Sectors Of The Indian EconomyClass 10 Economics NCERT Solutions
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Q1EXERCISES
Fill in the blanks using the correct option given in the bracket:
(i)
Employment in the service sector ______ increased to the same extent as production. (has / has not)
(ii)
Workers in the ______ sector do not produce goods. (tertiary / agricultural)
(iii)
Most of the workers in the ______ sector enjoy job security. (organised / unorganised)
(iv)
A ______ proportion of labourers in India are working in the unorganised sector. (large / small)
(v)
Cotton is a ______ product and cloth is a ______ product. [natural / manufactured]
(vi)
The activities in primary, secondary and tertiary sectors are ______ [independent / interdependent]
Solution
(i)
Employment in the service sector has not increased to the same extent as production.
(ii)
Workers in the tertiary sector do not produce goods.
(iii)
Most of the workers in the organised sector enjoy job security.
(iv)
A large proportion of labourers in India are working in the unorganised sector.
(v)
Cotton is a natural product and cloth is a manufactured product.
(vi)
The activities in primary, secondary and tertiary sectors are interdependent.
Q2EXERCISES
Choose the most appropriate answer. (a) The sectors are classified into public and private sector on the basis of:
(i)
employment conditions
(ii)
the nature of economic activity
(iii)
ownership of enterprises
(iv)
number of workers employed in the enterprise
(b)
Production of a commodity, mostly through the natural process, is an activity in ______ sector.
(i)
primary
(ii)
secondary
(iii)
tertiary
(iv)
information technology
(c)
GDP is the total value of ______ produced during a particular year.
(i)
all goods and services
(ii)
all final goods and services
(iii)
all intermediate goods and services
(iv)
all intermediate and final goods and services
(d)
In terms of GVA the share of tertiary sector in 2017-18 is between ______ per cent.
(i)
20 to 30
(ii)
30 to 40
(iii)
50 to 60
(iv)
60 to 70
Solution
(a) (iii) ownership of enterprises
(b) (i) primary
(c) (ii) all final goods and services
(d) (iii) 50 to 60 (As per Graph 2 in the chapter, the share of the tertiary sector in GVA for 2017-18 is shown to be more than 50% but less than 60%.)
Q3EXERCISES
Match the following: Problems faced by farming sector 1. Unirrigated land 2. Low prices for crops 3. Debt burden 4. No job in the off season 5. Compelled to sell their grains to the local traders soon after harvest Some possible measures
(a)
Setting up agro-based mills
(b)
Cooperative marketing societies
(c)
Procurement of food grains by government
(d)
Construction of canals by the government
(e) Banks to provide credit with low interest
Solution
The correct matches are as follows:
- Unirrigated land - (d) Construction of canals by the government
- Low prices for crops - (c) Procurement of food grains by government
- Debt burden - (e) Banks to provide credit with low interest
- No job in the off season - (a) Setting up agro-based mills
- Compelled to sell their grains to the local traders soon after harvest - (b) Cooperative marketing societies
Q4EXERCISES
Find the odd one out and say why.
(i)
Tourist guide, dhobi, tailor, potter
(ii)
Teacher, doctor, vegetable vendor, lawyer
(iii)
Postman, cobbler, soldier, police constable
(iv)
MTNL, Indian Railways, Air India, Jet Airways, All India Radio
Solution
(i)
Potter. The potter is the odd one out because pottery is a manufacturing activity that falls under the secondary sector. Tourist guide, dhobi (washerman), and tailor provide services and belong to the tertiary sector.
(ii)
Vegetable vendor. The vegetable vendor is the odd one out. While all are in the tertiary sector, teachers, doctors, and lawyers are generally professionals who require formal education and often work in the organised sector. A vegetable vendor is typically part of the unorganised sector and does not require formal education.
(iii)
Cobbler. The cobbler is the odd one out because a cobbler is a self-employed individual in the private sector. Postman, soldier, and police constable are all employees in the public sector.
(iv)
Jet Airways. Jet Airways is the odd one out because it is a private sector company. MTNL, Indian Railways, Air India, and All India Radio are all public sector undertakings (PSUs).
Q5EXERCISES
A research scholar looked at the working people in the city of Surat and found the following.
Place of work Nature of employment Percentage of working people In offices and factories registered with the government Organised 15 Own shops, office, clinics in marketplaces with formal license 15 People working on the street, construction workers, domestic workers 20 Working in small workshops usually not registered with the government
Complete the table. What is the percentage of workers in the unorganised sector in this city?
Solution
First, we complete the table based on the definitions of organised and unorganised sectors.
- 'Own shops, office, clinics in marketplaces with formal license' are part of the Organised sector as they are formally licensed and likely registered.
- 'People working on the street, construction workers, domestic workers' are classic examples of the Unorganised sector.
- 'Working in small workshops usually not registered with the government' is also part of the Unorganised sector.
The percentage for the last category is calculated by subtracting the others from 100%:
Completed Table:
| Place of work | Nature of employment | Percentage of working people |
|---|---|---|
| In offices and factories registered with the government | Organised | 15 |
| Own shops, office, clinics in marketplaces with formal license | Organised | 15 |
| People working on the street, construction workers, domestic workers | Unorganised | 20 |
| Working in small workshops usually not registered with the government | Unorganised | 50 |
Percentage of workers in the unorganised sector:
To find the total percentage of workers in the unorganised sector, we add the percentages from the relevant categories:
Therefore, the percentage of workers in the unorganised sector in this city is 70%.
Q6EXERCISES
Do you think the classification of economic activities into primary, secondary and tertiary is useful? Explain how.
Solution
Yes, the classification of economic activities into primary, secondary, and tertiary sectors is very useful. It provides a framework for understanding the structure and performance of an economy in the following ways:
-
Understanding Economic Structure: It helps to understand the contribution of each sector to the Gross Domestic Product (GDP) and employment. This gives a clear picture of which sector is dominant in the economy.
-
Tracking Economic Development: Historically, countries have shifted from being primary sector-dominant economies to secondary, and then to tertiary sector-dominant economies. This classification helps in analysing the stage of development of a country and tracking its progress over time.
-
Policy Formulation: By analysing the growth and employment data of each sector, governments can identify underperforming sectors. This allows them to formulate targeted policies and allocate resources to promote growth, create jobs, and address specific problems like underemployment in the agricultural sector.
-
Comparative Analysis: It allows for the comparison of the economic structures of different countries or regions, providing insights into their relative economic development and strengths.
For example, in India, this classification highlights the significant mismatch where the tertiary sector contributes the most to GDP, but the primary sector still employs the largest number of people. This points to the critical issue of disguised unemployment in agriculture and the need for job creation in the secondary and tertiary sectors.
Q7EXERCISES
For each of the sectors that we came across in this chapter why should one focus on employment and GVA? Could there be other issues which should be examined? Discuss.
Solution
For each of the primary, secondary, and tertiary sectors, it is crucial to focus on employment and Gross Value Added (GVA) for the following reasons:
-
GVA (or GDP contribution): GVA measures the value of goods and services produced by a sector. It indicates the economic strength and contribution of that sector to the national income. A higher GVA signifies a more productive sector, which is essential for the country's economic growth.
-
Employment: Employment data shows how many people are dependent on a particular sector for their livelihood. A sector that is a large employer is vital for the social and economic well-being of a large part of the population.
Focusing on both together helps to analyse the productivity and inclusivity of economic growth. For instance, in India, the tertiary sector has a high GVA share but a lower employment share, while the primary sector has a low GVA share but a high employment share. This reveals a major structural problem of underemployment and low income for a large portion of the workforce.
Other issues that should be examined include:
- Working Conditions: Beyond just the number of jobs, the quality of employment is important. This involves classifying work as organised or unorganised, examining wages, job security, social benefits, and safety at the workplace.
- Productivity: Labour productivity (output per worker) within each sector should be examined. Low productivity, especially in agriculture, is a major cause of low incomes.
- Regional Distribution: The growth of these sectors is often uneven across different states and regions. Examining these regional disparities is crucial for balanced development.
- Sustainability and Environmental Impact: The environmental cost of activities in each sector (e.g., resource depletion in the primary sector, pollution in the secondary sector) is a critical issue to be examined for long-term sustainable development.
- Technological Advancement: The level of technology used in each sector affects its productivity and future growth potential.
Q8EXERCISES
Make a long list of all kinds of work that you find adults around you doing for a living. In what way can you classify them? Explain your choice.
Solution
Here is a list of various kinds of work that adults around us do for a living:
- Farmer
- Teacher
- Factory worker
- Shopkeeper
- Doctor
- Bank clerk
- Construction worker
- Software engineer
- Bus driver
- Police officer
- Carpenter
- Street food vendor
- Lawyer
- Courier delivery person
These activities can be classified in several ways, with the choice of classification depending on the purpose of the analysis.
Classification Methods:
1. By Nature of Economic Activity (Primary, Secondary, Tertiary): This is useful for understanding the structure of the economy.
- Primary: Farmer
- Secondary: Factory worker, Carpenter, Construction worker
- Tertiary: Teacher, Shopkeeper, Doctor, Bank clerk, Software engineer, Bus driver, Police officer, Street food vendor, Lawyer, Courier delivery person
2. By Employment Conditions (Organised, Unorganised): This is useful for analysing worker welfare and job quality.
- Organised: Teacher (in a government or large private school), Doctor (in a large hospital), Bank clerk, Software engineer, Police officer
- Unorganised: Farmer, Factory worker (in a small workshop), Shopkeeper (small owner), Construction worker, Carpenter, Street food vendor
3. By Ownership (Public, Private): This is useful for understanding the role of the government versus private individuals in the economy.
- Public Sector: Teacher (in a government school), Doctor (in a government hospital), Bank clerk (in a public sector bank), Police officer
- Private Sector: Farmer, Factory worker, Shopkeeper, Doctor (in a private clinic), Software engineer, Bus driver (for a private company), Carpenter, Street food vendor, Lawyer
Explanation of Choice: If I want to understand how our country's economy is changing, I would use the primary, secondary, and tertiary classification. If I am concerned about issues like low wages and lack of job security, I would classify the work into organised and unorganised sectors. If I want to analyse the role of the government in providing employment and services, I would use the public and private sector classification.
Q9EXERCISES
How is the tertiary sector different from other sectors? Illustrate with a few examples.
Solution
The tertiary sector is fundamentally different from the primary and secondary sectors because it produces services rather than goods.
- Primary Sector: This sector involves the extraction and production of natural resources. The output is a tangible, natural product. Example: A farmer grows wheat.
- Secondary Sector: This sector involves the processing of raw materials (from the primary sector) into finished goods through manufacturing. The output is a tangible, manufactured product. Example: A factory uses wheat flour to manufacture biscuits.
- Tertiary Sector: This sector does not produce goods. Instead, it provides services that support the production and distribution process of the other two sectors, or provides essential services directly to consumers. The output is intangible.
Illustration with examples:
-
Support for other sectors: Goods produced in the primary (wheat) and secondary (biscuits) sectors need to be transported to markets. The transport service provided by trucks or trains is a tertiary sector activity. Similarly, a shopkeeper providing the service of selling these biscuits is also in the tertiary sector.
-
Direct services: A teacher provides the service of education, and a doctor provides the service of healthcare. These services do not result in a physical good but are essential for human development and well-being.
-
Communication and Finance: A farmer might need a loan to buy seeds. The banking service that provides the loan is a tertiary activity. Talking to a trader over the phone to fix a price involves a communication service, which is also part of the tertiary sector.
In essence, while the primary and secondary sectors focus on 'what is produced' (goods), the tertiary sector focuses on 'how things are facilitated' and provides intangible value (services).
Q10EXERCISES
What do you understand by disguised unemployment? Explain with an example each from the urban and rural areas.
Solution
Disguised unemployment, also known as hidden unemployment, is a situation in which more people are engaged in an economic activity than are actually required. Even if some of these surplus workers are removed, the total production will not be affected. It is a situation of underemployment where people are apparently working, but their contribution to the output is zero or negligible, and they are working below their potential.
Example from Rural Areas:
Consider a small farmer's family with 2 hectares of land. The entire family of five members works on this farm throughout the year. However, the work required on the farm can be efficiently managed by only three people. The two extra members are not contributing anything to the farm's output. They appear to be employed, but they are actually disguisedly unemployed. If these two people were to find work elsewhere, the farm's production would not decrease, and the family's total income would increase.
Example from Urban Areas:
In urban areas, disguised unemployment can be seen in the service sector. For instance, consider a small family-owned shop. All four brothers in the family work in the shop from morning to evening. However, the number of customers and the volume of work are such that only two people are needed to manage the shop effectively. The other two brothers are not adding to the shop's sales or profits. They are working because they do not have better job opportunities. Similarly, there are thousands of casual workers like painters, plumbers, or street vendors who may spend the whole day looking for work or selling goods but earn very little, indicating that the work they do is not sufficient to keep them fully employed.
Q11EXERCISES
Distinguish between open unemployment and disguised unemployment.
Solution
The distinction between open unemployment and disguised unemployment is as follows:
| Basis of Distinction | Open Unemployment | Disguised Unemployment |
|---|---|---|
| Definition | A situation where a person is able and willing to work but cannot find a job. | A situation where more people are employed in a job than are actually needed. |
| Visibility | It is clearly visible and can be easily identified and counted. | It is hidden and difficult to identify, as the person appears to be employed. |
| Productivity | The person is not working at all, so their contribution to production is zero. | The person is working, but their marginal productivity (contribution to output) is zero or negligible. |
| Occurrence | It is found in all sectors of the economy, particularly among the educated in urban areas. | It is predominantly found in the agricultural sector in rural areas and the unorganised service sector in urban areas. |
| Example | An educated youth in a city actively searching for a job but failing to find one. | Five family members working on a small farm that only requires three people to operate. |
Q12EXERCISES
"Tertiary sector is not playing any significant role in the development of Indian economy." Do you agree? Give reasons in support of your answer.
Solution
I do not agree with the statement that the tertiary sector is not playing any significant role in the development of the Indian economy. In fact, it is playing the most significant role in terms of its contribution to national income and is a key driver of economic growth.
Reasons to support this view:
-
Largest Producing Sector: Over the last few decades, the tertiary sector has emerged as the largest producing sector in India. As per the data for 2017-18 in the textbook, it contributes the most to the country's Gross Value Added (GVA), surpassing both the primary and secondary sectors.
-
Provision of Basic Services: The service sector includes essential services that form the backbone of a country's development, such as hospitals, educational institutions, banks, police stations, courts, and transport. The government has a primary responsibility to provide these services.
-
Support to Other Sectors: The development of the primary and secondary sectors is heavily dependent on services like transport, storage, trade, and banking. Without a robust tertiary sector, the agricultural and industrial sectors cannot grow efficiently.
-
Rising Income Levels: As incomes rise, people demand more services like tourism, private schools, professional training, and restaurants. The tertiary sector caters to these rising demands, improving the quality of life.
-
Growth in New Services: In recent years, new services based on information and communication technology (ICT), such as IT services, call centres, and software development, have become crucial for the economy. This part of the service sector has been growing rapidly and has created many high-skilled jobs.
While it is true that the growth in employment in the tertiary sector has not been commensurate with its growth in GVA, its overall contribution to the economy's output, infrastructure, and development is undeniable and highly significant.
Q13EXERCISES
Service sector in India employs two different kinds of people. Who are these?
Solution
The service sector in India employs two distinct kinds of people:
-
Highly Skilled and Educated Workers: This group is small in number but earns high incomes. They are employed in services that require advanced education and professional skills. Examples include workers in the information technology (IT) sector, banking and finance professionals, doctors, lawyers, teachers in universities, and management consultants.
-
Low-Skilled and Less Educated Workers: This group is very large in number but barely manages to earn a living. They are engaged in services that do not require much skill or education and are often part of the unorganised sector. Examples include small shopkeepers, repair persons, transport workers (like auto-rickshaw drivers), street vendors, and domestic workers. These people often perform these services because they lack alternative employment opportunities.
Q14EXERCISES
Workers are exploited in the unorganised sector. Do you agree with this view? Give reasons in support of your answer.
Solution
Yes, I agree with the view that workers are exploited in the unorganised sector. This sector operates largely outside the control of the government, and labour laws are not effectively implemented, which leads to the exploitation of workers.
Reasons to support this view:
-
Low and Irregular Wages: Workers in the unorganised sector are often paid very low wages, which are frequently below the government-stipulated minimum wage. Their earnings are not regular, as employment itself is not secure.
-
No Job Security: Employment is not secure. Workers can be asked to leave at any time by the employer without any reason or prior notice. There is no job security, which makes them highly vulnerable.
-
Long Working Hours: There are no fixed working hours. Workers are often required to work for 10-12 hours a day without any provision for overtime pay.
-
Lack of Benefits: Workers do not receive benefits that are common in the organised sector. There is no paid leave, no payment during holidays, and no leave due to sickness. They also lack social security benefits like provident fund, gratuity, and pensions.
-
Unsafe Working Conditions: The workplace is often unsafe, with no facilities like clean drinking water or a safe working environment. This puts the health and safety of the workers at risk.
Because of these conditions, workers in the unorganised sector face economic vulnerability and social insecurity, which constitutes exploitation.
Q15EXERCISES
How are the activities in the economy classified on the basis of employment conditions?
Solution
On the basis of employment conditions, economic activities are classified into two sectors:
-
Organised Sector: This sector includes enterprises or places of work where the terms of employment are regular and people have assured work. These enterprises are registered by the government and are required to follow its rules and regulations as laid down in various laws like the Factories Act, Minimum Wages Act, etc. Workers in this sector enjoy job security, fixed working hours, paid leave, social security benefits like provident fund and medical benefits, and pensions upon retirement.
-
Unorganised Sector: This sector is characterized by small and scattered units which are largely outside the control of the government. While rules and regulations exist, they are not followed. Jobs in this sector are low-paid, often not regular, and employment is not secure. There is no provision for overtime pay, paid leave, holidays, or sick leave. Workers can be dismissed without any reason.
Q16EXERCISES
Compare the employment conditions prevailing in the organised and unorganised sectors.
Solution
The employment conditions in the organised and unorganised sectors are vastly different. A comparison is presented below:
| Feature | Organised Sector | Unorganised Sector |
|---|---|---|
| Registration | Enterprises are registered with the government. | Enterprises are largely outside the control of the government. |
| Rules & Regulations | Follows government rules and regulations (e.g., Factories Act). | Rules and regulations are generally not followed. |
| Job Security | Employment is secure; workers cannot be dismissed without cause. | Employment is not secure; workers can be asked to leave anytime. |
| Wages | Wages are regular, generally higher, and follow minimum wage laws. | Wages are low, irregular, and often below the minimum wage. |
| Working Hours | Working hours are fixed, with provision for overtime pay. | Working hours are long and not fixed; no overtime pay. |
| Paid Leave | Entitled to paid leave, holidays, and sick leave. | No provision for paid leave, holidays, or sick leave. |
| Social Security | Benefits like provident fund, gratuity, and pension are provided. | No social security benefits are provided. |
| Other Benefits | Medical benefits and safe working conditions are ensured by law. | No such benefits are available. |
| Example | A teacher in a government school (Kanta's example). | A daily wage labourer in a grocery shop (Kamal's example). |
Q17EXERCISES
Explain the objective of implementing the MGNREGA 2005.
Solution
The primary objective of implementing the Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA 2005) is to enhance the livelihood security of people in rural areas. This is achieved by legally guaranteeing at least 100 days of wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work. This legal guarantee makes it a 'Right to Work'.
Other key objectives of the Act are:
- Poverty Alleviation: By providing a source of supplementary income, the Act aims to reduce poverty and vulnerability among rural households, especially during lean agricultural seasons.
- Creation of Durable Assets: The types of work given preference under the Act are those that help in creating durable rural assets, such as the construction of roads, canals, ponds, and wells. This helps to increase the productivity of land and support agricultural activities.
- Reducing Rural-Urban Migration: By providing employment opportunities in the villages themselves, the Act aims to reduce the distress migration of labourers from rural to urban areas in search of work.
- Empowering Vulnerable Groups: The Act promotes the empowerment of women, Scheduled Castes (SCs), and Scheduled Tribes (STs) by ensuring their participation and providing them with work.
If the government fails to provide employment within 15 days of application, it is liable to pay an unemployment allowance to the people, reinforcing the guarantee.
Q18EXERCISES
Using examples from your area compare and contrast that activities and functions of private and public sectors.
Solution
Let's compare and contrast the public and private sectors using examples from a typical area.
Examples:
- Public Sector: Government Senior Secondary School, State Bank of India (SBI) branch, Post Office, State Roadways Bus Service.
- Private Sector: A local private school (e.g., DPS), HDFC Bank branch, a local grocery store, a private bus service.
Comparison and Contrast:
| Basis | Public Sector (e.g., Government School) | Private Sector (e.g., Private School) |
|---|---|---|
| Ownership | Owned and managed by the government. | Owned and managed by private individuals or a company. |
| Primary Motive | The main motive is public welfare and providing an essential service (education) to all, often at a subsidized cost or free. | The main motive is to earn a profit. Fees are charged to cover costs and generate profit. |
| Source of Funds | Funded by the government through taxes and other revenues. | Funded by the owners through their own capital, loans, and fees from customers. |
| Accessibility | Aims to be accessible to everyone, regardless of their ability to pay. | Caters to customers who can afford their services. |
| Accountability | Accountable to the public and the government. | Accountable primarily to its owners and shareholders. |
| Function Example | The Post Office delivers mail to even the most remote villages, which may not be profitable. The State Roadways Bus Service may run on unprofitable routes to ensure connectivity for rural areas. | A private courier company may not serve remote, unprofitable areas. A private bus service will operate only on high-traffic, profitable routes. |
In summary, the public sector's primary function is to provide essential services for the welfare of society as a whole, often without a profit motive. In contrast, the private sector is driven by the motive to earn profits, and its activities are guided by market demand and profitability.
Q19EXERCISES
Discuss and fill the following table giving one example each from your area.
Well managed organisation Badly managed organisation Public sector Private Sector
Solution
This table is based on observations from a typical area. The examples can vary from place to place.
| Well managed organisation | Badly managed organisation | |
|---|---|---|
| Public sector | Kendriya Vidyalaya / Local branch of a nationalised bank like SBI: These are often well-managed, with regular staff, proper procedures, and consistent service delivery. They adhere to national standards. | Local Municipal Corporation Office / State Electricity Board Office: These can sometimes be badly managed, with long queues, unresponsive staff, frequent delays, and issues of corruption. |
| Private Sector | A reputed local supermarket / A major private hospital (e.g., Apollo): These are typically well-managed with a focus on customer service, efficiency, cleanliness, and quality to attract and retain customers and maximize profit. | A small, local restaurant with poor hygiene / A small workshop: These can be badly managed with irregular hours, poor quality products/services, and lack of customer care, often struggling to survive. |
Q20EXERCISES
Give a few examples of public sector activities and explain why the government has taken them up.
Solution
Here are a few examples of public sector activities and the reasons why the government has undertaken them:
-
Railways, Roads, and Bridges: The government undertakes the construction and maintenance of infrastructure like railways, roads, and bridges. This is because these projects require a massive investment of money that is often beyond the capacity of the private sector. Furthermore, the benefits are shared by the entire society, and it is difficult to collect user fees from every single person (e.g., for using a local road). The government's goal is to ensure connectivity and facilitate economic activity for everyone, not to make a profit.
-
Providing Electricity at Subsidised Rates: The government is involved in the generation and supply of electricity. It often supplies electricity at rates lower than the cost of production, especially to farmers and small-scale industries. The private sector would not do this as it would incur losses. The government does it to support farmers, encourage industrial production, and make electricity affordable for all, thus promoting overall economic development.
-
Procurement and Distribution of Food Grains (PDS): The Government of India, through the Food Corporation of India (FCI), buys wheat and rice from farmers at a fair price (Minimum Support Price) and sells it at a lower price to the poor through ration shops. The government bears the cost difference. This is done to support farmers by ensuring they get a reasonable price for their crops and to ensure food security for the poorer sections of society. A private company would not undertake such an activity as its primary motive is profit.
Q21EXERCISES
Explain how public sector contributes to the economic development of a nation.
Solution
The public sector contributes significantly to the economic development of a nation in the following ways:
-
Creation of Basic Infrastructure: The public sector builds and manages essential infrastructure such as roads, railways, ports, power plants, and irrigation dams. This infrastructure is crucial for the functioning of all other sectors of the economy, including agriculture and industry, and facilitates trade and commerce.
-
Development of Heavy Industries: In the initial stages of development, the government often sets up heavy industries like steel plants, oil refineries, and heavy engineering plants. These require huge capital investments and have long gestation periods, making them unattractive for the private sector. These industries provide a strong base for further industrialization.
-
Ensuring Balanced Regional Development: The private sector tends to concentrate its investments in already developed urban areas. The government can promote balanced regional development by setting up industries and infrastructure projects in backward and rural areas, thereby creating employment and raising income levels in those regions.
-
Investing in Human Development: The public sector provides essential services like education and healthcare to the masses, often at subsidized rates or for free. A well-educated and healthy population is more productive and is a cornerstone of long-term economic development.
-
Supporting the Private Sector: The government supports the private sector, especially small-scale industries, by providing electricity at affordable rates, supplying raw materials, and offering credit facilities. This encourages production and employment.
-
Poverty Alleviation and Employment Generation: The government runs various employment generation schemes (like MGNREGA) and poverty alleviation programs, which directly contribute to the welfare and economic upliftment of the poor.
Q22EXERCISES
The workers in the unorganised sector need protection on the following issues : wages, safety and health. Explain with examples.
Solution
Workers in the unorganised sector are highly vulnerable and need protection on the issues of wages, safety, and health.
-
Wages:
- Problem: Workers in the unorganised sector are often paid very low wages, which are not regular and are frequently below the legal minimum wage. They are exploited because of the surplus of labour and the lack of bargaining power.
- Example: A daily wage construction labourer may be paid only Rs. 250-300 for a full day's hard work, which might be less than the minimum wage prescribed by the state government. Similarly, a domestic worker may be paid a very low monthly salary for working long hours.
- Protection Needed: Strict enforcement of the Minimum Wages Act is required to ensure that these workers receive a fair wage for their labour.
-
Safety:
- Problem: Workplaces in the unorganised sector are often unsafe. Employers do not invest in safety measures or provide protective equipment, leading to a high risk of accidents and occupational hazards.
- Example: Construction workers often work on high-rise buildings without helmets, safety harnesses, or nets. Workers in small workshops or firecracker units may work with hazardous chemicals or machinery without any protective gear.
- Protection Needed: Government must enforce safety regulations through regular inspections and impose heavy penalties on employers who violate safety norms.
-
Health:
- Problem: Workers in the unorganised sector have no health benefits. They do not get paid sick leave, so an illness means a loss of income. They also cannot afford medical treatment for themselves or their families.
- Example: A street vendor who falls ill cannot work for a few days and loses their income for that period, pushing their family into debt. A rag picker is exposed to numerous diseases but has no access to affordable healthcare or medical insurance.
- Protection Needed: The government needs to provide access to affordable healthcare through public health centres and social security schemes like health insurance for unorganised sector workers.
Q23EXERCISES
A study in Ahmedabad found that out of 15,00,000 workers in the city, 11,00,000 worked in the unorganised sector. The total income of the city in this year (1997-1998) was Rs 60,000 million. Out of this Rs 32,000 million was generated in the organised sector. Present this data as a table. What kind of ways should be thought of for generating more employment in the city?
Solution
Data Presentation in a Table:
First, we calculate the missing figures:
- Number of workers in the organised sector = Total workers - Unorganised sector workers =
- Income generated in the unorganised sector = Total income - Organised sector income = Rs 60,000 million - Rs 32,000 million = Rs 28,000 million
Table: Distribution of Workers and Income in Ahmedabad (1997-1998)
| Sector | Number of Workers | Share of Workers (%) | Income Generated (in million Rs) | Share of Income (%) |
|---|---|---|---|---|
| Organised | 4,00,000 | 26.7% | 32,000 | 53.3% |
| Unorganised | 11,00,000 | 73.3% | 28,000 | 46.7% |
| Total | 15,00,000 | 100% | 60,000 | 100% |
Ways to Generate More Employment:
The table shows a major disparity: 73.3% of workers (in the unorganised sector) are generating only 46.7% of the income, indicating low productivity and low wages. To generate more and better employment, the following ways should be considered:
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Support for Small-Scale Industries: The government should provide support to the small workshops and units in the unorganised sector. This can be done by ensuring timely delivery of raw materials, providing access to cheap credit, and helping them with marketing their output. This would help these units grow, become more productive, and create more stable jobs.
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Skill Development Programs: Launching vocational training and skill development programs for unorganised sector workers can improve their productivity and earning potential, enabling them to move into better jobs.
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Promoting Labour-Intensive Industries: The city can promote industries that are labour-intensive, such as garment manufacturing, food processing, and leather goods, which can absorb a large number of workers.
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Urban Infrastructure Development: Investing in urban infrastructure projects like road construction, housing for the poor, and public transport can create a large number of jobs, especially for construction workers.
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Enforcement of Labour Laws: Strict enforcement of labour laws regarding minimum wages and working conditions can improve the quality of jobs in the unorganised sector. Better wages can lead to higher demand in the economy, which in turn can spur more employment.
Q24EXERCISES
The following table gives the GVA in Rupees (Crores) by the three sectors:
Year Primary Secondary Tertiary 2000 12,56,000 10,12,000 18,17,000 2013 17,87,000 24,59,000 46,30,000
(i)
Calculate the share of the three sectors in GDP for 2000 and 2013.
(ii)
Show the data as a bar diagram similar to Graph 2 in the chapter.
(iii)
What conclusions can we draw from the bar graph?
Solution
(i)
Calculation of the share of the three sectors in GVA:
For the year 2000:
- Total GVA = Primary + Secondary + Tertiary = Crores
- Share of Primary Sector =
- Share of Secondary Sector =
- Share of Tertiary Sector =
For the year 2013:
- Total GVA = Primary + Secondary + Tertiary = Crores
- Share of Primary Sector =
- Share of Secondary Sector =
- Share of Tertiary Sector =
(ii)
Bar Diagram:
The bar diagram would have the 'Years' (2000 and 2013) on the x-axis. The y-axis would represent the 'Share in GVA (%)', ranging from 0 to 60. For each year, there would be three bars representing the primary, secondary, and tertiary sectors.
- For 2000: A bar for Primary at ~31%, Secondary at ~25%, and Tertiary at ~45%.
- For 2013: A bar for Primary at ~20%, Secondary at ~28%, and Tertiary at ~52%. The bars for each sector would be color-coded for easy comparison across the years.
(iii)
Conclusions from the bar graph:
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Dominance of the Tertiary Sector: The tertiary (service) sector was the largest contributor to GVA in 2000 and its dominance has significantly increased by 2013, with its share rising from 44.5% to 52.2%. This indicates the growing importance of services in the Indian economy.
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Declining Share of the Primary Sector: The share of the primary (agricultural and related) sector has seen a sharp decline from 30.7% in 2000 to 20.1% in 2013. This shows the decreasing relative importance of agriculture in terms of economic output.
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Moderate Growth of the Secondary Sector: The share of the secondary (industrial) sector has increased, but only moderately, from 24.8% to 27.7%. Its growth has not been as rapid as that of the tertiary sector.
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Structural Shift in the Economy: The data clearly shows a structural transformation in the Indian economy, moving away from a reliance on the primary sector towards a service-dominated economy. This is a typical pattern observed in developing countries.