Understanding Economic Development · NCERT 2026–27
3 / 5Learning sections
Previous Year Questions (2014–2026)
Topic-wise CBSE Past Year Questions with year tags and detailed solutions.
Multiple Choice Questions (1 Mark)
2023, 2019
Q1. Which profession belongs to the Tertiary Sector?
Answer: (D) Teacher Explanation: A teacher provides a service rather than generating a physical product, putting teaching squarely inside the tertiary (service) sector. Fisherman, farmer, and woodcutter directly exploit natural resources and represent the primary sector.
OEB, 2022
Q2. Activities that help the development of Primary and Secondary sectors fall under:
Answer: (C) Tertiary Explanation: The tertiary sector provides services like transport, banking, and communication that facilitate and support the operations of the primary and secondary sectors.
OEB, 2021
Q3. Which of the following does NOT belong to the Service Sector?
Answer: (B) Agriculture Explanation: Agriculture directly exploits natural resources to produce primary goods, so it belongs to the Primary Sector. Transport, real estate, and restaurants are service-oriented and belong to the Tertiary Sector.
2022, 2019
Q4. When we produce goods by exploiting natural resources, it belongs to:
Answer: (C) Primary Explanation: When economic activity directly gathers or uses natural resources (like soil, water, minerals, forests), it is classified under the primary sector (e.g., farming, mining).
2022, 2020
Q6. Which of the following is an example of the Secondary Sector?
Answer: (C) Sugar mill Explanation: A sugar mill processes sugarcane (raw material) to manufacture sugar, making it an industrial/secondary activity. Fishing is primary, while banking and teaching are tertiary.
2020
Q7. Manufacturing activities belong to which sector?
Answer: (C) Secondary Explanation: The secondary sector covers activities in which natural products are changed into other forms through ways of manufacturing that we associate with industrial activity.
Q23. Read the statements and choose the correct option:
(I) Primary sector uses natural resources to produce goods. (II) Secondary sector transforms raw materials into finished goods. (III) Tertiary sector produces services, not goods. (IV) Banking belongs to the secondary sector.
Answer: (A) I, II and III Explanation: Statements I, II, and III are correct definitions of the sectors. Statement IV is incorrect because Banking provides support/services and belongs to the tertiary sector, not the secondary sector.
Assertion-Reason Questions (1 Mark)
OEB
AR-8.
Assertion (A): Secondary sector is also called the industrial sector.
Reason (R): Secondary sector involves manufacturing and construction activities.
Answer: (A) Both true; R correctly explains A. Explanation: Since secondary activities progressively become associated with different kinds of industries that come up, it is also called the industrial sector.
Very Short Answer Questions (2 Marks)
2020, 2018, 2016
VSA-7. Distinguish between Primary and Secondary sector with one example each.
Answer:
Primary Sector: Directly exploits natural resources to obtain raw products. Example: Agriculture, fishing, mining.
Secondary Sector: Transforms primary raw products into finished goods through manufacturing/processing. Example: Converting sugarcane into sugar in a factory.
2019, 2016
VSA-8. Why is Tertiary Sector also called the Service Sector?
Answer: It does not produce physical goods on its own. Instead, it generates services that assist and support the production process of the primary and secondary sectors. Examples include transport, communications, and banking.
2016, 2015
VSA-12. What is meant by economic activities?
Answer: Activities that produce goods and services and generate income in return are called economic activities. They are categorized into primary, secondary, and tertiary sectors.
Short Answer Questions (3 Marks)
2026 — Q38a, 2022, 2019
SA-8. Describe the importance of the Tertiary Sector in the economy.
Answer:
Supports Production: It provides essential trade tools like transport, communication, storage, and banking without which primary/secondary production cannot operate smoothly.
Dominant GDP Contributor: It produces more than half of India's GDP (around 57–60% GVA share).
Creates Quality Employment: It is the fastest-growing job provider for urban workers, administrative professionals, and technology experts (e.g., IT and software).
Long Answer Questions (5 Marks)
2022, 2019
LA-3. How are the three sectors interdependent? Explain with examples.
Answer: All three sectors rely heavily on one another; if one stops, the others suffer:
Primary → Secondary: Sugar mills (secondary) need sugarcane (primary); cotton textile factories need raw cotton. Without farming, these industries cannot operate.
Secondary → Primary: Farmers require manufactured industrial inputs such as tractors, chemical fertilizers, irrigation pumps, and pesticides to run modern farms.
Tertiary → Primary & Secondary: Services transport crops and manufactured goods to cities, provide loans (banking), and manage supply networks (communication/IT).
Primary/Secondary → Tertiary: Without goods produced by farms and factories, transport trucks would sit idle, shops would have nothing to sell, and banking services would experience a downturn.
Multiple Choice Questions (1 Mark)
2022
Q5. Cotton is grown by a farmer → sold to a textile mill → cloth is made. Cotton here is:
Answer: (B) Intermediate good Explanation: Cotton is a raw material used to produce cloth (final good). Goods used inside the production process to produce other goods are intermediate goods.
2023, 2021
Q8. GDP is the value of ___ produced during a year within the domestic territory.
Answer: (C) Final goods and services Explanation: Gross Domestic Product (GDP) is the value of all final goods and services produced within a country during a particular year. Intermediate goods are excluded.
2022, 2020
Q9. Why are intermediate goods excluded from GDP?
Answer: (B) To avoid double counting Explanation: The value of intermediate goods is already included in the value of the final good. Adding them separately would count their value multiple times, resulting in double counting.
2021
Q10. Which of the following is a final good?
Answer: (C) Bread bought by a consumer Explanation: Bread purchased by a consumer is directly consumed and does not undergo further production processing. All other options are intermediate goods.
Assertion-Reason Questions (1 Mark)
OEB
AR-3.
Assertion (A): GDP includes the value of intermediate goods.
Reason (R): Including intermediate goods would lead to double counting.
Answer: (D) A is false; R is true. Explanation: GDP excludes the value of intermediate goods to avoid the problem of double counting.
Case/Data-Based Questions (1x3 Marks)
2022, 2020, 2017, 2016
CBQ 4 — GDP Calculation with Example
Data Scenario: A farmer sells wheat to a mill for ₹10/kg. The mill grinds it and sells flour to a biscuit factory for ₹12/kg. The factory sells biscuits to consumers at ₹15/packet.
Q1. What is the value added to GDP from this chain?
Q2. Wheat and flour are examples of ___ goods.
Q3. Why is only ₹15 (biscuits) counted in GDP and not ₹37?
Answer: To avoid double counting. The value of wheat (₹10) and flour (₹12) are already included in the final price of the biscuit packet (₹15). Counting them separately would inflate the calculation of national production.
Very Short Answer Questions (2 Marks)
2023, 2022, 2020, 2016
VSA-1. Define **Gross Domestic Product (GDP)**.
Answer: Gross Domestic Product (GDP) is the total market value of all final goods and services produced within the boundaries of a country during a particular year.
2022, 2020, 2017
VSA-3. Distinguish between final goods and intermediate goods.
Answer:
Final Goods: Goods meant for direct use by final consumers. (e.g., Bread bought by a household). Their value is counted in GDP.
Intermediate Goods: Goods used as raw material or inputs for further production. (e.g., Flour bought by a bakery). Excluded from GDP to avoid double counting.
Short Answer Questions (3 Marks)
2022, 2020, 2017, 2016
SA-4. How is GDP calculated? Why are only final goods counted?
Answer:
Calculation: The value of final goods and services produced in the Primary, Secondary, and Tertiary sectors are calculated individually (Quantity × Price) and then summed up to give the GDP of a country.
Final Goods only: Intermediate goods' values are already embedded in the final good's price.
Double Counting: Counting raw materials separately counts the same value multiple times, distorting the actual size of the national economy.
Multiple Choice Questions (1 Mark)
2023, 2022, 2020
Q11. In India, the largest number of workers are employed in:
Answer: (C) Primary sector Explanation: Despite its falling share in GDP, the primary sector (agriculture) remains the largest employer in India, employing nearly 49% of the country's workforce.
2023, 2022
Q12. Which sector contributes the most to India's GDP today?
Answer: (C) Tertiary Explanation: Today, the tertiary (service) sector contributes approximately 57–60% of India's Gross Value Added (GVA) / GDP, making it the largest contributor.
2022, 2019, 2017
Q13. Disguised unemployment is mainly found in:
Answer: (C) Agriculture/Rural sector Explanation: Agriculture has a surplus of labour; too many family members work on small land plots when fewer would suffice. Their removal does not affect production output.
2022, 2021, 2019
Q14. NREGA guarantees ___ days of work per year to rural households.
Answer: (C) 100 Explanation: Under NREGA (MGNREGA), the government legally guarantees 100 days of manual wage employment per year to adult members of rural households.
Assertion-Reason Questions (1 Mark)
SQP 2022-23
AR-1.
Assertion (A): The tertiary sector has become the largest producing sector in India.
Reason (R): The tertiary sector provides services to the primary and secondary sectors.
Answer: (A) Both true; R correctly explains A. Explanation: Growth of primary and secondary activities leads to a demand for services, expanding the tertiary sector's output rapidly.
SQP 2021-22
AR-4.
Assertion (A): In disguised unemployment, extra workers appear to be working but their removal does not reduce output.
Reason (R): Disguised unemployment is common in urban manufacturing industries.
Answer: (C) A is true; R is false. Explanation: Disguised unemployment is primarily found in rural agriculture (farms), not urban manufacturing where workers are generally paid per shift or contract.
OEB
AR-6.
Assertion (A): NREGA provides legal guarantee of 100 days employment to rural households.
Reason (R): NREGA aims to reduce disguised unemployment in cities.
Answer: (C) A is true; R is false. Explanation: NREGA targets rural households, not cities or urban areas.
Case/Data-Based Questions (CBQs)
2023, SQP 2022-23
CBQ 1 — Sectoral GDP Contribution Table
Sector
1973–74
1993–94
2013–14
Primary
41.9%
31.4%
13.9%
Secondary
23.9%
26.0%
27.4%
Tertiary
34.2%
42.6%
58.7%
Q1. Which sector's share in GDP has increased the most from 1973-74 to 2013-14?
Q2. What does the declining share of the Primary sector indicate?
Q3. The table shows a pattern seen in most developed countries. What pattern?
Answer: It shows the sectoral transition pattern where the economic center of gravity shifts from the primary sector to the secondary and eventually the tertiary sector as development occurs.
Q4. Which sector is the largest contributor to India's GDP as per the latest data?
2022, 2020, 2019
CBQ 2 — Employment Distribution Table
Sector
% Workers (1972–73)
% Workers (2011–12)
Primary
74%
49%
Secondary
11%
24%
Tertiary
15%
27%
Q1. Despite declining employment share, which sector still employs the MOST workers?
Q2. What does the falling employment in Primary + rising in Tertiary indicate?
Answer: It indicates structural transition of the workforce. However, the high share of employment in the primary sector (49%) compared to its low GDP contribution shows that agriculture contains significant disguised/underemployment.
Q3. A state creates 1,000 new jobs in construction. Which sector does this fall under?
2022, 2019, 2016
CBQ 5 — NREGA / Employment Generation
"The government launched NREGA in 2005 to provide a legal guarantee of 100 days of employment per year to adult members of rural households willing to do unskilled manual work."
Q1. What is the full form of NREGA?
Q2. NREGA primarily targets which sector of employment?
Q3. How does NREGA help reduce disguised unemployment?
Answer: NREGA pulls surplus, unproductive workers away from overcrowded family farms by offering them guaranteed alternative employment in constructive rural infrastructure projects (like building roads, dams, or canals) with fixed wages.
Very Short Answer Questions (2 Marks)
2023, 2022, 2019, 2017, 2015, 2014
VSA-2. What is disguised unemployment? Give one example.
Answer: Disguised unemployment is a situation where more people are working than necessary. Since their marginal productivity is zero, removing them does not reduce the total production output. Example: If five members of a family work on a small farm that only requires three workers to run, the extra two are disguisedly unemployed.
2022, 2019, 2018, 2016, 2015
VSA-6. What is NREGA? State its main objective.
Answer: National Rural Employment Guarantee Act (2005) is a social safety program. Its objective is to guarantee 100 days of wage employment in a financial year to rural households willing to do unskilled manual work, reducing rural unemployment and migration.
2019, 2017
VSA-9. Define **underemployment**. How is it different from disguised unemployment?
Answer: Underemployment occurs when a person is working but less than their capacity, or is forced to work in jobs below their qualification level. Disguised unemployment is a specific subset of underemployment where the extra worker's marginal contribution is zero.
Short Answer Questions (3 Marks)
2023, 2022, 2020, 2019, 2016
SA-1. Why has the **Tertiary Sector** grown rapidly in India? Give three reasons.
Answer:
Basic Services: The government has taken responsibility for providing essential services such as hospitals, educational institutions, post offices, defense, and transport.
Industrial & Agriculture Development: Expansion of primary and secondary sectors creates demand for support services like trade, storage, and transport.
Rising Incomes: As incomes rise, people demand services like eating out, tourism, shopping, private schools, and professional medical services.
2022, 2019, 2018, 2016, 2015
SA-3. How can the **government create more employment** in rural areas?
Answer:
Infrastructure Development: Funding canals, dams, and roads creates direct employment and enables year-round multi-cropping.
Access to Cheap Credit: Offering affordable bank loans lets farmers buy seeds/equipment or start small cottage businesses.
2022, 2019, 2017, 2016
SA-5. Explain **disguised unemployment** with suitable examples.
Answer:
Definition: A situation where more workers are engaged in an activity than required, hiding the fact that some are underemployed. If removed, total production is unaffected.
Rural Example: Laxmi is a small farmer with a 2-hectare plot of unirrigated land. All 5 family members work on it because they have nowhere else to go, even though 3 could produce the same yield.
Urban Example: Thousands of casual painters, plumbers, and street vendors work all day but earn very little because there are too many people competing for the same jobs.
Long Answer Questions (5 Marks)
2022, 2019, 2018, 2016, 2015
LA-1. How has the government created employment through **NREGA**? Explain in detail.
Answer: MGNREGA has generated significant employment through these key features:
Legal Guarantee: It promises 100 days of guaranteed work in a year. If the government fails to provide it within 15 days, it pays an unemployment allowance.
Village Proximity: Work is provided within 5 kilometers of the worker's home, reducing distress migration to cities.
Asset Creation: The tasks focus on rural development (e.g., land development, water harvesting, canals, roads) which increases farming productivity.
Inclusive Wages: At least one-third of the jobs are reserved for women, and wages are paid directly to bank/post office accounts, cutting out middlemen.
2022, 2019, 2017, 2016
LA-2. Describe the **historical changes in the share of three sectors** in India's GDP and employment.
Answer:
GDP Transition: Between 1973-74 and 2013-14, India's GDP grew dramatically. The primary sector's share shrank from ~42% to ~14%, the secondary sector grew slightly to ~27%, and the tertiary sector surged from ~34% to ~59%, becoming the largest producer.
Workforce Lag: Employment did not transition at the same rate. The primary sector remains the largest employer, absorbing ~49% of workers in 2011-12. Secondary grew to ~24% and Tertiary to ~27%.
Key Finding: Unlike developed nations that moved employment to industries and services, India has a structural gap. Nearly half the workforce is in agriculture generating only 14% of GDP, resulting in severe disguised unemployment.
2019, 2017, 2016
LA-6. Compare the **Primary Sector's contribution** to GDP vs Employment. What does the gap indicate?
Answer:
GDP vs Employment: The primary sector accounts for only 13–15% of India's GDP, but it employs around 49% of the country's workforce.
Indications:
Disguised Unemployment: There are more people in agriculture than needed, diluting individual labor productivity.
Low Per-Worker Productivity: An agricultural worker produces far less value than a worker in the secondary or tertiary sectors.
Lack of Alternative Jobs: The secondary and tertiary sectors did not generate enough industrial/service jobs to absorb surplus farm labor.
Multiple Choice Questions (1 Mark)
2023, 2022, 2019
Q15. Which is an example of the Public Sector?
Answer: (C) Indian Railways Explanation: Indian Railways is owned, financed, and managed by the Central Government of India, making it a public sector enterprise. The others are privately owned companies.
2026
Q16. Identify the sector: "Ownership of assets and delivery of services in the hands of private individuals; guided by the motive to earn profits."
Answer: (A) Private Sector Explanation: In the private sector, ownership of assets and delivery of services is in the hands of private individuals or companies, and activities are guided by the motive to earn profits.
2022, 2021
Q17. Which is a feature of the Organised Sector?
Answer: (C) Workers have social security benefits Explanation: The organized sector is registered with the government and complies with labor laws. It provides jobs with fixed hours, written contracts, and social security benefits like Provident Fund (PF) and healthcare (ESI).
2022, 2020
Q18. A domestic worker employed in a house belongs to:
Answer: (C) Unorganised sector Explanation: Domestic helpers are not registered, do not have written contracts, lack job security, and are not covered by government labor regulations, placing them in the unorganized sector.
OEB
Q19. Which Act protects organised sector workers' minimum wages?
Answer: (A) Minimum Wages Act Explanation: The Minimum Wages Act is a key labor law that guarantees workers in the organized sector are not underpaid by establishing a legal wage floor.
2019, 2018
Q20. NREGA stands for:
Answer: (A) National Rural Employment Guarantee Act Explanation: NREGA (later renamed MGNREGA) was enacted in 2005 to offer guaranteed employment to rural workers.
2022
Q21. In the following, identify the Unorganised sector worker:
Answer: (C) Small shopkeeper Explanation: A small shopkeeper operates independently, does not follow strict registration laws, has no fixed job contracts, and lacks structural social benefits, representing the unorganized sector.
Assertion-Reason Questions (1 Mark)
OEB
AR-2.
Assertion (A): All workers in the service sector are in the organised sector.
Reason (R): Domestic workers lack job security and social protection.
Answer: (D) A is false; R is true. Explanation: The service sector contains both highly-paid software engineers (organized) and daily wage painters/shop assistants/maids (unorganized), so Assertion A is false.
OEB
AR-5.
Assertion (A): Public sector enterprises are owned and managed by the government.
Reason (R): The motive of public sector is profit maximisation.
Answer: (C) A is true; R is false. Explanation: The primary motive of the public sector is social welfare and offering affordable public services, not maximizing profits. Profit maximisation is the motive of the private sector.
OEB
AR-7.
Assertion (A): Workers in the unorganised sector are exploited.
Reason (R): Unorganised sector workers are not protected by any laws.
Answer: (A) Both true; R correctly explains A. Explanation: The unorganized sector operates outside government supervision, meaning employers can routinely bypass labor regulations, leaving workers exposed to underpayment, long hours, and sudden termination.
Case/Data-Based Questions (CBQs)
2022, 2021, 2019
CBQ 3 — Organised vs Unorganised Sector Comparison
Feature
Organised
Unorganised
Registration
Registered with govt.
Not registered
Job security
Yes
No
Fixed hours
Yes (8 hrs)
No
Social security
PF, gratuity, ESI
None
Minimum wage
Guaranteed
Often denied
Examples
Govt offices, banks
Street vendors, maids
Q1. Which sector does NOT guarantee minimum wages by law?
Q2. A garment factory employs 500 workers with ESI and PF. It belongs to:
Q3. Give one reason why unorganised sector workers are often exploited.
Answer: Unorganized sector units are small, scattered, and outside government control. Without labor inspectors, written contracts, or trade unions, workers cannot legally protest low wages, unsafe environments, or sudden dismissals.
Very Short Answer Questions (2 Marks)
2022, 2019, 2016
VSA-4. What is the Organised Sector? Give two examples.
Answer: The organised sector comprises enterprises where terms of employment are regular and workers have assured work. They are registered with the government and follow labor regulations. Examples: Government school teachers, bank employees.
2022, 2019, 2017, 2016
VSA-5. What is the Unorganised Sector?
Answer: The unorganised sector consists of small and scattered units that are largely outside government control. It is characterized by low, irregular wages, long work hours, and a total absence of job security or social benefits.
2019, 2017, 2016
VSA-10. Give two examples of activities in the Public Sector and explain why the government takes them up.
Answer: Examples: Indian Railways and government-run primary schools. The government manages these to ensure that essential, high-investment public goods and services are available to all citizens at affordable rates, which private profit-driven firms would not prioritize.
2018, 2017
VSA-11. What are **public facilities**? Give two examples.
Answer: Public facilities are essential services provided collectively by the government to improve people's lives. Examples: Public health centers (hospitals) and clean drinking water networks.
Short Answer Questions (3 Marks)
2026, 2022, 2021, 2019, 2017, 2016
SA-2. Distinguish between **Organised** and **Unorganised** sector. Give two differences.
Answer:
Feature
Organised Sector
Unorganised Sector
Job Security
Assured job security and written contracts.
No job security; can be dismissed anytime.
Benefits
Entitled to paid leave, PF, ESI medical support.
No paid leaves, medical benefits, or pension.
Working Hours
Fixed hours; overtime is paid.
Long, irregular hours; no overtime pay.
2022, 2021, 2019, 2016
SA-6. Distinguish between **Public** and **Private Sector**.
Answer:
Feature
Public Sector
Private Sector
Ownership
Owned and managed by the government.
Owned and managed by private individuals.
Primary Motive
Social welfare and public service.
Maximizing profit.
Examples
Indian Railways, BHEL, Post Office.
Tata Steel, Reliance Industries, Infosys.
2022, 2019, 2017, 2016
SA-7. Why does the government need to take up activities in the **Public Sector**?
Answer:
Huge Capital Investment: Infrastructure like railways, dams, and highways requires vast funds that private capital cannot or will not assemble.
Non-Excludable / Public Goods: Services must be available to everyone at subsidized, fair prices (like electricity and food grains via ration shops), which conflicts with private profit-seeking.
Regional Development: The government sets up plants in backward regions to reduce disparities and generate regional employment.
Long Answer Questions (5 Marks)
2022, 2019, 2017
LA-4. How can the government help workers in the **Unorganised Sector**?
Answer: The government can support unorganized workers through these policy measures:
Strict Enforcement of Laws: Regularly inspect factories to enforce the Minimum Wages Act and limit excessive daily working hours.
Financial Assistance: Provide subsidized credit to street vendors and small farmers to break their dependence on exploitative local moneylenders.
Social Security Nets: Set up affordable health insurance, pension programs (like PM Shram Yogi Maan-dhan), and provident fund options for casual workers.
Skill and Training: Launch training centers to help rural workers learn new skills, making it easier for them to transition into formal, organized jobs.
Direct Infrastructure Support: Build government-backed markets, warehouses, and storage structures so small producers can sell crops directly without dealers.
2022, 2019, 2014
LA-5. Explain the concept of **Public Sector** and describe its contribution to economic development.
Answer: The public sector covers businesses and assets owned and run directly by the government to provide public services.
Contributions to economic development:
Infrastructure Backbone: It constructed national transportation (railways/highways) and heavy industries (steel/power plants) that private capital avoided.
Balanced Regional Growth: By placing factories in backward districts, it brought infrastructure and income to under-developed areas.
Dignified Employment: It acts as a major employer, offering secure jobs with fair wages, medical support, and pension benefits.
Ensuring Social Equity: It runs subsidized programs (like PDS shops and state-run clinics) to protect low-income households from market pricing.
Economic Stability: By managing strategic sectors like defense, space research, and banking (public sector banks), it keeps national development secure.
📋 2026 Board Paper — Ch.2 Sectors of Indian Economy | March 7, 2026 · Set 1 · Code 32/5/1
Multiple Choice Questions (1 Mark)
2026 · Q30 [MCQ]
Q30. Identify the sector: "Ownership of assets and delivery of services is in the hands of private individuals or companies, and their activities are guided by the motive to earn profits."
Answer: (A) Private Sector Explanation: This matches the verbatim NCERT definition of the private sector, where assets and services are owned by private businesses or individuals and run primarily to generate profit (e.g., TISCO, Reliance).
Short Answer Questions (3 Marks)
2026 · Q38 [SA - Choice A]
Q38 (a). Describe the importance of the Tertiary Sector in the Indian Economy.
Answer: The tertiary sector is critical for the Indian economy due to:
Highest GDP Share: It is the largest producing sector in India, contributing over 55% of the total Gross Value Added.
Supporting Primary & Secondary Sectors: It provides essential logistics, storage, trading, and financing (banking) systems without which farms and factories cannot trade.
Rise of New Services: It drives innovation and high-value exports via information technology, software parks, call centers, and internet services.
2026 · Q38 [SA - Choice B]
Q38 (b). Describe the features of the Organised Sector.
Answer: Features of the organised sector include:
Government Registration: Enterprises are registered with the government and must follow regulatory laws (like the Factories Act and Shop Act).
Job Security: Employees have assured employment, written contracts, and clear terms of service; they cannot be laid off without legal procedure.
Mandatory Employee Benefits: Employers must provide paid leave, provident fund (PF) contribution, gratuity, medical support, and overtime pay for work beyond standard hours.