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Question-1

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, SAHARA Airlines, All India Radio.

Solution:
(i) Potter belongs to the secondary sector while the other three belong to the tertiary sector.

(ii) Vegetable vendor belongs to the unorganized sector while the other three belong to the Organised sector.

(iii) Cobbler belongs to the unorganized sector while the other three belong to the organized sector (Public sector).

(iv) SAHARA Airlines belongs to the Private sector while the other three belong to the Public sector.

Question-2

Complete the table. What is the percentage of workers in the unorganised sector in this city?

Solution:
The percentage of workers in the unorganized sector in Surat is 50 %.

Question-3

Do you think the classification of economic activities into primary, secondary
and tertiary is useful? Explain how.

Solution:
The classification of economic activities into primary, secondary and tertiary is very useful. Many activities are happening around us every minute, to understand these activities we have to group or classify them using some important criterion. Here the classification is based on the nature work that is done.

Question-4

For each of the sectors that we came across in this chapter why should one focus on employment and GDP? Could there be other issues which should be examined? Discuss.

Solution:
All the economic sectors are not growing at the same pace and not all of the service sector is growing equally. For instance if we take the service sector in India, it employs many different kinds of people. At one end there are a limited number of services that employ highly skilled and educated workers. At the other end, there are a very large number of workers engaged in services such as small shopkeepers, repair persons, transport persons, etc. These people barely manage to earn a living and yet they perform these services because no alternative opportunities for work are available to them. Hence, only a part of this sector is growing in importance. So, in this case if we focus on the employment percentage we will be able to determine the area where assistance for upliftment is required.


On the other hand the GDP helps us determine the share of the three sectors on the production platform. The GDP reveals the changing importance.

Production has increased many folds in the tertiary sector, while it was the Primary sector which was the highest producer a few decades ago.


The comparison of the GDP and employment readings show that the primary sector continues to be the largest employer even though it’s GDP has gone down. The reason for this is enough jobs were created in the secondary and tertiary sectors. 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. With these findings the government can take the necessary steps to lift up the Primary sector.

Hence the GDP and employment percentages of the three sector are very important for the balanced growth of a Nation.


Question-5

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

Solution:
The activities of the tertiary sector are different as these are activities that help in the development of the primary and secondary sectors. These activities, by themselves, do not produce a good but they are an aid or a support for the production process. For example, goods that are produced in the primary or secondary sector would need to be transported by trucks or trains and then sold in wholesale and retail shops. At times, it may be necessary to store these in godowns. We also may need to talk to others over telephone or send letters (communication) or borrow money from banks (banking) to help production and trade. Transport, storage, communication, banking, trade are some examples of tertiary activities. Since these activities generate services rather than goods, the tertiary sector is also called the service sector.

Question-6

What do you understand by disguised unemployment? Explain with an example each from the urban and rural areas.

Solution:
When people are apparently working but all of them are made to work less than their potential it is called disguised unemployment. That is when a person does not have a job it is clearly visible that he is unemployed, but when a person is working but less than his potential it is disguised unemployment.


Here are two examples:

1. Laxmi, owns about two hectares of unirrigated land dependent only on rain and grows crops like jowar and arhar. All five members of her family work in the plot throughout the year. as they have nowhere else to go for work. Everyone is working, but in actual fact their labour effort is divided as the job requires only 3 people. So there are 2 extra people working on the land, but as they are also sharing the work it is disguised unemployment.


2. 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 others doing odd jobs. Many of them don’t find regular jobs, hence this is also considered as disguised unemployment.


Question-7

Distinguish between open unemployment and disguised unemployment.

Solution:
When a person does not have job it is open unemployment. Whereas when a person is made to work less than his potential it is disguised unemployment

Question-8

"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:
Tertiary sector is playing any significant role in the development of Indian economy. Over the thirty years between 1973 and 2003, while production in all the three sectors has increased, it has increased the most in the tertiary sector. As a result, in the year 2003, the tertiary sector has emerged as the largest producing sector in India replacing the primary sector.

First, in any country several services such as hospitals, educational institutions, post and telegraph services, police stations, courts, village administrative offices, municipal corporations, defence, transport, banks, insurance companies, etc. are required. These are considered as basic services. In a developing country the government has to take responsibility for the provision of these services.


Second, the development of agriculture and industry leads to the development of services such as transport, trade, storage and the like, as we have already seen. Greater the development of the primary and secondary sectors, more would be the demand for such services.

Third, as income levels rise, certain sections of people start demanding many more services like eating out, tourism, shopping, private hospitals, private schools, professional training etc.

Fourth, over the past decade or so, certain new services such as those based on information and communication technology have become important and essential. The production of these services has been rising rapidly.

Therefore it is undisputable that the Tertiary sector is playing any significant role in the development of Indian economy.


Question-9

Service sector in India employs two different kinds of people. Who are these?

Solution:
Service sector employs two different kinds of people. They are teachers, doctors, washer men, barbers, cobblers, lawyers, and people to do administrative and accounting works. In recent times, certain new services based on information technology such as internet cafe, ATM booths, call centres, software companies etc have become important.

Question-10

Workers are exploited in the unorganised sector. Do you agree with this view? Give reasons in support of your answer.

Solution:
The unorganised sector is characterised by small and scattered units which are largely outside the control of the government. There are rules and regulations but these are not followed. Jobs here are low-paid and often not regular. There is no provision for overtime, paid leave, holidays, leave due to sickness etc. Employment is not secure. People can be asked to leave without any reason. When there is less work, some people may be asked to leave. A lot also depends on the whims of the employer.

Question-11

How are the activities in the economy classified on the basis of employment conditions?

Solution:
Activities in the economy are sometimes classified on the basis of employment conditions. This classification looks at the way people are employed and their conditions of work and also sees if there are any rules and regulations that are followed as regards the employment of the workers. The classifications are the organised and unorganised sectors.

Question-12

Compare the employment conditions prevailing in the organised and unorganised sectors.

Solution:
The Organised sector covers those enterprises or places of work where the terms of employment are regular and therefore, people have assured work. They are registered by the government and have to follow its rules and regulations which are given in various laws such as the Factories Act, Minimum Wages Act, Payment of Gratuity Act, Shops and Establishments Act etc. It is called organised because it has some formal processes and procedures. Some of these people may not be employed by anyone but may work on their own but they too have to register themselves with the government and follow the rules and regulations.


The Unorganised sector is characterised by small and scattered units which are largely outside the control of the government. There are rules and regulations but these are not followed. Jobs here are low-paid and often not regular. There is no provision for overtime, paid leave, holidays, leave due to sickness etc. Employment is not secure. People can be asked to leave without any reason. When there is less work, some people may be asked to leave. A lot also depends on the whims of the employer.


Question-13

Explain the objective of implementing the NREGA 2005.

Solution:
Under National Rural Employment Guarantee Act 2005 (NREGA 2005), all those who are able to, and are in need of, work have been guaranteed 100 days of employment in a year by the government. If the government fails in its duty to provide employment, it will give unemployment allowances to the people.

Question-14

Give a few examples of public sector activities and explain why the government has taken them up.

Solution:
Providing health and education facilities, construction of roads, bridges, railways, harbours, generating electricity, providing irrigation through dams are some of the Public sector activities. These activities are the primary responsibility of the government.

These activities need spending large sums of money, which is beyond the capacity of the private sector. Also, collecting money from thousands of people who use these facilities is not easy. Even if they do provide these things they would charge a high rate for their use. So governments have to undertake such heavy spending and ensure that these facilities are available for everyone.


Question-15

Explain how public sector contributes to the economic development of a nation.

Solution:
There are some activities, which the government (the Public sector) has to support. For example, selling electricity at the cost of generation may push up the costs of production of industries, especially small-scale units. Government here steps in by producing and supplying electricity at rates which these industries can afford. Government bears part of the cost.

Similarly, the government in India buys wheat and rice from farmers at a ‘fair price’. This is stored in godowns and sold at a lower price to consumers through ration shops. In this way, the government supports both farmers and consumers.

The private sector may not continue their production or business unless the government contributes in the above mentioned ways. Consequently production in the Private sector contributes to the economic development of a nation.


Question-16

The workers in the unorganised sector need protection on the following issues: Wages, safety and health. Explain with examples.

Solution:
A large number of workers are forced to enter the unorganised sector jobs, which pay a very low salary. They are often exploited and not paid a fair wage. Their earnings are low and not regular. These jobs are not secure and have no other benefits.

We also find that majority of workers from scheduled castes, tribes and backward communities find themselves in the unorganised sector. Besides getting the irregular and low paid work, these workers also face social discrimination. Protection and support to the unorganised sector workers is thus necessary for both economic and social development.

The workers in the unorganised sector do not get paid leave, payment during holidays, provident fund, gratuity etc. They are not provided medical benefits or other facilities like drinking water and a safe working environment when they retire, the workers do not get any pension.

Kamal is a daily wage labourer in a grocery shop. He goes to the shop at 7:30 in the morning and works till 8:00 p.m. in the evening. He gets no other allowances apart from his wages. He is not paid for the days he does not work. He has therefore no leave or paid holidays. Nor was he given any formal letter saying that he has been employed in the shop. He can be asked to leave anytime by his employer.





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