Sectors of the Indian Economy Class 10

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Subject	Social Science (Economics)
Class	10
Board	CBSE
Chapter No.	2
Chapter Name	Sectors of the Indian Economy
Type	Notes
Session	2025-26
Weightage	5 marks

Table of Contents

Sectors of Economic Activities
Primary (Agriculture) Sector
Secondary (Industrial) Sector
Tertiary (Service) Sector
Interdependence of Three Sectors
Final Goods and Intermediate Goods
Gross Domestic Product (GDP)
Historical Change in Sectors
Primary, Secondary, and Tertiary Sectors in India
Division of Sectors as Organized and Unorganized
Sectors in Terms of Ownership: Public and Private Sectors

Sectors of Economic Activities

People are engaged in various economic activities.
Some of these are activities producing goods.
Some others are producing services.
We can study these economic activities by grouping them (classifying them) using some important criteria. These groups are also called sectors.

Primary (Agriculture) Sector

These are activities that are undertaken by directly using natural resources.

Example 1: The cultivation of cotton.

· It takes place within a crop season. For the growth of the cotton plant, we depend mainly, but not entirely, on natural factors like rainfall, sunshine, and climate. The product of this activity, cotton, is a natural product.

Example 2: Dairy

· We are dependent on the biological process of the animals and the availability of fodder, etc. The product here, milk, also is a natural product.

Example 3: Mining

· Minerals and ores are also natural products.

When we produce goods by exploiting natural resources, it is an activity of the primary sector.

Since most of the natural products we get are from agriculture, dairy, fishing, and forestry, this sector is also called agriculture and related sector.

Secondary (Industrial) Sector

The secondary sector covers activities in which natural products are changed into other forms through ways of manufacturing that we associate with industrial activity.
The product is not produced by nature but has to be made and therefore some process of manufacturing is essential. This could be in a factory, a workshop, or at home.
Since this sector gradually became associated with the different kinds of industries that came up, it is also called as industrial sector.

Tertiary (Service) Sector

Economic activities in this sector 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 support for the production process.
For example, transport, storage, communication, banking, and trade are some examples of tertiary activities.
The service sector also includes some essential services that may not directly help in the production of goods.
For example, we require teachers, doctors, and those who provide personal services such as washermen, barbers, cobblers, lawyers, and people to do administrative and accounting works.
In recent times, certain new services based on information technology such as internet cafes, ATM booths, call centers, software companies, etc have become important.
Since these activities generate services rather than goods, the tertiary sector is also called the service sector.

Interdependence of Three Sectors

The tertiary sector does not produce any goods but it helps in the production of goods in the primary and secondary sectors. For example:

In the primary sector, we need the service of transportation for getting the supply of agricultural inputs and also for selling food grains in the market or supplying agricultural raw materials to agro-based industries.
In the secondary sector, we need the help of transportation for bringing the raw materials and taking the final products to the market.
Transportation is required in the service sector as well such as for providing medical facilities to the people and other services like fire services, etc.

Final Goods and Intermediate Goods

Final Goods	Intermediate Goods
i. The goods which are used for final consumption.	i. The goods which are used up in producing final goods & services.
ii. Value of final goods is included in the GDP.	ii. The value of intermediate goods is not included in the GDP.
iii. For example - TV, Bread, Bakery products, etc.	iii. For example - Flour, cotton, etc.

Gross Domestic Product (GDP)

Gross Domestic Product (GDP) is a broad measurement of a nation’s overall economic activity. GDP is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.

Historical Change in Sectors

The histories of many developed countries indicate that the primary sector was the most dominant sector of their economic activity at the initial stages of development. At that stage, most of the goods produced were natural products from the primary sector.
In the later phase, new methods of manufacturing were introduced, factories came up and people started shifting from agriculture to the secondary sector.
Later on, there has been a further shift from the secondary sector to the service sector. Most of the people employed in the primary and secondary sectors now shifted to the service sector and thus service sector became the most dominant sector.

Primary, Secondary, and Tertiary Sectors in India

Rising Importance of the Tertiary Sector in Production

Over the forty years between 1973-74 and 2013-14, while production in all three sectors has increased, it has increased the most in the tertiary sector.

As a result, in the year 2013-14, the tertiary sector emerged as the largest producing sector in India replacing the primary sector.

Reasons for Rising Importance of the Tertiary Sector in India:

Basic services: Services such as hospitals, educational institutions, post and telegraph services, transport, banks, and insurance companies are in this group.
Development of primary and secondary sectors: The development of agriculture and industry leads to the development of services such as transport, trade, and storage.
Rise in income levels: As income levels rise, certain sections of people start demanding many more services like eating out, tourism, shopping, private hospitals, private schools, and professional training centers.
Rise in information technology: Over the past decade or so, certain new services, such as those based on information and communication technology have become important and essential.
Globalization: Due to globalization, people have become aware of new services and activities, because of which the tertiary sector has gained importance.

But the entire tertiary sector has not grown in importance:

The service sector includes two different kinds of people.
One who is highly educated, skilled, and earning very high such as doctors, engineers, software professionals, etc., and on the other hand those who are not educated and unskilled such as street vendors, repair persons, etc.
Though the service sector has grown over the past few decades not all of the service sector has grown equally.
The educated and highly skilled workers have grown high whereas the uneducated and the unskilled barely manage to earn a living and yet they perform these services because no alternative opportunities for work are available to them.

Where are most of the people employed?

The primary sector is the largest employer in India. Nearly 44% of the population is engaged in this sector in one way or the other. However, its share in the GDP is very less because of the following reasons:

The average size of the land holdings is very low which results in low productivity per holder.
Less use of modern technology and know-how among the farmers to increase crop productivity.
The system of providing financing and marketing facilities has been insufficient since independence. The small and marginal farmers are not able to get benefits from the loan facilities and access to large markets.
The absence of alternate income-generating activities in rural areas gives rise to disguised unemployment where the efficient labor force is not used.

i. Underemployment: A situation where someone works less than their full potential or capacity. This can happen due to various reasons like:

Part-time work when desiring full-time.
A job that doesn't utilize their full skillset.
Seasonal work with limited hours during off-seasons.

ii. Disguised unemployment:

Specific Type of Underemployment. Occurs when there's a surplus of labor in a particular sector, often agriculture.
In summary, underemployment is more related to the quality of the job, while disguised unemployment is related to the quantity of the job.

How to create more employment in rural areas?

Employment can be generated in rural areas by:

People can be employed in projects like the construction of dams/canals/roads in the village.
Provide irrigation facilities so that farmers harvest two or three crops in a year. Thus, more people can be employed.
Government can open centers to give them training and financial assistance to help them become self-employed.
Government can invest and employ people in providing transportation and storage services.
Honey collection centers and vegetable and fruit processing units should be set up.
More cottage industries and services should be promoted in rural areas with soft loans and marketing support.

How to create more employment in urban areas?

There are a number of ways to increase urban employment in India, including:

Encouraging foreign investment: Attracting foreign investment can create jobs in a variety of industries, including manufacturing, technology, and services.
Developing small and medium-sized enterprises (SMEs): SMEs are a major source of employment in urban areas, and policies that support their growth and development can help to create jobs.
Providing vocational training: Vocational training can help to match workers with the skills that are in demand in the urban labor market.
Promoting the growth of the service sector: The service sector, including tourism, retail, and healthcare, is a major source of urban employment in India. Policies that encourage the growth of this sector can help to create jobs.
Focusing on Infrastructure development: Infrastructure development can create jobs in the short term, as well as make it easier for businesses to operate and for people to move around in the long term.
Encouraging entrepreneurship: Encouraging entrepreneurship can help to create new businesses and jobs, particularly in the informal sector.
Improving access to credit: Improving access to credit can help entrepreneurs and small businesses grow, which can create jobs.

Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA 2005)

The central government in India made a law implementing the Right to Work in about 625 districts of India. It is called Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA 2005).
Under MGNREGA 2005, all those who are able to, and are in need of work in rural areas are 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.
The types of work that would in the future help to increase the production from land will be given preference under the Act.

Division of Sectors as Organized and Unorganized

Organized Sector	Unorganized Sector
i. These units are registered with the government.	i. These units are not registered with the government.
ii. These are big units.	ii. These are small and scattered units.
iii. They follow the labor laws given by the government.	iii. They do not follow the labor laws given by the government.
iv. There are some formal processes and procedures in this sector.	iv. There are no formal processes and procedures in this sector.
v. There is a security of employment.	v. There is no security of employment.
vi. There are fixed working hours and workers are paid for overtime.	vi. There are no fixed working hours and workers are not paid for overtime.
vii. There are some other benefits like paid holidays, medical facilities, a safe working environment, a provident fund, etc.	vii. There are no benefits like paid holidays, medical facilities, a safe working environment, provident fund, etc.

Flexible Labor Laws: It means:

The company hires workers for a short period.
A lot of pressure and work overtime with no extra payment.
No work when there is no demand.

Government can:

Set some laws to see that the companies see the welfare of the workers.
See if the labor laws are properly implemented.
Government can create opportunities for alternative employment.

Sectors in Terms of Ownership: Public and Private Sectors

Public Sector	Private Sector
i. The sector of a nation's economy which is under the control of the government is known as the public sector.	i. The sector of a nation's economy which is owned and controlled by private individuals or companies is known as the private sector.
ii. Government owns most of the assets and provides all the services.	ii. Ownership of assets and delivery of services is in the hands of private individuals or companies.
iii. The main motive is to provide benefits to the people.	iii. The main motive is to earn profit.
iv. Government can raise money through taxes.	iv. To get services we have to pay money to individuals or companies.
v. For example - police, army, health, Indian railways, etc.	v. For example - Reliance company limited, TISCO, etc.

The public sector plays a major role in India than the private sector because:

The public sector is owned and run by the government. They enable the government to have control over the economy for the benefit of the people in general.
It creates employment opportunities.
It generates financial resources for development.
It ensures equality of income, and wealth and thus a balanced regional development.
Activities undertaken by the public sector require a huge amount of money. But it provides the services at a lower rate.
Its investment in the infrastructure sector paves the way for the agricultural and industrial development of a country like India.
It encourages the development of small, medium, and cottage industries.

Chapter 2: Sectors of the Indian Economy – NCERT Solutions

🔹 Q1. 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.
(ii) Workers in the _________ sector do not produce goods.
(iii) Most of the workers in the _________ sector enjoy job security.
(iv) A _________ proportion of labourers in India are working in the unorganized sector.
(v) Cotton is a _________ product and cloth is a _________ product.

Options: (primary, secondary, tertiary, organized, unorganized, has not)

✅ Answer:
(i) has not
(ii) tertiary
(iii) organized
(iv) large
(v) primary, secondary

🔹 Q2. Choose the most appropriate answer.

(i) The sectors are classified into public and private sector on the basis of:
(a) employment conditions
(b) the nature of economic activity
(c) ownership of enterprises
(d) number of workers employed

✅ Answer: (c) ownership of enterprises

(ii) Production of a commodity, mostly through the natural process, is an activity in _________ sector:
(a) primary
(b) secondary
(c) tertiary
(d) information technology

✅ Answer: (a) primary

(iii) GDP is the total value of _________ produced during a particular year:
(a) all goods and services
(b) all final goods and services
(c) all intermediate goods and services
(d) all intermediate and final goods and services

✅ Answer: (b) all final goods and services

(iv) In terms of GDP the share of tertiary sector in 2013–14 is _________:
(a) between 20% to 30%
(b) between 30% to 40%
(c) between 50% to 60%
(d) 70%

✅ Answer: (c) between 50% to 60%

🔹 Q3. Match the following:

Problems faced by farming sector	Measures and Solutions
1. Unirrigated land	A. Setting up agro-based mills
2. Low prices for crops	B. Cooperative marketing societies
3. Debt burden	C. Procurement by government
4. No job in off season	D. Construction of canals and tanks
5. Compelled to sell in local markets	E. Employment in services (e.g., MNREGA)

✅ Answer:
1 → D
2 → C
3 → B
4 → E
5 → A

🔹 Q4. Find the odd one out and say why:

(i) Tourist guide, dhobi, tailor, potter
✅ Odd one: Tourist guide – because it is a service (tertiary sector), while others are involved in goods production (secondary sector).

(ii) Teacher, doctor, vegetable vendor, lawyer
✅ Odd one: Vegetable vendor – because the rest are professionally qualified service providers.

(iii) Postman, cobbler, soldier, police constable
✅ Odd one: Cobbler – because the others are government employees (public sector).

(iv) MTNL, Indian Railways, Air India, Sahara Airlines
✅ Odd one: Sahara Airlines – it is privately owned; the others are public sector undertakings.

🔹 Q5. A research scholar says, “Agricultural sector appears to be the largest employer in India.” Do you agree? Why or why not?

✅ Answer:
Yes, agriculture is the largest employer in India, especially in rural areas. However, it does not contribute the highest to the GDP. This shows underemployment and low productivity in the sector.

🔹 Q6. Compare the employment conditions prevailing in the organized and unorganized sectors.

✅ Answer:

Organized Sector	Unorganized Sector
Job security and regular wages	No job security, irregular income
Fixed working hours and paid holidays	Long hours, no paid holidays
Social security benefits provided	No benefits like PF, insurance, etc.
Follow rules and laws of the government	Not registered under government laws

🔹 Q7. Explain the objective of implementing the NREGA 2005.

✅ Answer:
The objective of NREGA 2005 (now MGNREGA) is to provide guaranteed wage employment to rural households for at least 100 days a year. It also aims to create sustainable rural assets and reduce rural distress and unemployment.

🔹 Q8. Using examples from your area, explain the difference between the three sectors of the economy.

✅ Answer:

Primary sector: Involves natural resource usage – e.g., farming or fishing.
Secondary sector: Involves manufacturing – e.g., rice mill or textile factory.
Tertiary sector: Involves services – e.g., banking, transportation, education.

🔹 Q9. What do you understand by disguised unemployment? Explain with an example.

✅ Answer:
Disguised unemployment is when more people are employed than actually needed. Example: In a family farm, 5 members may work, but only 3 are required; the extra 2 are not contributing productively.

🔹 Q10. How are activities in the economy classified on the basis of employment conditions?

✅ Answer:
They are classified into:

Organized sector: Formal, registered, regular jobs.
Unorganized sector: Informal, unregistered, low-paid and insecure jobs.

PAST CBSE Board EXAM questions from Class 10 Economics – Chapter 2: Sectors of the Indian Economy,

✅ 1-MARK QUESTIONS (Very Short Answer)

What is the primary sector?
📅 Year: 2011
👉 Activities using natural resources directly like farming, fishing.
Which sector is the largest employer in India?
📅 Year: 2014, 2018
👉 Primary sector (especially agriculture).
Give one example of a job in the tertiary sector.
📅 Year: 2016
👉 Banking, education, transportation, etc.
Name the act passed in 2005 that guarantees 100 days of wage employment.
📅 Year: 2015
👉 Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005
What is the aim of implementing MGNREGA 2005?
📅 Year: 2020
👉 To provide guaranteed wage employment to rural households for 100 days annually.

✅ 2-MARK QUESTIONS (Short Answer)

Differentiate between the organized and unorganized sector.
📅 Year: 2013, 2018
👉 Organized: formal, job security, benefits. Unorganized: informal, low wages, no benefits.
Why is the tertiary sector becoming more important in India? Give two reasons.
📅 Year: 2017, 2021
👉 Increased demand for services, rise of information and communication technology.
What is disguised unemployment? Give one example.
📅 Year: 2012, 2016
👉 When more people are employed than required. E.g., 5 people working on a farm where only 3 are needed.
State two development measures taken to reduce unemployment in rural areas.
📅 Year: 2015
👉 MGNREGA, promoting rural industries, skill training programs.
Explain the concept of GDP.
📅 Year: 2019
👉 Gross Domestic Product – total value of final goods and services produced in a country during a year.

✅ 3-MARK QUESTIONS (Short Answer in Detail)

How do we classify economic activities based on sectors? Explain with examples.
📅 Year: 2013, 2020
👉 Primary (farming), Secondary (manufacturing), Tertiary (services).
Explain three reasons why employment in the unorganized sector is increasing.
📅 Year: 2017
👉 Lack of formal jobs, easy entry, rural migration.
What steps can be taken to reduce unemployment in the rural sector?
📅 Year: 2014, 2023 Sample Paper Style
👉 Promote self-employment, improve irrigation, develop cottage industries, expand MGNREGA.
Distinguish between public and private sector with examples.
📅 Year: 2016
👉 Public – owned by government (Railways); Private – owned by individuals (Tata, Reliance).
Explain any three ways to create more employment in the rural areas.
📅 Year: 2015
👉 Promote irrigation, rural industries, better transport and storage, training programs.

✅ 5-MARK QUESTIONS (Long Answer)

What is the difference between the primary, secondary, and tertiary sectors? Explain with examples.
📅 Year: 2013, 2019
👉 Primary: natural resources (farming); Secondary: production (factories); Tertiary: services (banking).
What is meant by underemployment? Why is it a serious problem in India? Suggest ways to reduce it.
📅 Year: 2014, 2022
👉 Fewer jobs than people. Affects income and productivity. Improve rural infrastructure, expand industries.
What is GDP? Who measures GDP in India? Explain the role of different sectors in GDP.
📅 Year: 2016, 2020
👉 GDP – total value of final goods/services; Measured by CSO; Tertiary sector growing faster.
Explain the rising importance of the tertiary sector in India. What problems are faced by this sector?
📅 Year: 2017, 2021
👉 Demand for services has increased; employment generation is still limited in some service areas.
Describe the features of employment in the unorganized sector. What steps should be taken to protect workers in this sector?
📅 Year: 2018, 2024 (Model Paper)
👉 Low wages, no job security; Steps: Minimum wages, registration, welfare schemes.

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