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Detailed, Step-by-Step NCERT Solutions for Class 12 Economics Chapter 12 Rural Development Questions and Answers were solved by Expert Teachers as per NCERT (CBSE) Book guidelines covering each topic in chapter to ensure complete preparation.

Rural Development NCERT Solutions for Class 12 Economics Chapter 12

Rural Development Questions and Answers Class 12 Economics Chapter 12

Question 1.
What do you mean by rural development? Bring out the key issues in rural development.
Answer:
Rural development is a comprehensive term, which essentially focuses on actions for the development of economically and socially backward rural areas. The following are the key issues of action plan for rural development in India:

• Land Reforms: Technical reforms in agriculture should be supplemented with land reforms.
• Poverty Alleviation: Measures need to be taken, to alleviate poverty and improve the living conditions of the weaker section of the area.
• Human Capital Formation: Investment in human capital through education, training and medical care is required to make the manpower resources strong and efficient.
• Development of Productive Resources: The development programmes should be launched to improve the condition of landless labourers and non-farming communities and generate employment opportunities particularly in the non-agricultural areas.
• Development of Infrastructure: It includes provision of credit facilities to the farmers, facilities in agricultural research, efficient means of transport, communication and power resources for development of rural areas.

Question 2.
Discuss the importance of credit in rural development.
Answer:
In India, people living in rural areas are mostly farmers. These farmers are poor and cannot afford modem tools and equipment to perform agricultural and allied activities. Moreover, there is a long time gestation between crop sowing and realisation of income after production. Therefore, farmers need credit to meet their initial investment on seeds, fertilisers, implements and other family expenses. They can obtain funds by borrowing loans for their general and specific need. Thus, credit plays a vital role in the rural development.

Question 3.
Explain the role of micro-credit in meeting credit requirements of the poor.
Answer:
Self Help Groups (SHGs) are formed to organise rural poor, particularly women, into small groups and pool their savings. A typical SHG consists of 15-20 members. These members usually belong to one neighbourhood, who meet and save regularly. Saving per member depends on the ability of the people to save.

The SHG can extend these savings as small loans or micro-credit to the needy members from the group itself. Although the group, charges interest .on these loans, it is still less than what the moneylenders charge. If the group saves regularly for a year or two, it becomes eligible for availing loan from the bank.

Question 4.
Explain the steps taken by the government in developing rural markets.
Answer:
The government has taken the following steps for developing rural markets:
(i) Regulated Markets: Regulated markets have been developed with, a view to protect the farmers from the malpractices of intermediaries. The system of regulated markets helps farmers to secure fair prices for their produce and conduct dealing in the market without the fear of being cheated.

(ii) Use of Standard Weights: The government has appointed Weight Inspectors to check the use of standard weights to eliminate the chances of farmers being cheated by brokers.

(iii) Grading and Standardisation: It means preparation, shifting and sorting of goods according to a certain criteria. Grading the goods confirms their quality and encourages the farmers to grow quality products. Moreover, it provides confidence to the consumers.

(iv) Dissemination of Market Information: There is a need to develop an efficient information system to ensure availability of knowledge to the farmers regarding prevailing market prices. All India Radio and Doordorshan broadcast prices of agricultural goods on a regular basis.

(v) Marketing Inspection, Research and Training: There is an urgent need to market adequate arrangements for education, research extension, market inspection and occasional surveys of market. This will go a long way to help in identifying problems and finding solutions for efficient marketing system. The Directorate of Marketing an d Inspection undertakes inspection of major agricultural products throughout the country.

(vi) Provision of Warehousing Facilities: To prevent distress sale by the farmers, particularly the small and marginal farmers, due to prevailing low prices, rural godowns have been set up. The Central Warehousing Corporation was set up in 1957 with the purpose of constructing and running godowns and warehouses for the storage of agricultural produce. The states have also set up the State Warehousing Corporations for the same purpose.

(vii) Organisation of Cooperative Marketing Societies: The government has encouraged the establishment of cooperative marketing societies such as National Cooperative Development Corporation (NCDC) to promote programmes for the production, processing, storage and marketing of agricultural produce.

(viii) Development of Means of Transport: Under various Five Year Plans, the government has paid attention towards the development of means; of transport to facilitate cheap and easy transportation of agricultural produce.

Question 5.
Why is agricultural diversification essential for sustainable livelihoods?
Answer:
Agricultural diversification refers to change in cropping pattern and/or a shift of workforce from agriculture to other allied activities and non-agriculture sector. There are two major problems associated with agriculture:

(i) In India, most of the farm labourers get engaged during kharif season and many of them remain unemployed during rabi season, It happens especially’ in the areas with poor irrigational facilities.

(ii) Agriculture is burdened with excess supply of labour’, Due to these reasons, many people suffer from disguised and seasonal unemployment. Diversification in agriculture is essential to avoid the greater risk associated with the sole dependence on farming for livelihood.

Question 6.
Critically evaluate the role of the rural banking system in the process of rural development in India.
Answer:
Rapid expansion of the banking system had a positive impact on rural farm and non-farm output, income and employment. Rural banking has helped farmers to avail services and credit facilities. Moreover, it has become a source of variety of loans to farmers to meet their production needs.

India has achieved food security since the events of famines have been reduced significantly. At present, FCI maintains abundant stock of grains. However, formal institutions, except commercial banks, have failed to ensure availability of loans to the rural poor. Owing to the political populism, the government often becomes inconsiderate towards the recovery of loans.

Moreover, there has been a high default rate on part of the farmers. Therefore, the banking sector needs to take up the role of customer relationship specialist to ensure proper disbursal and recovery of loans.

Question 7.
What do you mean by agricultural marketing?
Answer:
Agricultural marketing is a process that involves the assembling, storage, processing, transportation, packaging, grading and distribution of different agricultural commodities across the country.

Question 8.
Mention some obstacles that hinder the mechanism of agricultural marketing.
Answer:
Over the years, the government has taken several steps to improve the mechanism of agricultural marketing in India. Although progress has been made in this sphere, there are still many shortcomings in the existing system of agricultural marketing.

(i) Selfish Private Traders: Private traders misguide farmers through faulty weighing, manipulated accounts and incorrect information about prevailing market prices.

(ii) Sale at Village Level: It has been discovered that despite a network of the regulated markets, farm produce is still being bought by the traders in the villages. 40-50 per cent of the total production of paddy was being sold directly to the rice mills. On an average only 50 per cent of the total marketed surplus was brought to the market.

(iii) Inadequate Transport and Storage Facilities: Transport facilities have been inadequate. Farmers experience a lot of difficulty in carrying produce from fields to their homes and from villages to markets. Moreover, there is inadequate access to proper storage facilities, which results in huge wastage of perishable items.

(iv) Non-availability of Information: The farmers do not get information about the prevailing prices in the market. As a result, the farmers have to accept whatever prices are quoted to them and prevent them from obtaining optimum profits.

Question 9.
What are the alternative channels available for agricultural marketing? Give some examples.
Answer:
Alternate marketing channels have been emerging through which farmers can directly sell their produce to consumers. It increases their share in the price paid by the consumer. Example of Alternative Marketing Channels

• Apni Mandi in Punjab, Haryana, Rajasthan
• Hadaspur Mandi in Pune
• Rythu Bazar – a vegetable and fruit market in Andhra Pradesh
• Uzhavar Santhai – a farmers markets in Tamil Nadu

Question 10.
Distinguish between green Revolution’ and golden Revqt&tion’.
Answer:
Green Revolution was a strategy adopted by India after independence to achieve self-sufficiency in foodgrains. Introduction of HYV seeds along with fertilisers, insecticides and modern irrigational facilities resulted in increased crop yields of foodgrains like wheat and rice. Golden revolution refers to the period between 1991-2003

when the planned investment in horticulture became highly productive and it emerged as a sustainable livelihood option in India. India has emerged as a world leader in producing a variety of fruits like mangoes, bananas, coconuts, cashew nuts and a number of spices and the second largest producer of fruit and vegetables.

Question 11.
Do you think various measures taken by the government to improve agricultural marketing are sufficient? Discuss.
Answer:
Various measures have been taken by the government to improve agricultural marketing, which include regulation of markets, provision of infrastructural facilities, promotion of cooperative marketing and adoption of policy instruments to protect farmers’ income. Despite of all the measures undertaken so far, there are still many obstacles in attaining successful agricultural marketing.

• Farmers often get trapped by defective weighing techniques and misappropriation of accounts.
• Farmers have limited knowledge of market prices and conditions and hence, they are forced to sell their output at a lower price.
• Storage facilities are not sufficient which expose the crops to the attacks by pests and bad weather.
• Existence of moneylenders for obtaining credit is still predominant because of the lack of institutional sources of finance.
• Insufficient transportation facilities limit the farmers from selling their produce at far off places.

Question 12.
Explain the role of non-farm employment in promoting rural diversification.
Answer:
Indian agricultural sector is already overcrowded. This creates the problem of disguised and seasonal ; unemployment. Thus, the rapidly increasing labour force needs to find alternate employment opportunities in non-farm sectors. A shift of work force from agriculture to other allied activities and non-agriculture sector promotes agricultural diversification.

Non-farm economy has several segments such as food processing industries, leather industries, tourism, pottery, crafts and handlooms. Promotion of non-farm activities helps farmers in acquiring new skills, explore alternative sources of revenues and raise income.

Question 13.
Bring out the importance of animal husbandry, fisheries and horticulture as a source of diversification.
Answer:
Animal husbandry, fisheries and horticulture have emerged as important sources of diversification. : Their role and contribution to the Indian economy have been discussed below.

(i) Animal Husbandry: Animal husbandry is a branch of agriculture-related to the management and care of farm animals such as cattle, sheep, pigs, hens and goats. It is integrated with the I rural sector of Indian economy. Livestock plays a significant role in the rural development.

At present, the livestock sector alone provides alternate livelihood options to over 70 million small 1 and marginal farmers and landless labourer. India’s wealth of cattle stands around 300 million, j which includes 108 million buffaloes (2012). The performance of the Indian dairy sector has been quite impressive over the last three decades. Meat, eggs, wool and other by-products are ! also emerging as important productive sectors.

(ii) Fisheries: The water bodies consists of sea. oceans, rivers, lakes, natural aquatic ponds, streams etc. These are an integral and life-giving source for the fishing community. Kerala, Gujarat, Maharashtra and Tamil Nadu are the major producers of marine products.

There has been a significant development of fisheries in India due to progressive increase in budgetary allocations and introduction of new technologies. At present, inland sources contribute about 64 per cent to the total fish production and the remaining 36 per cent comes from the marine secton Tubes total fish production in India accounts for 0.7 per cent of the total GDP.

(iii) Horticulture: Horticulture.is 1- the art and science of cultivating fruits, vegetables,tuber crops,flowers, medicinal and aromatic plants, spices and plantation crops. India has varying climate and soil conditions, which facilitates growing of diverse horticultural crops, These crops play Im a crucial role in providing food and nutrition, besides addressing employment concerns.

India has emerged as a world leader in producing a variety of fruits like mangoes, bananas, coconuts, cashew nuts and a number of spices. Horticulture has contributed significantly in improving the economic condition of many farmers.

Question 14.
‘Information technology plays a very significant role in achieving sustainable development and food security’-Comment.
Answer:
Various information and software tools have been developed, which help the governments predict areas of food insecurity and vulnerability. Accordingly, necessary action can be taken to prevent or reduce the likelihood of an emergency. It also benefits the agriculture sector as it can disseminate information about emerging technologies and their applications, prices, weather and soil conditions for growing different crops.

IT acts as a tool for releasing the creative potential and knowledge embedded in society. It also has potential of employment generation in rural areas. Thus, information technology plays a significant role in achieving sustainable development and food security.

Question 15.
What is organic farming and how does it promote sustainable development?
Answer:
Organic farming includes the entire system of farming that restores, maintains and enhances the ecological balance. Organic farming promotes sustainable development by rendering the following benefits:

• Provides nutritional and healthy foods
• Uses locally produced and cheap inputs to produce organic products
• Produces goods in an environmentally sustainable way
• Minimises the risk chemical fertilisers and pesticides
• Prevents soil and groundwater pollution

Question 16.
Identify the benefits and limitations of organic farming.
Answer:
The benefits and limitation of organic farming are discussed below:
Benefits of Organic Farming

• Organic agriculture uses locally produced and cheap, organic input, thereby generating good returns on investment.
• It has a potential of income generation through exports as the demand for organically grown crops is rising.
• Organically grown food has more nutritional value than the food grown through chemical farming. This provides us with health foods.
• Organic farming requires more labour input and hence is an attractive proposition in India.
• The produce is pesticides free and produced in an environmentally sustainable way.

Limitations of Organic Farming

• Yields from organic farming are less compared to the yield from modem agriculture farming, at least in the initial years.
• Organic produce may also have more blemishes and shorter shelf life than sprayed produce,
• Infrastructural facilities are inadequate to encourage small farmers to adopt organic farming
• There is a limited choice to produce off-season crops in organic farming.

Question 17.
Enlist some problems faced by farmer’s during the initial years of organic farming.
Answer:
Problems faced by farmers during the initial years of organic farming are:

• Limited or no knowledge regarding organic farming methods
• Lack of financial support to buy farm inputs
• Fear of losing revenue since yields from organic farming are low
• Risk of losing farm output because of shorter shelf life

Detailed, Step-by-Step NCERT Solutions for Class 12 Economics Chapter 11 Human Capital Formation In India Questions and Answers were solved by Expert Teachers as per NCERT (CBSE) Book guidelines covering each topic in chapter to ensure complete preparation.

Human Capital Formation In India NCERT Solutions for Class 12 Economics Chapter 11

Human Capital Formation In India Questions and Answers Class 12 Economics Chapter 11

Question 1.
What are the two major sources of human capital in a country?
Answer:
The two major sources of human capital in a country are education and health, The contribution of an educated person to the economic growth is more than an uneducated person. Similarly, a healthy persor provides uninterrupted labour supply for a longer period than an unhealthy person. Hence, education and health are the most important factors for the economic growth.

Question 2.
What are the indicators of educational achievement in a country?
Answer:
The indicators of educational achievement in a country are:

• Adult literacy rate measures the proportion of literate population in the age group of 15 and above.
• Primary completion rate is the percentage of students who complete the last year of primary schooling.
• Youth literacy rate measures the proportion of literate population in the age group of 15 and 24 years.
• Net attendance ratio is the total number of children of age group 14 and 15 years attending school as a percentage of total number of children in the same age group.
• Teacher-pupil ratio is the number of students, attending the school divided by the number of teachers in the school.

Question 3.
Why do we observe regional differences in educational attainment in India?
Answer:
There are wide regional differences in educational attainment in India. The per capita expenditure on education was ? 34,651 in Himachal Pradesh in 2014-15 while it was only 4,088 in Bihar during the same period. This leads to differences in educational opportunities and attainment across states. The following factors are responsible for disparity in educational attainment across states:

(i) Economic Factors: Relatively affluent states are in a position to invest more in education by building schools, colleges and appointing qualified teachers.

(ii) Political Factors: The commitment on the part of state governments also plays a significant role in proper implementation of education schemes. Thus, difference in political will towards creating better human capital among different states is another reason for regional differences in educational attainment.

(iii) Socio-cultural Factors: Each state has its own social norms and traditions, which may create difference in attitude towards education across regions. People in socially developed regions understand the importance of education while in socially backward regions education is not considered important, especially for girls.

Question 4.
Bring out the differences between human capital and human development.
Answer:
Following are the points of difference between human capital and human development:

Question 5.
How is human development a broader term as compared to human capital?
Answer:
Human development is a far broader concept as compared to human capital. Human development involves those factors which lead to social welfare and development. On the other hand, human capital focuses only on human beings and their contribution to the economy. Human development includes overall prosperity of individuals through education and health, while human capital considers human beings as a source of Increasing economic productivity.

Question 6.
What factors contribute to human capital formation?
Answer:
The following factors contribute to human capital formation:

• Investment in education
• Investment in health
• job training
• Expenditure in migration
• Information relating to labour and other markets

Question 7.
How government organisations facilitate the functioning of schools and hospitals in India?
Answer:
Government organisations play a significant role in the functioning of schools and hospitals in India. Since private institutions are guided by the profit motive, the price they charge for providing education and health facilities is high.

Therefore, it becomes the responsibility of the government to regulate their functioning. In order to ensure that health and education facilities also reach the weaker and underprivileged section of the society, the government has set up various organisations such as:

(i) Education Sector

• NCERT (National Council of Education Research and Training) is responsible for designing textbooks up to grade 12. It forms the base for school curriculum in India.
• UGC (University Grants Commission) is the prime funding authority for university education.
• AICTE (All India Council for Technical Education) enforces rules and regulations regarding technical education in India.

(ii) Health Sector

• ICMR (India Council for Medical Research) enforces rules and regulations regarding research in health sector.
• National Institute of Health and Family Welfare is responsible for promotion of health and family welfare programmes.

Question 8.
Education is considered as an important input for the development of a nation. How?
Answer:
The availability of educated labour force facilitates adaptation of new technologies. Economists have stressed the need for expanding education opportunities in a nation as it accelerates the development process. Education confers highly valued benefits apart from higher earning capacity.  Following are the benefits of attaining education:

• Its gives better social standing and pride.
• It enables to make better choice in life.
• It provides knowledge to understand the changes taking place in the society.
• It stimulates innovations.

Question 9.
Discuss the following as a sources of human capital formation:
(i) Health Infrastructure
(ii) Expenditure on Migration
Answer:
(i) Health Infrastructure: Health means state of complete physical, mental and social soundness.Investment in health facilities is essential to build a physically and mentally strong human capital, thereby increasing labour productivity. It involves availability of preventive and curative medicine, supply of clean drinking water and good sanitation.

A healthy person is more productive than a sick person who is unable to work efficiently due to bad health. Thus, development of health facilities through expenditure on health infrastructure will directly increase the supply of healthy labour force and hence, enhance the human capital formation.

(ii) Expenditure on Migration: People migrate in search of jobs that fetch them higher salaries than what they may get in their native places. For instance, engineers and doctors migrate to other countries for higher salaries that they may get in such countries. Migration involves transportation cost, higher cost of living in the migrated place and psychic cost of living in an unknown socioculture set-up. The increased earnings at the new place outweigh the cost of migration. Hence, expenditure on migration is also a source of human capital formation.

Question 10.
Establish the need for acquiring information relating to health and education expenditure for the effective utilisation of human resources.
Answer:
The need for acquiring health and education expenditure reiated information for the effective utilisation of human resources is discussed below:

(i) Education: Investment in education is considered as the most important source of human capital. Without education, human beings have only brutal manpower, that is, they have only physical labour. Investment in education gives human being additional skills to do the same ; job The information related to education includes information regarding availability of seats in i educational institutions, courses, eligibility requirement and fee being charged for the courses.  Such information enables people to make better choice among various options available to j them. This leads to effective utilisation of human skills and knowledge.

(ii) Health: Availability of information related to health creates awareness among people. Earlier various health measures were not adopted due to lack of information. For instance, a few years back, people considered AIDS as a disease, which could spread even by shaking hands or sharing food. However, with awareness campaigns people have now become informed about  it.

The use of health related information and family welfare programmes ensures the supply of  healthy workforce. It helps in making human resource effective by increasing the capacity to j work and improving productivity.

Question 11.
How does investment in human capital contribute to growth?
Answer:
Growth means increase in real national income of a country. National income of a country is the sum total of the market value of all goods and services produced during the period of one year in that country. The contribution of an educated person to economic growth is more than an uneducated person.

In the same way, a healthy person provides uninterrupted labour supply for a longer period of time. Thus, health is also an important factor for economic growth. The skilled and healthy labours make effective utilisation of the material inputs and capital, which increases the productivity and ultimately results in faster economic growth.

Beside education and health, an individual’s income generating capacity factors are on-the-job training, labour market information and migration. All these factors enhance productivity of human capital, which contributes to economic growth.

Question 12.
‘There is a downward trend in inequality world-wide with a rise in the average education levels’. Comment.
Answer:
A rise in the average education level has resulted in reduced inequality at the global level. Governments of different countries are investing heavily in the education sector thereby making better earning opportunities available to all. Distribution of income has become less biased and income inequality between the rich and the poor is reducing across the world. A rise in education level not only reduces inequality but also helps in alleviating problems like poverty, unemployment and underutilisation of resources.

Question 13.
Examine the role of education in the economic development of a nation.
Answer:
Education confers highly valued benefits apart from higher earning capacity. It plays a significant role in the economic development of a country.
(i) Enhances Knowledge and Skills: It inculcates quality skills and knowledge among the people, which enhances their productivity. This gives better opportunity to do work and earn higher income.

(ii) Promotes Modern Methods: An educated individual is more open to adopt new and modern techniques in production methods. This can boost the economy of a nation.

(iii) Eradicates Inequality: Education is an effective tool for reducing inequality. It increases the income earning capacity of economically backward people/ regions in a country thereby reducing the unequal distribution of income.

(iv) Encourages Innovation: An educated person has the ability to innovate new skills and techniques that can make the production process more efficient and hence, help in the economic development of a nation.

(v) Increases Participation Rate: Education enables a greater proportion of population to participate in the economic activities of the nation, thereby accelerating the development process.

Question 14.
Explain how investment in education stimulates economic growth?
Answer:
Economic growth means increase In reai national income of a country. Naturally, the conm bution of the educated person to economic growth is more than that of an illiterate person Invest, tent in education is considered as the most important source of human capital. Without education, human beings have only brutal manpower, that is, they have oniy physical labour.

Investment in education gives human being additional skills to do the same job. Individuals are able to make better choice among various-options available to them. This leads to effective utilisation of human skills and knowledge thereby stimulating the nation’s economic growth.

Question 15.
Bring out the need for on-the-job training of a person.
Answer:
Firms incur expenditure on providing on-the-job training to their workers. Training imparts technical skills and know-how among the workers while working at the actual work site. On-the-job training helps in enhancing the productivity of the workers and facilitates better utilisation of raw materials. It enables workers to absorb values and standards of an organisation. The workers may be trained by either of the following two methods:

• Training within the firm under the supervision of a skilled worker
• Off-campus training

Question 16.
Trace the relationship between human capital and economic growth.
Answer:
The role of human capital formation in economic growth is very significant. The importance of human capital in economic growth is clear from the wording of India’s Seventh Five Year Plan document: “Human resources development or human capital has necessarily to be assigned a key role in any development strategy, particularly in a country with a large population.

Trained and educated on sound lines, a large population can itself become an asset in accelerating economic growth and in ensuring social change in desired directions.” There is a positive relationship between human capital and economic growth, The labour skill and efficiency of an educated and healthy person is more than an uneducated and unhealthy person.

Question 17.
Discuss the need for promoting women’s education in India.
Answer:
There has been extreme gender inequality in India in terms of participation in employment, education and decision making. Women have always been neglected in the field of education, which has led to their weaker and lower status in India. However, in orderto achieve overall economic development and growth, female education and empowerment should be given priority. The following points explain the need for promoting women’s education in India:

• To improve their economic independence and feasibility
• To raise the social and moral status of women
• To maintain favourable fertility rate
• To enhance health care of women and their children
• To enable them infuse good moral values and impart quality education to her children

Question 18.
Argue in favour of the need for the different forms of government intervention in education and health sectors.
Answer:
In India, the education and health sectors services are provided both by public as well as by private institutions. The different forms of government intervention in education and health sectors are important because:
(i) The private institutions are guided by profit motive and hence, the cost of education and health sen/ices provided by them is higher. As a result, it is difficult for majority of the population to avail these services due to their economic inability. Public institutions, on the other hand, are guided by the motive of social welfare to enhance human capital. Thus, it becomes the responsibility of the government to provide quality education and health facilities at economical cost.

(ii) Private institutions neglect the remote and rural areas where people lack initiative for education and health. Thus, the role of government is to encourage and make them aware of advantages of education and health.

Question 19.
What are the main problems of human capital formation in India?
Answer:
The main problems of human capital formation in India are:

(i) Limited Resources: The resources required to invest in education, health and other sources of human capital insufficient. Although the government is investing huge amounts in human capital, the returns are very low due to high pressure of population.

(ii) Implementation Problems: The government has initiated various programmes such as Sarva Shiksha Abhiyan and National Rural Health Mission to supplement human capital formation. These programmes suffer from corrupt officials and faulty implementation. As a result, the benefits do not reach the targeted people.

(iii) Poor Quality: Human capital formation in India has been progressing rapidly in quantitative terms. However, quality of human capital is far from satisfactory. Health facilities are inadequate in many areas. A large number of educational institutions are being opened, which impart inferior quality of education and skills, and produce unemployable educated youth.

(iv) Improper Planning: There has been improper planning for human capital formation, which has resulted in shortage of manpower in the health and education sectors. There are schools but no teachers and there are hospitals but no doctors. Moreover, physical infrastructure falls short of the requirement.

Question 20.
In your view, is it essential for the government to regulate the fee structure in education and health care institutions? If so, why?
Answer:
Education and health are the most important sectors for the formation of quality human capital. It is, therefore, the responsibility of the government to ensure that these services reach all the sections of the society. For this purpose, either the government should directly provide these sendees through government institutes or encourage private sector participation. India has a vast population, which still lacks health care and education.

It is not feasible for the government alone to fulfill the requirement due to lack of resources. Hence, private sector is allowed to operate in these sectors. However, private sector is driven by profit as primary motive. If the fee becomes unaffordable for the common people, the purpose of these facilities will be defeated. Therefore, the government must intervene and regulate the fee structure in education and health care institutions.

Detailed, Step-by-Step NCERT Solutions for Class 12 Economics Chapter 10 Poverty Questions and Answers were solved by Expert Teachers as per NCERT (CBSE) Book guidelines covering each topic in chapter to ensure complete preparation.

Poverty NCERT Solutions for Class 12 Economics Chapter 10

Poverty Questions and Answers Class 12 Economics Chapter 10

Question  1.
Why calorie-based norm is not adequate to identify the poor?
Answer:
The government uses Monthly Per Capita Expenditure (MPCE) of households, which is a calorie- based norm, to identify the poor. However, there are certain limitations to this norm, which are discussed below:

• It groups all the poor together, without differentiating between the very poor and the other types of poor.
• It takes into account only expenditure on food and a few select items. With this mechanism, it becomes difficult to identify who among the poor need the most help.
• Various factors such as accessibility to basic education, health care, drinking water and sanitation are ignored while developing poverty line.
• Social factors such as illiteracy, ill health, lack of access to resources, discrimination or lack of civil and political freedoms trigger and perpetuate poverty. These are also not taken into consideration while determining poverty line.

Question 2.
What is meant by‘Food for Work’ programme?
Answer:
National Food for Work Programme was launched on November 14, 2004 in 150 most backward districts of the India. It is implemented as a 100 per cent centrally sponsored scheme and the foodgrains are provided to States free of cost. The objective of the programme was to intensify the generation of supplementary wage employment.

NFWP is open to all rural poor who are in need of wage employment and willing to do manual unskilled work. Collector is appointed as the nodal officer at the district level. He has the overall responsibility of planning, implementation, coordination, monitoring and supervision.

Question 3.
Why are employment generation programmes important in poverty alleviation in India?
Answer:
The government has initiated various self-employment and wage employment programmes, which help in alleviation of poverty in India by:

• providing an opportunity to the poor to raise the level of their income through government supported schemes
• creating additional assets such as watersheds, water harvesting, canal building, road construction, etc. by means of work generation
• helping in formation of human capital by imparting knowledge and enhancing skills

Question 4.
How can creation of income earning assets address the problem of poverty?
Answer:
Creation of durable assets generates the employment opportunities, which eventually helps in solving the problem of poverty by improving the standard of living of the people. Also, creation of assets such as watershed development works, water harvesting, canal building, construction of roads connecting rural to urban areas and dam construction contribute significantly towards the social and economic development of a country. All these assets are very important for the welfare of the society as a whole.

Question 5.
The three-dimensional attack on poverty adopted by the government has not succeeded in poverty alleviation in India. Comment.
Answer:
Government of India adopted a three-dimensional approach as an attempt to reduce poverty.

• Growth-oriented approach
• Expansion of self-employment and wage employment programmes
• Provision of minimum basic amenities to the people

With the implementation of various strategies to alleviate poverty, the percentage of absolute : poor has declined significantly since independence. However, illiteracy, hunger, malnourishment and lack of basic amenities continue to be common concerns in many parts of India. Reasons which prevented the successful implementation of government’s three-dimensional attack on poverty are:

• There was unequal distribution of land and other assets due to which the benefits from direct poverty alleviation programmes have been acquired by the non-poor.
• The amount of resources allocated for these programmes were insufficient compared to the extent of poverty.
• The government and bank officials who were responsible for the implementation of these programmes were ill-motivated, inadequately trained and corruption prone.

Question 6.
What programmes has the government adopted to help the elderly people, poor and destitute women?
Answer:
The government initiated National Social Assistance Programme under which, homeless elderly people are given pension to sustain themselves. The programme also covers poor and destitute women.

Question 7.
Is there any relationship between unemployment and poverty? Explain.
Answer:
There exists a direct relationship between unemployment and poverty. Poor people lack basic literacy and skills. As a result, they have very limited economic opportunities and face unstable employment. A large number of rural poor migrate to urban areas in search of employment and I livelihood.

The industries in cities, however, have not been able to absorb all these people. The urban poor are either unemployed or intermittently employed as casual labourers. Such labourers have limited skills, sparse opportunities and no job security and hence, they are among the most vulnerable in society. Moreover, the intermittent nature of work compels indebtedness, which reinforces poverty. Thus,unemployment is both the cause and consequence of poverty.

Question 8.
Suppose you are from a poor family and you wish to get help from the government to set up a petty shop. Under which scheme you will apply for assistance and why?
Answer:
A person from a poor family in urban area can apply for assistance through Swarna Jayanti Shahari Rozgar Yojana (SJSRY). However, if a person belongs to rural area, he can apply for assistance under the Prime Minister’s Rozgar Yojana (PMRY). These programmes provide financial assistance in the form of bank loans to educated unemployed from low-income families to set up small industries and shops. Such a scheme encourages individuals to set up any kind of enterprise that can generate employment for them.

Question 9.
Illustrate the difference between rural and urban poverty. Is it correct to say that poverty has shifted from rural to urban areas? Use the trends in poverty ratio to support your answer.
Answer:
Rural poverty implies lack of adequate land, basic dwelling and welfare support through Public Distribution System. The rural poor usually include landless agricultural labourers and cultivators with very small landholdings. Urban poverty is not as intense as rural poverty since a wide variety of jobs are available in urban areas.

The urban poor do jobs such as cart and rickshaw pullers that involve physical labour or menial jobs such as sweeping streets and providing domestic help to make a living. The people involved in such jobs are mostly illiterate and unskilled. The table below shows the estimates of poverty in rural and urban areas in India during 1973-74 and 201 1-12.

The poverty ratio in rural area declined by 38 percent from 41.8 per cent in 2004-05 to 25.7 per cent in 201 1-12. In urban areas, on the other hand, the poverty ratio has declined by 46 per cent from 25.7 percent to 13.7 percent during the period 2004-05 and 201 1-12. The percentage decline is more in urban area. These trends, therefore, do not reflect any major shift of poverty from rural to urban areas.

Question 10.
Suppose you are a resident of village, suggest a few measures to tackle the problem of poverty.
Answer:
Following measures can be taken to tackle the problem of poverty:

• Generation of employment opportunities
• Training of unskilled workers
• Development of cottage and small scale industries
• Improvement in social and economic infrastructure such as schools, roads, hospitals, power, telecom, IT services, training institutions, etc.
• Facilities for education, health and safe drinking water
• Financial assistance for generation income and assets

Detailed, Step-by-Step NCERT Solutions for Class 12 Economics Chapter 9 Liberalisation, Privatisation and Globalisation: An Appraisal Questions and Answers were solved by Expert Teachers as per NCERT (CBSE) Book guidelines covering each topic in chapter to ensure complete preparation.

Liberalisation, Privatisation and Globalisation: An Appraisal NCERT Solutions for Class 12 Economics Chapter 9

Liberalisation, Privatisation and Globalisation: An Appraisal Questions and Answers Class 12 Economics Chapter 9

Question 1.
Why were reforms introduced in India?
Answer:
Economic reforms were introduced in India to overcome the economic crisis relating to its external 1 debt. The government was not able to make repayments on its borrowings from abroad. The economy was facing problem of declining foreign exchange, growing imports without matching rise in exports and high inflation. Hence, India changed its economic policies in 1991 as a result of pressure from international institutions like the world bank and IMF.

Question 2.
Why is it necessary to become a member of WTO?
Answer:
It is necessary to become a member of WTO because:

• It helps in raising standard of living, real income and employment through expansion of trade.
• It promotes optimum utilisation of the world’s resources.
• It secures the share of developing countries in the growth of international trade.
• It eliminates discriminatory treatment in international trade.
• It ensures linkage among different trade policies, environment policies and sustainable development.

Question 3.
Why did RBI have to change its role from controller to facilitator of financial sector in India?
Answer:
The financial sector in India is controlled by the RBI. All the commercial banks and financial institutions in India are controlled by RBI through various norms and regulations. The RBI decides the proportion of deposits banks have to maintain with themselves, fixes interest rates, nature of lending to various sectors, etc. RBI had to change its role from controller to facilitator in India to allow the financial sector to take decisions on various matters without consulting the RBI.

Question 4.
How is RBI controlling the commercial banks?
Answer:
The commercial banks are controlled by RBI through various norms and regulations. The RBI decides the amount of money that the banks can keep with themselves by fixing CRR and SLR, fixes interest rates, nature of lending to various sectors, etc.

Question 5.
What do you understand by devaluation of rupee?
Answer:
Devaluation of rupee means lowering of the value of rupee in terms of the currencies of the foreign countries. Devaluation takes place when a country has adopted a fixed rate system.

Question 6.
Distinguish between the following: .
(i) Strategic and Minority Sale
(ii) Bilateral and Multi-lateral Trade
(iii) Tariff and Non-tariff barriers
Answer:
(i) Strategic and Minority Sale: In strategic sale, 5 \% or more stake of PSU is sold to the private sector along with the transfer of ownership. In minority sale, less than 49% stake is sold to the private sector. However, the ownership is not transferred and remains with the government.

(ii) Bilateral and Multi-lateral Trade: Trade between two countries is called bilateral. On the other hand, trade between more than two countries is known as multi-lateral trade.

(iii) Tariff and Non-tariff Barriers: Imposing excise duty or custom duty on the import of goods is a tariff barrier. On the other hand, imposing the restriction on the quantity of traded goods through quotas or licenses are non-tariff barriers.

Question 7.
Why are tariffs imposed?
Answer:
Tariffs are imposed:

• to protect the domestic industries from foreign competition; and
• to earn revenues.

Question 8.
What is the meaning of quantitative restrictions?
Answer:
Quantitative restrictions are imposed by the government to restrict the quantity of goods that can be imported or exported. These can be imposed by means of quotas and licenses. Under this restriction, quantity of trade remains fixed. Quantitative restrictions are imposed to promote domestic industries and protect them from foreign competition.

Question 9.
Those public sector undertakings which are making profits should be privatised. Do you agree with this view? Why?
Answer:
Privatisation implies shedding of the ownership or management of a government owned enterprise, The main motive pf public sector enterprises is social or economic welfare of the people while the main  motive of private sector is to earn profit even at the cost of public welfare. Privatising the profit making j PSUs will affect the development of poorer section of the society.

Thus, public sector undertakings ; which are making profits should not be privatised. A country can achieve ‘growth with justice’ objective or sustainable development only through public sectors participation in the growth process. However, it is essential to privatise those public sector undertaking which are making losses.

Question 10.
Do you think outsourcing is good for India? Why developed countries are opposing it?
Answer:
Outsourcing means a company going out to a source outside the company to buy regular services that were formerly used to be provided departmentally and internally. In recent times, outsourcing has intensified in modes of communications, particularly Information Technology (IT), voice based business process, record keeping, accountancy, banking services, music recording, film editing, book transcription, clinical advice or even teaching.

India, where wages are low and skilled workers are plentiful, is able to take advantage of the competitiveness of their manpower. Thus, outsourcing is good for India. Developed countries are opposing it to avoid migration of manpower from underdeveloped countries to developed countries.

Question 11.
India has certain advantages, which makes it a favourite outsourcing destination. What are these advantages?
Answer:
Advantages of India as an outsourcing destination are:

• Low wage rate
• Abundant skilled workers
• Rapid technological development

Most multinational corporations and even small companies are outsourcing their services to India where these can be availed at a cheaper cost with reasonable degree of skill and accuracy. These advantages make India a favourite outsourcing destination.

Question 12.
Do you think the navaratna policy of the government helps in improving the performance of public sector undertakings in India? How?
Answer:
In 1996, in order to improve efficiency, infuse professionalism and enable them to compete more effectively in the liberalised global environment, the government chose nine PSUs and declared them as Navaratnas.

They were given greater managerial and operational autonomy in taking various decisions to run the company efficiently and hence, increase their profits. Greater operational, financial and managerial autonomy had also been granted to 97 other profit-making enterprises referred to as ‘Miniratnas’.

The first set of navaratna companies is as under.

• BPCL
• HPCL
• IOCL (Indian Oil Corporation Ltd.)
• ONGC
• SAIL
• IPCL
• BHEL
• NTPC
• BSNL

GAIL and MTNL are the other two PSUs, which were also given the same status.

Question 13.
What are the major factors responsible for the high growth of the service sector?
Answer:
The following factors are responsible for the high growth of the service sector:

• Increased demand for services such as banking, insurance, transportation, communication, etc.
• Introduction of New Economic Policy encouraged large inflow of foreign capital in India
• Cheap manpower and latest developments in IT and telecommunications made India a favourite outsourcing destination
• Awareness about education increased the number of qualified people who could contribute more towards services sector

Question 14.
Agricultural sector appears to be adversely affected by the reform process.Why?
Answer:
Agriculture appears to be adversely affected by the reform process because the reforms have not been able to benefit agriculture, which is evident from the decelerating growth rate. The most important issue is the existence of large food-stock in the country and still having more than 250 million people below the poverty line.

Per capita availability of foodgrains and nutritional quality has been declining despite mounting stocks of food grains. Cuts in the subsidies given to the foodgrains producers also raised prices of food grains as the burden of such cuts is passed on to the consumers. However, agricultural subsidies are declining due to the adoption of reform process in this sector also.

Question 15.
Why has the industrial sector performed poorly in the reform period?
Answer:
The following factors are responsible for poor performance of industrial sector during the reform period:

• The demand for domestically produced industrial goods had declined due to availability of cheaper imports and lower investment in this sector. Domestic manufacturers faced tough competition from better quality and low priced goods from abroad.
• Developed countries impose non-tariff barriers to restrict imports from developing countries like India.
• There has always been lack of infrastructural facilities such as power generation, road network, etc.

Question 16.
Discuss economic reforms in India in the light of social justice and welfare.
Answer:
The role of economic reforms in India in the light of social justice and welfare can be discussed with help of the following arguments:
Arguments in Favour of Economic Reforms

• Economic reforms have created opportunities to have greater access to global markets.
• Reforms have opened new avenues for employment.
• There has been rapid increase in foreign direct investment and India’s foreign exchange reserves.

Arguments against Economic Reforms

• Economic reforms have improved the income and standard of living of oniy high income groups. The gap between the rich and poor has increased. This has led to inequality in Indian society.
• Reforms have concentrated only on the development of service sector. The growth and development of agnculture and industry have been ignored.
• The growth of public expenditure has been curtailed, which has reduced the scope for tax revenues.

Detailed, Step-by-Step NCERT Solutions for Class 12 Economics Chapter 8 Indian Economy 1950-1990 Questions and Answers were solved by Expert Teachers as per NCERT (CBSE) Book guidelines covering each topic in chapter to ensure complete preparation.

Indian Economy 1950-1990 NCERT Solutions for Class 12 Economics Chapter 8

Indian Economy 1950-1990 Questions and Answers Class 12 Economics Chapter 8

Question 1.
Define a plan.
Answer:
A plan describes the way of allocating the resources of a nation to productive use. A plan should have general as well as specific objectives, which needs to be achieved within a specified period of time. In India, the duration of plans is 5 years.

Question 2.
Why did India opt for planning?
Answer:
On the eve of independence, the agricultural sector in India was burdened with surplus labour and low productivity. There was lack of modem industries, capacity building and public investment. Also, India became the net supplier of raw materials and consumer of finished industrial products from Britain.

There was a need to opt for planning to initiate the process of development with the aim of opening out new opportunities in various sector of the economy, gaining competitiveness and hence, raising the living standard of its people.

Question 3.
Why should plans have goals?
Answer:
Plans should have clearly specified goals. Plans are meant to achieve something and since goals are the ultimate targets of any plan, plans must include goals. There are different goals being emphasised in different plans in India. The major goals of the Five Year Plans are:

• Growth
• Modernisation
• Self-reliance
• Equity

However, not equal importance is given to all the goals in all the plans. Due to limited resources, a choice has to be made in each plan as to which goals needs to be given the primary importance.

Question 4.
What are High Yielding Variety (HYV) seeds?
Answer:
High Yielding Variety (HYV) seeds are better quality seeds, which help increase the production of crops significantly.

Question 5.
What is marketable surplus?
Answer:
Marketable surplus is that portion of agriculture produce which is sold in market by the farmers.

Question 6.
Explain the need and type of land reforms implemented in the agriculture sector.
Answer:
Although agricultural sector was the main source of national income and employment, it remained backward and deficient. It was burdened with defective institutions like Zamindari’ and ‘Jagirdari’. Zamindars were only interested in collecting rent-from the tillers and contributed nothing to improve the productivity of the land. Hence, it was important to implement land reforms to abolish these institutions and make the tenants or tillers, the owners of land.

Following are the different type of land reforms implemented in the agriculture sector

(i) Land Ceiling: It means fixing the maximum size of the land which could be owned by an individual. This purpose of this policy was to reduce the concentration of land in a few powerful hands.

(ii) Abolition of Intermediaries: The policy aimed to bring the tenant in direct control with government and hence, freeing them from the exploitation of zamindars. The cultivators are expected to take more interest in increasing output if they are made the owners of the land. Ownership of land enables the tiller to make profit from the increased output.

Question 7.
What is Green Revolution? Why was It implemented and how did it benefit the farmers? Explain in brief. –
Answer:
Green revolution refers to the large increase in production of foodgrains resuiting from the use of High Yielding Variety (HYV) seeds, especially for wheat, rice and maize.

Green Revolution was implemented:

• to break the stagnation in agriculture caused during the colonial rule: and
• to increase the productivity of agricultural sector.

Benefits of Green Revolution

• Self-sufficiency in foodgrains
• Marketable surplus
• Maintenance of buffer stock
• Upliftment of small farmers

Question 8.
Explain ‘growth with equity’ as a planning objective.
Answer:
Growth refers to increase in country’s domestic output in terms of goods and services. Growth alone may not improve the kind of life which the people are living. A country can have high growth, but most of its people might be living in poverty. It is important to ensure that the benefits of economic prosperity reach the poor sections as well, instead of being enjoyed only by the rich.

Thus, in addition to growth, equity is also important. Equitable distribution of income helps in narrowing the gap between the rich and poor and hence, avoids concentration of wealth in a few hands. Every Indian should be able to meet his or her basic needs such as food, decent house, education and health care. Inequality in the distribution of wealth should be reduced.

Question 9.
Does modernisation as a planning objective create contradiction in the light of employment generation? Explain.
Answer:
Modernisation refers to adoption of latest techniques in the production of goods and services. Adoption of technology tends to involve capital-intensive techniques of production. There might be increased unemployment due to fall in the demand for unskilled labour force. However, technology would encourage individuals to acquire education and training for the same thereby increasing the supply of skilled labour required to run modem machines.

Thus, it would not be correct to say that modernisation as a planning objective creates contradiction in the light of employment generation. Also, modernisation not only refers to adoption of new technology. It also includes transformation in social outlook and making the society more prosperous.

Question 10.
Why was it necessary for a developing country like India to follow self-reliance as a planning objective?
Answer:
‘Self-reliance was considered as an important planning objective to reduce our dependence on foreign countries for food. In the initial years’ of independence, it was feared that dependence .on imported food supplies, foreign technology and foreign capital may make India’s sovereignty vulnerable to foreign interference in our policies.

Question 11.
What is sectoral composition of an economy? Is it necessary that the service sector should contribute maximum to GDP of an economy? Comment.
Answer:
Sectoral composition refers to the contribution made by different sectors in the GDP of the economy. The table below shows the different sectors of Indian economy and their contribution to the country’s GDP

As observed in the case of many developed economies of the world, the share of agriculture declines while the industrial sector becomes dominant with development. Further, if a country’s service sector contributes maximum to the country’s GDP then the country is considered to be at the higher level of development. However, it may also sometimes depend upon the resources a country specialises in.

Question 12.
Why was public sector given a leading role in industrial development during the planning period?
Answer:
Public sector was given a leading role in industrial development during the planning period due to the following reasons:

• Private industrialists had limited capital to undertake investment in industrial ventures necessary to have strong industrial base in the economy.
• The state wanted to generate large scale employment opportunities through public sector.
• While private sector strives to maximise their own profits, public sector ensures equitable distribution of income and wealth.

Question 13.
Explain the statement that green revolution enabled the government to procure sufficient foodgrains to build its stocks that could be used during times of shortage.
Answer:
The spread of green revolution technology enabled India to achieve self-sufficiency in foodgrains. Our country is no longer dependant on foreign nations to meet our food requirements. Due to surplus, the price of good grains declined relative to other consumption items.

The low income groups, who used spend a large percentage of their income on food, benefited from this decline in relative price. The green revolution enabled the government to procure sufficient amount of foodgrains to build a stock that could be used at the time of food shortage.

Question 14.
While subsidies encourage farmers to use new technology, they are a huge burden on government finances. Discuss the usefulness of subsidies in the light of this fact.
Answer:
Subsidies are benefits provided by the government to the domestic producers to encourage production. Subsidies are the incentives for adoption of the new HYV technology by farmers. Some economists favour the elimination of subsidies due to the following reasons:

• The purpose of subsidies is already served.
• Subsidies are benefitting the farmers in the more prosperous region. It is no more benefitting the target groups.
• They are a huge burden on government finances.

However, some believe that the government should continue with agricultural subsidies because farming in India is a risky business. Most farmers are very poor, who would be unable to afford the required input without subsidy. Eliminating subsidies will increase the inequality between rich and poor farmers and hence, violate the goal of equity. The correct policy, therefore, would be to analyse the system and ensure that the benefits of subsidies reach the poor farmers only.

Question 15.
Why, despite the implementation of green revolution, 65 percent of our population continued to be engaged in the agricultural sector till 1990?
Answer:
Although the proportion of GDP contribution by agricultural has declined over the years, the proportion of population working in the sector has not declined considerably. This is because the industrial and service sectors have not absorbed the workforce working in the agricultural sector.

Question 16.
Though public sector is very essential for industries, many public sector undertakings incur huge losses and are a drain on the economy’s resources. Discuss the usefulness of public sector undertakings in the light of this fact.
Answer:
The presence of public sector is important because:

• It helps in creating strong base for heavy industries.
• It contributes towards the development of infrastructure.
• It develops the backward areas.
• It mobilises savings and foreign exchange in right direction.
• It prevents concentration of economic power in a few strong hands.
• It promotes equality through equal distribution of wealth.
•  It creates large scale employment opportunities.

Question 17.
Explain how import substitution can protect domestic industry?
Answer:
Import substitution is the policy which aims to replace or substitute imported goods by domestically ; produced goods and protect the domestic industries from foreign competition, The government may restrict imports and protect domestic industries from foreign competition through tariffs and quotas,

• Tariffs are tax on imported goods. They make imported goods more expensive and discourage their use.
• Quotas specify the quantity of goods which can be imported.

The effect of tariffs and quotas is that, they restrict import and therefore, protect the domestic firms from foreign competition.

Question 18.
Why and how was private sector regulated under the IPR 1956?
Answer:
The aim of the private sector is to maximise profit. In fulfilling this aim, it tends to ignore the welfare of the people. The purpose of IPR, 1956 was to promote regional equality and to ensure that the quantity of goods produced was not more than what the economy required. According to the IPR, the private sector was under the control of the state through the system of licenses.

No new industry was allowed to set up unless a license was obtained from the government. This policy primarily aimed at promoting industries in backward regions. It was easier to obtain a license for an industrial unit to be established in an economically backward region. Moreover, such industrial units were given certain concessions such as tax benefits and electricity at a lower tariff.

Question 19.
Match the following:

Answer:
1. (C), 2. (D.), 3. (B.), 4. (E.), 5. (A.), 6 (F.)

Detailed, Step-by-Step NCERT Solutions for Class 12 Economics Chapter 7 Indian Economy on the Eve of Independence Questions and Answers were solved by Expert Teachers as per NCERT (CBSE) Book guidelines covering each topic in chapter to ensure complete preparation.

Indian Economy on the Eve of Independence NCERT Solutions for Class 12 Economics Chapter 7

Indian Economy on the Eve of Independence Questions and Answers Class 12 Economics Chapter 7

Question 1.
What was the focus of the economic policies pursued by the colonial government in India? What were the impacts of these policies?
Answer:
The focus of the economic policies pursued by the colonial government in India was concerned more with the protection and promotion of the economic interests of their home country rather than the development of the Indian economy.

The impacts of the policies pursued by the colonial government are stated below:

• India became the net supplier of raw materials and consumer of finished industrial products from Britain.
• India’s traditional handicraft industry was destroyed.
• The growth of India’s aggregate real output was less than two percent during the first half of the twentieth century.
• Agricultural and industrial sectors remained backward and unproductive.

Question 2.
Name some notable economists who estimated India’s per capita income during the colonial period.
Answer:
Notable economists who estimated India’s per capita income (PCI) during the colonial period were Dadabhai Naroji, William Digby, Findlay Shiras, V.K.R.V. Rao and R.C, Desai, Among them, V.K.R.V. Rao’s role is considered very significant in estimating India’s GDP during that time.

Question 3.
What are the main causes of India’s agriculture stagnation during the colonial period?
Answer:
The main causes of India’s agriculture stagnation during the colonial period were:

(i) Land Settlement and Revenue System: The land settlement system introduced by the colonial government, particularly the Zomindari System, caused immense misery among the cultivators of land, Their economic conditions deteriorated as the profit accruing out of the agriculture ; sector went to the zamindars instead of the cultivators. The zamindars did nothing to improve ; the condition of agriculture.

(ii) Commercialisation of Agriculture: Farmers were forced to grow cash crops such as cotton, indigo, etc. instead of food crops. Cash crops were mainly produced to meet the colonial interests. Commercialisation of agriculture increased the burden of revenue on farmers. It also led to shortage of foodgrains in the country. ;

(iii) Other Causes: Factors such as low level of technology, lack of irrigation facilities and the use of negligible amount of fertilisers further worsened the conditions of farmers and contributed to such low level of agricultural productivity.

Question 4.
Name some modern industries which were in operation in our country at the time of independence.
Answer:
The cotton and jute textile mills, iron and steel industries, sugar, cement and paper industries were some modern industries, which were in operation in our country at the time of independence.

Question 5.
What was the two-fold motive behind the systematic de-industrialising effected by the British in pre-independent India?
Answer:
As the agriculture and manufacturing lagged, India could not develop a sound industrial base under the colonial rule. Even as the country’s world famous handicraft industries declined. No corresponding! modern industrial base was allowed to come up and enjoy the benefits of the former. The primary motive of the colonial government behind this policy of systematically de-industrializing India was two-fold.

The intention was, first, to reduce India to the status of a mere exporter of important raw materials for Britain’s upcoming modern industries and second, to turn India into a spreading market for the finished products of those industries. This was to ensure their continued expansion to the maximum advantage of their home country, Britain.

Question 6.
The traditional handicrafts industries were ruined under the British rule. Do you agree with this view? Give reasons in support of your answer.
Answer:
Traditional handicraft industries got a set-back during British period. The main reasons were the following:

• The economic policies pursued by the colonial government in India were concerned more with the protection and promotion of the economic interests of their mother country than with the development of the Indian economy.
• During British period, Indian economy was transformed into a mere supplier of raw materials and consumer of the finished industrial products from Britain.

Question 7.
What objectives did the British intend to achieve through their policies of infrastructure development in India?
Answer:
Basic infrastructure such as railways, ports, water transport, posts and telegraphs developed under the British rule. However, the intention was not to provide amenities to Indian population but to satisfy colonial interests. The infrastructural development during British rule and the motives behind them are mentioned below:

Roads were built primarily to serve the purposes of mobilising the army within India and drawing out raw materials from the countryside to the nearest railway station or the port for export. Railways were introduced in India in 1850 to assist British industries in widening the market for their finished goods. The aim of developing postal and telegraph was to enhance the efficiency of British administration.

Question 8.
Critically appraise some of the shortfalls of the industrial policy pursued by the British colonial administration.
Answer:
Following were some of the shortfalls of the industrial policy pursued by the British colonial administration:

• Decline of the indigenous handicraft industries
• Slow progress of modern industries
• Absence of capital goods industry
• Slow growth rate of industrial sector
• Contribution of industrial sector to the GDP remained very small

Question 9.
What do you understand by the drain of Indian wealth during the colonial period?
Answer:
India had been an important trading nation since ancient times. The colonial government pursued the restrictive policies of commodity production, trade and tariff, which adversely affected the structure, composition and volume of India’s foreign trade. As a result, India became the net exporter of primary products and an importer of finished consumer and capital goods.

Although India’s foreign trade is characterised by a large export surplus during the colonial period, the surplus came at huge cost to the India’s economy. The export surplus did not result in any flow of gold or silver into India. Rather, this was used to make payments for the expenses incurred by the office set up by the colonial government in Britain, expenses on war, and the import of invisible items. All these led to the drain of Indian wealth during the colonial period.

Question 10.
Which is regarded as the defining year to mark the demographic transition from its first to the second decisive stage?
Answer:
1921 is regarded as the defining year to mark the demographic transition from its first to the second decisive stage. However, neither the total population of India nor the rate of population growth at this stage was very high.

Question 11.
Give a quantitative appraisal of India’s demographic profile during the colonial period.
Answer:
Population growth had increased at a fast rate after 1921. On the eve of independence, population was increasing and the economy was firmly in a ‘Vicious Circle of Poverty’. The overall literacy level was less than 16 per cent and the female literacy was less than 7 per cent. Infant mortality rate was quite alarming at about 218 per thousand in comparison with the present infant mortality rate of 63 per thousand. Life expectancy was only 32 years in contrast to the present 63 years, Extensive poverty prevailed in India on the eve of independence. The first official census operation ; was exercised in 1881.

Question 12.
Highlight the salient features of India’s pre-independence occupational structure.
Answer:
Following are the salient features of India’s preindependence occupational structure:

• The distribution of working persons across different industries and sectors showed little sign of change during the colonial rule.
• The largest share of workforce (i.e. 72.7 percent) was engaged in primary sector.
• The secondary and tertiary sectors accounted for 10.1 and 17.2 per cent of working population respectively on the eve of independence.
• There were growing regional variation. Parts of Madras Presidency, Bombay and Bengal witnessed a decline in the share of workforce dependent on agricultural sector and increase in the share of workforce in the manufacturing .and services sectors. On the other hand, in states such as Orissa, Rajasthan and Punjab, there had been an increase in the share of workforce dependent on agriculture during the same period.

Question 13.
Underscore some of India’s most crucial economic challenges at the time of independence.
Answer:
At the time of independence, economic challenges before the country were enormous.
(i) British rule used Indian agricultural sector to satisfy their interests. As a result, agricultural productivity was extremely low at the time of independence. There was lack of investment and labour was surplus. Also, the social and economic conditions of farmers were very poor.

(ii) As the country’s world famous handicraft industries declined, no corresponding modern industrial base was allowed to come up and enjoy the benefits of the former. There was a serious need for modernisation, diversification, capacity building and increase of public investment in industrial sector.

(iii) Basic infrastructure was developed during British rule, but to satisfy colonial interests. There was a need to upgrade and expand the existing railway network.

(iv) The level of poverty and unemployment was very high. There was a need for welfare orientation of public economic policy.

Question 14.
When was India’s first official census operation undertaken?
Answer:
India’s first official census was undertaken in 1881. In the independent India, it was undertaken in 1951.

Question 15.
Indicate the volume and direction of trade at the time of Independence.
Answer:
India has been an important trading nation since ancient times. But the restrictive policies of commodity production, and trade and tariff pursued by the colonial government adversely affected the structure, composition and volume of India’s foreign trade.

Consequently, India became an exporter of primary products such as raw silk, cotton, wool, sugar, indigo, jute, etc. and an importer of finished consumer goods like cotton, silk and woollen clothes and capital goods like light machinery produced in the factories of Britain. Britain maintained a monopoly control over India’s exports and imports. As a result, more than half of India’s foreign trade was restricted to Britain while the rest was allowed with a few other countries like China, Ceylon (Sri Lanka) and Persia.

Question 16.
Were there any positive contributions made by the British in India? Discuss.
Answer:
Although the primary intention of the British policies was to benefit their colonial interest, it did have some positive impact on Indian economy. These positive impacts are discussed below:

• Introduction of railways enabled people to undertake long distance travels and hence, break geographical and cultural barriers
• Commercialisation of agriculture widened the scope of primary sector activities.
• Postal and telegraphs services introduced by the British serve the public of the country even today.