Other Sectors of Indian Economy - Questions & Answers

MULTIPLE CHOICE QUESTIONS

1. When was the First Industrial Policy Resolution adopted by the Government of India?
(a) 1948      (b) 1956      (c) 1951      (d) 1991
Answer: (a) 1948

2. When was the Second Industrial Policy Resolution passed?
(a) 1947      (b) 1948      (c) 1956      (d) 1951
Answer: (c) 1956

3. A mixed economy is characterised by the
(a) Co-existence of rural and urban sectors      (b) Public and private sectors
(c) Both (a) and (b)      (d) None of these
Answer: (b) Public and private sectors

4. Private sector works for the maximisation of profit whereas the public sector work for social welfare.
(a) Public, private      (b) Private, public      (c) Private, joint      (d) Joint, private

5. After the liberalization of the Indian economy, the opportunity for the growth and expansion of the private sector increased.
(a) public sector      (b) joint sector      (c) cooperative sector      (d) private sector

6. The public sector enterprises are owned and controlled by the Government.
(a) Government      (b) Individuals      (c) Foreigners      (d) None of these

7. Indian Railways is an example of departmental public sector undertaking.
(a) ONGC      (b) SAIL      (c) State Bank of India      (d) Indian Railways

8. ABC Ltd. is a company in India. The company issues shares for ₹100,000 out of which shares amounting to ₹51,000 were held by the Maharashtra State Government, ₹49,000 were held by the general public. ABC Ltd. is a Government company.
(a) Private      (b) Government      (c) Associate      (d) Subsidiary

9. Indian economy is a
(a) socialist economy      (b) market economy      (c) traditional economy      (d) mixed economy
Answer: (d) mixed economy

10. Reducing the role of public sector and increasing the role of private sector falls under
(a) Liberalisation      (b) Privatisation      (c) Globalisation      (d) None of these
Answer: (b) Privatisation

11. Private sector contributes about 80 per cent of the country's national income.
(a) 20 per cent      (b) 30 per cent      (c) 50 per cent      (d) 80 per cent

12. About two-third of the country's total population reside in villages.
(a) one-third      (b) two-third      (c) half      (d) three-fourth

13. Agriculture is the main occupation of rural population.
(a) Horticulture      (b) Trade      (c) Industry      (d) Agriculture

14. Which of the following statements is / are incorrect?
I. A large proportion of urban population is engaged in primary activities
II. Motor vehicles are the major source of air pollution in urban areas
Alternatives :
(a) Only I      (b) Only II      (c) Both I and II      (d) None of these
Answer: (a) Only I

15. Which of the following statements is/are correct?
I. The entire agricultural sector is owned and managed by the private sector.
II. The wholesale as well as retail trade in India are in the hands of the private sector
Alternatives :
(a) Only I      (b) Only II      (c) Both I and II      (d) None of these
Answer: (c) Both I and II

ASSERTION - REASONING & MATCHING BASED QUESTIONS

1. Identify the correct sequence of alternatives given in Column II by matching them with respective terms in Column I :
Column I                            Column II
(A) Private Sector                (i) Simple life style
(B) Public Sector                  (ii) Agriculture
(C) Rural Sector                   (iii) Indian railways
(D) Urban Sector                  (iv) Higher incidence of pollution
Choose the correct alternative:
(a) A - (ii), (B) - (iv), (C) - (i), (D) - (iii)
(b) A - (iii), (B) - (ii), (C) - (iv), (D) - (i)
(c) A - (ii), (B) - (iii), (C) - (i), (D) - (iv)
(d) A - (ii), (B) - (i), (C) - (iii), (D) - (iv)
Answer: (c) A - (ii), (B) - (iii), (C) - (i), (D) - (iv)

2. From the set of statements given in column I and column II choose the correct pair of statements.
Column I                                   Column II
(A) Objective of Public Sector      (i) Profit
(B) Feature of Urban Sector         (ii) Seasonal employement
(C) Public Sector                         (iii) ONGC
(D) First Industrial Policy              (iv) 1956
Alternatives :
(a) A - (i)      (b) B - (ii)      (c) C - (iii)      (d) D - (iv)
Answer: (c) C - (iii)

3. Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives:
Assertion (A): Private sector activities are operated through the instrument of market mechanism.
Reason (R): State Bank of India is a private sector enterprise.
Alternatives :
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Answer: (c) Assertion (A) is true but Reason (R) is false.

4. Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives:
Assertion (A): Most urban people our engaged in farming activities.
Reason (R): Most urban people are engaged in secondary and tertiary sector.
Alternatives :
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Answer: (d) Assertion (A) is false but Reason (R) is true.

SHORT ANSWER TYPE QUESTIONS

1. What do you mean by the private sector in the Indian economy?
Answer: Private sector refers to that part of a country's economy that is run by individuals and companies rather than the government.

2. Mention two features of Indian private sector.
Answer:
(i) Individuals and corporations operate this sector.
(ii) Profit maximisation is the main objective of the private sector.

3. Explain the meaning of public sector.
Answer: Public sector covers all those occupations and economic activities which are owned and controlled by the government.

4. State two objectives of public sector in India.
Answer:
(i) To promote rapid economic development through creation and expansion of strong infrastructure.
(ii) To promote balanced regional growth.

5. Classify public sector employment.
Answer: Public sector employment in India can be classified into two categories:
(i) Public sector employment in Government administration, defence and other Government services.
(ii) Employment in public sector enterprises run by the Union Government, State Governments and local bodies.

6. Mention two differences between the private and the public sector.
Answer:
1. Ownership: Public sector is owned by the government, whereas private sector is owned by individuals or companies.
2. Motive: Public sector focuses on public welfare, whereas private sector primarily focuses on profit.

7. State two main features of rural sector of the Indian economy.
Answer:
(i) About 75 per cent of the rural people are engaged in primary sector.
(ii) A large portion of rural land is used for agriculture and allied activities.

8. State two main features of urban sector of the Indian economy.
Answer:
(i) Urban population is largely engaged/employed in secondary and service activities.
(ii) A large part of urban land is used for building factory sheds, residential houses, markets, educational institutions, hospitals, etc.

9. Give two differences between the rural and urban sector.
Answer:
1. Meaning: Rural areas refer to villages, whereas Urban areas refer to town and cities alongwith their surrounding.
2. Lifestyle: Life in rural areas is simple and relaxed, whereas life in urban areas is fast and complicated.

LONG ANSWER TYPE QUESTIONS

1. Discuss the role of private sector in the Indian economy.
Answer: The role of the private sector in India is highly significant:
(i) Private Sector and Agriculture: The entire agricultural sector is completely owned and managed by the private sector. Agriculture provides employment to about half of the country's population.
(ii) Private Sector and Industrial Development: The private sector has heavily invested in industries producing a wide range of intermediate products, machines, and consumer goods.
(iii) Private Sector and Trading: The wholesale as well as retail trade in India are in the hands of the private sector.
(iv) Private Sector and National Income and Employment: The private sector contributes to the major part of national income and employment. Presently, nearly 80 per cent of the country's national income is contributed by the private sector.

2. What is meant by the term 'Public Sector'? State its main objectives.
Answer: That part of the economy under the control of the government is known as the public sector.
The main objectives behind setting up public sector enterprises were as follows:
(i) To promote rapid economic development through creation and expansion of strong infrastructure.
(ii) To generate financial resources for development.
(iii) To create employment opportunities.
(iv) To promote balanced regional growth.
(v) To reduce inequalities of income and wealth among people.
(vi) To promote exports on one hand and reduce imports (i.e., import substitution), on the other.

3. Analyse the role of public sector in the Indian economy in terms of the following :
(a) Share in Employment
(b) Development of Infrastructure.
Answer:
(a) Share in Employment: Public sector employs 70 per cent of the workers employed in the organised sector of the Indian economy. 50 per cent of the total employment in the public sector is in government administration, defence and other government services like health, education, etc. The remaining 50 per cent is employed in various economic enterprises run by the centre, state and local governments.
(b) Development of Infrastructure: Without the development of infrastructural facilities (such as transport, communication, power, irrigation, education, basic industries, etc.) economic development is not possible. These infrastructural facilities are developed only by the public sector of the country because private sector does not take interest in their development due to lack of resources and less profitability.

4. Discuss briefly four features of the rural sector of the Indian economy.
Answer:
(i) Dependence on Agriculture: About 75 per cent of the rural people are engaged in primary sector such as agriculture, fisheries, forestry, dairying etc.
(ii) Low Density of Population: The density of population in the rural sector is lower than in the urban sector.
(iii) Poverty: According to the 2011-12 estimates, about 22 crores of people in rural areas are poor and live below the poverty line.
(iv) Underdeveloped Infrastructure: The economic infrastructure (which comprises transport and communication system, electricity, banking, etc.) as well as social infrastructure (which consists of health and education, supply of safe drinking water, sanitation facilities, etc.) are found to be most underdeveloped.

5. Explain the following as features of urban sector
(a) size
(b) class extremes
Answer:
(a) Size: The size of an urban community is much larger than that of a rural community. Greater importance is attached to the individual than to the family. Nuclear families are more popular in urban areas.
(b) Class extremes: A town and a city house the richest as well as the poorest of people. In a city, the slums of the poor exist alongside the costly and luxurious bungalows of the rich amidst the apartments of the middle class people.

6. Describe the four differences between the private and public sector.
Answer:
1. Ownership: Public sector is owned by government, whereas private sector is owned by individuals or companies.
2. Motive: Public sector focuses on public welfare, whereas private sector primarily focuses on profit.
3. Finance: Public sector is funded by government taxes and loans, whereas private sector is financed by owners and shareholders.
4. Benefits for working: Public sector creates large-scale and stable jobs, whereas private sector creates more competitive and skilled jobs.

7. Differentiate rural areas from urban areas in respects of the following.
(a) Size & density of population
(b) Environments
(c) Relationship
Answer:
(a) Size & density of population: Density of population is low and the size of rural community is small. In contrast, density of population is higher and the size of urban community is much larger.
(b) Environments: Rural people live in close contact with nature, whereas urban people live under man-made environment and hence greater isolation from nature.
(c) Relationship: People have intimate relationship and face-to-face contracts with each other in rural areas. People do have formal relationship and temporary social relations in urban areas.

QUESTION BANK

1. What do you understand by public sector?
Ans. Public sector covers all those occupations and economic activities which are owned and controlled by the government.

2. What do you understand by private sector?
Ans. Private sector refers to that part of a country's economy that is run by individuals and companies rather than government.

3. Why India has given importance to the public sector?
Ans. In India, public sector is given importance because it
(i) develops infrastructures.
(ii) provides support to some activities like subsidised electricity to many units.
(iii) provides basic facilities like health, education.

4. What is the motive of private sector?
Ans. Private sector is guided by the motive of profit.

5. Why should the government construct roads and build dams?
Ans. Government should construct roads and dams because private sector does not take interest in their development due to lack of resources and less profitability.

6. Give a few examples of public sector activities.
Ans. Examples of public sector activities
(i) Construction of roads, dams etc.      (ii) Railways
(iii) Government schools, hospitals       (iv) Water supply

7. Classify public sector employment into two categories.
Ans. Public sector employment in India can be classified into two categories :
(i) Public sector employment in Government administration, defence and other Government services.
(ii) Employment in public sector enterprises run by the Union Government, State Governments and local bodies.

8. Give any two objectives of public sector in India.
Ans. (i) To promote balanced regional development.
(ii) To develop strong infrastructure.

9. Mention the names of any two departmental organisations.
Ans. (i) Indian Railways      (ii) Post and Telegraph

10. How would you classify public sector undertakings?
Ans. (i) Department enterprises; (ii) Statutory undertaking; and (iii) Government companies.

11. Classify sectors of an economy on the basis of habitation.
Ans. On the basis of habitation, an economy is classified into rural and urban sectors.

12. Mention two features of the rural sector of Indian economy.
Ans. Two features of rural sector :
(i) About 75 per cent of the rural people are engaged in primary sector.
(ii) A large portion of rural land is used for agriculture and allied activities.

13. Mention two features of the urban sector of Indian economy.
Ans. Two features of urban sector :
(i) Urban population is largely engaged/employed in secondary and service activities.
(ii) A large part of urban land is used for building factory sheds, residential houses, markets, educational institutions hospitals, etc.

14. Define disguised unemployment. Why does it exist in rural areas?
Ans.
• Disguised unemployment refers to a situation where more people are employed than are actually required.
• Disguised unemployment is commonly found in the agricultural sector in rural areas of India.
• This problem exists due to excessive pressure of population on land. All members of the family share the farm work.

15. Explain why does seasonal unemployment exist in rural areas of India.
Ans.
• Agriculture is a seasonal occupation. Our workers and farmers do not find work round the year. In the absence of proper irrigation facilities, multiple cropping is not possible in rural area.
• Further, subsidiary employment opportunities are also lacking. This forces the rural people to remain out of work during the off-season around 3 to 4 months in a year. This feature is known as seasonal unemployment which is a common form of rural unemployment in India.

16. Which type of unemployment is found in urban areas of India?
Ans. In urban areas, we find educated and industrial unemployment.

17. What is urban and rural area?
OR
How do you define rural and urban areas?
Ans.
• An urban area is the region surrounding a city. Most inhabitants of urban areas have non-agricultural employment.
• Rural areas (also called countryside) is a geographic area that is located outside towns and cities. Whatever is not urban is considered rural.

18. Mention any two features of private sector.
Ans. (i) Individuals and corporations operate this sector.
(ii) Profit maximisation is the main objective of private sector.

19. Mention two features of public sector.
Ans. (i) Public sector organisations are owned, controlled and managed by the government.
(ii) Public enterprises have service motive.

20. How much of India is urban?
Ans. About 33% of the population is living urban areas.

21. What is the role of private and public sector in mixed economy?
Ans. In public sector, industries like defence power, energy, basic industrial are set up. On the other hand, in private sector, all the consumer goods industries, agriculture small-scale industries are developed. The government encourages both the sectors to develop simultaneously.

22. Why does the private sector do better?
Ans. Private sector functions better as it works without too much government intervention. Further, private enterprises have more latitude in hiring new employment, lower pay scales and market place like condition.

23. What is the role of public sector in the economy?
Ans. Public sector promotes rapid economic development through infrastructure creation. It creates employment opportunities. It generates financial resources for further development. It ensures equality of income and wealth and thus a balanced regional development.