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

mcqeasy

In urban areas, which sector is the main source of employment?

Official previous-year question

Verified 1 Aug 2026.

Options

APrimary Sector
BSecondary Sector
CMining Sector
DService Sector

Did you get this right?

Solution

The correct option is Service Sector.

Explanation

The economy is structurally classified into three broad sectors based on the nature of activities: Primary (extraction of raw materials), Secondary (manufacturing and construction), and Tertiary (services). The pattern of employment differs distinctly between rural and urban settlements due to the availability of resources and the nature of economic demand.

Sectoral Analysis in Urban Areas:

Primary Sector: This includes agriculture, animal husbandry, forestry, and fishing. It is the dominant employer in rural areas. In urban areas, employment in this sector is negligible as land use is primarily residential, commercial, or industrial rather than agricultural.
Secondary Sector: This comprises manufacturing industries and construction. While it is a significant provider of jobs in cities, it is generally outpaced by the service sector in modern urban economies.
Service Sector (Tertiary Sector): This sector includes trade, transport, communication, banking, insurance, education, healthcare, and IT services. In urban areas, the service sector is the main source of employment. The concentration of markets, administrative offices, and specialized services in cities drives this trend.
Mining Sector: Mining is technically part of the primary sector. It is location-specific based on mineral deposits and is not a general source of employment for the majority of urban centers.

Key Takeaway:
While the Primary Sector employs the majority of the workforce in rural areas, the Service Sector is the largest employer in urban areas, reflecting the structural transformation associated with urbanization.

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?

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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?

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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?

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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?

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

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The correct option is Service Sector.

Explanation

Sectoral Analysis in Urban Areas:

Primary Sector: This includes agriculture, animal husbandry, forestry, and fishing. It is the dominant employer in rural areas. In urban areas, employment in this sector is negligible as land use is primarily residential, commercial, or industrial rather than agricultural.
Secondary Sector: This comprises manufacturing industries and construction. While it is a significant provider of jobs in cities, it is generally outpaced by the service sector in modern urban economies.
Service Sector (Tertiary Sector): This sector includes trade, transport, communication, banking, insurance, education, healthcare, and IT services. In urban areas, the service sector is the main source of employment. The concentration of markets, administrative offices, and specialized services in cities drives this trend.
Mining Sector: Mining is technically part of the primary sector. It is location-specific based on mineral deposits and is not a general source of employment for the majority of urban centers.