Sectors of the Indian Economy: Class 10 Important Questions & Answers

Are you looking for important questions and answers from Class 10 Economics Chapter 2 Sectors of the Indian Economy? Here are some commonly asked questions and their answers compiled by CBSE Guidance from various sources like CBSE official sample papers, CBSE previous years' questions, and question banks.

sectors of indian economy class 10 important questions answers

SubjectSocial Science (Economics)
Chapter No.2
Chapter NameSectors of the Indian Economy
TypeQuestions and Answers
Weightage 5 marks

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Sectors of the Indian Economy Class 10 Questions and Answers

Q. No. 1) Multiple Choice Questions (MCQs)

i. Arrange the following in the correct sequence:

  1. Transporting cloth to the workshops
  2. Sale in shops and showrooms
  3. Spinning the yarn
  4. The weaving of the fabric


a. i → iv → iii → ii

b. iii → iv → i → ii

c. iv → i → ii → iii

d. iii → iv → ii → I

Ans. Option (b)

ii. Which one of the following belongs to the service sector?

a. Multiple cropping

b. Sericulture

c. Information technology

d. Aluminum smelting

Ans. Option (c)

iii. Fill in the blank:

SectorCriteria Used
Primary, Secondary & TertiaryNature of economic activity
Organized & Unorganized?


a. Nature of employment activities

b. Nature of social activities

c. Nature of production activities

d. Nature of political activities

Ans. Option (a)

iv. Choose the correct option from the following:

List I (Example)List II (Sector)
a. CourierTertiary sector
b. FishermanSecondary sector
c. CarpenterPrimary sector
d. TransporterSecondary sector

Ans. Option (a)

v. Manufacturing provides job opportunities to reduce dependence on agriculture. Identify which sector the following jobs belong to –

Jobs created or promoted by manufacturing industriesSector
A. Garmet production1. Primary
B. Research & Development2. Tertiary
C. Banking3. Secondary
D. Mining4. Quaternary

Choose the correct option:

a. A-1, B-2, C-3, D-4

b. A-3, B-4, C-2, D-1

c. A-2, B-3, C-1, D-2

d. A-4, B-1, C-4, D-3

Ans. Option (b)

vi. Which of the following is an example of the dependency of the primary sector on the tertiary sector?

a. Weavers made less money because the shops did not want to sell handloom products.

b. The bank employees could not reach on time due to a transportation strike.

c. Diary and poultry producers suffered a loss when the shops went on strike.

d. Farmers suffered a loss when there was not enough water to grow cotton.

Ans. Option (c)

vii. If there is a disruption by transporters and lorries refuse to transport vegetables, milk, etc. from rural areas to urban areas, food will become scarce in urban areas, whereas farmers will be unable to sell their products.
Which of the following sectors will be affected due to the situation stated above?

a. Primary and Secondary

b. Secondary and Tertiary

c. Tertiary, Primary, and Secondary

d. Tertiary and Primary.

Ans. Option (c)

viii. Which of the following gives the CORRECT explanation of Gross Domestic Product?

a. The value of final goods and services is added for secondary and tertiary sectors for one year.

b. The value of every good and service is added up for all three sectors for one year.

c. The value of final goods and services is added up for all three sectors for one year.

d. The value of goods is added for the primary sector for one year.

Ans. Option (c)

ix. Observe the graph given below:

sectors of the indian economy class 10

Which of the following statements BEST explains the graph?

a. The production in all three sectors has decreased and it has decreased the most in the primary sector.

b. The production in all three sectors has increased and it has increased the most in the primary sector.

c. The production in all three sectors has increased and it has increased the most in the tertiary sector.

d. The production in all three sectors has increased and all three sectors have similar growth.

Ans. Option (c)

x. The share of the tertiary sector to the GDP has increased but the contribution of which sector to employment is highest at present?

a. Primary

b. Tertiary

c. Secondary

d. None of these

Ans. Option (a)

xi. Which was the largest sector in 1973 in India in terms of employment?

a. Public sector

b. Private sector

c. Primary sector

d. Tertiary sector

Ans. Option (c)

xii. According to 2017-18 data, the share of different sectors in employment (percentage) in India was

  • Primary sector - 44%
  • Secondary sector – 25%
  • Tertiary sector – 31%

Out of the three sectors, why did the ratio of employment in the Primary sector high?

Select the most suitable option from the following:

a. Workers in the primary sector are underemployed.

b. Low job opportunities in the secondary sector.

c. Efforts of labor are not equivalent in all the sectors.

d. Outsourcing of job opportunities in the secondary sector.

Ans. Option (a)

xiii. Which of the following explains the rising importance of the tertiary sector in our country?

a. Greater demand for services

b. The decreasing importance of other sectors

c. Increased formalization of the service sector

d. Global pressure to develop the tertiary sector

Ans. Option (a)

xiv. The type of unemployment in which more people work than actually needed is known as _____.

a. Disguised unemployment

b. Seasonal unemployment

c. Underemployed

d. Over employed

Ans. Option (a)

xv. A man is employed on a food processing farm where he has to do a lot of manual work. His wife and daughter also help him with his work on the farm every day. Which type of employment is this an example?

a. Under employment

b. Seasonal employment

c. Over employment

d. Cyclical employment

Ans. Option (a)

xvi. Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA) states a guarantee of a minimum of 100 days of employment per year. If the government is unable to fulfill these 100 days of employment, the government would have to _____.

a. Pay the compensation in lieu of these days

b. Provide another scheme for the same

c. Pay at least 1/3 percent allowance

d. Provide health care as compensation

Ans. Option (a)

xvii. Which of the following examples fall under an organized sector?

a. A daily wage laborer working for a contractor.

b. An engineer gets all employment benefits.

c. A cleaning staff in a private school.

d. A tailor stitching clothes at his home.

Ans. Option (b)

xviii. A woman works at a sweet shop in her village on a contract basis and gets a meager salary after working the entire day. She doesn’t get any holidays or paid leave, rather her employer deducts her salary whenever she is absent from work. Find out in which of the following sectors she is working.

a. Primary sector

b. Service sector

c. Organized sector

d. Unorganized sector

Ans. Option (d)

xix. The sectors are classified into public and private sectors on the basis of:

a. Employment conditions

b. The nature of economic activity

c. Ownership of enterprises

d. Number of workers employed in the enterprise

Ans. Option (c)

xx. In the question given below, there are two statements marked as Assertion (A) and Reason (R). Read the statements and choose the correct option.

Assertion (A): Not every good or service that is produced and sold needs to be counted to know the total production in each sector.

Reason (R): The value of final goods already includes the value of all the intermediate goods.


a. Both A and R are true and R is the correct explanation of A.

b. Both A and R are true but R is not the correct explanation of A.

c. A is correct but R is wrong.

d. A is wrong but R is correct.

Ans. Option (a)

Q. No. 2) Reema works as a Head Technician at Mehta Textiles Private Ltd., whereas Shirin works as a Sales Executive at Kashvi Fashion Showroom. Identify the sectors of the economy in which Reema and Shirin are working. Evaluate the role of each of these sectors in the Indian economy.

Ans. Reema works in the Secondary or Manufacturing sector and Shirin works in the Tertiary or Service sector.

Role of Secondary/Manufacturing sector:

  • This sector covers activities in which natural products are changed into other forms through ways of manufacturing that we associate with industrial activity, hence it is also called as industrial sector.
  • This sector provides large-scale employment and helps in earning huge revenue. It helps in the development of a nation.

Role of Tertiary/Service sector:

  • 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 support for the production process. For example, goods need to be transported by trucks or trains and then sold in wholesale and retail shops; they have to be stored in go-downs.
  • The service sector contributes the most to the national economy these days and is further growing.
Q. No. 3) With the example of sugar cane, explain the interdependence of all three sectors of the economy.

Ans. Primary sector: cultivation of sugar cane.

Secondary sector: processing of sugar cane to make sugar tertiary sector.

Tertiary sector: Transportation of sugar cane into factories for processing it into sugar. Transportation of sugar packs to various markets. Sale of sugar by wholesalers and retailers.

The cultivation of sugarcane comes under the primary sector. This cultivated sugarcane is the raw material for sugar-making industries (comes under the secondary sector). Sugarcane is transported to the sugar mills with the help of vehicles which comes under the tertiary sector. Sugar made by sugar mills is further transported to various markets and sold by retailers and wholesalers using the tertiary sector.

Q. No. 4) Explain the interdependence of all three sectors giving examples from the transportation system.

Ans. 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.
Q. No. 5) Distinguish between final goods and intermediate goods.


Final GoodsIntermediate Goods
i. The goods which are used for final consumption.i. The goods which are used up in producing final goods.
ii. Value of final goods is included in the national income.ii. The value of intermediate goods is not included in the national income.
iii. For example - TV, Bread, Bakery products, etc.iii. For example - Flour, cotton, etc.
Q. No. 6) Define the term GDP. At present which sector has the maximum contribution to the GDP of India?

Ans. 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.

At present, the tertiary sector has the maximum contribution to the GDP of India.

Q. No. 7) What does the history of developed countries indicate about the shifts that have taken place between 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.
Q. No. 8) “Tertiary sector is playing a significant role in the development of the Indian Economy’. Justify the statement.


  • 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.
Q. No. 9) Why has the entire tertiary sector not grown in importance? Explain.

Ans. 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 but 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.

Q. No. 10) Name the sector that is the largest employer in India. Why does this sector produce only a quarter of the National GDP?

Ans. 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.
Q. No. 11) Define:
  1. Underemployment
  2. Disguised unemployment.


i. Underemployment refers to a situation where a person is working, but not in a job that fully utilizes their skills, education, or experience. This can include working in a job that is part-time, temporary, or that pays less than what would be expected for someone with their qualifications. Underemployment can lead to dissatisfaction, frustration, and a sense of wasted potential among workers.

ii. Disguised unemployment, on the other hand, refers to a situation where there are more workers available in a particular labor market than are needed to efficiently produce the current level of output. These workers may not be officially classified as unemployed because they may be working in low-productivity jobs or in informal sectors of the economy, but they are not fully utilizing their skills or abilities. This type of unemployment can lead to underemployment and inefficiency in the economy.

In summary, underemployment is more related to the quality of the job, while disguised unemployment is related to the quantity of the job.

Q. No. 12) Compare Tables “A” & “B” and answer the question given below.

Table- A

Share of Sectors in GDP in %


Table -B

Share of sectors in employment in %


A remarkable fact about India is that while there has been a change in the share of the three sectors in GDP, a similar shift has not taken place in employment. Why didn’t a similar shift out of the primary sector happen in the case of employment? Substantiate your answer.

Ans. Substantial shift in employment in the Primary Sector hasn’t happened because of the following reasons:

  • Insufficient job creation in the secondary and tertiary sectors: The primary reason for the limited shift in employment from the primary sector is the failure to generate an adequate number of jobs in the secondary (industrial) and tertiary (service) sectors. The growth of industrial output and service sector production has been significant, but the corresponding increase in employment opportunities has been comparatively lower.
  • Underemployment in the agricultural sector: The primary sector, particularly agriculture, suffers from underemployment, with more people engaged in farming than necessary. Even if a few individuals are moved out of agriculture, it does not significantly affect production. This indicates that workers in the agricultural sector are not fully utilized, leading to a lower productivity level.
  • Share of Sectors in Employment: Though industrial output or the production of goods went up by more than nine times during the period, employment in the industry went up by around three times. The same applies to the tertiary sector as well. While production in the service sector rose by 14 times, employment in the service sector rose by around five times. As a result, more than half of the workers in the country are working in the primary sector, mainly in agriculture, producing only about one-sixth of the GDP. In contrast to this, the secondary and tertiary sectors produce the rest of the produce whereas they employ less than half the people
Q. No. 13) How can more job opportunities be created in rural areas?

Ans. 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.
Q. No. 14) In what ways can employment be increased in urban areas?

Ans. 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.
Q. No. 15) Ravi works in a leather bag manufacturing and export company. He feels insecure due to the introduction of flexible labor laws. How can the government help him?

Ans. Flexible labor laws mean:

  • The company has lived workers for short period.
  • A lot of pressure and work over time.
  • 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.
Q. No. 16) Explain NREGA 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.
Q. No. 17) Rohan works in a bank as a clerk while Sumit works on a construction site as a laborer. Find out the difference in their conditions of work and judge the benefits and drawbacks of working in the respective sectors.
Compare the employment conditions prevailing in the organized and unorganized sectors.
Explain the working condition of workers in the unorganized sector.

Ans. Rohan works in an organized sector whereas Sumit works in an unorganized sector.

Organized SectorUnorganized 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 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.
Q. No. 18) ‘Agriculture is an unorganized sector in India’. Do you agree with this statement? Justify your answer with suitable examples.

Ans. Agriculture is an activity of an unorganized sector in India because

  • There is no fixed number of working hours.
  • Agricultural laborers have no job security.
  • Government rules and regulations to protect the laborers are not followed.
  • Agricultural laborers are often exploited and are not paid a fair wage.
  • Agricultural laborers don’t get any other benefit apart from daily wages. Sometimes, they do overtime without any payment.
Q. No. 19) Distinguish between the Public and Private Sectors.
Classify the sector of the economy on the basis of ownership of enterprises.


Public SectorPrivate 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.
Q. No. 20) Though the public and private sectors exist side by side in the Indian economy, the public sector plays a leading role. Explain the statement with reasons.
‘Public sector contributes to the economic development of India.’ Justify the statement.

Ans. 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.
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2 thoughts on “Sectors of the Indian Economy: Class 10 Important Questions & Answers”

  1. Sir, in the question 12 disguised unemployment is a type of underemployment isn’t it… then why did you make it the type of unemployment

    1. NO I did not give them as type of unemployment. I have just asked to define them. Disguised unemployment is a type of underemployment but both are not exactly same. There is a slight difference in them as discussed in Q. No. 11.

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