Social Science (087) — AI-generated practice question

The private sector is driven by profit, so it only provides services where it can charge high prices and earn returns. Supplying electricity to rural households, for example, requires huge investment in infrastructure over vast areas, making it unprofitable for private companies.

If left to the market, electricity would be priced very high—beyond the capacity of poor rural consumers and small industries. Many small-scale industries would be forced to shut down, as their production costs would rise sharply.

Therefore, the government steps in to produce and supply electricity at affordable rates, bearing part of the cost itself. This ensures that essential services reach all sections of society, not just those who can afford high prices.

Source: Chapter 2 – Sectors of the Indian Economy, Public and Private Sectors

---

The examiner expects three things in this answer:

1. Why the private sector won't act – profit motive means it avoids costly, low-return services.
2. Government's role – it bears part of the cost/subsidises to ensure affordable supply.
3. Consequence without intervention – high prices, shutdown of small industries, denial of services to poor.

Use the textbook's own electricity example directly—it scores better than a self-invented one. Keep the answer focused; avoid writing about GDP or unrelated sectors.