Consider the following statements regarding self-employment in India: 1. In rural areas, the majority of the workforce consists of landless casual labourers. 2. Self-employed workers are found more in rural areas than in urban areas. 3. In urban areas, everyone runs their own shops or offices. Which of the statements given above is/are correct?

The correct option is 2 only Explanation The structure of the workforce in India is classified into three broad categories based on employment status: Self-employed, Regular Wage/Salaried Employees, and Casual Labourers. The distribution of these categories varies significantly between rural and urban areas due to the nature of economic activities (agriculture vs. industry/services). - Statement 1 is Incorrect: In rural areas, the primary economic activity is agriculture. Since a large portion of the rural population cultivates their own land (even if small holdings) or engages in family-based enterprises, self-employment is the dominant status. According to Periodic Labour Force Survey (PLFS) data, self-employment constitutes the largest share (over 50%) of the rural workforce, which is significantly higher than in urban areas. - Statement 2 is Correct: While landless casual labourers form a significant part of the rural workforce (approximately 20-25%), they do not constitute the majority. The majority of the rural workforce consists of self-employed individuals (farmers and artisans). - Statement 3 is Incorrect: The statement uses the extreme term "everyone." The urban workforce is diverse and includes a high proportion of regular salaried employees (approximately 40-50%) and casual labourers. While self-employment (running shops, businesses, or offices) exists, it does not encompass the entire urban population. Key Takeaway: Self-employment is the primary source of livelihood in rural India (due to agriculture), whereas Regular Wage/Salaried employment has a much higher share in urban areas compared to rural areas.

NCERT Class 11 Economics — Chapter 7: Employment: Growth, Informalisation and Other Issues

mcqmedium

Consider the following statements regarding self-employment in India:

In rural areas, the majority of the workforce consists of landless casual labourers.
Self-employed workers are found more in rural areas than in urban areas.
In urban areas, everyone runs their own shops or offices.

Which of the statements given above is/are correct?

Official previous-year question

Verified 1 Aug 2026.

Options

A1 and 3 only
B1, 2 and 3
C2 only
D1 only

Did you get this right?

Solution

The correct option is

2 only

Explanation

The structure of the workforce in India is classified into three broad categories based on employment status: Self-employed, Regular Wage/Salaried Employees, and Casual Labourers. The distribution of these categories varies significantly between rural and urban areas due to the nature of economic activities (agriculture vs. industry/services).

Statement 1 is Incorrect: In rural areas, the primary economic activity is agriculture. Since a large portion of the rural population cultivates their own land (even if small holdings) or engages in family-based enterprises, self-employment is the dominant status. According to Periodic Labour Force Survey (PLFS) data, self-employment constitutes the largest share (over 50%) of the rural workforce, which is significantly higher than in urban areas.
Statement 2 is Correct: While landless casual labourers form a significant part of the rural workforce (approximately 20-25%), they do not constitute the majority. The majority of the rural workforce consists of self-employed individuals (farmers and artisans).
Statement 3 is Incorrect: The statement uses the extreme term "everyone." The urban workforce is diverse and includes a high proportion of regular salaried employees (approximately 40-50%) and casual labourers. While self-employment (running shops, businesses, or offices) exists, it does not encompass the entire urban population.

Key Takeaway:
Self-employment is the primary source of livelihood in rural India (due to agriculture), whereas Regular Wage/Salaried employment has a much higher share in urban areas compared to rural areas.

Your note

More from Chapter 7: Employment: Growth, Informalisation and Other Issues

With reference to the definition of ‘workers’ in the Indian economy, consider the following statements: 1. Self-employed individuals are considered workers in the Indian economy. 2. A person temporarily abstaining from work due to illness is excluded from the worker category. 3. Those who help main workers in economic activities without receiving direct payment are included in the category of workers. Which of the statements given above is/are correct?

medium

Consider the following statements regarding the ‘Worker-Population Ratio’ in India: 1. It is defined as the total population divided by the number of workers. 2. The worker-population ratio is generally higher in rural areas compared to urban areas. 3. A higher ratio indicates that a greater proportion of the population is actively contributing to the production of goods and services. Which of the statements given above is/are correct?

medium

With reference to the concepts of Gross Domestic Product (GDP) and Gross National Product (GNP), consider the following statements: 1. GNP is calculated by deducting the value of exports from the GDP. 2. GDP is the total money value of all final goods and services produced in a country in a year. 3. The net earning from foreign transactions is always positive for a developing country like India. Which of the statements given above is/are correct?

easy

Consider the following statements regarding the participation of women in the workforce in India: 1. Women constitute the majority of the workforce in rural India. 2. The worker-population ratio for women is significantly higher in urban areas than in rural areas. 3. Many household activities performed by women are not recognised as productive work, leading to an underestimation of women workers. Which of the statements given above is/are correct?

medium

The term "Squatters" in the context of the informal sector refers to:

easy

Keep practising Chapter 7: Employment: Growth, Informalisation and Other Issues

Work through every question from this NCERT chapter.

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The correct option is

2 only

Explanation

Statement 1 is Incorrect: In rural areas, the primary economic activity is agriculture. Since a large portion of the rural population cultivates their own land (even if small holdings) or engages in family-based enterprises, self-employment is the dominant status. According to Periodic Labour Force Survey (PLFS) data, self-employment constitutes the largest share (over 50%) of the rural workforce, which is significantly higher than in urban areas.
Statement 2 is Correct: While landless casual labourers form a significant part of the rural workforce (approximately 20-25%), they do not constitute the majority. The majority of the rural workforce consists of self-employed individuals (farmers and artisans).
Statement 3 is Incorrect: The statement uses the extreme term "everyone." The urban workforce is diverse and includes a high proportion of regular salaried employees (approximately 40-50%) and casual labourers. While self-employment (running shops, businesses, or offices) exists, it does not encompass the entire urban population.