?
[1 Mark]
Q5.
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005 guarantees how many days of work per year?
[1 Mark]
Q6.
Indian Railways is an example of the:
[1 Mark]
Q7.
In India, the task of measuring GDP is undertaken by:
[1 Mark]
Q8.
Which sector was the LARGEST producing sector in India in 2017-18 in terms of GVA?
[1 Mark]
Q9.
Workers in the Organised Sector are entitled to:
[1 Mark]
Q10.
GVA (Gross Value Added) is different from GDP because GVA:
[1 Mark]
Section B
Short Answer Questions — I
6 × 3 = 18 Marks
Answer each question in 3–5 sentences.
Q11.
Distinguish between the Primary Sector and the Secondary Sector with two examples of each.
[3 Marks]
Q12.
What is meant by "disguised unemployment"? How is it different from open unemployment? Give one rural example.
[3 Marks]
Q13.
Why are only "final goods and services" counted while calculating GDP? Explain with the help of the biscuit example.
[3 Marks]
Q14.
State any three ways in which the government can create more employment in the agricultural sector.
[3 Marks]
Q15.
Compare the working conditions of Kanta (organised sector) and Kamal (unorganised sector) on any three points.
[3 Marks]
Q16.
Give three reasons why the Tertiary Sector has become increasingly important in India.
[3 Marks]
Section C
Short Answer Questions — II
8 × 4 = 32 Marks
Answer each question in 6–8 sentences.
Q17.
Explain the concept of GDP with a suitable example. Why does India now prefer to use GVA over GDP for sector comparison?
[4 Marks]
Q18.
What is the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005? Explain its main features and importance for the rural poor.
[4 Marks]
Q19.
Analyse why a large portion of Indian workers remain employed in the Primary Sector even though its share in GVA has declined significantly.
[4 Marks]
Q20.
How are economic activities classified into Organised and Unorganised Sectors? Why is it important to protect workers in the Unorganised Sector?
[4 Marks]
Q21.
"The three sectors of the economy are highly interdependent." Support this statement with suitable examples involving all three sectors.
[4 Marks]
Q22.
Distinguish between the Public Sector and the Private Sector. Why does the government have to invest in certain sectors where the private sector is reluctant to invest?
[4 Marks]
Q23.
Describe the historical shift of economic activity from Primary to Secondary and then to the Tertiary Sector in developed countries. Has India followed the same pattern? Explain.
[4 Marks]
Q24.
Read the following data carefully and answer the questions:
[4 Marks]
In 1977-78: Primary Sector employed 71% of workers; Tertiary Sector contributed 35% of GVA.
In 2017-18: Primary Sector employed 44% of workers; Tertiary Sector contributed 55% of GVA.
In 2017-18: Primary Sector employed 44% of workers; Tertiary Sector contributed 55% of GVA.
(a)What significant change do you observe in the GVA share of the Tertiary Sector?
(b)Why does Primary Sector still employ 44% of workers despite low GVA contribution?
(c)What does this indicate about the nature of employment in India?
Section D
Long Answer Questions
6 × 5 = 20 Marks
Answer each question in 10–12 sentences. Diagrams/tables may be drawn where relevant.
Q25.
Explain the three sectors of economic activity — Primary, Secondary, and Tertiary — with two suitable examples each. How are they interdependent? Illustrate with a chain of dependence from farming to retailing.
[5 Marks]
Q26.
What is underemployment? Explain with examples from both rural and urban areas. What measures can the government take to solve the problem of underemployment in India? Suggest any four measures.
[5 Marks]
Q27.
Why is the Public Sector important for India's economic development? Explain with reference to the provision of infrastructure, essential services, and support to agriculture. Give four examples of Public Sector activities.
[5 Marks]
Q28.
"India needs to urgently create employment in the secondary and tertiary sectors to absorb the surplus agricultural labour." Justify this statement. How can semi-rural industries help solve this problem?
[5 Marks]
Q29.
Compare and contrast the Organised and Unorganised Sectors in India on the following points: (i) Job security, (ii) Wages, (iii) Benefits, (iv) Government regulation. Mention which vulnerable groups are most affected by unorganised sector work and why they need protection.
[5 Marks]
Q30.
Analyse the rising importance of the Tertiary Sector in India with reference to: (i) the historical context, (ii) GVA data comparing 1977-78 and 2017-18, (iii) four reasons for the growth of services. Also explain why not all parts of the service sector are growing equally.
[5 Marks]
Answer Key & Marking Scheme
Answer Key & Marking Scheme
Sectors of the Indian Economy — Class X | Maximum Marks: 80 | For Examiner Use Only
Section A
Answer Key (MCQ)
| Q. No. | Ans | Key Point | Explanation |
|---|---|---|---|
| Q1 | (C) | Growing cotton in a field | Growing cotton directly uses natural resources (land, rainfall, sunshine) — a hallmark of the Primary Sector. |
| Q2 | (B) | Industrial Sector | The Secondary Sector transforms raw materials through manufacturing and is called the Industrial Sector. |
| Q3 | (C) | All final goods and services produced within a country in a year | GDP counts only FINAL goods and services to avoid double-counting intermediate goods. |
| Q4 | (B) | Five family members working on a 2-hectare farm where only two are needed | When workers appear employed but their removal would not reduce output, it is disguised/hidden unemployment. |
| Q5 | (C) | 100 days | MGNREGA 2005 guarantees 100 days of paid employment per year to rural adults willing to work. |
| Q6 | (C) | Public Sector | Indian Railways is owned and operated by the Government of India — a Public Sector enterprise. |
| Q7 | (C) | A Central Government Ministry | A Central Government Ministry, with help from state departments, collects data and estimates GDP. |
| Q8 | (C) | Tertiary Sector | By 2017-18 the Tertiary (Service) Sector had emerged as the largest sector by GVA in India. |
| Q9 | (B) | Provident fund, paid leave, medical benefits, and pension | Organised Sector workers enjoy provident fund, paid leave, medical benefits, pension, and legal job protection. |
| Q10 | (C) | Adjusts GDP for taxes and subsidies | GVA = GDP adjusted for taxes and subsidies, providing a more accurate sector-wise contribution measure. |
Section B
Model Answers
3 Marks Each
Q11.Primary vs Secondary Sector
Primary Sector: Activities that directly use natural resources. Examples: (1) Wheat farming — uses soil, rain; (2) Coal mining — extracts natural mineral. [1 mark]
Secondary Sector: Transforms natural products through manufacturing. Examples: (1) Converting cotton into cloth in a textile mill; (2) Converting sugarcane into sugar. [1 mark]
Key distinction: Primary = extraction from nature; Secondary = transformation/manufacturing. [1 mark]
Q12.Disguised Unemployment
Disguised Unemployment: A situation where workers appear employed but their marginal productivity is zero — i.e., if they left, output would NOT fall. Also called Hidden Unemployment. [1 mark]
Difference from Open Unemployment: Open unemployment is clearly visible (person has no job at all). Disguised unemployment is hidden — the person appears to be working. [1 mark]
Rural Example: Laxmi's family of 5 all work on a 2-hectare farm. Only 2-3 are actually needed. If 2 leave, farm output remains the same — those 2 were disguisedly unemployed. [1 mark]
Q13.Why Only Final Goods Count in GDP
Reason: If we count every stage of production, we would be counting the value of the same thing multiple times (double-counting). Only the FINAL price includes all intermediate values. [1 mark]
Biscuit Example: Farmer sells wheat = Rs 20. Mill sells flour = Rs 25. Company sells biscuits = Rs 80. [1 mark]
Only Rs 80 (biscuits — the final good) is counted in GDP. Rs 20 and Rs 25 are already embedded in Rs 80. Counting all three would give Rs 125 — incorrect. [1 mark]
Q14.Creating Employment in Agriculture
Build irrigation infrastructure (wells, canals, dams) — enables second crop (rabi season), creating more agricultural work within the same land. [1 mark]
Improve rural roads and storage — farmers can transport and store produce, which also creates jobs in transport and trade sectors. [1 mark]
Provide cheap agricultural credit through banks — farmers can buy seeds, fertilisers, and pumpsets on time, increasing land productivity and hiring more labour. [1 mark]
Q15.Kanta (Organised) vs Kamal (Unorganised)
Job Security: Kanta has an appointment letter and assured work; Kamal can be dismissed anytime without reason. [1 mark]
Benefits: Kanta receives provident fund, paid leave, medical allowances, and pension; Kamal receives only daily wages — no leave, no overtime, no benefits. [1 mark]
Working Hours: Kanta works fixed hours (9:30 AM to 5:30 PM) with paid Sundays; Kamal works 7:30 AM to 8:00 PM with no paid holidays. [1 mark]
Q16.Importance of Tertiary Sector in India
Basic services like hospitals, courts, defence, banks, and transport are essential — the government must provide them in a developing country. [1 mark]
Growth of Primary and Secondary Sectors creates demand for more services like storage, transport, banking, and insurance. [1 mark]
Rising incomes lead people to demand more services — eating out, private schools, tourism, professional training. IT-based services (software, ATMs, call centres) have also grown rapidly. [1 mark]
Section C
Model Answers
4 Marks Each
Q17.GDP and GVA
GDP (Gross Domestic Product): Total monetary value of all FINAL goods and services produced within a country in a particular year. [1 mark]
Example: A packet of biscuits sold for Rs 80 is counted — not the wheat (Rs 20) or flour (Rs 25) that went into making it. [1 mark]
Why India shifted to GVA: GVA (Gross Value Added) measures each sector's contribution after adjusting for taxes and subsidies, allowing fairer international comparison. India adopted GVA to align with global reporting practices. [1 mark]
GVA = GDP — Product Taxes + Subsidies. It gives a cleaner picture of the actual value added by each sector. [1 mark]
Q18.MGNREGA 2005
MGNREGA 2005 is the Mahatma Gandhi National Rural Employment Guarantee Act, implemented across approximately 625 districts of India. It is also known as the Right to Work. [1 mark]
Key Feature 1: Guarantees 100 days of paid employment per year to all rural adults who are willing to do unskilled manual work. [1 mark]
Key Feature 2: If the government fails to provide employment within 15 days of applying, it must pay an unemployment allowance — making employment a LEGAL entitlement. [1 mark]
Importance: Reduces rural distress, provides income security, reduces migration to cities, and funds productive works (canals, roads, wells) that increase future agricultural output. [1 mark]
Q19.Primary Sector Employment Despite Low GVA
In 2017-18, the Primary Sector employed about 44% of India's workforce but contributed only about 15% of GVA — a massive mismatch. [1 mark]
Reason 1: Not enough alternative jobs were created in Secondary and Tertiary Sectors. Industrial output grew 9x but employment only 3x; service output grew 14x but employment only 5x. [1 mark]
Reason 2: Workers have no other option — they remain in agriculture because they cannot move elsewhere. This is disguised unemployment. [1 mark]
Implication: Low productivity per worker in agriculture. Workers are underemployed — if some left, agricultural output would NOT fall. Urgent need to create jobs in industry and services. [1 mark]
Q20.Organised vs Unorganised Sector & Worker Protection
Organised Sector: Enterprises registered with the government and following laws like Factories Act, Minimum Wages Act. Workers have fixed hours, job security, provident fund, paid leave, and pension. [1 mark]
Unorganised Sector: Small and scattered units mostly outside government control. Work is irregular, low-paid, with no job security or benefits. Workers can be dismissed without cause. [1 mark]
Why protection is needed: About 80% of rural households are small/marginal farmers. Urban unorganised workers include street vendors, construction workers, domestic helpers. Both are vulnerable. [1 mark]
Workers from SC, ST, and backward communities disproportionately end up in the unorganised sector, facing both economic exploitation and social discrimination. Protection is a matter of social justice. [1 mark]
Q21.Interdependence of Three Sectors
The three sectors are not independent — they form an interconnected chain. [0.5 mark]
Primary depends on Secondary: If farmers refuse to sell sugarcane, sugar mills (Secondary) shut down. Primary supplies raw material to Secondary. [1 mark]
Secondary affects Primary: If fertiliser prices (manufactured good) rise, farming costs increase and farmers' profits fall. Secondary inputs are essential for Primary production. [1 mark]
Tertiary supports both: If transporters go on strike (Tertiary), food becomes scarce in cities and farmers cannot sell. Tertiary connects Primary production to consumers. [1 mark]
Conclusion: No sector can function in isolation. Disruption in one sector cascades to others. [0.5 mark]
Q22.Public vs Private Sector
Public Sector: Government owns assets and provides services. Goal = public welfare. Examples: Indian Railways, BSNL, Post Office. Funds raised through taxes. [1 mark]
Private Sector: Privately owned, profit-motivated. Examples: Tata Steel (TISCO), Reliance Industries. Services provided at market price. [1 mark]
Why govt must invest: (i) Some infrastructure (roads, dams, bridges) requires huge capital that private firms cannot risk. (ii) Collecting money from thousands of users is not feasible privately. [1 mark]
Additional reasons: (iii) Some goods (like subsidised electricity) keep small industries alive — private firms would charge full market rate. (iv) Essential services like schools, hospitals must reach ALL citizens, not just those who can pay. [1 mark]
Q23.Historical Shift Between Sectors
In early development stages (Stage 1), Primary Sector dominates — farming, fishing, and mining employ most people. Most goods are natural products. [1 mark]
Stage 2: With industrial revolution, Secondary Sector grows — factories expand, people move from farms to cities. Manufacturing becomes dominant in output and employment. [1 mark]
Stage 3 (Developed countries today): Tertiary Sector (services) becomes largest — most workers in IT, finance, health, education. This pattern is seen in USA, UK, Japan. [1 mark]
India's Pattern: India skipped a full industrial transition. Tertiary Sector grew rapidly in output (it is now the largest by GVA), BUT Primary Sector still employs the most workers (44%). The expected employment shift out of agriculture did NOT happen fully — because not enough industrial and service jobs were created. [1 mark]
Q24.Data-Based Question
(a) GVA share of Tertiary Sector rose from about 35% in 1977-78 to 55% in 2017-18 — a growth of approximately 20 percentage points, making it the largest contributing sector. [1.5 marks]
(b) Primary Sector still employs 44% because: (i) Not enough secondary/tertiary jobs were created; (ii) Agricultural workers have no alternative livelihood; (iii) Workers remain in farming even at very low productivity (disguised unemployment). [1.5 marks]
(c) This indicates a significant structural imbalance: Tertiary creates the most wealth but employs fewer people, while Primary employs the most but is least productive. India needs urgent job creation in industry and services to absorb surplus agricultural labour. [1 mark]
Section D
Model Answers
5 Marks Each
Q25.Three Sectors — Definitions, Examples and Interdependence
PRIMARY SECTOR: Activities that directly exploit natural resources. Does not process further. Also called the Agriculture and Related Sector. [0.5 mark]
Examples of Primary: (1) Cotton cultivation — uses sunlight, rainfall, soil; (2) Coal mining — extracts natural mineral resource. [0.5 mark]
SECONDARY SECTOR: Transforms primary products into manufactured goods. Also called the Industrial Sector. Can occur in factories, workshops, or at home. [0.5 mark]
Examples of Secondary: (1) Cotton → cloth in textile mill; (2) Sugarcane → sugar in factory. [0.5 mark]
TERTIARY SECTOR: Provides services that support Primary and Secondary sectors. Also called the Service Sector. Does NOT produce physical goods. [0.5 mark]
Examples of Tertiary: (1) Banking — provides credit to farmers and industrialists; (2) Transport — moves goods from farm to factory to market. [0.5 mark]
INTERDEPENDENCE — Chain Example: A farmer grows cotton (Primary) → A mill weaves it into cloth (Secondary) → A transport company delivers cloth to shops (Tertiary) → A bank finances both the farmer and the mill (Tertiary). If any link breaks, the whole chain suffers. [1 mark]
Conclusion: The three sectors are mutually dependent. Growth in one stimulates demand in others. [0.5 mark]
Q26.Underemployment — Examples and Solutions
Underemployment (Disguised Unemployment): People appear to be working but are not fully utilised. Their removal would NOT reduce total output. Marginal productivity = zero. [1 mark]
Rural Example: Laxmi's family of 5 works on a 2-hectare unirrigated farm. All appear employed throughout the year. But the farm only needs 2-3 workers. If 2 left, output stays the same. Those 2 are underemployed. [1 mark]
Urban Example: Thousands of casual workers (painters, plumbers, street vendors) spend the whole day looking for or doing odd jobs but earn very little. A street vendor may sit all day but sell almost nothing. [1 mark]
Solutions — (1) Irrigation: Government investment in canals and wells enables a second crop, creating more agricultural employment on the same land. [0.5 mark]
(2) Cheap agricultural credit via banks: Farmers can buy seeds and fertilisers timely, increasing productivity and hiring more labour. [0.5 mark]
(3) Semi-rural agro-industries: Dal mills, cold storages, food processing near villages create non-farm jobs without requiring migration. [0.5 mark]
(4) MGNREGA 2005: Legal guarantee of 100 days of work per year provides a safety net for rural underemployed workers. [0.5 mark]
Q27.Importance of Public Sector for India
The Public Sector (government-owned) plays a critical role because certain services and infrastructure cannot be left to private profit motives. [0.5 mark]
(1) Infrastructure: Roads, bridges, railways, dams, harbours require massive capital investment. Private firms cannot bear this risk. Example: Indian Railways, NTPC (electricity). [1 mark]
(2) Essential Services: Health, education, drinking water, sanitation must reach ALL citizens, including the poor. Private sector charges market prices — unaffordable for millions. Example: Government schools, PHCs. [1 mark]
(3) Supporting Agriculture: Government buys wheat and rice at Minimum Support Price (MSP) — protects farmers. Sells through ration shops (PDS) — protects consumers. Government bears the cost difference. [1 mark]
(4) Subsidised Inputs: Government provides electricity below production cost to keep small industries viable. Without this, many small units would close. [1 mark]
Conclusion: Public Sector exists not to earn profit but to promote welfare and ensure equitable development across all regions and income groups. [0.5 mark]
Q28.Absorbing Surplus Agricultural Labour
India's Problem: The Primary Sector employs about 44% of workers but contributes only ~15% of GVA. This is because there are far more agricultural workers than needed — a classic case of disguised unemployment. [1 mark]
Justification: Industrial output grew 9x between 1977-2018 but employment grew only 3x. Service output grew 14x but employment grew only 5x. Growth happened without enough job creation. [1 mark]
Therefore, India urgently needs employment growth in Secondary (industry) and Tertiary (services) to absorb the millions underemployed in agriculture. [0.5 mark]
Role of Semi-Rural Industries: (1) Dal mills / pulse processing units near farming villages — create processing jobs without migration. [0.5 mark]
(2) Cold storage units — allow farmers to store potatoes, onions, and sell when prices are high; creates ancillary jobs. [0.5 mark]
(3) Honey collection centres near forests — buy wild honey from tribal farmers; alternative income. [0.5 mark]
(4) Food processing industries (potato chips, tomato paste, rice milling) located in semi-rural areas — bring factory employment to villages. [0.5 mark]
Conclusion: Locating industries and services in semi-rural areas is key to absorbing agricultural surplus while also developing rural economies. [0.5 mark]
Q29.Organised vs Unorganised Sector — Detailed Comparison
(i) Job Security: Organised — workers have formal contracts, appointment letters, and cannot be dismissed without cause. Unorganised — can be dismissed anytime; employment depends on employer's whim. [1 mark]
(ii) Wages: Organised — regular salary; overtime paid at higher rate; governed by Minimum Wages Act. Unorganised — daily wages; irregular; often below minimum wage; no overtime pay. [1 mark]
(iii) Benefits: Organised — provident fund, paid leave, medical allowances, gratuity, pension. Unorganised — no benefits at all; not paid for sick days or holidays. [1 mark]
(iv) Government Regulation: Organised — registered under Factories Act, Shops & Establishments Act, etc.; regularly inspected. Unorganised — rules exist but are NOT followed; units are largely outside government control. [1 mark]
Vulnerable Groups: Landless agricultural labourers, small/marginal farmers, artisans (weavers, blacksmiths), urban casual workers, SC/ST/OBC workers. They face both economic exploitation and social discrimination. Protection needed for both economic and social justice. [1 mark]
Q30.Rising Importance of Tertiary Sector
(i) Historical Context: Primary dominated initially; then Secondary grew during industrialisation; in the last century, Tertiary became largest in developed countries. India is experiencing this shift. [1 mark]
(ii) GVA Data: In 1977-78, Tertiary contributed about 35% of GVA; in 2017-18, it rose to approximately 55%. It overtook Primary as the largest sector. Meanwhile Primary's GVA share fell significantly. [1 mark]
(iii) Four Reasons: (1) Essential public services (hospitals, courts, banks, defence) must be provided — government duty; (2) Growth of agriculture and industry creates demand for transport, storage, banking; (3) Rising incomes lead people to spend more on services — restaurants, private schools, tourism; (4) IT-based services (call centres, ATMs, software) have become economically important. [2 marks]
Why not all services grow equally: At one end — highly skilled workers in IT, finance (high-paying). At the other — street vendors, repair persons, small shopkeepers who barely survive. Only high-end services are truly growing. The low-end exists because workers have no alternative, not because demand is high. [1 mark]
Marks Distribution Summary
| Section | Questions | Marks Each | Total Marks |
|---|---|---|---|
| A — MCQ | Q1 – Q10 (10 Qs) | 1 mark | 10 Marks |
| B — Short Answer I | Q11 – Q16 (6 Qs) | 3 marks | 18 Marks |
| C — Short Answer II | Q17 – Q24 (8 Qs) | 4 marks | 32 Marks |
| D — Long Answer | Q25 – Q30 (6 Qs) | 5 marks | 20 Marks |
| TOTAL | 30 Questions | — | 80 Marks |
