Prelims · Economy & social development · 24 questions

National income, growth & inflation

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Asked in 6 of 11 years · most in 2024 (2)

UPSC syllabus: “Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.” See the full syllabus →

Prelims 2024 · Q45

Easy

With reference to the sectors of the Indian economy, consider the following pairs:

	Economic activity	Sector
1.	Storage of agricultural produce	Secondary
2.	Dairy farm	Primary
3.	Mineral exploration	Tertiary
4.	Weaving cloth	Secondary

How many of the pairs given above are correctly matched?

Answer & explanation

Answer: (b) Only two

Only pairs 2 and 4 are right. Dairy farming works on natural products, so it is primary, and weaving turns yarn into cloth, so it is secondary. Storage is a support service, so it is tertiary, and mineral work belongs with mining, a primary activity.

✗ 1. Storing farm produce in godowns supports production and trade without making a good. NCERT lists storage among tertiary (service) activities, not secondary.
✓ 2. Milk is a natural product from animals. NCERT places agriculture, dairy, fishing and forestry in the primary sector.
✗ 3. Minerals and ores are natural products, and mining is a primary activity. Mineral exploration is part of that work, not a support service like banking or trade.
✓ 4. Weaving makes cloth from yarn through manufacturing, which is the mark of the secondary sector.

Remember · Primary means taking from nature (farming, dairy, mining). Secondary means manufacturing (weaving). Tertiary means supporting services (transport, storage, banking, trade).

📘 Read it in NCERT: Class 10 Understanding Economic Development, Ch 2 (practise this chapter) · Class 10 Understanding Economic Development, Ch 2 (practise this chapter) · Class 10 Understanding Economic Development, Ch 2 (practise this chapter) · Class 12 Fundamentals of Human Geography, Ch 4 (practise this chapter)

Sources

NCERT Class 10 · Understanding Economic Development, Chapter 2 “Since most of the natural products we get are from agriculture, dairy, fishing, forestry, this sector is also called agriculture and related sector.”
NCERT Class 10 · Understanding Economic Development, Chapter 2 “This could be in a factory, a workshop or at home. For example, using cotton fibre from the plant, we spin yarn and weave cloth.”
NCERT Class 10 · Understanding Economic Development, Chapter 2 “Transport, storage, communication, banking, trade are some examples of tertiary activities.”
NCERT Class 12 · Fundamentals of Human Geography, Chapter 4 “It, thus includes, hunting and gathering, pastoral activities, fishing, forestry, agriculture, and mining and quarrying.”

Question and answer: UPSC's official GS Paper I (2024, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink ·

Prelims 2024 · Q47

Easy

With reference to physical capital in Indian economy, consider the following pairs:

	Items	Category
1.	Farmer's plough	Working capital
2.	Computer	Fixed capital
3.	Yarn used by the weaver	Fixed capital
4.	Petrol	Working capital

How many of the above pairs are correctly matched?

Answer & explanation

Answer: (b) Only two

Fixed capital is durable equipment that keeps yielding service for years. Working capital is what production uses up, such as raw materials and fuel. So the computer (fixed) and petrol (working) are matched correctly, while the plough is fixed capital and the weaver's yarn is working capital.

✗ 1. A plough is a durable implement used season after season. It is fixed capital, not working capital.
✓ 2. A computer is a machine that serves for years without being consumed, so it is fixed capital.
✗ 3. Yarn is a raw material that is used up in making cloth. NCERT places raw materials like cloth among working-capital needs and sewing machines and handlooms among assets, so yarn is working capital.
✓ 4. Petrol is burnt up when used, an input consumed in production, so it is working capital.

Remember · Fixed capital: durable tools and machines that serve for years. Working capital: inputs used up in production, such as raw materials and fuel.

📘 Read it in NCERT: Class 12 Introductory Macroeconomics, Ch 4 (practise this chapter) · Class 10 Understanding Economic Development, Ch 3 (practise this chapter)

Sources

NCERT Class 12 · Introductory Macroeconomics, Chapter 4 “Machines produced in an economy in a given year are not 'used up' to produce other goods but yield their services over a number of years.”
NCERT Class 10 · Understanding Economic Development, Chapter 3 “for meeting working capital needs (e.g. buying seeds, fertilisers, raw materials like bamboo and cloth), for housing materials, for acquiring assets like sewing machine, handlooms, cattle, etc.”

Question and answer: UPSC's official GS Paper I (2024, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink ·

The same topic in Mains

Economy: planning, growth & employmentGS 3 syllabus
Inclusive growthGS 3 syllabus

Read it in NCERT

Class 10 Understanding Economic Development, Chapter 2cited in 3 explanations
Class 12 Fundamentals of Human Geography, Chapter 4cited in 1 explanation
Class 12 Introductory Macroeconomics, Chapter 4cited in 1 explanation
Class 10 Understanding Economic Development, Chapter 3cited in 1 explanation