CBSE Class 10 · Sectors of the Indian Economy

Comparing the Three Sectors Class 10: GDP, GVA and Employment

Updated 14 October 2026 · Fact-checked

In developed countries, importance shifted from the primary sector to the secondary and then the tertiary sector. In India, between 1977-78 and 2017-18, production grew most in the tertiary sector, which became the largest producer. But employment did not shift similarly: the primary sector is still the largest employer, because not enough jobs were created elsewhere.

Notice the mismatch: the tertiary sector produces the most, but the primary sector still employs the most people (bar sizes are approximate).

Illustration drawn for QuestionBuddy.

Understand Comparing the Three Sectors: GDP and Employment

The historical pattern in developed countries.
1. At initial stages of development, the primary sector was most important. As farming improved and produced more food, people took up crafts, trade, transport, administration and the army; still, most goods and most jobs were in the primary sector.
2. Over more than a hundred years, new methods of manufacturing brought factories; people moved from farms to factories; the secondary sector became most important in production and employment.
3. In the past 100 years, a further shift took place to the tertiary sector, which became most important in total production, and most working people are now employed in it.

India: production (Graphs 1 and 2, GVA, 1977-78 to 2017-18). Production rose in all three sectors but most in the tertiary sector, which, by 2017-18, became the largest producing sector, replacing the primary sector.

Why the tertiary sector became important (four reasons).
1. Basic services such as hospitals, educational institutions, post and telegraph, police stations, courts, village administrative offices, municipal corporations, defence, transport, banks and insurance are needed; in a developing country the government must provide them.
2. Development of agriculture and industry raises demand for transport, trade and storage.
3. Rising incomes make some people demand more services: eating out, tourism, shopping, private hospitals and schools, professional training, especially in big cities.
4. New services based on information and communication technology have become important and are growing rapidly.
Caution: not all of the service sector is growing equally. A few services employ highly skilled, educated workers; but a very large number work as small shopkeepers, repair persons and transport persons who barely earn a living, because no other work is available.

India: employment (Graph 3). While sector shares in GVA changed, a similar shift did not occur in employment: the primary sector is still the largest employer.

Why? Not enough jobs were created in the secondary and tertiary sectors. Industrial output rose more than nine times, but industrial employment rose only about three times; service production rose 14 times, but service employment only about five times.
Result: more than half of workers are in the primary sector, mainly agriculture, producing only about one-sixth of GVA, while the secondary and tertiary sectors produce the rest with less than half the workers.

Underemployment (disguised unemployment). This means there are more people in agriculture than necessary: moving some out would not reduce production. NCERT's example: Laxmi, a small farmer with about two hectares of unirrigated land, grows jowar and arhar; all five family members work on it all year because they have nowhere else to go. Everyone works, but no one is fully employed; their effort is divided. This hidden underemployment is called disguised unemployment. If landlord Sukhram hires one or two of them, or two move to a factory, family income rises and farm production stays the same. It also exists in cities: casual workers such as painters, plumbers and repair persons may not find work every day.

Comparing the Three Sectors: GDP and Employment: key facts

Historical shift (developed countries): Primary -> secondary (factories) -> tertiary (most production and jobs)
India 1977-78 to 2017-18: Tertiary production grew most; tertiary became the largest producing sector by 2017-18; GVA data.
Four reasons for tertiary growth: Basic services; growth of agriculture and industry; rising incomes; ICT-based services; Not all services growing equally.
Employment mismatch: Industry: output x9, jobs x3; services: output x14, jobs x5; primary still largest employer; More than half of workers produce ~1/6 of GVA.
Disguised unemployment: More people working than needed; each works below potential; removing some does not cut output; Laxmi's family of five on 2 hectares.

How to answer Comparing the Three Sectors: GDP and Employment questions

Questions ask about the historical shift between sectors, why the tertiary sector has grown, why employment has not shifted, and what disguised unemployment is. Data items use NCERT's figures on output and job growth.

1For the historical shift, write the three stages in order with reasons.
2For tertiary growth, give all four reasons, then add the caution about uneven growth.
3For the employment mismatch, quote nine-times/three-times and 14-times/five-times.
4Define disguised unemployment and illustrate it with Laxmi's family.
5Write about 60 words for 3 marks and 120 for 5 marks.

Comparing the Three Sectors: GDP and Employment in real life

The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Disguised unemployment

Suppose a family of six runs a small roadside tea stall that two people could easily manage. All six spend the whole day at the stall because none of them has found other work.

Identify the type of unemployment and explain what would happen if two of them found jobs elsewhere.

Try it first, then show the solutionSolution

Everyone appears busy, but the work needs only two people.
This is underemployment, or disguised unemployment.
If two leave for other jobs, the stall's sales stay the same.
Family income rises from the new wages.

Answer: This is disguised unemployment: all six seem to be working, but the stall needs only two, so each works below their potential. If two family members found jobs elsewhere, the stall would sell just as much, while the family would earn extra wages. NCERT shows the same with Laxmi's family on a small farm.

Memory hook: Everyone busy, no one fully employed.

Tricks to remember Comparing the Three Sectors: GDP and Employment

Short memory aids. Say each one aloud once, then use it on a question the same day.

P to S to T
Farm, Factory, Service: the order of importance in developed countries.
Use it when: Historical shift.
9-3 and 14-5
Industry output x9, jobs x3; services output x14, jobs x5.
Use it when: Employment mismatch data.
B-D-I-N
Basic services, Demand from agriculture and industry, Incomes rising, New ICT services.
Use it when: Reasons for tertiary growth.

Comparing the Three Sectors: GDP and Employment: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: Largest producing sector · 1 mark · MCQBoard level

Which sector emerged as the largest producing sector in India in 2017-18?
(a) Primary
(b) Secondary
(c) Tertiary
(d) Organised

Try it first, then show the solutionSolution

Production grew most in the tertiary sector, which replaced the primary sector as the largest producer (1 mark).

Answer: (c) Tertiary

Example 2: Why the tertiary sector grew (3 marks) · 3 marks · Short answerBoard level

Give three reasons why the tertiary sector has become important in India. (3 marks)

Try it first, then show the solutionSolution

Basic services such as hospitals, schools, police, courts, transport and banks are required, and the government must provide them (1 mark).
Development of agriculture and industry increases demand for transport, trade and storage (1 mark).
Rising incomes increase demand for services like eating out, tourism and private schools; and new ICT-based services have grown rapidly (1 mark).

Answer: Basic services such as hospitals, schools, police, courts, transport and banks are needed in every country, and in a developing country the government must provide them. Growth of agriculture and industry raises demand for transport, trade and storage. Rising incomes create demand for eating out, tourism and private schools, and new ICT-based services have expanded rapidly.

Example 3: Assertion-reason: employment shift · 1 mark · Assertion-reasonHarder board level

Assertion (A): The primary sector continues to be the largest employer in India.
Reason (R): Not enough jobs were created in the secondary and tertiary sectors.
(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 true, but R is false.
(d) A is false, but R is true.

Try it first, then show the solutionSolution

NCERT gives R as the reason for A (1 mark).

Answer: (a) Both A and R are true, and R is the correct explanation of A.

Example 4: Production vs employment (5 marks) · 5 marks · Long answerHarder board level

'A remarkable fact about India is that while the share of the three sectors in GVA has changed, a similar shift has not taken place in employment.' Explain the statement and its consequences. (5 marks)

Try it first, then show the solutionSolution

Between 1977-78 and 2017-18 production grew most in the tertiary sector, which became the largest producer, replacing the primary sector (1 mark).
But the primary sector remains the largest employer (1 mark).
Reason: industrial output rose more than nine times but jobs only about three times; services output rose 14 times but jobs about five times (1 mark).
Consequence: more than half of workers are in agriculture producing only about one-sixth of GVA (1 mark).
So agriculture has more workers than necessary: underemployment or disguised unemployment, as with Laxmi's family (1 mark).

Answer: Between 1977-78 and 2017-18, production rose in all sectors but most in the tertiary sector, which became India's largest producing sector, replacing the primary sector. Employment did not follow: the primary sector is still the largest employer. Not enough jobs were created elsewhere: industrial output rose more than nine times but industrial jobs only about three times, and services output rose 14 times but service jobs about five times. As a result, more than half of India's workers remain in agriculture, producing only about one-sixth of GVA. Agriculture has more workers than it needs, so many are underemployed, as in Laxmi's family where five people work a small plot.

Example 5: Passage: Laxmi's farm (3 marks) · 3 marks · Short answerHOTS / competency

Read and answer. NCERT describes Laxmi, a small farmer owning about two hectares of unirrigated land dependent on rain, growing jowar and arhar. All five members of her family work on the plot throughout the year because they have nowhere else to go. Later, landlord Sukhram hires one or two of them to work on his land. (a) What kind of unemployment does Laxmi's family face? (b) What happens to production on Laxmi's farm when two members work elsewhere? (c) What happens to the family's income, and why? (3 marks)

Try it first, then show the solutionSolution

(a) Underemployment, or disguised unemployment: all work, but none fully (1 mark).
(b) Production stays the same, since five people are not needed on the small plot (1 mark).
(c) Family income rises, because the members who move earn wages while the farm still produces as much (1 mark).

Answer: (a) Disguised unemployment, or underemployment: everyone works, but none is fully employed. (b) Production on the farm does not fall, because the small plot does not need five people. (c) The family's income rises, since the members working for Sukhram or in a factory now earn wages while the farm still produces the same.

Example 6: Uneven growth of services (3 marks) · 3 marks · Short answerHOTS / competency

'Not all of the service sector is growing equally well.' Explain. (3 marks)

Try it first, then show the solutionSolution

The service sector employs many kinds of people (1 mark).
At one end, a limited number of services employ highly skilled and educated workers (1 mark).
At the other, very many work as small shopkeepers, repair persons and transport persons who barely earn a living because there is no alternative work; only part of the sector is growing in importance (1 mark).

Answer: The service sector employs very different kinds of people. A limited number of services employ highly skilled, educated workers. But a very large number of people work as small shopkeepers, repair persons and transport persons, barely earning a living, only because they have no other work. So only part of the sector is really growing in importance.

Where students lose marks in Comparing the Three Sectors: GDP and Employment

The slips examiners see most often, and what to write instead.

Mistake: Assuming employment followed production
Students link the two automatically.
Wrong working
Most Indians now work in the tertiary sector.
Right working
The primary sector is still the largest employer.
Do this: Separate production and employment.
Usually costs: 1-2 marks.
Mistake: Defining disguised unemployment as having no job
Confusion with open unemployment.
Wrong working
Disguised unemployment means people without work.
Right working
People appear to work, but more are working than needed.
Do this: Hidden, not visible.
Usually costs: 1 mark.
Mistake: Giving only one reason for tertiary growth
IT services dominate thinking.
Wrong working
Services grew because of IT.
Right working
Also basic services, demand from other sectors and rising incomes.
Do this: Four reasons.
Usually costs: 1-2 marks.
Mistake: Wrong multipliers
Four numbers.
Wrong working
Industrial jobs rose nine times.
Right working
Industrial output x9, jobs x3; services output x14, jobs x5.
Do this: 9-3 and 14-5.
Usually costs: 1 mark.

Exam tips

Use Laxmi's family as the standard illustration of disguised unemployment.
Quote the output-versus-jobs multipliers to explain the employment mismatch.
Add NCERT's caution that only part of the service sector is growing.
Economics in 2026-27 has 1-, 3- and 5-mark questions.

Practice questions on Comparing the Three Sectors: GDP and Employment

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

Q1 · 1 mark · MCQBoard level
Over 1977-78 to 2017-18, services production in India rose about 14 times, while service sector employment rose about:
(a) two times
(b) five times
(c) nine times
(d) fourteen times
Hint
14-5.
Answer
(b) five times
Q2 · 3 marks · Short answerBoard level
What does the history of developed countries indicate about shifts between sectors? (3 marks)
Hint
Three stages.
Answer
At first the primary sector was most important, with most goods and jobs in it. Over more than a hundred years, new manufacturing methods and factories made the secondary sector most important in production and employment. In the past 100 years, there has been a further shift to the tertiary sector, which now leads in production and employs most working people.
Q3 · 1 mark · Assertion-reasonHarder board level
Assertion (A): Disguised unemployment is easily visible.
Reason (R): In disguised unemployment, people appear to be working but work less than their potential.
(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 true, but R is false.
(d) A is false, but R is true.
Hint
Hidden or visible?
Answer
(d) A is false, but R is true. It is hidden, which is why it is called disguised.
Q4 · 3 marks · Short answerHOTS / competency
Suppose a city has thousands of casual workers such as painters and plumbers who wait at a crossing every morning, and many go home without work. Is this underemployment? Explain using NCERT. (3 marks)
Hint
Underemployment can occur outside agriculture.
Answer
Yes. NCERT notes that underemployment also happens in other sectors: thousands of casual workers in urban services search for daily work as painters, plumbers and repair persons, and many do not find work every day. They are not fully unemployed but work far less than their potential, so they are underemployed.
Q5 · 3 marks · Short answerHOTS / competency
Using NCERT's data, explain why more than half of India's workers produce only about one-sixth of its GVA. (3 marks)
Hint
Jobs vs output growth.
Answer
Output in industry and services grew much faster than jobs: industrial output more than nine times but jobs about three times, services output 14 times but jobs about five times. So workers stayed in agriculture, where more than half of them now produce only about one-sixth of GVA. Many are underemployed: agriculture has more workers than it needs.
Q6 · 5 marks · Long answerHOTS / competency
'The tertiary sector is the largest producer in India, so most Indians must be working in services.' Evaluate this statement. (5 marks)
Hint
Production vs employment; uneven growth; disguised unemployment.
Answer
The first part is true: between 1977-78 and 2017-18, tertiary production grew the most and the sector became the largest producer, driven by basic services, demand from agriculture and industry, rising incomes and new ICT services. But the conclusion is wrong. Employment did not shift in the same way: the primary sector is still the largest employer, with more than half of workers producing only about one-sixth of GVA. Service jobs grew only about five times while output grew 14 times. Even within services, a few skilled jobs grow while many small shopkeepers and repair persons barely survive. So production and employment tell very different stories, and agriculture remains crowded with underemployed workers.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1.Which years does NCERT compare?Show answer
1977-78 and 2017-18.
2.What share of GVA do agricultural workers produce?Show answer
About one-sixth.
3.How much land does Laxmi own?Show answer
About two hectares of unirrigated land.
4.What is another name for underemployment?Show answer
Disguised unemployment.
5.Which sector is still the largest employer?Show answer
The primary sector.

Comparing the Three Sectors: GDP and Employment: frequently asked questions

Why is the tertiary sector growing in India?

Because of the need for basic services, demand created by agriculture and industry, rising incomes, and new ICT-based services.

Why has employment not shifted out of agriculture?

Not enough jobs were created in industry and services; output there grew much faster than employment.

What is disguised unemployment?

A situation where more people work than needed, so each works below potential; removing some does not reduce output.

What is the historical pattern of sectors in developed countries?

Importance shifted from the primary to the secondary sector, and then to the tertiary sector.