GSEB Class 12 Economics Solutions Chapter 10 Industrial Sector

Choose The Correct Option For The Following Questions:

 

Question 1. How much was the contribution of industries in 2013-14 in national income of India?
(A) 16.6%
(B) 27%
(C) 40%
(D) 60%
Answer: (B) 27%
In simple words: The share of industries in India's national income for the years 2013-14 was 27%.

Exam Tip: Remember key economic figures like industrial contribution to national income, as these are frequently asked in objective questions.

 

Question 2. What was the proportion of employment in industries in 2011-12?
(A) 10%
(B) 24.3%
(C) 27%
(D) 49%
Answer: (B) 24.3%
In simple words: About 24.3% of all working people were employed in industries during 2011-12.

Exam Tip: Keep in mind the specific year when recalling employment and contribution data, as these figures can change over time.

 

Question 3. How much investment is needed in large scale industries?
(A) 2 crores
(B) 5 crores
(C) More than 10 crores
(D) 100 crores
Answer: (C) More than 10 crores
In simple words: Big industries, also known as large scale industries, usually need a lot of money to start up, typically over 10 crores.

Exam Tip: Understand the investment criteria for different industry scales (small, medium, large) as this is a fundamental concept.

 

Question 4. What is public sector?
(A) Sector run by people
(B) Sector run by government
(C) Sector run on co-operation
(D) International sector
Answer: (B) Sector run by government
In simple words: The public sector includes industries and services that are owned and managed by the government.

Exam Tip: Distinguish clearly between public, private, and cooperative sectors, understanding who owns and manages each type.

 

Question 5. When was the implementation of special economic zones?
(A) 1947
(B) 1991
(C) 2000
(D) 2011
Answer: (C) 2000
In simple words: Special Economic Zones were first started in the year 2000 in India to help boost trade and investment.

Exam Tip: Note important dates related to key economic reforms and policies, such as the introduction of SEZs.

 

Answer The Following Questions In One Line:

 

Question 1. Which type of production techniques are being utilized by small scale industries?
Answer: Small scale industries use labour intensive production methods.
In simple words: Small businesses mostly use human labor, not big machines, to make things.

Exam Tip: Remember that small scale industries generally prefer labor-intensive techniques due to lower capital requirements and a focus on employment generation.

 

Question 2. What is medium scale industries?
Answer: Industries that operate using either labour intensive or capital intensive production methods, and have an investment between Rs. 5 crores and Rs. 10 crores, are known as medium scale industries. For instance, industries that make machinery, chemicals, or electronic equipment fall into this category.
In simple words: Medium scale industries use both manual and machine-based methods, investing between Rs. 5 crore and Rs. 10 crore. They make things like machines and electronics.

Exam Tip: Be precise with the investment ranges and production techniques when defining different types of industries.

 

Question 3. Define public corporation.
Answer: An industrial unit owned by either the central or state government, but established to manage certain public programs or for a specific purpose, is called a public corporation. Examples include the Life Insurance Corporation, state transport corporations, Air India, and units that produce and sell fertilizers.
In simple words: A public corporation is a government-owned company set up to run public services or meet a specific goal, like LIC or Air India.

Exam Tip: When defining terms, include key characteristics and at least two relevant examples to support your explanation.

 

Question 4. Australia is known as which type of nation in the world?
Answer: Australia is known as an agriculturally developed nation.
In simple words: Australia is famous for being a country where farming is very advanced and important.

Exam Tip: Recognize specific characteristics or sectors for which certain countries are well-known, especially in the context of economic geography.

 

Question 5. How many special economic zones are in India?
Answer: There are 8 special economic zones in India. They are:
1. Santa Cruz (Maharashtra)
2. Kochin (Kerala)
3. Kandla (Gujarat)
4. Surat (Gujarat)
5. Chennai (Tamil Nadu)
6. Visakhapatnam (Andhra Pradesh)
7. Falta (West Bengal) and
8. Noida (Uttar Pradesh)
Any individual, government, private, and public sector entity, state government, or their representative body may start a special economic zone. Even foreign institutions can set up a special economic zone. All special economic zones are ultimately controlled by the government.
In simple words: India has eight special economic zones, including Santa Cruz, Kochin, and Kandla. Anyone, even foreign companies, can start an SEZ, but the government always oversees them.

Exam Tip: Listing specific examples for concepts like SEZs helps demonstrate a comprehensive understanding. Ensure you can name at least 3-4.

 

Answer The Following Questions In Brief:

 

Question 1. What is small scale industry?
Answer: Small scale industries (SSI):

• Industries that primarily use labour intensive production methods and involve an investment between Rs. 25 lakhs and Rs. 5 crores are known as small scale industries (SSI).
• These industries often function as supporting (ancillary) industries for larger businesses.

Example: Industries that make tools and basic consumer items such as bread, biscuits, furniture, and garments.
In simple words: Small scale industries use a lot of workers, not big machines, and cost between Rs. 25 lakhs and Rs. 5 crores to start. They often make parts for bigger factories or everyday items like bread.

Exam Tip: Emphasize the investment limit and production technique (labour intensive) when defining small scale industries.

 

Question 2. Give examples of joint stock companies.
Answer: Joint sector industries:

• Industries that are owned jointly by the government and private individuals who have invested capital and are managed by private individuals are called joint sector industries.
• The government grants ownership rights of such industries to individuals and institutions but retains 51% or more of the company's shares. Therefore, even though it is a joint sector industry, the government maintains control.

Example: Gujarat State Petroleum Corporation (GSPC).
In simple words: Joint sector industries are owned by both the government and private people. The government owns more than half the shares, so it still has control. Gujarat State Petroleum Corporation is an example.

Exam Tip: Highlight the shared ownership between government and private entities, with government maintaining majority control, when explaining joint sector companies.

 

Question 3. How does social sector being changed by industrialisation?
Answer: Change in social structure:

• Industrialization also brings about important changes in how society is set up.
• It fosters a sense of discipline, hard work, competition, teamwork, self-reliance, cooperation, understanding, and creativity among people.
• With the growth of these positive traits, negative aspects like blind beliefs, fatalism, narrow perspectives, and rigid behavior decrease.
• These kinds of societal changes encourage people to work towards economic improvement.

In simple words: Industrialization changes society by making people more disciplined, hard-working, and team-oriented. It helps remove old negative beliefs and encourages everyone to work for better economic growth.

Exam Tip: Focus on both the positive changes (discipline, cooperation) and the decline of negative traits (blind beliefs, fatalism) when discussing industrialization's impact on social structure.

 

Question 4. How does industries are helpful to modernize agriculture?
Answer: Modernization of agriculture:

• It becomes very important to update agriculture to boost the growth of the farming sector and to increase output from land and workers.
• Industries can offer technology to assist in improving the agriculture sector. Some common modern machines used in farming include tractors, threshers, submersible pumps, and equipment for spraying pesticides.
• Chemical-based fertilizers, pesticides, and similar products are also made by industries.
• Therefore, it can be said that with the use of modern technology, the advancement of the agriculture sector becomes possible.

In simple words: Industries help modernize farming by giving us new technology and machines like tractors, sprayers, and better fertilizers. This helps farming grow and produce more.

Exam Tip: Connect specific industrial outputs (machinery, fertilizers) directly to their benefits in modernizing agriculture (increased productivity, efficiency).

 

Question 5. What is a special economic zone?
Answer: Special Economic Zone (SEZ):

• A Special Economic Zone (SEZ) is a specific area where business and trade laws are different from the rest of the country. It is created to boost trade, increase investment, create jobs, offer tax benefits, and ensure efficient management.
• In India, the Special Economic Zone (SEZ) policy was introduced on April 1, 2000.
• The primary goal of establishing SEZs in India was to attract foreign investment and to create a free environment for exports.
• SEZs are implemented to help Indian industrial sectors compete with the global economy, thereby increasing our exports.
• To draw foreign investors, the government offers various tax advantages to businesses that establish their industries in these special economic zones.
• Some special economic zones were also developed based on the model of China's SEZs. These zones greatly helped in developing an export-focused production sector with foreign direct investment (FDI).
• Countries such as China, India, Jordan, Poland, the Philippines, Russia, and North Korea have successfully used special economic zones.

In simple words: A Special Economic Zone (SEZ) is a special area with different rules to help businesses, boost trade, and create jobs. India started SEZs in 2000 to attract foreign money and increase exports, offering tax breaks to companies that set up there.

Exam Tip: Clearly state the definition, objectives, benefits, and implementation date of SEZs. Mentioning examples of countries that have used them successfully adds value.

 

Give Answers To The Point Of The Following Questions:

 

Question 1. Explain any three matters (points) about importance of industry.
Answer:
1. Contribution in national income:

• At the time of independence, the agriculture sector was dominant in India because the country had always been agriculture-focused.
• After the growth of industries, the farming economy's share decreased, and industries' contribution increased compared to agriculture.
• The government has made various systematic and planned efforts to boost the economy, which in turn has raised the share of industries in national income.
• In 1951, the industrial sector contributed 16.6% to national income. This figure rose to 27% (at constant prices) by 2013-14.

2. Employment:

• India is a very populous country. The nation cannot provide jobs for its entire workforce. However, India has increased job opportunities through planned efforts in developing industrial sectors.
• Through deliberate actions in the industrial sector, India has created more employment opportunities.
• In 1951, 10.6% of workers were employed in industries. This percentage increased to 24.3% by 2011-12.
• There was a rapid increase in small scale industries, which mainly use labor-intensive methods. With the rise in small scale industries, the problem of unemployment has been largely solved. This can be further improved with proper planning.

3. Export income:

• As the agriculture sector grew, it also led to the development of the industrial sector. When the amount of industrial production increased, the excess goods began to be exported. This generated export income for us. Foreign currency also helps us to bring in products that are in short supply.
• In 2013-2014, approximately two-thirds of all export earnings came from industries.

In simple words: Industries are important because they boost national income, create many jobs, and earn money through exports. They helped India move from being only farming-based to a more balanced economy, creating opportunities and valuable foreign currency.

Exam Tip: Structure your answer with clear headings for each point (national income, employment, export income). Use statistics to support your arguments where appropriate.

 

Question 1. Explain any three matters (points) about importance of industry.
Answer:1. Contribution in national income:
• At the time of independence, the agriculture sector predominated in India because the country was agriculture-oriented from the very beginning.
• After the growth of industries, the agriculture economy decreased, and industries contributed more compared to agriculture.
• The government has made various planned attempts to boost the economy, which in turn increased the share of industries in national income.
• In the year 1951, the industrial sector had contributed 16.6% to national income. This rose to 27% (at constant prices) in the year 2013-14.
2. Employment:
• India is a very populated nation. The country cannot provide employment to its entire workforce. However, India has increased job opportunities through planned efforts in the development of industrial sectors.
• Through planned efforts in the industrial sector, India has increased job opportunities.
• In the year 1951, 10.6% of workers were employed in industries. This percentage increased to 24.3% in 2011-12.
• There was a quick rise in small scale industries, which mainly use labour-intensive methods. With the increase in small scale industries, the employment problem has largely been solved. This can be further improved with proper planning.
3. Export income:
• As the agriculture sector grew, it also led to the growth of the industrial sector. When the volume of industrial output increased, the excess began getting exported. This earned us export revenue. Foreign currency also helps to import scarce products.
• In 2013-2014, approximately 2/3rd of export earnings came from industries.
4. Balanced economic development:
• Industries play a very crucial role in achieving fast and balanced economic growth.
• The government establishes several public sector companies in less developed or backward areas to boost job opportunities and raise the living standard of those areas.
• When people's basic needs are met, they tend towards savings and purchasing luxury items. This leads to the growth of industries involved in such services and products.
• Therefore, along with industries for primary commodities, the demand for industries related to luxury and entertainment also grows.
5. Modernization of agriculture:
• It becomes extremely vital to modernize agriculture to increase the growth of the agriculture sector and boost land and labour productivity.
• Industries can provide technology to help develop the agriculture sector. Some commonly used modern machines in agriculture include tractors, threshers, submersible pumps, and equipment to spray pesticides.
• Chemical-based fertilizers, pesticides, and other similar products are also made by industries.
• Hence, it can be said that by using modern technology, the agriculture sector's development becomes possible.
6. Strengthens the structure of economy:
• Industries produce goods like iron and steel, cement, etc., which are useful for building infrastructure such as dams, roads, and bridges.
• These industries also make vehicles such as buses, trucks, railways, planes, cars, and two-wheelers, used for transportation.
• Safety-protection tools, such as arms and ammunition like rifles, bullets, and tanks, are also produced by industries. This lessens reliance on other nations and makes our nation much stronger.
• So, industries form a foundation for strengthening our economy's structure.
7. Change in social structure:
• Industrialization also brings certain important alterations in the social system.
• Industrialization fosters feelings of discipline, diligence, competition, teamwork, self-reliance, cooperation, understanding, and innovation among people.
• With the development of such good qualities, negative traits like blind beliefs, fatalism, narrow perspectives, and orthodox behavior reduce.
• These types of social changes encourage people to achieve economic progress.
In simple words: Industries are very important for a country's development. They help increase national income, create many jobs, boost exports, ensure balanced growth, modernize farming, strengthen the economy's foundation, and lead to positive social changes like increased discipline and innovation.

Exam Tip: When discussing the importance of industry, remember to cover its broad impact on economic factors like income, employment, trade, and its role in social and agricultural development.

 

Question 2. Explain structure of industry.
Answer: Types of industries are based on investment criteria.
Based on investment, industries are grouped into five categories.
These are detailed below.
1. Cottage industry:
A cottage industry is one run only by family members, using simple tools and very little electricity, machinery, or investment.
Example: Industries making khadi cloth, papad, khakhra, and incense sticks.
2. Tiny industries:
Industries that operate using a labour-intensive production method, with an investment limit up to Rs. 25 lakhs, are known as tiny industries.
Example: Industries producing artistic items made from metal, leather, and clay.
3. Small scale industries (SSI):
• Industries that use a labour-intensive production method and have an investment of Rs. 25 lakhs to Rs. 5 crores are called small scale industries (SSI).
• These industries function as supporting industries for larger industries.
Example: Industries producing tools and basic consumer goods like bread, biscuits, furniture, and garments.
4. Medium scale industries:
Industries that use either a labour-intensive or capital-intensive production method and have an investment of Rs. 5 crores to Rs. 10 crores are known as medium scale industries.
Example: Industries making machinery, chemicals, and electronic equipment.
5. Large scale industries:
Industries that use a capital-intensive production method and have an investment of more than Rs. 10 crores are known as large-scale industries.
Example: Industries producing railway coaches, engines, large vehicles, iron and steel, and petroleum products.
Industries based on ownership are categorized as follows:
1. Public Sector Units (industries):
Industries that are owned and managed by the government, or industries whose ownership and management belong to the government, are known as Public Sector Units (PSUs).
Public sector units are further divided into three types.
They are:
(A) Departmental industries:
• The industries run, funded, and managed by government departments are called departmental industries.
• The minister of the specific department is the ultimate authority for such an enterprise. Civil servants oversee the operations.
• The government decides the management of expenditure and income for such industries through its budget.
Example: Railways, post and telegraph services, and radio and television broadcasting.
(B) Public corporations:
• An industrial unit owned by either the central or state government but set up to manage specific public programs or for a particular goal is called a public corporation.
• The government plays the top role in the management and decisions of such industries.
Example: Life Insurance Corporation (LIC), state transport corporation, Air India, and fertilizer producing and selling units are examples of public corporations.
(C) Government company:
• A company owned by the central and/or state government is called a government company. It operates under the Company Law, 2013.
• Either all the capital or most of the shares are owned by the government. In some situations, private investment is also encouraged, but at least 51% of shares are held by the government.
• These units do not work under direct government control.
Example: Hindustan Machine Tools, Oil and Natural Gas Limited, and Indian Oil Corporation.
2. Private sector industries:
• Industrial units owned and run by private companies or private owners are known as private sector industries.
• Such industries might be owned by individual private persons or partners.
Example: Units manufacturing cars, TVs, and shoes.
3. Joint sector industries:
• Industries owned jointly by the government and private individuals who have invested capital and are managed by private individuals are called joint sector industries.
• The government gives ownership rights of such industries to people and institutions but holds 51% or more shares of that company. So, even when the industry is a joint sector one, the government still has control over it.
Example: Gujarat State Petroleum Corporation (GSPC).
4. Co-operative Sector Industries:
Industries that operate on a cooperative basis, aiming to stop the exploitation of small (marginal) owners, laborers, or consumers, and to provide benefits to all, are known as industries of the cooperative sector.
Example: Amul, IFFCO, and KRIBHCO.
Types of industries on the basis of products:
1. Consumers goods industries:
Industries that make goods used directly by consumers are called consumer goods industries.
Example: Industries producing ghee, oil, and cosmetics like soaps and shampoo.
2. Intermediate goods industries:
Industries making semi-finished goods that are not used directly by consumers but are sent to other industries for further processing are called intermediate goods industries.
Example: Industries producing yarn, steel sheets, and machines.
In simple words: Industries are classified based on two main things: how much money is invested and who owns them. Investment levels define categories like cottage, tiny, small, medium, and large-scale industries, while ownership differentiates between public, private, joint, and cooperative sectors. This structure helps understand how different industries operate and contribute to the economy.

Exam Tip: To explain the structure of industry comprehensively, categorize industries by investment (cottage, tiny, small, medium, large) and ownership (public, private, joint, cooperative), providing clear examples for each type.

 

Question 3. Discuss the importance of small scale industries.
Answer: Small scale industries (SSIs) are vital for India's economy and social progress. They create a large number of jobs, especially for those in rural areas, helping to reduce unemployment. SSIs also produce a wide range of goods, supporting larger industries and meeting local consumer demands. These industries require less capital to start, promoting entrepreneurship and balanced regional development. Additionally, they help boost exports and save foreign exchange by making goods locally.
In simple words: Small scale industries are super important because they create lots of jobs, make many useful products, are easy to start with less money, help different regions grow, and also earn foreign money for the country.

Exam Tip: When discussing the importance of small scale industries, focus on their role in employment generation, contribution to production, regional development, and impact on foreign trade.

 

Question 4. Discuss steps of government to develop industries.
Answer: Steps taken by the government for developing industries:
1. State-owned enterprise:
• Certain industries, such as infrastructural industries, iron and steel plants, and insurance, are considered key sectors of an economy. These industries create the foundation for economic growth.
• These industries need a very large amount of investment and specialized skills, and they also carry high risks. Hence, the private sector is often hesitant to enter these industries.
• Therefore, the government itself establishes such industries to boost and sustain the economy.
2. Encouragement to private sector industries:
• To support private sectors, the government offers various types of aid to private individuals, such as providing land at concession rates, electricity, water, tax advantages, and financing at lower interest rates.
• In this way, the government promotes competition and establishes a positive market environment.
• The government has also allowed private sector entry into several areas that were initially reserved only for the public sector.
3. Import tariff:
• The import tariff is the rate of import duty (tax) charged for bringing goods into the country.
• To protect local companies from foreign competitors, the government imposes high import duty on foreign products. This makes imported items more expensive than locally made ones. As a result, local industries can survive well.
4. Technical skills and training:
• The government provides various types of technical and professional training to domestic industries. This helps them upgrade their products and services to match international standards, which in turn helps local industries compete against foreign products.
• These trainings were primarily offered during the period of liberalization and globalization.
• Through such trainings, the government makes local industries aware of new global technologies, products, selling methods, and management techniques.
• Technical skills also help to create value in domestic industries.
5. Economic help:
• The government offers various types of financial aid to industries to reduce their production costs.
• This helps domestic industries lower their production costs and sell their products in the international market at competitive rates compared to products from other countries.
• The different ways the government provides financial aid include offering concessions on land rates, water, electricity, telephone, and transport charges. It may also provide funding at a reduced rate and various other grants.
6. Basic facilities/services:
• The government offers fundamental facilities like roads, water, electricity, banks, insurance, and sewage systems to help industries develop.
• By using these essential facilities, industries can save their money, time, and effort to produce and sell products faster and more efficiently.
7. Establishing various institutions and policies:
• The government creates industrial policies and also makes necessary changes periodically to help industries grow properly.
• The government frames several supportive policies like import policy, export policy, monetary policy, fiscal policy, and tax policy.
• The government drafts laws like the Industries Act, Company Act, and Competition Act to prevent unfair competition.
• The government has also created institutions such as IDBI, SIDBI, ICICI, IFCI, and GIC to provide financial support to various industries.
• It also makes efforts and policies to attract foreign investment in India.
In simple words: The government takes many steps to help industries grow, including setting up state-owned enterprises, encouraging private businesses with support, using import tariffs to protect local companies, providing technical training, offering financial aid, ensuring basic facilities like roads and electricity, and creating supportive policies and institutions to attract investment and fair competition.

Exam Tip: When discussing government steps for industrial development, ensure you cover policy, financial support, infrastructure, human capital, and trade protection measures.