Q1. [4] deep exam-ready
Study the following data carefully and answer the questions:
In India, between 1977–78 and 2017–18, production in all three sectors increased. However, the tertiary sector grew the fastest and became the largest contributor to GVA by 2017–18. Despite this, the primary sector continued to employ more than half of the country's workforce in 2017–18. Industrial output rose more than nine times during the period, but employment in the industrial sector grew only about three times. Similarly, production in the service sector rose 14 times, but employment in the service sector rose only about five times.
(i) What does the data reveal about the relationship between production growth and employment growth in India?
(ii) What term is used for the situation where workers in the primary sector are apparently working but contributing far less than their potential?
(iii) Mention any two consequences of the employment situation described above for the workers remaining in agriculture.
Generated by claude-sonnet-4-6 · 2026-06-26 13:22 · grounding rag
Model Answer
(i) The data reveals that production growth has been much faster than employment growth in India. Industrial output rose 9 times but employment grew only 3 times; service sector production rose 14 times but employment only 5 times. This means growth has not generated enough jobs to absorb the workforce.
(ii) This situation is called disguised unemployment (also called underemployment). Workers appear to be employed but contribute less than their potential; removing some would not reduce total output.
(iii) Two consequences for workers remaining in agriculture:
- Workers are underemployed — more people share the same work, so each individual works less than their full capacity.
- They earn very low incomes — the primary sector contributes only about one-sixth of GVA despite employing more than half the workforce, meaning per-worker productivity and earnings are very low.
Source: Chapter 2 — Sectors of the Indian Economy; 'Where are most of the people employed?' section
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Explanation
- (i) demands analysis of the mismatch between production and employment data — state the trend clearly with figures.
- (ii) The exact textbook term is disguised unemployment; underemployment is acceptable but disguised unemployment is the precise answer examiners look for.
- (iii) Two points needed — focus on underemployment (too many people for available work) and low income/wages as the direct consequences. Avoid vague answers; link them to the data (1/6 of GVA, more than half the workers).