Class X Economics | Chapter 2 | Sectors Of The Indian Economy | Important Questions From Sectors In Terms Of Ownership

Here are important questions from the unit Sectors in terms of ownership public and private sectors.

Sections in this article

One mark questions

1. Give an example of a private sector company?

Reliance Industries Ltd.

2. How do big private companies contribute to the development of the country?

They generate employment and contribute to the growth of GDP by producing goods and services.

3. Classify the economy on the basis of ownership

On the basis of ownership, the economy can be classified as public and private sectors.

4. What is the main difference between the public and private sectors in an economy?

The private sector is mainly driven by the motive to make profits. This is not the case with public sector.

5. How does the public sector help in the development of a country?

Every country needs several things to develop. For example, there is a need to build roads, railways and airports. Likewise, there is a need to build hospitals and schools. The public sector helps in the development of a country by building and expanding essential infrastructure.

6. What is the basis on which the sectors of economy are classified as public and private?

The sectors of economy are classified as public and private depending upon who owns the assets and who is responsible for delivering the services.

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7. Most of the assets in the public sector are owned by ……………………………..

The government

8. Why does the government collect taxes?

The government collects taxes to raise money to take care of the expenses associated with providing services in the public sector.

3 / 5 mark questions

9. State any five features of private and public sectors

Public sector

  • The public sector provides various amenities needed by the society as a whole. For example, it builds roads, railways and bridges.
  • The chief aim of the public sector is not to make profits. Rather it works with the objective of providing services.
  • Through various entities in the public sector the government aims to uplift the poor and marginal sections of the society.
  • Public sector creates employment opportunities through the expansion of infrastructure.
  • It prevents private companies from forming monopolies.

Private sector

  • The ownership of assets and the responsibility of delivering services in the private sector are in the hands of private individuals or companies.
  • Private sector operates with the sole objective of making profits.
  • This sector does not invest in the things that the society needs as a whole.
  • They do not take much interest in serving the poorest sections of the society.
  • They charge a high rate for providing many facilities to people.

10. How does public sector contribute to the economic development of a country?

Every country needs certain services to function properly. For example, every nation needs roads, railways, airports, bridges, hospitals and schools. In order to build this essential infrastructure a lot of money is required which only the government can afford. Hence, in order to develop the country, the government invests in these areas and create job opportunities and provides essential infrastructure that promotes the private sector as well.

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The public sector ensures that even the poorest sections of the society have access to essential services like education and healthcare and essential commodities like food grains. Hence, it buys grains and pulses from farmers at fair price and then distribute them to the poor people at concessional rates. Thus, it ensures the development of every section of the society.

The public sector provides essential infrastructure for private companies to operate. For example, private companies, especially small and medium sized companies, need electricity at affordable rates to continue to operate. Hence, the public sector offers electricity at subsidized rates to private companies so that they can run their operations and generate jobs for the people.

Since public sector is not driven by profits, it provides goods at cheaper rates and prevents private companies from forming monopolies.

11. Differentiate between the public and private sectors of the economy with examples.

In the public sector, the government owns most of the assets and is also responsible for delivering services. In the private sector, ownership of assets and the responsibility for delivering services are in the hands of private individuals or companies.

The main objective of the public sector is serving the country by making essential services available at affordable rates and building infrastructure like roads, railways, power projects, schools and hospitals. Public sector units are not driven by profits. By contrast, private sector organisations operate with the sole objective of making profits.

Public sector plays a crucial role in making essential services available for all. For example, it provides education and healthcare for free or at affordable rates. Private sector will charge a hefty fee for making these services available.

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Some services require the spending of a large amount of money which only the government can afford. For example, buildings roads or railways require huge amounts of money and hence they are usually built by the public sector.

12. Identify five areas where the government must spend for the welfare of the people.

  • The government has a responsibility to ensure that development reaches every section of the society.
  • It should provide free education and healthcare to poor sections of the society.
  • It should build a nation wide network of roads to ensure good connectivity between different regions.
  • It should provide food for free or at subsidized rate to poor people.
  • The government should ensure that everyone has access to potable water.
  • The government needs to ensure that development is not confined to specific areas. It should strive to ensure the development of the whole country.

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