Play Music
Vividh Bharati
Live News
| Village Details | |
| Population | Around 450 families |
| Main Activity | Farming |
| Land Ownership | 80 families of upper caste |
| Other Activities | Dairy, transport, small-scale manufacturing, etc. |
| Connectivity | Well-connected with neighboring towns, all-weather roads |
| Electricity | Many houses equipped; used for tube wells, small businesses, education, and healthcare |
| Production Stages | |
| Factors | Land, capital, labor, enterprise |
| Natural Resources | Forests, minerals, water |
| Labor | Varies from manual labor to highly educated workers |
| Physical Capital | Machines, tools, buildings (fixed capital), money, materials (working capital) |
| Enterprise | Knowledge, human capital |
| Farming in the Village | |
| Significance | Most important activity; 75% of working population involved |
| Cultivation | No idle land; multiple cropping; use of electricity for irrigation; modern farming methods |
| Green Revolution and Sustainable Use of Land | |
| Impact | Record production of food items; increased greenery; reduced soil fertility and groundwater |
Solved Question for You: Q. Opportunity cost is also known as _____.
Solution: The correct option is A. Transfer earning. Transfer earning require a minimum payment to keep the factor of its production in its present use. It is an opportunity cost of an individual forgoes when deciding to work in one job rather than the next best alternative.
| Human Resource | |
| Population | Second largest in the world |
| Main Advantage | Human resource as an asset to the country |
| Economic Activities | |
| Primary Activities | Agriculture, horticulture, animal husbandry, etc. |
| Secondary Activities | Manufacturing |
| Tertiary Activities | Banking, transport, finance, services |
| Quality of Population | |
| Determinants | Literacy rate, health, skills |
| Difference | Healthy, literate population contributes to GDP |
Solved Question for You: How are human resources different from other resources?
Answer: Human resource is known to be one of the superior resources as compared to the other resources like land and physical capital. It can make use of land and physical capital, however, land and physical capital cannot become useful on its own.
India has the second largest population in the world. And while there are a few drawbacks of this, it is also an advantage. The citizens can be an asset to the country. Their skill and knowledge is a resource that can be utilized for economic activities. Let us see how People as Resource can contribute to our economy.
Human Resource: Human resource refers to the people who are part of the workforce. The human resource plays a significant role in the economy of a country by contributing to productivity. The other resource becomes useful because of the input by the human resource.
Economic Activities: The economic activities can be divided into three types – primary, secondary, and tertiary activities. These activities are further classified based on their production goals as market and non-market activities.
Quality of Population: The prime important aspects that determine the quality of life are literacy rate, health, and skills. The illiterate and unhealthy population can be a liability for the economy whereas the literate and healthy population can be an asset for the economy.
Solved Question for You: How are human resources different from other resources?
Answer: Human resource is known to be one of the superior resources as compared to the other resources like land and physical capital. It can make use of land and physical capital, however, land and physical capital cannot become useful on its own.
| Poverty in India | |
| Population Affected | 22% of total population |
| Definition | Lack of basic needs like proper food, water, or shelter |
| Measurement of Poverty | |
| Criteria | Nutrition and income levels |
| Urban Dweller | At least 2100 calories per day |
| Rural Dweller | At least 2400 calories per day |
| Minimum Income | 32 rupees in urban areas, 26 rupees in rural areas per day |
| Causes of Poverty in India | |
| Historical Factor | Exploitative British colonial rule |
| Socio-Economic Factors | Lack of land resources, population explosion |
| Government Schemes | |
| Mahatma Gandhi National Rural Employment Guarantee Scheme | Guarantees 100 days of wage labour to rural dwellers |
| PMRY (Pradhan Mantri Rozgar Yojna) Scheme | Employment scheme for literate people in urban and rural areas |
Solved Question for You: What is the current minimum income for a person to be considered below poverty line?
Answer: It is earning below 32 rupees in urban areas and 26 rupees in rural areas of India.
| Food Security | |
| Definition | Ability to guarantee a nutritionally sufficient food supply |
| Stages |
|
| Food Security Scenario in India | |
| Current Situation | Facing triple affliction of malnutrition |
| Under-nutrition | Result of multiple factors, with food security at its core |
| How to Ensure Food Security in India | |
| Dimensions |
|
| National Food Security Mission | |
| Objectives | Augment production of cereals and pulses |
| Sources of Foodgrains Across the Nation | |
| Regions |
|
Question For You: How has the Green Revolution made India self-sufficient in terms of food grains?
Answer: Specifically in the late 1960s, the introduction of Green Revolution motivated Indian farmers to cultivate HYV (high-yielding varieties) seeds. This trend led to increase in the production of food grains, particularly rice and wheat. Moreover, after the outburst of Green Revolution India has avoided famines even during worse weather conditions.
| Development and its Meaning | |
| Definition | Improvement in the quality of life and well-being of the people of the economy |
| Goals |
|
| Human Development Index (HDI) | |
| Definition | A composite index measuring average achievements in a country in three basic dimensions of human development: per capita income, literacy rate, and life expectancy |
Question For You: Why is PCI important to determine development?
Answer: PCI of a country indicates the income per capita or the average income of the country. It gives an idea as to the financial resources of the country. These are important to achieve other development goals such as literacy, healthcare and to provide infrastructure. Thus, PCI is a critical factor in determining development.
| Introduction to the Sectors of Indian Economy | |
| Sectors | Primary Sector, Secondary Sector, Tertiary Sector |
| Primary Sector | |
| Definition | Dependent on natural resources for manufacturing goods and executing processes |
| Examples | Agriculture, fishing, forestry |
| Problems | Underemployment, disguised employment |
| Solutions | Increased funds for irrigation facilities, providing loans for buying high-quality seeds and fertilizers |
| Secondary Sector | |
| Definition | Dependent on natural ingredients to create products and services |
| Examples | Transportation, manufacturing |
| Contribution | 14% of workforce, 28% of GDP |
| Tertiary Sector | |
| Definition | Contributes the largest share in GDP, service sector |
| Examples | IT services, consulting |
| Contribution | 23% of workforce, 59% of GDP |
| Issue | Lower-paying jobs do not attract much employment |
Solved Question for You: Explain why the service sector is growing in India with suitable example.
Answer: The service sector in India is growing due to its diverse employment opportunities catering to individuals with varying skill sets. Unlike some sectors that require highly educated and skilled workers, many service sector jobs accommodate individuals with different qualifications. Additionally, self-employment opportunities in this sector provide livelihood options for those unable to secure traditional employment.
| Introduction to Money and Credit | |
| Topics | What is Money, Forms of Money, Credit |
| What is Money? | |
| Definition | Currency used in daily transactions |
| Forms | Coins, paper notes, plastic money, digital money |
| Function | Facilitates payments for goods and services |
| Forms of Money | |
| Bank Deposits | Savings in banks, earn interest |
| Cheque | Written orders for bank withdrawals |
| Credit Cards | Electronic payments, form of loan |
| Credit | |
| Definition | Means of lending, borrowing money for expenses |
| Bank's Role | Lends money, generates income through interest |
Solved Question for You: When was the Rs 1000 currency note reintroduced by RBI?
Answer: The Rs 1000 currency note was reintroduced by RBI in October 2000 after being discontinued in 1978.
| Introduction to Globalisation and the Indian Economy | |
| Topics | Globalisation, Indian Economy Reacts, Benefits, Disadvantages |
| What is Globalisation? | |
| Definition | Free movement of people, goods, and services across boundaries |
| Impact | Unified and integrated global economy |
| Indian Economy Reacts to Globalisation | |
| Key Figures | Dr. Manmohan Singh, Economic Growth Statistics |
| Benefits of Globalisation Impacting India | |
| Rise in Employment | SEZs, EPZs, Outsourcing |
| Surge in Compensation | Higher wages, Skill enhancement |
| Improved Standard of Living | Wealth generation, Purchasing power |
| Disadvantages of Globalisation in India | |
| Informal Sector Issues | Exclusion from labor legislation, Poor working conditions |
| Health and Working Conditions | Poor health, Disgraceful conditions |
Question for You: Do you think the impact of globalization hasn’t been uniform?
Answer: Looking at the trend and its uprising since all these years, the answer is yes! To be precise, globalization has proven advantageous to professional and skilled individuals, primarily from urban regions. The unskilled population hasn’t gained enough out of globalization. For example, industries, as well as service firms, have been supported by this scheme more effectively as compared to the agricultural sector. The rise of MNCs has been quite significant after globalization. However, small producers are bound to face tough competition.
| Introduction to Consumer Rights | |
| Definition | Consumer protection and the rights of consumers |
| Consumer Protection Act, 1986 | |
| Key Points | Enactment, Objectives, National Consumers' Day |
| Consumer Rights | |
| Right to Safety | Protection against hazardous goods and services |
| Right to Information | Access to quality, quantity, and price information |
| Right to Choose | Access to competitive markets and product choice |
| Right to Seek Redressal | Approach consumer courts for complaints |
| Right to be Heard | Consumer complaints to be duly recognized and heard |
| Right to Consumer Education | Access to information about consumer rights and protection |
Consumer Forums: Consumer forums assist in representing consumer interests and guiding them in filing complaints.
Solved Example for You: What is the need for consumer awareness?
Answer: Consumer awareness is crucial to educate consumers about their rights, remove illiteracy and lack of education regarding consumer rights, and empower them to seek redressal if exploited by market entities.
| British Colonial Rule | |
| Agricultural Sector | Heavy exploitation, transformation into supplier of raw materials |
| Industrial Sector | Minimal development, focus on British interests |
| Foreign Trade | Controlled by British, limited benefits to India |
| Demographic Condition | Robbed of education and opportunities, reduced to servants |
| Occupational Structure | Shifted towards serving British interests |
| Infrastructure | Minimal investment, focused on British needs |
Solved Example for You: Name some individuals who tried to estimate colonial India’s per capita income.
Answer: Some individuals like – Findlay Shirras, Dadabhai Naoroji, William Digby, V.K.R.V. Rao and R.C. Desai tried to estimate such figures. Although the results were inconsistent, the estimates of V.K.R.V. Rao are considered accurate. An estimate was the best that could be calculated. The estimate was that colonial India’s growth of output was less than 2%.
| Agricultural Sector | |
| Pre-Colonial Scenario | Self-sufficient and sustainable, primarily rice and wheat, rare famines |
| Colonial Saga | Exploitation by British, loss of self-sufficiency, frequent famines |
| Stagnation during British Rule | Negligible reforms, profit extraction, primitive technologies, focus on cash crops |
Solved Question for You: What was the main interest of the zamindars?
Ans: The correct option is “A”. The only interest the Zamindars had was to collect the rent from the farmers. They did not particularly care about the welfare of the farm or the farmer.
Agricultural Sector- Descriptive Representation
The Pre-Colonial Scenario of Agricultural Sector: Before British colonization, India's agricultural sector was self-sufficient and sustainable, primarily producing rice and wheat with rare incidences of famines. Villages were self-sustaining and independent, with minimal occurrences of starvation.
The Colonial Saga: British colonization brought exploitation and loss of self-sufficiency to India's agricultural sector. The British focused on profit extraction, leading to frequent famines and deterioration in agricultural productivity. The zamindari system exacerbated the situation, with profits going to zamindars instead of cultivators.
Stagnation of Agricultural Sector during British Rule: The British introduced negligible reforms and primitive technologies, focusing on cash crops for their own benefit. The shift towards commercialization further worsened the plight of Indian farmers, leaving the agricultural sector in a state of stagnation.
| Foreign Trade | |
| Foreign Trade in 17th and 18th Century | India a major player, exporting high-quality manufactured goods worldwide |
| The Colonisation Effect | British diverted trade for their benefits, reduced India to a supplier of raw materials |
| Export Surplus under British Rule | Controlled by British, used for British interests, led to shortages of essential goods in India |
A Solved Question for You: How was the export surplus used?
Ans: The correct option is “D”. Britishers never meant to use the surplus for Indian interests. It was used to make payments for an office set up in Britain, to meet war expenses and import invisible items.
Foreign Trade- Descriptive Representation
Foreign Trade in the 17th and 18th Century: Pre-colonial India thrived in foreign trade, exporting high-quality manufactured goods worldwide, including textiles, handicrafts, spices, and other commodities.
The Colonisation Effect on Foreign Trade: British colonization diverted India's foreign trade for British benefits, reducing India to a supplier of raw materials and importer of finished goods. India's share in the world economy drastically declined under British rule.
Export Surplus under British Rule: The British controlled India's export surplus, using it for British interests such as office expenses, war, and import of goods, leading to shortages of essential goods in India. The surplus never benefited India's economy.
| Demographic Condition | |
| Official Demographic Data | First census in 1881, revealing widespread poverty, illiteracy, and low life expectancy |
A Solved Example for Reference: When was the first official census of colonial India recorded?
Ans: The correct option is “D”. The first official census conducted by the British government in India was in 1881, and this was also done after much delay.
Demographic Condition- Descriptive Representation
Demographic Condition in Colonial India: Colonial rule in India resulted in widespread poverty, illiteracy, and low life expectancy. The first official census was conducted in 1881, revealing the dire conditions faced by the Indian population.
Before 1881, the British showed little interest in Indian demography, with some individuals like Findlay Shirras, Dadabhai Naoroji, and V.K.R.V. Rao attempting to collect data. However, accurate demographic data was not available until the late 19th century.
The colonial rule, marked by exploitation and neglect, led to hunger, disease, and death among the Indian population. Despite the demographic transition beginning around 1921, literacy rates remained low, particularly for women, and public health facilities were scarce.
Life expectancy was recorded to be as low as 32 years, with high infant mortality rates. Poverty was widespread, and Indians lived in constant fear of starvation and diseases. The demographic profile of colonial India was appalling by human standards.
| Occupational Structure | |
| Employment in India before Colonisation | Pre-British India had diverse employment opportunities in the industrial and agricultural sectors, with skilled craftsmen forming the majority of the workforce. |
| Occupational Structure of Colonial India | Under colonial rule, India transformed into primarily agrarian economy, with the workforce diverted towards plantations and agricultural activities. The workforce distribution shifted significantly, with agriculture accounting for 70-75% of the workforce. |
A Solved Example For You: The share of the agricultural sector in the Indian workforce under colonial rule was:
Ans: The correct option is ‘A’. The Indian economy became agrarian with 70-75% of workforce depending on the agricultural sector for livelihood. And this trend continued even post independence. But now our dependence on agriculture is slowly decreasing.
Occupational Structure- Descriptive Representation
Occupational Structure: The occupational structure of India underwent significant changes before and during colonial rule. Pre-colonial India had a diverse range of employment opportunities in both the industrial and agricultural sectors, with skilled craftsmen forming the majority of the workforce. However, colonial exploitation led to a transformation into a primarily agrarian economy, with a large portion of the workforce diverted towards plantations and agricultural activities.
Under colonial rule, agriculture accounted for 70-75% of the workforce, while the manufacturing and services sectors saw a decline in workforce participation. Regional variations also emerged, with some areas experiencing a decline in agriculture and an increase in manufacturing and services, while others saw the opposite trend.
The selfish interests of the colonizers led to a drastic change in the occupational structure of India, with agriculture dominating the workforce.
| Infrastructure | |
| Infrastructure in Pre-colonial India | The state of infrastructure during pre-British India was poor, with below-average transportation and communication lines, lack of proper roads, and reliance on animal-drawn carriages for transport. |
| Infrastructure Development in British India | British colonial rule saw significant infrastructure development aimed at serving colonial interests, including the introduction of railways, roads, telegraphs, ports, and water transport systems. However, these developments primarily served British interests rather than providing basic amenities to the people. |
A Solved Example For You: Why did the colonial government invest in a railway system?
Ans: The correct option is “D”. The Britishers had very greedy motives to develop railways in India. They ultimately only looked after their own needs of transporting raw materials and mobilization of their army with ease.
Infrastructure- Descriptive Representation
Infrastructure: Infrastructure development in colonial India, particularly under British rule, saw significant changes aimed at serving colonial interests rather than fulfilling the basic needs of the population.
Infrastructure in Pre-colonial India: Pre-colonial India lacked proper infrastructure, with poor transportation and communication lines, inadequate roads, and reliance on traditional modes of transport such as animal-drawn carriages.
Infrastructure Development in British India: British colonial rule witnessed infrastructure development initiatives primarily aimed at serving colonial interests, including the introduction of railways, roads, telegraphs, ports, and water transport systems. These developments facilitated the transportation of raw materials and goods to ports for export, while also enabling the mobilization of the British army. However, the benefits of these developments largely accrued to the British, with limited impact on improving the quality of life for the Indian population.
| Types of Economy | |
| Traditional Economy | A traditional economy is based on ancient customs and beliefs, primarily focused on agriculture and characterized by the absence of currency or money. |
| Command Economy | In a command economy, the government makes all economic decisions, including what goods and services are produced, in what quantities, and at what prices. Examples include communist countries like China and Cuba. |
| Market Economy | A market economy relies entirely on free market forces, with no government intervention. Prices and production are determined by supply and demand. Examples include the United States and Hong Kong. |
| Mixed Economy | A mixed economy combines elements of both command and market economies. While private businesses operate freely, the government regulates specific sectors to protect public interests. Examples include India and France. |
A Solved Example For You: One of the biggest limitations of a free market economy is which of the following?
Ans: The correct answer is option D. In a market economy the government cannot interfere to stop monopoly or concentration of wealth in the hand of a few. So this often leads to uneven distribution of resources as people with money hold all the cards.
Types of Economy: Economists have identified four different types of economy – traditional, command, market, and mixed economy, each with its unique characteristics and features.
Traditional Economy: Based on ancient customs and beliefs, traditional economies focus on agriculture and rely on barter systems with no concept of currency.
Command Economy: In a command economy, the government makes all economic decisions, determining what goods and services are produced, their quantities, and prices. Examples include communist countries like China and Cuba.
Market Economy: Market economies rely entirely on free market forces, with prices and production determined by supply and demand. Examples include the United States and Hong Kong.
Mixed Economy: Mixed economies combine elements of both command and market economies. While private businesses operate freely, the government regulates specific sectors to protect public interests. Examples include India and France.
| Five Year Plan | |
| Goals of the Five Year Plans | Every five year plan in India is developed with specific goals, such as promoting growth, modernization, self-reliance, and equity within the economy and society. |
| Types of Goals | The five generalized goals of a five year plan include growth, modernization, self-reliance, equity, and stability, with each plan focusing on one or two primary objectives. |
| First Five Year Plan | The first five year plan in India was launched in 1951 under the guidance of Prime Minister Jawaharlal Nehru, aiming to kickstart economic development in the newly independent nation. |
A Solved Question For You: In which year was the first five year plan passed?
Ans: The correct option is D. India became independent in 1947 but our first economic plan came out in 1951 under the guidance of the PM and chairman of the Planning Commision Jawarhalal Nehru.
Five Year Plan: The Indian government introduced the concept of five year plans after independence to systematically allocate resources and achieve specific economic and social goals over a five year period.
Goals of the Five Year Plans: Each five year plan aims to promote growth, modernization, self-reliance, equity, and stability within the economy and society, with a focus on specific objectives tailored to the needs of the nation.
First Five Year Plan: Launched in 1951 under the guidance of Prime Minister Jawaharlal Nehru, the first five year plan focused on jumpstarting economic development in post-independence India, laying the foundation for subsequent plans.
| Land Reforms | |
| Objectives of the Land Reforms | The objectives of land reforms in India included bringing systematic changes to the agrarian structure, abolishing intermediaries like zamindars, promoting equity and social justice, preventing exploitation of tenant farmers, and increasing agricultural output. |
| Steps Implemented under the Land Reforms | The steps taken under land reforms included passing Zamindari Abolition Acts in various states, seizure of surplus land, imposition of land ceiling laws, promotion of consolidation of holdings, and encouragement of cooperative farming. |
| Importance of Land Reforms | Land reforms acted as incentives for farmers, increased agricultural output, established a relationship between farmers and the government, and promoted social justice and equity. |
A Solved Question For You: Bhoodan movement was started in India by _______.
Ans: The correct option is A. Vinoba Bhave initiated this movement in 1951. It was also known as the Land Gift Movement. This was a voluntary form of land reform where they collected surrendered land from landowners and gifted them to the poor landless farmers.
Land Reforms: Land reforms in India aimed to rectify the inequities of the zamindari system inherited from British rule by redistributing land ownership to farmers, abolishing intermediaries, and promoting equity and social justice.
Objectives of the Land Reforms: The objectives included systemic changes in the agrarian structure, abolition of intermediaries, promotion of equity, prevention of tenant farmer exploitation, and increased agricultural productivity.
Steps Implemented under the Land Reforms: Land reforms involved passing legislation to abolish zamindari, seizure of surplus land, imposition of land ceiling laws, promotion of consolidation of holdings, and encouragement of cooperative farming.
Importance of Land Reforms: Land reforms incentivized farmers, boosted agricultural output, fostered a closer relationship between farmers and the government, and facilitated social justice and equity.
| Green Revolution | |
| Features of the Green Revolution | The Green Revolution introduced High Yielding Variety (HYV) seeds, improved irrigation, increased use of fertilizers and pesticides, and introduced modern technology and machinery in Indian agriculture. |
| Market Surplus | The higher agricultural output led to market surplus, benefiting the economy by lowering food prices and creating food reserves. |
| Impact of the Green Revolution | The Green Revolution resulted in increased agricultural production, higher per acre yield, reduced dependence on imports, creation of employment opportunities, and improved income for farmers. |
A Solved Question For You: Which of the following grains were produced the most during the Indian green revolution?
Ans: The correct option is C. The two grains that benefitted the most in the Green Revolution were Wheat and Rice. In fact, many believe rather than Green Revolution, Grain Revolution is the more suited name.
Green Revolution: The Green Revolution in India aimed to achieve self-sufficiency in food production through the introduction of High Yielding Variety (HYV) seeds, improved irrigation, increased use of fertilizers and pesticides, and adoption of modern technology and machinery.
Market Surplus: The Green Revolution resulted in market surplus, leading to lower food prices, creation of food reserves, and overall economic benefits.
Impact of the Green Revolution: The Green Revolution brought about increased agricultural production, higher per acre yield, reduced dependence on imports, creation of employment opportunities, and improved income for farmers.
Industrial Policies- Tabular Representation
| Industrial Policy | |
| Control of the State | The state played a primary role in promoting industrial development, with sectors like coal, petroleum, aviation, and steel reserved exclusively for the state. |
| Industrial Policy Resolution 1956 | Introduced a classification of industries into three categories: state-owned, private with supplementary services, and private. The policy aimed to regulate and promote industrial growth. |
| Small Scale Industries | Promoted for rural development, small-scale industries received support through reserved products, financial aid, and encouragement from committees like the Karve Committee. |
| Infrastructure Development | Government policies focused on strengthening infrastructure like transportation, rail, banking, and communication to support industrial growth, primarily through the public sector. |
| Promotion of Capital Goods Industry | The Mahalanobis model emphasized heavy industries, especially those producing capital goods, to create a robust industrial base and meet the capital requirements. |
A Solved Question For You: What was the contribution of the industrial sector in 1950?
Ans: The correct option is A. During the post-independence era, the contribution of the industrial sector was only 11.8% of the GDP. We saw some development of this in the coming years and by 1991 it had become around 25%.
Industrial Policies- Descriptive Representation
Industrial Policy: India's industrial policy aimed to promote industrial development, with a focus on state control, promotion of small-scale industries, infrastructure development, and the capital goods industry.
Control of the State: The state played a significant role in promoting industrial growth, with key sectors reserved exclusively for state control.
Industrial Policy Resolution 1956: Introduced a classification of industries into three categories and aimed to regulate and promote industrial growth through state intervention.
Small Scale Industries: Promoted for rural development, small-scale industries received support through reserved products, financial aid, and encouragement from committees like the Karve Committee.
Infrastructure Development: Government policies focused on strengthening infrastructure like transportation, rail, banking, and communication to support industrial growth, primarily through the public sector.
Promotion of Capital Goods Industry: The Mahalanobis model emphasized heavy industries, especially those producing capital goods, to create a robust industrial base and meet the capital requirements.
Subsidies- Tabular Representation
| Subsidies | |
| Suggesting higher consumption/ production | Subsidies create a gap between consumer prices and producer costs, leading to changes in demand or supply decisions. |
| Transfers and Subsidy | Subsidies differ from transfers as they aim to influence the consumption or distribution decisions in favor of subsidized goods, rather than directly supplementing income. |
| Mode of Administering a Subsidy | Subsidies can be provided to producers or consumers, through public enterprises, cross-subsidization, or targeting specific groups based on selected criteria. |
| Effects of a Subsidy | Subsidies have allocative, redistributive, fiscal, and trade effects on the economy, which can lead to both positive and negative consequences. |
| Subsidy Issues in India | India faces challenges with subsidies due to the vastness of governmental activities, weak cost recovery efforts, and low efficiency levels. |
| Methodology for Estimation of Subsidies in India | Different approaches and conventions are used to measure the magnitude of subsidies, with examples including food, electricity, and health subsidies. |
A Solved Example For You: The government gives subsidies in various sectors. Which of the following are the special effects of subsidies?
Ans: b) 2 only. There is no straight relation between subsidies given and inflation. It may increase inflation (eg. subsidies on LPG helping people save more, as a result, increasing their capacity which can cause demand-pull inflation.) or decrease inflation by making easy to get to low cost subsidized goods. Subsidies certainly increase the fiscal deficit. Subsidies increases do not decrease the export competitiveness of goods, as a result, it decreases their cost of production.
Subsidies- Descriptive Representation
Subsidies: Subsidies, as a fiscal policy instrument, aim to influence consumption or production decisions by creating a gap between consumer prices and producer costs. They have various effects on the economy and are administered through different means, targeting specific groups or sectors.
Transfers and Subsidy: Subsidies differ from transfers as they aim to influence the consumption or distribution decisions in favor of subsidized goods, rather than directly supplementing income.
Mode of Administering a Subsidy: Subsidies can be provided to producers or consumers, through public enterprises, cross-subsidization, or targeting specific groups based on selected criteria.
Effects of a Subsidy: Subsidies have allocative, redistributive, fiscal, and trade effects on the economy, which can lead to both positive and negative consequences.
Subsidy Issues in India: India faces challenges with subsidies due to the vastness of governmental activities, weak cost recovery efforts, and low efficiency levels.
Methodology for Estimation of Subsidies in India: Different approaches and conventions are used to measure the magnitude of subsidies, with examples including food, electricity, and health subsidies.
Trade Policy- Tabular Representation
| Trade Policy | |
| Inward Looking Strategy | India adopted the trade policy of inward-looking or Import Substitution just after independence to boost domestic production and protect domestic goods from international competition. |
| Trade Policies and Industrial Development | Trade policies focused on protecting the domestic market from foreign imports, leading to the growth and diversification of the industrial sector. |
| Public Sector Enterprises | The development of public sector enterprises was a feature of the early five-year plans, aimed at providing essential services to the public. However, over time, criticism arose regarding their inefficiency and monopolistic tendencies. |
A Solved Question For You: What was the Permit License Raj? How did it affect our economy?
Ans: During 1960-1980, to open any company or business in India, industrialists had to obtain many permits from associated authorities. This system led to delays, increased corruption, and misuse by certain industrialists to stifle competition. The government needed to change its trade policy to promote ease of doing business in the country.
Trade Policy- Descriptive Representation
Trade Policy: India's trade policy post-independence focused on boosting domestic production and protecting domestic industries through inward-looking strategies such as import substitution.
Trade Policies and Industrial Development: These policies led to the growth and diversification of the industrial sector by protecting it from foreign competition and promoting indigenous industries.
Public Sector Enterprises: The development of public sector enterprises aimed to provide essential services to the public. However, criticisms arose over time regarding their inefficiency and monopolistic tendencies, leading to calls for reforms.
Solved Question: The Permit License Raj was a system during 1960-1980 where industrialists had to obtain numerous permits to start a business in India, leading to delays, corruption, and stifling of competition. This affected the economy negatively, prompting the government to reform its trade policies to promote ease of doing business.
| Introduction to LPG | |
| Liberalization | Loosening of government control to promote competition and growth of the private sector. |
| Privatization | Transfer of ownership and management from government to private sector, leading to improved efficiency and competition. |
| Globalization | Integration of the economy with the global economy, focusing on foreign trade and investments. |
A Solved Question For You: How are public sector undertakings classified with respect to their performance and professionalism?
Ans: Public sector undertakings (PSUs) in India are classified based on their performance and professionalism into Maharatnas, Navratnas, and Miniratnas.
Introduction to LPG: LPG stands for Liberalization, Privatization, and Globalization, representing the economic reforms undertaken by India in 1991.
Liberalization: It aimed to remove restrictions hindering economic growth, promote competition, and encourage foreign trade and investment.
Privatization: This policy involved transferring ownership and management of government-owned enterprises to the private sector, leading to improved efficiency and competition.
Globalization: It focused on integrating the Indian economy with the global economy, emphasizing foreign trade and investments.
Solved Question: Public sector undertakings (PSUs) in India are classified based on their performance and professionalism into Maharatnas, Navratnas, and Miniratnas.
| Liberalization: Economic Reforms during Liberalization | |
| Industrial Sector Reforms | Abolition of industrial licensing, contraction of public sector, de-reservation of production areas, expansion of production capacity, freedom to import capital goods. |
| Financial Sector Reforms | Reduction of various ratios (SLR, CRR), competition from new private banks, change in the role of RBI, deregulation on interest rates. |
| Tax Reforms / Fiscal Reforms | Simplification of tax structure, reduction in taxation rates, increased tax revenue for the government, reduction of tax evasion. |
| Foreign Exchange Reforms / External Sector Reforms | Devaluation of Rupee, abolition of quota system on imports, reduction of import duties, withdrawal of export duties. |
A Solved Question For You: What were the economic reforms during Liberalization?
Ans: Economic Reforms during Liberalization. Many sectors were impacted during the course of Liberalization. They were: Industrial Sector Reforms, Financial Sector Reforms, Tax Reforms / Fiscal Reforms, Foreign Exchange Reforms / External Sector Reforms.
Liberalization: Economic Reforms during Liberalization
A Solved Question For You: What were the economic reforms during Liberalization?
Ans: Economic Reforms during Liberalization. Many sectors were impacted during the course of Liberalization. They were: Industrial Sector Reforms, Financial Sector Reforms, Tax Reforms / Fiscal Reforms, Foreign Exchange Reforms / External Sector Reforms.
| Economic Reforms in India | |
| The Crisis of 1991 and the Reforms | Crisis due to inefficient management, need for new economic policies, emergence of liberalization, privatization, and globalization. |
| Liberalization | End of restrictions hindering development, opening up of economic borders for foreign investment, expansion of production capacity, abolishing industrial licensing, de-reservation of producing areas, freedom to import goods. |
| Privatization | Reduction of public sector role, objectives include reducing public sector workload, providing better goods/services, improving government's financial condition, allowing entry of foreign direct investments and healthy competition. |
| Globalization | Integration of Indian economy with world economy, encouraging private and foreign investment, foreign trade, establishing global links. |
A Solved Question For You: In what two groups can the reforms be categorized?
Answer: The reforms can be categorized into Stabilization Measures and Structural Reform Policies. Stabilization measures are short-term in nature and attempt to control the crisis situation, while structural reform policies are long-term policies aimed at improving the overall economic condition.
Economic Reforms in India
A Solved Question For You: In what two groups can the reforms be categorized?
Answer: The reforms can be categorized into Stabilization Measures and Structural Reform Policies. Stabilization measures are short-term in nature and attempt to control the crisis situation, while structural reform policies are long-term policies aimed at improving the overall economic condition.
| Education in India | |
| Human Capital: | Human capital and economic growth are interdependent, skilled workers increase productivity, innovation drives growth, higher employment leads to economic development, positive societal changes. |
| Growth in Government Expenditure on Education: | Increased expenditure on education as percentage of government expenditure and GDP, irregular growth during 1952-2010, disparities in expenditure among states. |
| Expenditure on Elementary Education: | Major share of expenditure on elementary education, variations in expenditure per student among states, free and compulsory education for children aged 6-14, educational opportunities disparities. |
| Educational Achievement in India: | Improvement in adult literacy rate, primary completion rate, and youth literacy rate, gender equity issues, future prospects for education for all, improving gender equity, challenges in higher education. |
A Solved Question For You: What is Education? What are its objectives?
Solution: Education in India means the process of teaching, learning, and training of human capital in schools and colleges. Its objectives include the development of science and technology, utilization of natural resources and human capital across all regions, enhancement of human thinking, and fostering good citizenship.
Education in India
A Solved Question For You: What is Education? What are its objectives?
Solution: Education in India means the process of teaching, learning, and training of human capital in schools and colleges. Its objectives include the development of science and technology, utilization of natural resources and human capital across all regions, enhancement of human thinking, and fostering good citizenship.
| Sources of Human Capital | |||||||||||||||||||
| Human Resource Capital: | The conversion of human resources into human assets, including physical and human capital. | ||||||||||||||||||
| Differences Between Physical Capital and Human Capital: |
|
||||||||||||||||||
Solved Example for You: Which are the two types of Human Resource Capital?
Answer: There are two types of Human Resource Capitals. They are:
Sources of Human Capital
Human Resource Capital: The conversion of human resources into human assets, including physical and human capital.
Differences Between Physical Capital and Human Capital:
Solved Example for You: Which are the two types of Human Resource Capital?
Answer: There are two types of Human Resource Capitals. They are:
| What is Human Capital State in India? | |
| Human Capital: | The advancement of human resources through education, health, migration, job training, and information. |
| State of Human Capital in India: | India recognizes the significance of human capital in financial development. The Seventh Five Year Plan emphasizes the importance of human resource improvement. Key reasons for this emphasis include: |
|
|
Problems of Human Capital Formation in India:
Solved Question for You: Why is 'growing population' a factor in the state of human capital in India?
Answer: Growing population unfavorably influences the quality of human capital by reducing per capita availability of resources such as sanitation, jobs, education, healthcare, etc.
What is Human Capital State in India?
Human Capital: The advancement of human resources through education, health, migration, job training, and information.
State of Human Capital in India: India recognizes the significance of human capital in financial development. The Seventh Five Year Plan emphasizes the importance of human resource improvement due to reasons such as higher productivity of physical capital, innovative skills leading to economic growth, higher employment rate, reduced wealth inequalities, and a positive outlook in the workforce.
Problems of Human Capital Formation in India:
Solved Question for You: Why is 'growing population' a factor in the state of human capital in India?
Answer: Growing population unfavorably influences the quality of human capital by reducing per capita availability of resources such as sanitation, jobs, education, healthcare, etc.
| Rural Development in India | |
| Rural Development: | Focuses on the upliftment and development of rural economies to address poverty issues and enhance productivity. |
| Key Issues in Rural Development: |
|
Scope for Improvement:
Rural Development in India
Rural Development: Focuses on the upliftment and development of rural economies to address poverty issues and enhance productivity.
Key Issues in Rural Development:
Scope for Improvement:
| Credit System in Rural Areas | |
| Credit System: | Important for rural development, provides capital infusion for productivity enhancement. |
| Development of Present Credit System: |
|
Spectrum of Change:
Credit System in Rural Areas
Credit System: Important for rural development, provides capital infusion for productivity enhancement.
Development of Present Credit System:
Spectrum of Change:
| Agricultural Market System | |
| History of Agricultural Market System: | In the pre-independence era, farmers were exploited by traders and middlemen, leading to the need for state intervention to improve efficiency. |
| Measures of Improvement: |
|
Loopholes:
The Hurdles against Improvement:
Emerging Alternate Marketing Channels:
Agricultural Market System
History of Agricultural Market System: In the pre-independence era, farmers were exploited by traders and middlemen, leading to the need for state intervention to improve efficiency.
Measures of Improvement:
Loopholes:
The Hurdles against Improvement:
Emerging Alternate Marketing Channels:
| Diversification into Productive Activities | |
| Why the call for Diversification? |
|
Diversification through Shift into other Productive Streams
Problems faced by Alternative Industries:
Why the call for Diversification?
Diversification through Shift into other Productive Streams
Problems faced by Alternative Industries:
| Interconnect of Organic Farming and Sustainable Development | |
| The Need of Organic Farming |
|
The Downsides of Organic Farming
Green VS. Golden Revolution
Information Technology and Sustainable Development
The Need of Organic Farming
The Downsides of Organic Farming
Green VS. Golden Revolution
Information Technology and Sustainable Development
| Employment: Definition and Important Terminologies | |
| Worker - Population Ratio | The ratio of workers contributing to productive activities in a country to its total population. It provides insight into the employment situation of a country, indicating what proportion of the population is actually contributing to the production of goods and services. |
| Worker Types | |
| Hired Worker | A worker employed by others (employers) and receives a salary/wage as compensation for work. |
| Casual Worker | A worker engaged by employers on a temporary basis for specific work, without receiving any social security or other work benefits. |
| Regular Salaried Worker | A worker hired by employers on a permanent basis and paid regular salaries/wages for their work. |
| Self-Employed | A worker who owns and works for their own enterprise. |
| Sectors of the Economy | |
| Primary Sector | Constitutes agriculture and allied activities, employing the maximum number of workers in the country. |
| Secondary Sector | Mainly includes manufacturing activities, along with electricity, gas, water supply, and construction. |
| Tertiary Sector | Comprises the service sector, including transport, communication, banking, insurance, trade, and storage. |
Worker - Population Ratio
The ratio of workers who are contributing to productive activities in a country to its total population. It gives an idea about the employment situation of a country, indicating what proportion of the population is actually contributing to the production of goods and services. The ratio is usually multiplied by 100 for percentage values.
Worker Types
The workforce can be categorized into different types based on their employment status. Hired workers are employed by others, while self-employed individuals own and work for their own enterprises. Within hired workers, casual workers are engaged temporarily, while regular salaried workers are employed on a permanent basis.
Sectors of the Economy
The economy can be broadly divided into three sectors based on the engagement of workers in different kinds of employment. The primary sector includes agriculture and allied activities, the secondary sector comprises manufacturing activities, and the tertiary sector encompasses service-related industries.
| Unemployment: Definition and Calculation | |
| Unemployment Rate | Percentage of unemployed persons in the total labor force. Calculated as (No. of Unemployed Persons / Total Labor Force) x 100. |
| Types of Unemployment | |
| Rural Unemployment | Open, seasonal, or disguised unemployment prevalent in rural areas where agriculture is the primary occupation. |
| Urban Unemployment | Includes industrial, educated, and technological unemployment prevalent in urban areas with a high concentration of industries and service sectors. |
| Causes of Unemployment | |
| Economic Growth Rate | A slow economic growth rate leads to fewer job opportunities compared to the available labor force. |
| Population Growth | Rapid population growth results in a higher number of job seekers than available jobs. |
| Technological Dependency | Increase in automation and technological advancements reduce the demand for manual labor, causing technological unemployment. |
| Government Policies | Inadequate funding and ineffective implementation of employment-generating schemes contribute to rising unemployment. |
| Employment Generation | |
| National Rural Employment Guarantee Act (NREGA) | Provides 100 days of guaranteed wage employment to rural households willing to perform unskilled manual work. |
| Government Initiatives | State and federal governments enact social security programs, provide unemployment allowances, and conduct training programs to address unemployment issues. |
Unemployment: Definition and Calculation
Unemployment refers to the state of being out of work despite being able and willing to work. It is calculated as the percentage of unemployed persons in the total labor force using the formula (No. of Unemployed Persons / Total Labor Force) x 100.
Types of Unemployment
Rural unemployment is prevalent in areas where agriculture is the main occupation, characterized by open, seasonal, or disguised unemployment. Urban unemployment includes industrial, educated, and technological unemployment, primarily found in urban areas with a high concentration of industries and service sectors.
Causes of Unemployment
Unemployment is caused by factors such as slow economic growth, rapid population growth, technological dependency, and ineffective government policies.
Employment Generation
Employment generation initiatives include the National Rural Employment Guarantee Act (NREGA) providing guaranteed wage employment, along with various government initiatives aimed at providing unemployment allowances, conducting training programs, and enacting social security programs.
| Economics and the Environment | |
| Environment | The totality of resources and planetary inheritance, comprising biotic and abiotic components, performing functions such as resource supply, waste assimilation, sustenance of life, and aesthetic value. |
| Environmental Degradation | |
| Definition | Economic activities leading to the decline in the environment's ability to perform its functions, caused by over-utilization of resources, pollution, and depletion of non-renewable resources. |
| Global Environmental Crisis | |
| Issues | Global warming and ozone layer depletion caused by greenhouse gas emissions and release of substances like chlorofluorocarbons (CFCs) respectively. |
| Measures to Save the Environment | |
| Pollution Control | Regulatory standards and pollution control boards to mitigate air, water, noise, and soil pollution. |
| Forest Conservation | Afforestation measures and strict implementation of forest conservation regulations to combat deforestation. |
| Social Awareness | Campaigns and movements to create awareness about environmental issues. |
| Waste Management | Efficient management of solid waste in urban areas and conversion of rural waste into compost for agricultural use. |
| Water Management | Implementation of rainwater harvesting and conservation measures to address water scarcity issues. |
| Implementation of Policy Programmes | Enactment and enforcement of environment-centric policies and acts to promote environmental conservation efforts. |
Economics and the Environment
Environmental degradation caused by economic activities poses a threat to sustainable development. The environment, comprising biotic and abiotic components, performs vital functions such as resource supply, waste assimilation, sustenance of life, and aesthetic value.
Environmental Degradation
Economic activities lead to environmental degradation, characterized by over-utilization of resources, pollution, and depletion of non-renewable resources, causing adverse effects such as poor air and water quality, deforestation, and climate change.
Global Environmental Crisis
Global warming and ozone layer depletion are critical issues resulting from greenhouse gas emissions and release of substances like chlorofluorocarbons (CFCs). These phenomena lead to melting polar ice caps, rising temperatures, and increased exposure to harmful ultraviolet rays.
Measures to Save the Environment
Pollution control measures, forest conservation efforts, social awareness campaigns, waste management, water management, and implementation of policy programmes are essential to combat environmental degradation and address global environmental crises.
| Sustainable Development | |
| Definition | Process of providing for present needs without compromising the ability of future generations to meet their own needs, emphasizing rational resource usage and pollution control. |
| Features | |
| Rise in Per Capita Income (PCI) | Sustained increase in PCI worldwide to ensure equitable development. |
| Rational Resource Usage | Optimal utilization of resources to prevent depletion and ensure availability for future generations. |
| Pollution Checks | Implementation of measures to control pollution and minimize environmental degradation. |
| Population Control | Efforts to stabilize population growth to reduce strain on natural resources. |
| Renewable Energy Sources | Emphasis on renewable energy to meet future energy needs sustainably. |
Sustainable Development
Sustainable development emphasizes meeting present needs without compromising the ability of future generations to meet their own needs. It advocates rational resource usage, pollution control, population stabilization, and reliance on renewable energy sources to ensure environmental sustainability.
| Comparative Development Experiences of India and its Neighbours | |||
| Development Path | India | Pakistan | China |
| Independence | 1947 | 1947 | 1949 |
| First Economic Plan | 1951-1956 | Medium Term Plan (1956) | 1953 |
| Economic Reforms | 1991 | 1988 | 1978 |
| Economic Strategy | Import Substitution followed by Liberalization | Import Substitution followed by Openness to the World | Great Leap Forward followed by Economic Reform and Opening Up |
| Social Development Focus | Rural Development, Employment Generation, Poverty Alleviation | Rural Development, Poverty Alleviation, Green Revolution | Healthcare System, Poverty Reduction, Population Control |
| Public/Private Sector Importance | Significant importance to the public sector with strict regulations on private companies | Mixed economy with shifts in focus between public and private sectors | Shift towards liberalization and promotion of private enterprises |
Comparative Development Experiences of India and its Neighbours
We examine the development paths of India, Pakistan, and China, considering their similarities and differences. All three nations embarked on their development journeys around the same time, with India and Pakistan gaining independence in 1947 and China in 1949.
Initially, all three countries followed economic planning, with India's first Five Year Plan starting in 1951, Pakistan's Medium Term Plan in 1956, and China's first plan in 1953. They emphasized the importance of the public sector and social expenditure.
India initially pursued a policy of closed trade to boost domestic industries, while Pakistan also followed import substitution. China, under Mao's leadership, implemented the Great Leap Forward to industrialize the economy.
In terms of social development, India focused on rural development, employment generation, and poverty alleviation. Pakistan prioritized rural development, poverty alleviation, and the Green Revolution, while China developed a strong healthcare system, focused on poverty reduction and population control.
The importance of the public and private sectors varied, with India placing significant emphasis on the public sector, Pakistan adopting a mixed economy approach, and China shifting towards liberalization and promoting private enterprises.
People in any society require various goods and services for their daily lives, including food, clothing, shelter, transportation, and services such as education and healthcare.
Each individual or decision-making unit in society produces some goods or services and wants a combination of many goods and services, not all of which are produced by them.
CENTRAL PROBLEMS OF AN ECONOMY
Production, exchange, and consumption of goods and services are fundamental economic activities.
Every economy faces the problem of allocating scarce resources to the production of different goods and services and distributing the produced goods and services among individuals.
ORGANISATION OF ECONOMIC ACTIVITIES
In a centrally planned economy, the government controls major economic activities.
The central authority makes all important decisions regarding production, exchange, and consumption of goods and services.
In a market economy, economic activities are organized through market mechanisms.
Prices of goods and services play a crucial role in coordinating economic activities in a market system.
POSITIVE AND NORMATIVE ECONOMICS
Positive economics involves the objective analysis of economic phenomena, while normative economics deals with value judgments.
Both positive and normative analyses are essential in understanding economic issues and policy decisions.
At Studento, we make sure you always remain focused on your studies
Website status : 16% complete
Release Date(Tentative) : 01st May 25
