Role of Service Sector in Indian Economy: NBSE Class 10 Social

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Here you will find all the questions, solutions, answers, and notes of chapter 17: Role of Service Sector in Indian Economy of Social Science for class 10 students studying under Nagaland Board of School Education (NBSE). However, the study materials should be used only for references and nothing more. The notes can be modified/changed according to needs.

Summary

In our everyday life, we find different people engaged in different types of activities to earn their living. People like farmers, casual workers, cobblers, shopkeepers, vegetable vendors. domestic servants, industrialists, teachers, doctors, lawyers, chartered accountants etc. perform different types of activities. All households are concerned with one or the other type of activity to earn wealth or money to satisfy their wants. All these activities are called economic activities. Economic activities produce different types of goods and services which satisfy people’s wants. The sum total of economic activities constitutes an economy.

Economic activities are carried on or are controlled by individuals, firms, private institutions and also by the government. Individuals and firms usually work for private gain or profit. But the governments have to consider not only the private gains of individuals or groups but also the welfare of society by taking the people as a whole.

A framework within which all economic activities of a country can be largely described is called the economy. In other words, an economy is the aggregate of economic activities in a country within which various types of goods and services are produced, distributed and consumed. It consists of all those individuals, households, fields, factories, mines, businesses, schools, colleges, offices, banks, hospitals, railways.

Textual questions and answers

Multiple Choice Questions

1. The sector that converts raw materials into goods is the

A. Primary sector
B. Secondary sector
C. Tertiary sector
D. Organised sector

Answer: B. Secondary sector

2. In which sector activities are not guided by profit motive?

A. Public sector
B. Private sector
C. Organised sector
D. Unorganised sector

Answer: A. Public sector

3. Services of teachers, doctors, lawyers etc. are included in the

A. Primary sector
B. Secondary sector
C. Tertiary sector
D. All of these

Answer: C. Tertiary sector

4. There was a strike announced by the “Transport union” due to which the Lorries refused to transport vegetables, milk, etc. from the rural areas to the urban areas. Food became scarce in urban areas whereas farmers were unable to sell their products. Which of the following sectors are affected due to the strike carried out by the “Transport Union”.

A. Primary and Secondary sector
B. Secondary and Tertiary sector
C. Tertiary, Primary and Secondary sector
D. Tertiary and Primary sector

Answer: C. Tertiary, Primary and Secondary sector

5. Read the following statements – Assertion (A) and Reason (R). Choose one of the correct alternatives given below.

Assertion (A): Intermediate goods are sold by one producer to another either for further processing or for resale.
Reason (R): All intermediate goods after processing become final goods.

A. Both the Assertion (A) and Reason (R) are true, and the Reason is a correct explanation of the Assertion.
B. Both the Assertion and Reason are true, but the Reason is NOT a correct explanation of the Assertion.
C. The Assertion is true, but the Reason is false.
D. The Assertion is false, but the Reason is true

Answer: B. Both the Assertion and Reason are true, but the Reason is NOT a correct explanation of the Assertion.

Very Short Answer Questions

1. Mention one reason for the need of public sector in India.

Answer: The motivating force in the private sector is profit making instead of social welfare.

2. What are secondary activities?

Answer: Secondary activities are those which convert one type of product into another.

3. Name the sector where goods and products are produced by exploiting natural resources.

Answer: Primary Sector

4. Why is the tertiary sector also called the service sector?

Answer: Tertiary activities generate services rather than goods.

Short Answer Questions

1. What is meant by disguised unemployment? Give an example.

Answer: Disguised unemployment exists where part of the labour force is either left without work or is working in a manner where worker productivity is zero. If we remove such workers from the field, then the total production will not fall. For example, suppose four people are working in a field and the total output is 10 quintals of wheat. If we remove one person and the output still remains 10 quintals, it means that one person was disguisedly unemployed.

2. Mention any one measure to remove unemployment in India.

Answer: One measure to remove unemployment in India is to promote industries and services in semi-rural areas where a large number of people may be employed.

3. What is public sector? Give examples of public sector units.

Answer: The public sector is that portion of an economic system that is controlled by national, state or local governments. Examples of public sector units are Indian Railways, Post Office and Indian Oil Corporation Ltd. (IOCL).

Long Answer Questions

1. Distinguish between organised and unorganised sectors of the Indian economy.

Answer: Organised sector covers those enterprises or places of work where the terms of employment are regular and therefore, people have assured work. In this sector, self-employed people also have to register themselves with the government.

An unorganised sector, on the other hand, includes those activities of people where no rules and regulations are followed. Example: landless agricultural labourers, small and marginal farmers etc.

2. The tertiary sector is becoming the most important sector in India. Give reasons in support of the statement.

Answer: The tertiary sector has now become the most important sector in fast-developing India because of the following reasons:

(l) The service sector provides the basic services for the development and provision of which government takes responsibility.
(II) The development of agriculture and industry requires the development of services such as transport, storage, trade, means of communication etc.
(III) As income levels rise, certain sections of people start demanding more services like hotels, tourism, shopping, private schools, private hospitals etc.
(IV) Over the past decade, services based on information and technology are being increasingly demanded.
(V) The service sector employs many different kinds of people like small shopkeepers, repairpersons, transport persons etc.
(VI) Globalisation has also created new opportunities for companies providing services, particularly those involving IT.

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

Answer: In the public sector, the government owns most of the assets. Industries owned by the government or its agencies are called Public Sector Undertakings (PSUs). Indian Railways, Post Office, Indian Oil Corporation Ltd. (IOCL), Steel Authority of India Ltd (SAIL) are some of the examples of PSUs. The purpose of the public sector is not to earn profits. There are a number of activities that are required by society as a whole but the private sector does not like to take initiative because of the low rate of return. And some of these activities need a large sum of money which is beyond the capacity of the private sector. Even if they provide these things they would charge a high price for their use. Construction of roads, bridges, railways, harbours, generating electricity, providing irrigation through dams etc. are examples of such activities. Thus, governments have to undertake such heavy spending and ensure that these facilities are available for everyone in the society which is vital for the economic growth of a country as infrastructure is the backbone of any economy.

Extra/additional MCQs

1. What is an economy?

A. The sum total of economic activities B. The activities carried out by the government C. The primary sector activities D. The secondary sector activities

Answer: A. The sum total of economic activities

2. What does the primary sector include?

A. Manufacturing activities B. Agriculture and allied activities C. Service activities D. Construction activities

Answer: B. Agriculture and allied activities

3. Which sector converts raw materials into goods?

A. Primary sector B. Secondary sector C. Tertiary sector D. Unorganized sector

Answer: B. Secondary sector

4. Which sector provides services to the primary and secondary sectors?

A. Primary sector B. Secondary sector C. Tertiary sector D. Organized sector

Answer: C. Tertiary sector

5. What is the value of all final goods and services produced in each sector during a particular year called?

A. Gross Domestic Product (GDP) B. Gross National Product (GNP) C. National Income D. Per Capita Income

Answer: A. Gross Domestic Product (GDP)

6. In which year was the Mahatma Gandhi National Rural Employment Guarantee Act launched?

A. 2004 B. 2005 C. 2006 D. 2007

Answer: C. 2006

7. What is the condition when part of the labor force is either left without work or is working in a manner where worker productivity is zero?

A. Unemployment B. Underemployment C. Disguised unemployment D. Seasonal unemployment

Answer: C. Disguised unemployment

8. Which sector is controlled by the government?

A. Private sector B. Public sector C. Organized sector D. Unorganized sector

Answer: B. Public sector

9. What is the sector run by individuals and companies rather than the government?

A. Private sector B. Public sector C. Organized sector D. Unorganized sector

Answer: A. Private sector

10. In which year was the Right of Children to Free and Compulsory Education Act passed?

A. 2007 B. 2008 C. 2009 D. 2010

Answer: C. 2009

11. What is the name of the program launched by the Government of India to achieve education for all?

A. Sarva Shiksha Abhiyan (SSA) B. Mid-Day Meal Scheme C. District Primary Education Programme D. Operation Blackboard

Answer: A. Sarva Shiksha Abhiyan (SSA)

12. Which sector’s share in GDP has seen a significant decline in India over the years?

A. Primary sector B. Secondary sector C. Tertiary sector D. Organized sector

Answer: A. Primary sector

13. Which sector’s share in GDP has seen a sharp increase in India over the years?

A. Primary sector B. Secondary sector C. Tertiary sector D. Organized sector

Answer: C. Tertiary sector

14. What is the term used for people traveling to a country other than their own to obtain medical treatment?

A. Health tourism B. Medical tourism C. Wellness tourism D. Therapeutic tourism

Answer: B. Medical tourism

15. Which sector has emerged as the largest producing sector in India, replacing the primary sector?

A. Primary sector B. Secondary sector C. Tertiary sector D. Organized sector

Answer: C. Tertiary sector

16. Which sector is responsible for providing basic services like hospitals, educational institutions, and transportation in a developing country?

A. Primary sector B. Secondary sector C. Tertiary sector D. Public sector

Answer: D. Public sector

17. What is the name of the government program launched to eradicate polio in India?

A. Pulse Polio Immunization Program B. National Immunization Program C. Universal Immunization Program D. Polio Eradication Campaign

Answer: A. Pulse Polio Immunization Program

18. Which sector witnessed revolutionary changes as a result of the policy of liberalization in India?

A. Primary sector B. Secondary sector C. Tertiary sector D. Public sector

Answer: C. Tertiary sector

19. In which year was the Indian Oil Corporation Ltd. (IOCL) established?

A. 1959 B. 1964 C. 1969 D. 1974

Answer: Not mentioned in the passage.

20. Which sector includes economic activities related to forestry, dairying, fishing, and mining?

A. Primary sector B. Secondary sector C. Tertiary sector D. Unorganized sector

Answer: A. Primary sector

21. Which sector includes economic activities related to manufacturing and construction?

A. Primary sector B. Secondary sector C. Tertiary sector D. Unorganized sector

Answer: B. Secondary sector

22. What is the term used for the sector that includes activities where no rules and regulations are followed?

A. Organized sector B. Unorganized sector C. Primary sector D. Secondary sector

Answer: B. Unorganized sector

23. Which sector is guided primarily by the motive of profit?

A. Public sector B. Private sector C. Organized sector D. Unorganized sector

Answer: B. Private sector

24. What is the name of the Act that guarantees 100 days of employment in every rural household in a year?

A. National Rural Employment Guarantee Act B. Mahatma Gandhi National Rural Employment Guarantee Act C. Rural Employment Guarantee Scheme D. National Employment Guarantee Act

Answer: B. Mahatma Gandhi National Rural Employment Guarantee Act

25. Which Indian company is mentioned in the passage as a multinational company in the automobile sector?

A. Tata Motors B. Maruti Suzuki C. Mahindra & Mahindra D. Hyundai Motors India

Answer: A. Tata Motors

26. Which Indian company is mentioned in the passage as a multinational company in the IT sector?

A. Tata Consultancy Services (TCS) B. Wipro C. Infosys D. HCL Technologies

Answer: C. Infosys

27. Which Indian company is mentioned in the passage as a multinational company in the pharmaceutical sector?

A. Cipla B. Ranbaxy C. Dr. Reddy’s Laboratories D. Sun Pharmaceutical Industries

Answer: B. Ranbaxy

28. What is the term used for investment in education, training, and medical care?

A. Physical capital B. Human capital C. Natural capital D. Financial capital

Answer: B. Human capital

29. Which sector’s share in employment has not fallen much in India despite its declining contribution to GDP?

A. Primary sector B. Secondary sector C. Tertiary sector D. Organized sector

Answer: A. Primary sector

30. Which sector accounts for more than 50% of GDP but employs only about 31% of the workforce in India?

A. Primary sector B. Secondary sector C. Tertiary sector D. Organized sector

Answer: C. Tertiary sector

Extra/additional questions and answers/solutions

Q. What is an economy?

Answer: A framework within which all economic activities of a country can be largely described is called the economy.

Q. What is the primary sector?

Answer: The primary sector includes activities relating to land like agriculture and allied activities such as forestry, dairying, fishing, poultry farming, mining, stone quarrying, etc.

Q. What is the secondary sector?

Answer: The secondary sector covers activities relating to manufacturing and construction.

Q. What is the tertiary sector?

Answer: The tertiary sector provides services like transportation of goods, storage of goods, banking and insurance, and so on.

Q. What is Gross Domestic Product (GDP)?

Answer: The value of final goods and services produced in each sector during a particular year gives us the Gross Domestic Product (GDP).

Q. What is the most important sector in the initial stages of development?

Answer: In the initial stages of development, primary activities remain the most important activities of the economy.

Q. Which sector underwent revolutionary changes due to liberalization?

Answer: It is the service sector which underwent revolutionary changes as a result of the policy of liberalization.

Q. What is disguised unemployment?

Answer: It exists where part of the labor force is either left without work or is working in a manner where worker productivity is zero.

Q. What is underemployment?

Answer: The condition at which workers are at jobs which is inadequate with respect to their training or education.

Q. What is the public sector?

Answer: The public sector is that portion of an economic system that is controlled by national, state or local governments.

Q. What is the private sector?

Answer: The private sector is an economic system that is run by individuals and companies rather than the government.

Q. What is the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)?

Answer: Under MGNREGA 2005, all those who are able to work and in need of work can apply for work, with a guarantee of 100 days of employment in every rural household in a year.

Q. What is the organized sector?

Answer: The organized sector covers those enterprises or places of work where the terms of employment are regular and governed by certain rules and regulations.

Q. What is the unorganized sector?

Answer: The unorganized sector includes those activities of people where no rules and regulations are followed, such as landless agricultural laborers, small and marginal farmers, artisans in rural areas, and workers in small industries.

Q. What are the benefits of workers in the organized sector?

Answer: Workers in the organized sector enjoy security of employment, fixed working hours, overtime pay, provident fund, gratuity, paid leave, medical benefits, and pension after retirement.

Q. What are the challenges faced by workers in the unorganized sector?

Answer: Workers in the unorganized sector do not have any job security, are not paid fair wages, are often exploited by their employers, and do not have any other benefits.

Q. Why is investment in human capital important?

Answer: Investment in human capital (through education, training, medical care, etc.) yields a return just like investment in physical capital, leading to higher productivity and incomes.

Q. How has globalization impacted the growth of the tertiary sector in India?

Answer: Globalization has enabled some large Indian companies to emerge as multinationals, contributing to the growth of the tertiary sector. Companies like Tata Motors (automobiles), Infosys (IT), Ranbaxy (medicines), Asian Paints (paints), and Sundaram Fasteners (nuts and bolts) have spread their operations worldwide. Additionally, globalization has created new opportunities for companies providing services, particularly those involving IT, data entry, accounting, administrative tasks, and engineering, which are now being outsourced to countries like India.

Q. What is the role of the public sector in providing essential services to the society?

Answer: The purpose of the public sector is not to earn profits. There are a number of activities which are required by the society as a whole but the private sector does not like to take initiative because of low rate of return. And some of these activities need a large sum of money which is beyond the capacity of the private sector. Even if they provide these things they would charge a high price for their use. Construction of roads, bridges, railways, harbours, generating electricity, providing irrigation though dams etc. are examples of such activities. Thus, governments have to undertake such heavy spending and ensure that these facilities are available for everyone in the society.

Q. How has the service sector contributed to the growth of the Indian economy?

Answer: The service sector in India has the largest share in the GDP accounting for 57% in 2009-10 and provides employment to 23% of the total workforce. In 1990-91, these percentage figures were 40.6% and 14% respectively. It is in fact the service sector which underwent revolutionary changes as a result of the policy of liberalisation. Our service sector grew quickly with a growth rate of 7.5% during 1991-2000 against the growth rate of 4.5% in 1951-80. Information technology and business process outsourcing are among the fastest growing sectors.

Q. What are the reasons behind the rapid growth of the service sector in India?

Answer: There could be several reasons behind the growth of the service sector in India:

• The service sector provides the basic services (such as health, education, post and telegraph services, maintenance of law and order, administrative services, transport services, banking and insurance services etc), for the development and provision of which government takes the responsibility.
• The development of agriculture and industry requires the development of services such as transport, storage, trade, means of communication etc.
• As income levels rise, certain sections of people start demanding more services like hotels, tourism, shopping, private schools, private hospitals etc.
• Over the past decade, services based on information and technology are being increasingly demanded.
• Service sector employs many different kinds of people like small shopkeepers, repair persons, transport persons etc. It also employs highly skilled and educated workers.

Q. What measures can be taken to remove disguised unemployment or underemployment in India?

Answer: The following measures can be adopted to remove disguised unemployment or underemployment:

• In semi-rural areas, more industries and services can be promoted where a large number of people may be employed.
• One or two members of the family can be made to work on daily wages in the field of a big farmer.
• Some members of such a family may shift to work in a nearby factory and thus can earn money for the family.
• The government/banks can provide concessional loans to the small farmers to improve their irrigation facilities like setting up of pump sets. The farmers can grow two or three crops in a year. Thus more people can be employed on the same field.
• In villages near forest areas, we can start honey collection centres where farmers can come and sell wild honey.
• By improving the education and health infrastructure, we can provide lakhs of jobs for teachers, doctors, nurses etc. A study conducted by the Planning Commission estimates that nearly 20 lakh jobs can be created in the education sector alone. This would also raise the level of human development.
• Tourism has vast potential for increasing the income and employment for people.

Q. Explain the significance of investment in education and health for the development of human capital in India.

Answer: Investment in human capital (through education, training, medical care etc.) yields a return just like investment in physical capital. This can be seen directly in the form of higher incomes earned because of higher productivity of the more educated or the better trained persons, as well as the higher productivity of healthier people. A child, too, with investments made on her education and health, can yield a high return in the future in the form of higher earnings and greater contribution to the society. Educated parents are found to invest more heavily on the education of their child. This is because they have realised the importance of education for themselves. They are also conscious of proper nutrition and hygiene. They accordingly look after their children’s needs for education and good health. A virtuous cycle is thus created in this case.

Q. What are the initiatives taken by the government to improve the education and health sectors in India?

Answer: The government’s endeavour has been to achieve education for all. Special emphasis is laid on education of children belonging to disadvantaged groups and simultaneously to provide greater opportunities for access to quality higher education by investing in infrastructure and faculty, promoting academic reforms, improving governance and institutional restructuring. The RTE and SSA (Right of Children to Free and Compulsory Education Act, 2009 and Sarva Shiksha Abhiyan) lays a special focus on the children of disadvantaged social groups (SC, ST, OBC and minority communities). It provides for development of specific interventions/ strategies for education of these target groups.

The Government has taken several initiatives in healthcare, such as:

• Large scale vaccination programmes like that of polio.
• Setting up new government hospitals and medical colleges.
• Setting up six new AIIMS in different parts of India.
• Encouragement to private sector in health care for setting up private hospitals and nursing homes.
• Reasonable pricing of necessary medicines.
• Special emphasis on eradication of communicable diseases.
• Improving water supply, sewage and sanitation infrastructure etc.

Q. Differentiate between the primary, secondary and tertiary sectors based on their economic activities.

Answer: Using economic activities as the criteria, an economy can broadly be classified into the following three broad sectors:

• Primary Sector: In the primary sector, activities relating to land like agriculture and allied activities such as forestry, dairying, fishing, poultry farming, mining, stone quarrying etc. are included. In this sector, goods/products are produced by exploiting natural resources.
• Secondary Sector: It covers activities relating to manufacturing and construction. It converts one type of product into another. For example, manufacturing of cotton yarn by using cotton fibre, weaving of cloth from cotton yarn, using sugarcane in making sugar or gur, and using of bricks to make houses and buildings etc.
• Tertiary Sector: Apart from primary and secondary activities there is a third category of activities that fall under tertiary sector. The economy needs not only physical goods but also services like transportation of goods, storage of goods, banking and insurance and so on. These services are needed by households and primary and secondary sectors. Tertiary activities themselves do not produce goods but they are a support for the production process.

Q. How has the contribution of the three sectors in GDP changed over the years in India?

Answer: The data reveal that GDP from the primary sector (agriculture and allied activities) declined from 51.88% in 1950-51 to 41.66% in 1970-71 and thereafter, sharply declined to 13.94% in 2013-14. This was partially neutralised by an increase in the share of the secondary sector from 16.19% in 1950-51 to about 23.62% in 1970-71 and further increased to about 26.13%. Biggest hike in the GDP share occurred in case of services from about 29.54% in 1950-51 to 33.26% in 1970-71 to 59.93% in 2013-14. The emerging structural change in GDP shares witness a big decline in the share of agriculture, coupled with a modest increase in the share of industry and a much sharper increase in the share of services which now account for nearly half of the total GDP.

27. What is the difference between the organized and unorganized sectors in terms of employment conditions?

Answer: Organised sector covers those enterprises or places of work where the terms of employment are regular and therefore, people have assured work. They are governed by certain rules and regulations. The economy is called organised because it has some formal processes and procedures. In this sector, self-employed people too have to register themselves with the government.

Unorganised sector, on the other hand, includes those activities of people where no rules and regulations are followed. Landless agricultural labourers, small and marginal farmers, artisans in rural areas and workers in small industries, casual workers in construction, trade and transport, street vendors, garment makers, rag-pickers etc.