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TS Inter 1st Year Political Science Study Material Chapter 1 Meaning, Nature and Scope of Political Science

November 16, 2022October 25, 2022 by Srinivas

Telangana TSBIE TS Inter 1st Year Political Science Study Material 1st Lesson Meaning, Nature and Scope of Political Science Textbook Questions and Answers.

TS Inter 1st Year Political Science Study Material 1st Lesson Meaning, Nature and Scope of Political Science

Long Answer Questions

Question 1.
Define Political Science and explain its scope.
Answer:
Introduction :
Political Science is a premier social science. It is mainly concerned with the study of the state in its relation with Society, Citizens, Associations and the world at large. Aristotle is regarded as the Father of Political Science. He wrote famous book “THE POLITICS”.

Meaning :
The word politics is derived from the ancient Greek word “POLIS” meaning city. State and polity from ‘Poletieia’ meaning government of constitution. Politics came to mean the study of state and government and the Institutions of the state.

Definitions :
Political Scientists gave various definitions on Political Science. They are as follows:
1. J.W. GARNER :
“Political Science begins and Ends with the State”.

2. R.G. GETTLE :
“Political Science is” The historical investigation of the state in the past, an analytical study of the state of present and what the state ought to be in the future”.

3. ROBERT DAHL :
“Political Science is the Scientific study of importance of power, Authority and influence.”

Scope of Political Science :
The scope of Political Science means the subject matter covered by it or the topics which are included in its study. It may be explained in the follow-ing ways :

i) Study of man in relation to the Society, State and Government :
Political science is concerned with the perennial and central issue of establishing proper relationship among state, society and government with individual. Aristotle stated that Man is a social and political animal as well.

ii) Study of State :
Political science explains the origin, evolution and purpose of the state and its intimate relationship between the state and the citizens. It explains the various theories of the origin of the state and it also studies the nature, functions and various theo¬ries of the state.

iii) Study of the Government :
Scope of political science includes the study of government. Political science explains the relationship between state and government. The state realises it’s aims and objectives through the government. Government formulates various policies, programs and their implementation for well being of the people. Political science also studies various forms and structures of the government and their merits and demerits.

iv) Study of Associations and Institutions :
There are several associations and institutions which influence the life of the individual. Political science studies various associations, institutions and their relationship with the state. Political science explains structure, nature and functions of the various associations and institutions. It also studies voluntary organisations and their role in the political processes.

v) Study of Rights and Duties :
Scope of Political Science includes the study or rights and duties of citizens. In recent times, issues relating to civil rights, human rights and civil society got significance in the study of political science.

vi) Studies of National and International Issues :
The scope of Political science comprises the study of national and international affairs. The political science deals with the matters relating to nation state, territorial integrity and it’s sovereignty. It also studies inter-national aspects like armaments and disarmaments, balance of power, defence and security studies. It also covers international law, international organisations etc.,

vii) Study of Comparative Government and Polities :
The importance of the comparative study of government and politics has been increased in recent times. Political science covers the study of various world governments, their structures and functions. It studies the relationship among the different political systems in the world.

viii) Study of Modem Political Analysis :
The 20^th century political science is regarded as a study of sharing and shaping of power, and it’s execution in a day to day political process. Political science studies the modem concepts like, political socialisation, political participation, political development, political culture and political communication.

ix) Study of Public Policies :
Modem political scientist like David Easton, Gabriel A. Almond, Charles Merriam argued that ‘political science is a policy science’. They considered political science as the study of formulation, execution and evaluation of public policies. They also emphasised the study of political parties, pressure groups, mass media and organs of the governments and their influence in the formulation of the public policies. It also studies major polices like Agriculture policy, Industrial policy, Environmental policy, Reservation policy and Education policy etc.

Thus, the scope of political science has, in recent times, extended to the study of above concepts and theories and has become one of the most Relevant social sciences.

Question 2.
Write about the importance of Political Science.
Answer:
Introduction :
Political Science is a premier social science. It is mainly concerned with the study of the state in its relation with Society, Citizens, Associations and the world at large. Aristotle is regarded as the Father of Political Science. He wrote famous book “THE POLITICS”.

Definitions :
Political Scientists gave various definitions on Political Science. They are as follows :
1. J.W. GARNER :
“Political Science begins and Ends with the State”.

2. R.G. GETTLE :
“Political Science is” The historical investigation of the state in the past, an analytical study of the state of present and what the state ought to be in the future”.

3. ROBERT DAHL :
“Political Science is the Scientific study of importance of power, Authority and influence.”

The political science helps to bring out certain changes in the political system and also suggests solutions for the political problems. It also helps to promote good citizenship and formation of responsible government susceptible to public opinion.

1. Political Science explains concepts and theories :
Political Science studies the relations between the individual, society and state. It helps to protect the liberty and freedom of the individuals. Study of Political Science aids to know the political theories, concepts and ethical principles useful for the creation of a progressive society.

2. Political Science examines forms and organs of the government :
‘The study of Political Science enhances the knowledge of the systems of government. It details about monarchy, aristocracy, democracy, dictatorship and other forms of goverment. It speaks about the organs of the government like legislature, executive and judiciary, their functions and inter relations.

3. Political Science enlightens on rights and duties :
Fundamental rights are essential for the people to lead a good life in a political society. The observations made in Political Science help to enlighten the citizens about their respective rights and duties …… all their pros and cons to contribute for a good citizenship.

4. Political Science provides knowledge of the political thinkers :
The study of Political Science provides knowledge of the political thinkers and theories which had influenced the world in different times. There were many political theories, which became popular in different times. The philosophers like Rousseau and Voltaire laid the foundations for French Revolution through their works. In the same way, the writings of Karl Marx led to a revolution in Russia and the ideas of Mao led to a revolutionary trend in China. Mahatma Gandhi provided constructive political leadership to Indian freedom struggle. The study of political science educates about political thinkers.

5. Political science deals with International Relations :
The significance of the Political Science gradually increased as many Sovereign independent countries joined the world political system. It speaks about the inevitable co-operation between different countries. The international relations as a network became very important due to the Industrial Revolution, and its effects. Modernisation, technological development and transport facilities led to formation of regional groups between neighboring countries resulting in growing importance of international relations. Study of Political Science enlightens about all these subjects in detail.

6. Political Science explains world organisations :
The United Nations Organisation has been putting continuous efforts to promote peace, co-operation and friendship among nations of the world. Its agencies are spread throughout the world undertaking various activities for the development of human kind. Political Science acquaints us with all these matters.

Question 3.
Discuss the relationship of Political Science with history and economics.
Answer:
Political Science has intimate relation with other social sciences like History and Economics. Such inter-relation between political science and History as well as relation between political science and Economics can be detailed as below.
a. Political Science – History
b. Political Science – Economics.

a. Political Science – History :
History describes the past. The development of man¬kind and society can be known through History. History being the .story of man, functions as a treasure house of human experiences. It is like a laboratory to all social sciences. The political, economic, social, cultural, religious and literary activity of man can be known only through History. It describes different associations of man from earliest times. History conveys information to the present society, the developments in the past in the areas like state, civilization, culture, religion and economic activity. History is a written record of different events, movements, their causes and inter-relations. History provides information to study the political activity in the past. The birth and development of political ideas and institutions is known through history.

“History without Political Science has no fruit.
Political Science without History has no root”

There has been continuous transformation and development of political institutions since the earliest period of History. The evolution of different political institutions through the ages is recorded in History. History is the foundation of Political Science. A comparative study of the previous political institutions and the contemporary political activity provides a scope to find ideal and stable political institutions in future. The knowledge of political activity is very much essential to understand the events like founding of the Indian National Congress, the French Revolution, the Russian Revolution and the theories like the two Nation Theory of the Muslim League and also to estimate their impact.

In the same way it is possible to study the concepts proposed by Plato, Aristotle and other Philosophers in the light of the knowledge of history of Ancient Europe. Different political thinkers like Machiavelli, Montesquieu and Lord Bryce developed their respective theories basing on the information found in history. As Robbon opined, it is essential for a student to know about the history of his own race to study the constitution and foreign policy of his race. The knowledge of Political Science is essential to history, in the same way as the knowledge of History to Political Science. History and Political Science can contribute for the development of any civilised society in the spirit of mutual co-operation.

b. Political Science – Economics :
Economics studies the aspects like wealth, production, distribution and exchange of goods. It studies about various methods to accumulate wealth. Economics is a sociological study of the aspects like wealth, production and distribution. All the social institutions and political theories place the human life on a right track. A clearly defined political system is very essential for a man to become a good and ideal citizen. Economics helps in different ways to study the human welfare.

Economics tries to co-ordinate file methods of satisfying unlimited wants with limited resources. Lack of peace and dissatisfaction prevail in a society when the economic needs are not satisfied. The Primary needs like food, clothing, shelter, education and medical aid are to be satisfied. Otherwise life becomes sorrowfuL If the basic needs are not satisfied, the individual has to spend all his energy for that purpose only. A poverty sticken society gives scope for the prevalence of immorality and anti-social elements. An individual suffering from hunger, ignorance, ill health cannot be in a position to assess his political aims and responsibilities. He resorts to many crimes to satisfy his hunger. Such individual entertains a spirit to adopt illegal means for his progress. He cannot use his rights properly and discharge his duties. A citizen without basic needs cannot understand the value of right to vote. The communists feel that democracy cannot be successful without a socialist economy. Aristotle, warned that economic inequalities lead to social revolutions.

Even though Political Science and Economics are two different disciplines, their common aim is the welfare of people. The policies related to the production, consumption, proper use of exchange units, removing inflation, contributing for the accumulation of national wealth, promotion of industrial development are very much a part of the activities of a modem State. The impact of economic policies is very much considerable on all the above policies. It is quite possible to solve many economic problems through a political system only.

Short Answer Questions

Question 1.
Write about the relationship of Political Science with sociology.
Answer:
The knowledge of Sociology is essential to a political scientist. It is essential to study the sociological roots to understand the nature of the State. The Greeks never conceived any difference between society and State. In the opinion of Greek philosophers, State is not only a political system but also a social system of commendable value. Social customs help to systematise social set up and social life. The political scientists give importance to the trends of socialisation to understand the behaviour of the citizen as an individual and part of a community.

Of late, political sociology developed as a special science. This very factor shows how much functional is the impact of social institutions on political life. Political parties, groups and public opinion are subjected to the influence of social factors. The political changes in a State cannot be understood without the knowledge of the social conditions and institutions. For instance, an indepth study of political activity in India needs a study of the social factors like caste, religion, area and language and also processes related to them.

As Political Science discusses the organised groups of people, Sociology studies both organised and unorganised groups. Political Science deals with all the political institutions in the past, present and future. Sociology discusses the rise and growth of all institutions in a society in the past and present.

Question 2.
Write about the relationship of Political Science with economics.
Answer:
Political Science – Economics :
Economics studies the aspects like wealth, production, distribution and exchange of goods. It studies about various methods to accumulate wealth. Economics is a sociological study of the aspects like wealth, production and distribution. All the social institutions and political theories place the human life on a right track. A clearly defined political system is very essential for a man to become a good and ideal citizen. Economics helps in different ways to study the human welfare.

Economics tries to co-ordinate the methods of satisfying unlimited wants with limited resources. Lack of peace and dissatisfaction prevail in a society when the economic needs are not satisfied. The Primary needs like food, clothing, shelter, education and medical aid are to be satisfied. Otherwise life becomes sorrowful. If the basic needs are not satisfied, the individual has to spend all his energy for that purpose only. A poverty sticken society gives scope for the prevalence of immorality and anti-social elements. An individual suffering from hunger, ignorance, ill-health cannot be in a position to assess his political aims and responsibilities.

He resorts to many crimes to satisfy his hunger. Such individual entertains a spirit to adopt illegal means for his progress. He cannot use his rights properly and discharge his duties. A citizen without basic needs cannot understand the value of right to vote. The communists feel that democracy cannot be successful without a socialist economy. Aristotle, warned that economic inequalities lead to social revolutions.

Question 3.
What is the nature of Political Science?
Answer:
The traditional writers considered the study of state and government as the proper sphere of political science. The state and government are both closely related. There can be no state without government. The sate and government, therefore, have been the central subjects of the study of political science.”

In the period after the Second World War, political scientists in the West developed new theories and concepts in the discipline of political science. American political scientist, Harold Lasswell, in the 1930 s, defined politics as the science of the study of power because the state is a structure of power and the business of the political scientists is to examine ‘Who gets Power, When and How” ?. Twenty years later during 1950 s, a school of thinking shifted the emphasis and redefined politics as a policy-making science. Modem writers have expanded the scope of political science. They describe political science ‘as the science of the study of power’, or a policy-making science; or a fundamental activity in every organized group of human life.

Broadly speaking, the study of Political Science developed in two strands: the normative and the empirical. In the normative studies of political science, the main focus is on norms, values and goals or ends of political life and activity. Most of the studies of the concepts such as liberty, equality, justice and empowerment and the study of ideologies are covered under normative studies. The empirical studies, both quantitative and qualitative, focus on facts and the actual processes or means that subscribe to the achievement of goals. The study of the functioning Of government and other institutions and the human interactions in different capacities come under empirical studies. These include, the studies on public policy, voting behaviour, political parties, pressure groups and social movements.

Question 4.
Write a brief note on Evolution of Political Science.
Answer:
The beginning of a study of politics (or political thinking) is traced to the ancient Greek philosophers like Socrates, Plato and Aristotle. Among these, Aristotle- is regarded as the father of Political Science because of his objective and systematic (scientific) study of the affairs of the government and politics. Aristotle used the term ‘politics’ to designate the science of the state. He called ‘politics’ a ‘Master Science’ as it covered almost all the activities of individuals in society that includes political and social institutions. In fact, politics was a comprehensive concept for the Greeks. However, the Greek concept of politics underwent changes over the centuries. In other words, the Greek concept of politics is no more valid today. The study of politics has acquired a wider meaning in the modem times.

As a matter of fact, with the evolution of the systems of production through different stages (e.g., hunters and food-gatherers, to agriculture and then to industry/factory) social and economic institutions become important, and so also political organizations evolved and progressed. This resulted in a distinction between three spheres of human activities, namely, ‘politics’, ‘social’ and ’economics’. Henceforth, Political Science came to be defined as ‘science of state and government. Thus, the detailed study of the evolution of the State, its functions and the government constituted the subject matter of the study of Political Science.

With the influence of the study of Behaviourism in natural Sciences, the behavioural Movement has been initiated in Social Sciences. After the Second world war, the behavioural movement which had emerged in 1920’s, became very popular movement in 1950’s. This movement was led by American Political Scientists like Charles Marrium, Gabriel Almond, David Easton etc. Behaviouralism emphasises on the study of political behaviour, perceptions of the individuals towards their own political system. Hence the study of political science confined itself to the study of political behaviour in an organised society. The study area of political science also extends to policy formulation, implementation and evaluation of the political systems. Hence, the political science is also called as policy science. The concept of policy science was propounded by J. Lasswell.

Very Short Answer Questions

Question 1.
Define Political Science.
Answer:
Political Scientists gave various definitions on Political Science. They are as follows.
1. J.W. GARNER :
“Political Science begins and ends with the State”.

2. R.G. GETTLE :
“Political Science is” The historical investigation of the state in the past, an analytical study of the state of present and what the state ought to be in the future”.

3. ROBERT DAHL :
“Political Science is the Scientific study of importance of power, Authority and influence.”

Question 2.
Mention any four points of significance of Political Science.
Answer:

Political Science explains concepts and theories.
Political Science enlightens on Rights and Duties.
Political Science provides knowledge of the political thinkers.
Political Science deals with International Relations.

Question 3.
What is meant by sociology?
Answer:
Sociology is the root of all social sciences. Sociology studies the changes in different social institutions. It discusses the social, ethical, economic and cultural systems in a society. It also studies the human relations, social conditions, origin, growth and development of different systems, their respective forms, the rules, customs and traditions.

Question 4.
How Political Science is different from economics?
Answer:
Political Science differs from Economics in many respects which are as follows :

Political Science is normative whereas economics is descriptive
Political Science deals with values whereas Economics deals with prices.
Political Science is concerned with people whereas economics is concerned with things.
The scope of Political Science is much wider than that of Economics
Political Science tries to secure social welfare through administration whereas economics through better distribution of wealth.

Question 5.
Behaviouralism.
Answer:
It is a modem interdisciplinary approach in Political Science. It seeks to make political Science a real Science. It originated in 1925 but became popular in the USA after the second World War. David Easton, Robert Dahl, Gabriel Almond are important supporters of this approach. It studies political behaviour of people by using Scientific methods of data collection. It is a protest against the Traditional Approach.

Question 6.
Post – Behaviouralism.
Answer:
Post – Behaviouralism is a reaction to Behaviouralism. It brought a change of perspective in political science. Post behaviouralism considered ethics and values as equally important along with the facts and methods.

Question 7.
Master Science.
Answer:
Aristotle used the term ‘Politics’ to designate the science of the state. He called ‘Politics’ a “Master Science” as it covered almost all the activities of Individuals in Society that includes Political and Social Institutions.

Question 8.
Aristotle.
Answer:
The Ancient Greek philosopher Aristotle is regarded as the Father of Political Science because of his objective and scientific study of the affairs of the government and politics. Aristotle used the term ‘Politics’ to designate the science of the state. He called politics a Master Science. He was the disciple of Plato.

TS Inter 2nd Year Economics Study Material Chapter 10 Telangana Economy

November 16, 2022October 24, 2022 by Srinivas

Telangana TSBIE TS Inter 2nd Year Economics Study Material 10th Lesson Telangana Economy Textbook Questions and Answers.

TS Inter 2nd Year Economics Study Material 10th Lesson Telangana Economy

Essay Questions

Question 1.
Write an essay on the structure of Telangana State.
Answer:
The historical background as a backdrop for the birth of Telangana is discussed here under. It was on 1st November 1956, the former A.R state (that existed upto 1^st June, 2014) was formed by merging the Hyderabad state with the former Andhra state.

Former Hyderabad State :
Hyderabad state was a princely state ruled by the Nizams for more than two centuries (1724-1948). It had its own currency, administrative system, transport and communication network including railways and postal services. Urdu was not only the official language, but also the medium of instruction at all levels of education.

When India became independent on 15^th August 1947, the then ruler of Hyderabad state, Mir Osman Ali khan, the Seventh Nizam, preferred to retain the state as an independent entity. All the other princely states agreed to amalgamate with the Indian union and the Hyderabad state continued to remain as a separate unit outside the purview of the Indian sovereignty. During that period, internal unrest generated in the state and the people of the state particularly peasants, revolted against the feudal regime. This is known as the Telangana armed struggle. Under those circumstances, the Government of India compelled the Nizam for the merger of the Hyderabad state with Indian union though an armed intervention which was recorded in history as police action. This merger took place on 17^th September 1948. In the year 1952, general elections were held to the state assembly and a popular government assumed the power with Dr. Burgula Ramakrishna Rao as the Chief Minister.

Six Decades Struggle for Separate Telangana State :

The promises and safeguards to Telangana region made at the time of formation of Andhra Pradesh state were not fulfilled, they were neglected and the resources were exploited. Notable among those safeguards that were flouted are :

The Gentlemen’s Agreement of 1956
The All Party Accord of 1969.
The Eight Point Formula and Five Point Formula of 1969 & 1970, repsectively.
The Judgement of Supreme Court of India in 1972.
The Six Point Formula and the Presidential Order of 1974.
G.O. No. 610 of 1985 and Girglani Commission Report.

As a consequence of this, the Telangana region had lagged behind Seemandhra area in all the vital sectors, contributing to serious imbalances in all the levels of development between Telangana and Seemaandhra. This situation emerged as the root cause for recurring agitations and causing enormous loss of life.

Though, earlier struggles, especially the struggle in 1969 had revived the demand for separate Telangana state it was intensified in the recent decade and in particular from 2009, the decade old struggle has taken place in the form of mass strikes, bandhs, rail roko, blocking national highways, strikes by students, closure of universities and educational institutions, “sakala janula samme” by government employees, open suicides and the unto death hunger strike of Sri K. Chandra Sekhar Rao, TRS President, the then M.P At last, the UPA government declared the .Telangana as 29th state.The “appointed day” was notified as 2^nd June 2014 for bifurcation and formation of Telangana as a separate state with existing 10 districts of Telangana region and the remaining 13 districts of Seemaandhra as A.P. state.

Telangana Topography :
Telangana is situated on the Deccan plateau of Indian peninsula. The region is drained by two major rivers, Godavari with about 79% catchment area and Krishna with about 69% catchment area and several minor rivers such as Bhima, Manjeera, Musi, Pranahita and other smaller rivulets. The annual rainfall is between 900 mm to 1,500 mm in northern Telangana and 700 to 900 mm in southern Telangana from the south west. monsoons. Various soil types exist in the state. About 45% of the forest area of united A.P. is located in 5 districts of Telangana. The state of Telangana is spread over 1,14,840 square kilo meters and consists of 10 districts. It is the 12^th largest state in terms of area and size of the population in the country.

Question 2.
What is GSDP? Explain the trends in GSDP and per capita income in Telangana.
Answer:
Gross State Domestic Product (GSDP) :
Gross state domestic product (GSDP) or state income is the most important indicator for measuring the economic growth of a state. Gross state domestic product may be defined as “the sum of total volume of all goods and services produced in a year within the geographical boundaries of a state accounted without duplication”.

Trends of GSDP in Telangana Economy :
Growth rate of GSDP indicates the performance of a state economy and the sectoral performance reflects the change in the magnitude and composition of different sectors out of GSDP of the state economy over a time.

GSDP, in Telangana it increased from Rs. 3.59 lakh crore to Rs. 9.69 lakh crores in current prices and from Rs. 3.59 lakh crores to Rs. 6.63 lakh crores between 2011-12 and 2019-20 in constant prices. In the same period, the GDP of All – India increased from Rs. 87.36 lakh crores to 203.8 lakh crores in current prices and from Rs. 87.36 crores to Rs. 146.83 lakh crores in constant prices. With regard to year to growth rates in Telangana, the growth rate of GSDP in 2012-13 was 11.7 percent and it increased to 14.3 percent in 2018-19 and 12.6 in currect prices by 2019-20 while in the same period, the growth rate of GDP in all-India decreased from 13.8 percent to 11 per cent and 7.5, respectively, in current prices. Except in 2012-13 and 2013-14, the Telangana state out performed in respect of its GSDP growth rate over GDP growth rate of all India in between 2011-12 to 2019-20.

In constant prices the growth rate of GSDP of Telangana increased from 3 percent to 8.2 percent during 2012-13 to 2019-20. The growth rate of GDP of all India increased from 5.5 percent in 2012-13 to 8.3 percent by 2016-17 then after it decreased to 5 percent by 2019-20. The GSDP growth rate of Telangana when compared to GDP growth rate of all India is less than all India during 2012-13 to 2014-15, but then after it is more than the growth rate of all India.

With regard to the share of Telangana in all India GDP both in current prices, and constant prices ranged in between 4.11 percent to 4.5 percent during 2011-12 to 2019-20.

Per Capita Income at Current Prices in Telangana and All India : The per capita income (PCI) is obtained by dividing the net state domestic product by mid year population of the state/country in the respective year. The per capita income of Telangana vis-a-vis all India and their growth trends at current prices are shown in Table.

The Per Capita Income of Telangana vis-a-vis All India and Their Growth Trends at Current Prices
TS Inter 2nd Year Economics Study Material Chapter 10 Telangana Economy 1

From the above table it is evident that, the per capita income (PCI) of Telangana is much higher than the all India over the years. There is a steup rise in the PCI of the state from Rs. 91,121 in the year 2011-12 to Rs. 2,28,216 in the year 2019-20(AE), registering a growth rate of 150 percent over 2011-12. Whereas the PCI of all India was Rs. 63,462 in the year 2011-12, and it increased to Rs. 1,34,432 in the year 2019-20(AE), registering a growth of 111 percent over 2011-12. This implies that the PCI of the state grew much faster than the All-India PCI.

Question 3.
Write an essay on sectoral contribution of gross state value added of Telangana Ecoriomy.
Answer:
Annual Average Sectoral Growth Rates in GSVA of Telangana State :
The growth rates of primary, secondary and tertiary sectors will be measured in terms of Gross Value Added (GSVA) at basic prices. The constituents of these sectors include :

a) Primary Sector :
This sector consists of sectors like crops,’livestock, forestry and logging, fishing and acquaculture and mining and quarrying.

b) Secondary Sector :
This sector comprise of the sectors such as manufacturing, electricity, gas, water supply and other utility services and construction.

c) Tertiary Sector :
This sector include sectors, namely, trade and repair services, hotels and restaurants, transport (including railways, road, water, air and services incidental to transport), storage, communication and services related to broadcasting, financial services, real estate, ownership of dwellings and professional services, public administration and other services.

The sectoral analysis provides an outline about how well the sectors have performed in the previous years and are expected to perform in the current year.

If we look at the annual average growth rates of these sectors in current prices, in respect of primary sector its growth rate decreased from 21.9 percent (8.6% in constant prices) in 2012-13 to just 2.2 percent (-58% in constant prices) in 2015-16 then after it increased to 17.1 percent in 2016-17, but again it decreased 15.8 percent (10.7% in constant prices) by 2019-20 (AE). Thus, we observe a mixed trend in the growth rate pattern of this sector.

As regards secondary sector, it experienced a negative growth rate in 2012-13 and 2014-15. A highest growth rate of 20.3 percent (21.4% in constant prices) in 2015-16 and a lowest of just 1.6 per cent (0.1% in constant prices) in 2016-17 and a moderate growth of 5.3 per cent . (1.7% in constant prices) by 2019-20 (AE).

The growth rate of tertiary sector ranged between 18.4 percent to 14.1 percent (8.4% to 9.6% in constant prices) during 2012-13 to 2019-20. Overall, we can see a mixed trend, both in current and constant prices, in the growth rates of sectoral GSVA in Telangana state during 2012-13 to 2018-19.

Sectoral Contribution to over all Gross State Value Added (GSVA) in Telangana :
In current prices, the share of tertiary sector is growing at a higher rate (from 52.8 percent in 2011-12 to 65.2 percent in 2019-20AE) while the shares of primary (from 19.6 percent in 2011-12 to around 18.6 percent in 2019-20AE) and secondary (from 27.6 percent in 2011-12 to around 16.2 percent in 2019-20 AE) are declining during the period 2011-12 to 2018-19 in Telangana. We can observe instability in the growth pattern of shares of both primary , and secondary sectors. In contrast to his, we find a gradual and stable increase in the share of services sector during 2011-12 to 2019-20.

Question 4.
Describe the demographic profile of Telangana State.
Answer:
Telangana State through changes in quantity and quality of population. As the size and quality of population shape human resource endowment. They have an angle bearing both on demand generation and supply creation aspects of goods and services. There are significant changes in the size of the population and other demographic features during seven census decade years from 1951 to 2011. The total population of Telangana more than doubled from 1.1 crore in 1951 to over 2.6 crores by 1981, climbing to 3.52 crores by 2011.

In total geographical area of India, the share of Telangana is 3.5% according to 2011 census. Ranga Reddy stands at the top with 52.97 lakhs population as against this Nizamabad stands at bottom with 25.51 lakhs population. Population density is defined as an average number of persons living per square kilometer area compared to all India Telangana is less densely populated. Hyderabad district being the capital city is highly populated with 18,172 persons living her square km.

Population growth rate of Telangana state is marked lower than the growth rate at all India level. In the recent census decade, while Telangana registered and annual growth rate of 1.4%.

The age group consisting of 0-6 years denote child population. In Telangana, the share of child population marginally decreased from 14.2% in 2001 to 10.5% in 2011.

As per 2011 census, the percentage of SC population to total population is 15.44% as against to this, the percentage of S.T population to total population is 9.34% in Telangana state. Among Sc’s, the highest percentage of population is to be found in Karimnagar district with 18.80% of the total and the lowest in Hyderabad district with 6.29% of the total. As far as ST’s are concerned, the highest percent of their population is found in Khammam district with 27.37% of the total ST population.

As per the 2011 census, the sex Ratio is 990 females per 1,000 males in Telangana, where as it is 940 females per 1,000 male population in India. Thus, Telangana state has relatively more female population than that is recorded at the national level.

Share of Immigrants in Telangana Population : The higher growth of urban population in Telangana state is mainly due to migration of population from Andhra and partly from other states. The share of Telangana in the erstwhile Andhra Pradesh was 42 percent in 2011. From 1961 to 2011, total migration of population is 62 lakh. Rangareddy district stood top in urban-ization with 70% people living in towns, which is mainly due to development of towns and suburban areas around Hyderabad that fall in Rangareddy district.

Question 5.
Describe the status of education and Health sectors in Telangana State.
Answer:
Education in Telangana :
Education is a crucial element in strengthening the human resources and economic development of a country. Education helps in creating more productive labour force. The 45^th Article of the Indian Constitution has laid the responsibility on the states to provide free and compulsory education to both boys and girls of the age group of 6 tb 14 years.

Literacy Rates in Telangana :
According to the Population Census, 2011 the literacy rate of Telangana is 66.54 per cent. However considerable variations are observed in literacy rates among different groups like rural and urban, within districts, age groups, social groups and male and female.

As far as literacy levels in districts are concerned, among 33 districts of the state, Hyderabad stands at top with 83.25 percent literacy rate and Jogulamba Gadwal district stands at the bottom with 49.87 per cent.

1. Education Profile of the State :
a. Enrolment :
During the year 2017-18, about 58.71 lakh children were enrolled in all the schools, of them 53 percent were enrolled in private schools, 47 percent in government schools including the schools run by the centred government, local bodies and aided schools.

b. Gross Enrolment Ratio (GER) :
In 2017-18, the gross enrolment rate among children in primary schools was 98.76 for boys and 98.05 for girls and in upper primary schools, it was 87.32 for boys and 88.47 for girls. Overall, the GER for girls was higher than boys in upper primaiy schools in Telangana.

c. Pupil – Teacher Ratio (PTR) :
During 2018-19, the pupil-teacher ratio observed was 18.90, 14.12, and 17.85 for primary, upper primary and secondary schools respectively. The overall PTR is 17.67 for the year 2018.19.

2. School Education :
a. Samagra Shiksha Abhiyan :
Hitherto the state government implemented the centrally sponsored schemes (a) ‘Sarva Siksha Abhiyan’ (SSA) to universalise elementary education; and (b) ‘Rashtriya Madhyamik Shiksha Abhiyaan’ programme (RMSA) to improve the access and quality of secondary education.

b. Kasturba Gandhi Balika Vidyalaya (KGBV) :
There were 391 KGBVs at the time of formation of the state and this number increased to 475 by 2017-18. Government of India supports only classes VI to VIII under KGBVs, however, state government extended the scheme by adding IX and X classes to facilitate continuation of girls’ education upto Class-X and to avoid dropouts.

e. Model Schools :
194 model schools were started in the academic year 2013-14 in the state, with an objective to provide quality education in English medium by highly qualified teachers. As the scheme was terminated by the centre, the government of Telangana took over the responsibility of running model schools from the year 2015-16 onwards.

3. Intermediate Education :
The Department of Intermediate Education administers intermediate education system in the state. There are 2,558 junior colleges with a total enrolment of 7.18 lakh students. The department also offers 23 vocational education courses at intermediate level in junior colleges in the state with special focus on job oriented courses.

4. Higher Education:
a. Collegiate Education :
The objective of Department of Collegiate Education is to provide access, equity and quality in higher education. Towards this direction, state government is making all efforts with government of India funds under Rashtriya Uchchatar Shiksha Abhiyan (RUSA).

b. Degree Online Services, Telangana (DOST) :
The government of Telangana has introduced online admissions for under graduate courses (BA/BCom/BSc/BBA/etc) in the state of Telangana in the year 2016 through web based system called Degree Online Services, Telangana (DOST). In the year 2018-19, a total of 2,00,472 students were admitted in all degree colleges through DOST. Out of which 42,688 were admitted in government degree colleges.

c. Technical Education :
The department manages the government polytechnics and monitors the private unaided polytechnics and professional colleges. At present there are 820 diploma and degree level professional institutions in the state with a total intake of 1,36,805.

5. Social Welfare Educational Institutions :
To bring social equity and improve access to education for children of SCs, STs, BCs, minorities and differently-abled children, the state has been providing hostel and residential school facilities, supply of books and other provisions at free of cost.

a. Scheduled Castes Residential Schools :
Telangana Social Welfare Residential Educational Institutions Society (TSWREIS) is running 268 (out of which 175 meant only for girls) residential educational institutions (from 5^th standard to undergraduate level) in the state for Scheduled Caste (SC) children. Of the 268 institutions, 134 were sanctioned after formation of the state.

b. Schedule Tribes Residential Schools :
(a) Telangana Tribal Welfare Residential Educational Institutions Society (TTWREIS) (Gurukulams) : There are 175 Gurukulams in the state (b) Ashram Schools : There are 321 ashram schools in the state, (c) Government Primary Schools (GPS) : Tribal Welfare Department is running 1,427 government primary schools with 1^st to 3^rd or 5^th classes and around 22 thousand students.

c. Backward Classes Welfare Residential Schools :
Mahatma Jyothiba Phule Telangana Backward Classes Welfare Residential Education Institutions Society (MJPTBCWREIS) is es-tablished to facilitate access to quality education for the students of backward classes (BCs) and economically backward classes (EBCs).

d. Minority Residential Institutions :
Telangana Minorities Residential Educational Institutions Society (TMREIS) established with the objective of providing a high quality education A total of 216 minority residential institutions including 12 colleges with 79,424 students are functioning in the state.

Health Sector in Telangana :
In order to reach the goal of “Health for All” of World Health Organization (WHO), Government of Telangana is implementing different programmes like National Maternity Benefit Programme, Integrated Child Development Programme and Supplementary Nutrition Programme for the women in reproductive age group and the programme of Balika Samrudhi Yojana for children.

As per SEO – 2020, in Telangana state, there are 4,797 health sub-centres, 633 primary health centres, 249 urban primary health centres, 90 community health centres, 19 area hospitals, 29 district hospitals, 9 medical college hospitals, 12 speciality hospitals and 2 super speciality hospitals.

Health Sector related Programmes of Telangana :
After formation of the state, Telangana government initiated several health related programmes. Some of them are presented here under :

a) Kanti Velugu :
People mostly tend to live with eye problems or postpone until it is too late. Particularly, the women and elderly persons neglect eye vision problems. To address this problem, the government has launched Kanti velugu programme with a vision to build avoidable blindness free Telangana through simple pair of glasses and cataract surgery.

b) Basti Dawakhana :
Basti Dawakhana is an initiative to offer quality health services to urban poor. One basti dawakhana caters to 5000 – 10000 population. The basti dawakhana is located within the urban slum. Currently 104 basti dawakhanas are functioning in the state.

c) Health and Wellness Centres :
Health and Wellness centres will provide comprehensive health care, including for non-communicable diseases and maternal and child health services. These centres will also provide free essential drugs and diagnostic services. Currently 636 PHCs, 86 sub-centres, 104 Basti dawakhanas and 227 UPHCs have been converted as Health and Wellness Centres.

d) Telangana Vaidya Vidhana Parishad (TWP) Hospitals :
These hospitals (107) functioning under the control of TWP mainly cater to the maternity and child health care services, besides general medicine, general surgery, ophthalmology, paediatrics, orthopaedics, dermatology, ENT, etc.

e) AYUSH (Ayurveda, Yoga, Naturopathy, Unani and Homoeopathy) :
The Telangana government along with the National AYUSH Mission (NAM) is encouraging the AYUSH system of medicine. Presently 860 dispensaries and institutions are functioning under the AYUSH department.

f) Aarogyasri Health Care Trust :
Aarogyasri Scheme (AS) is a unique government sponsored health insurance scheme being implemented by Aarogyasri Health Care Trust in the state, with the objective of assisting below poverty line families. The scheme provides end-to-end cashless medical services for identified diseases.

g) KCR Kit :
The Telangana state government launched a new programme called KCR Kit on 2 June 2017 to provide compensation to pregnant women (pre and post natal periods) living below poverty line, who are receiving health services from public health institutions in the state, @ Rs. 12,000 (for a male child) and Rs. 13,000 (for a female child) for wage loss.

Question 6.
Explain the irrigation facilities available in Telangana State.
Answer:
Irrigation Sources in Telangana :
According to Arthur Lewis, “the revolutionary change in the farm sector can be obtained only through the provision of adequate irrigation facilities and agricultural inputs”. Since, water is an important factor in agricultural production; government should ensure adequate and timely supply of water.

The main sources of irrigation in Telangana state can be classified into four categories, viz. (i) canals, (ii) wells, (iii) tanks and (iv) other sources.

Source – wise Irrigation in Telangana (in percentage)
TS Inter 2nd Year Economics Study Material Chapter 10 Telangana Economy 2

The above table shows gross irrigated area under different sources from 1960-61 to 2013-14. From the table, it can be seen that tank irrigation which had a higher share of 60 percent in 1960-61, gradually declined to 8.94 percent in 2013-14, whereas the share of well irrigation increased from 19.01 percent to 73.83 percent during the same period.

The present status of irrigation projects in Telangana state is as follows :

A. Godavari River Basin :
i) Kaleshwaram Project :
Kaleshwaram Project has been conceived from the erstwhile Dr. B.R. Ambedkar Pranahita – Chevella Sujala Sravanthi project. Originally, Dr. B.R. Ambedkar

Pranahita – Chevella Sujala Sravanthi was proposed to utilize 160 TMC of allocated water of Godavari basin as per Godavari Water Dispute Tribunal (GWDT) award.

The original project has been divided into two components viz., Kaleshwaram and Dr. B.R. Ambedkar Pranahita Project (Adilabad) as follows :

(a) Dr. B.R. Ambedkar Pranahita Project :
To divert 20 TMG of water by constructing a barrage across river Pranahita near the confluence of Wainganga and Wardha rivers at Tummidihetti (V), Koutala (M), Kumram Bheem district for irrigating an ayacut of 2,00,000 acres in East Adilabad district against the original proposed 56,500 acres in the district.

(b) Kaleshwaram Project :
Construction of one barrage across river Godavari at Medigadda near Kaleshwaram and two more barrages between Medigadda (Lakshmi barrage) and Sripada Yellampally Project at Annaram and Sundilla and to convey water from Sripada Yellampally Project to the command area spread over in 7 districts of Telangana.

(ii) Alisagar Lift Irrigation Scheme :
Through this it is intended to supplement irrigation facilities to the gap ayacut of the Nizam Sagar Project in Navipet, Renjal, Yedapally, Nizamabad, Dichpally and Makloor mandals of Nizamabad district to the extent of 53,793 acres. The scheme proposes lifting 720 cu secs of water from right bank of Godavari rivesr near Kosli village.

(iii) Argu 1 a Raj a ram Guthpa Lift Irrigation Scheme :
Through this it is intended to supplement the irrigation facilities to the gap ayacut of the Nizam Sagar Project in Nizamabad district to the extent of 38,792 acres lying under the distributaries D74 to D82 of the Nizam Sagar Project.

(iv) Choutpally Hanmanth Reddy Lift Irrigation Scheme :
Through this it is proposed on the Shetpally tank, which is fed by Distributary D4 of Sri Rama Sagar Project – Laxmi canal, is taken upto provide irrigation facility to an ayacut of 11,625 acres in 18 villages.

(v) Lendi Interstate Project :
This is an interstate major irrigation project between Telangana and Maharashtra. The head works are loqated in Nanded district of Maharashtra. This project proposes to irrigate 49r000 acres, out of which the irrigation*potential would be 22,000 acres in Telangana and 27,000 acres in Maharashtra.

(vi) M. Baga Reddy Singur Project :
The Singur project has been constructed across river Manjeera, a tributary of the river Godavari near Singur village, Sangareddy district, with a gross capacity of 29.91 TMC.

(vii) J. Chokka Rao Devadula Lift Irrigation Scheme :
This scheme contemplates for lifting of water from Godavari river near Gangaram (V), Eturunagaram (M), Jayashankar district to irrigate 6.21 lakh acres in upland drought-prone areas of Warangal Urban.

(viii) Lower Penganga Project :
This is a joint project between the states of Maharashtra and Telangana on the river Penganga, which is a tributary of the river Godavari. The headworks are located near Tadsoali village in Ghatanji taluk of Yavathmal district of the Vidharbha region in Maharashtra state. The net available yield is estimated to be 42.67 TMC and shared in the ratio of 88:12.

(ix) Sita Rama Lift Irrigation Scheme :
After formation of Telangana state, the government has takenup this duly combining both Rajiv Dummugudem and Indira Sagar Rudramkota Ayacut and uncovered an ayacut of about 1.00 lakh acres totalling to 5.00 lakh acres in Bhadradri Kothagudem, Khammam and Mahabubabad districts.

(x) Thupakulagudem Barrage (Sammakka Barrage) :
The government had taken up construction of barrage at Kanthanapalli, Mulugu district. The project envisages lifting of 50 TMC of water from Godavari river at Kanthanpalli. The government approved the proposals to shift the barrage location from Kanthanapally (V) to Thupakulagudem (V) Warangal rural. Telangana government proposed to rename this project as “Sammakka Barrage”.

(xi) Sri Kumuram Bheem Project :
This is a medium irrigation project proposed across Peddavagu stream near Ada (V), Asifabad (M) and (Dist). The project is proposed to irrigate an ayacut of (18,421 Ha) 45,500 acres covering 69 villages in 4 mandals i.e., Asifabad, Wankidi, Kagaznagar and Sirpur (T) of Asifabad district.

(xii) Palemvagu Project :
This is a medium irrigation project across Palemvagu stream, a major tributary of river Godavari. It is located near Mallapuram village, Venkatapuram mandal of Jayashankar Bhupalapally district. It provides irrigation facilities to 4,100 Ha. (10,132 acres) kharif wet and 1250 Ha ID rabi ayacut and drinking water supply.

(xiii) Sri Ramsagar Project :
It was constructed on the Godavari river at Pochampadu village in Nizamabad. The districts covered under this project are Karimnagar, Warangal, Adilabad, Nalgonda and Khamam. Area irrigated under this project is 4 lakh acres.

(xiv) Nizamsagar Dam :
It is a reservior constructed across the Manjeera river, a tributary of the Godavari river between Achampet and Banganpalle villages of Nizamabad district. It provides irrigation facilities to the area of 2.31 lakh acres.

(xv) Kadem Project :
It is located in Adilabad district on kadem river. Area irrigated under this project is 25,000 areas in Adilabad district.

B. Krishna River Basin :
i) Mahatma Gandhi Kalwakurthy Lift Irrigation Project :
This project is proposed to provide irrigation facilities to an extent of 4.10 lakh acres and to supply drinking water to chronically drought-prone upland areas in the erstwhile Mahabubnagar district. Fourty TMC of water is proposed to be lifted in the three stages from the foreshore of Srisailam reservoir.

ii) Rajiv Bhima Lift Irrigation Scheme :
This scheme envisages lifting of water from the Krishna river at two different places : One at Panchadevpad, the foreshore of the Jurala Project and another at the foreshore of the Ookachetty vagu project at Ramanpad for irrigation in the chronically drought-affected upland areas in part of 15,mandals and to provide drinking waer to the enroute 196 villages of Mahabubnagar district.

iii) Jqwahar Nettempadu Lift Irrigation Scheme :
This scheme ewisages the lifting of 21.425 TMC of water from the forehsore of Priyadarshini Jurala project reservoir to provide irrigation facilities to 2 lakh acres in the drought-prone upland areas of Gadwal and Alamput constituencies, covering about 148 viollages in eight mandals.

iv) Priyadarshini Jurula Project :
This is a multi purpose project across the river Krishna, near .Revulapally village in Jogulamba-Gadwal district. The project is intended to irrigate an ayacut of 1.02 lakh acres under the left main canal (NTR canal) and right main canal (Nalla Somanadri canal) in drought prone mandals of Atmakur, Kothakota, Pebbair of Wanapathy district.

v) Rajoli Banda Diversion Scheme :
The construction of anicut was started in 1946 and completed by 1958. The water whs supplied to the 143 km long Rajolibanda diversion scheme (RDS) canal to benefit a drought area of 15 villages in Manvi taluk of Karnataka, and eight villages in Gadwal taluk, 67 villages of Alampur taluk in erstwhile Mahabubnagar district.

vi) Koilsagar Lift Irrigation Scheme :
This project was constructed at Bollaram village of Devarakaddra mandal, Mahaboobnagar district in 1955 to irrigate an ayacut of 12,000 acres in Amarchintha constitutency in Mahaboobnagar district.

vii) Palamuru-Rangareddy Lift Irrigation Scheme :
This scheme envisages irrigating an ayacut of 12.30 lakh acres in upland areas of Nagarkumool (1 lakh acres), Mahabubnagar (4.14 lakh acres), Rangareddy (3.34 lakh acres), Vikarabad (3.22 lakh acres) and Nalgonda (0.30 lakh acres) districts and drinking water requirement to en-route villages, GHMC and industrial water requirements from the foreshore of Srisailam reservoir during flood season.

viii) Ghattu Lift Irrigation Scheme :
It envisages irrigating an ayacut of 28,000 acres in upland areas of Ghattu, Dharur and K.T. Doddi mandals of Jogulamba Gadwal district.

ix) Dindi Lift Irrigation Scheme :
The upland areas of Nalgonda district are endemi- cally drought prone besides large areas are in grip of fluoride. The only source of water that can be brought to this area to mitigate the above problems is the river Krishna. The Dindi LIS envisages providing irrigation facilities to 3.61 lakh acres and drinking water to four districts, i.e., Nagarkurnool, Nalgonda, Yadadri-Bhuvanagiri and Rangareddy.

x) Udayasamudram LIS :
This scheme envisages lifting of 6.70 TMC of water from the foreshore of Udayasamudram balancing reservior of AMR SLBC project for irrigating 1 lakh acres of ayacut in chronically drought-affected upland areas of Nakrekal, Nalgonda; Munugode. Thungathurthy assembly constituencies of Nalgonda district.

xi) Nagarjuna Sagar Project :
The biggest in the world constructed on the river Krishna in the border of Nalgonda and Guntur districts. Its right canal irrigates 1.11 million acres to Andhra and 0.32 million acres in Telangana.

xii) Srisailam Project :
This project was constructed on Krishna river in the border of Mahabubnagar and Kumool districts. Area irrigated under this canal is 4.20 lakh acres.

Question 7.
Assess the growth and perspectives of IT and ITeS sectors in Telangana state.
Answer:
FT and HfeS Sectors in Telangana; The state holds a leading position in IT and information technology enabled services (ITeS) in the country in terms of production and exports. Rapid changes in technology in the IT sector gave rise to new opportunities, especially in big data analytics, cyber security; cloud computing, animation and gaming, etc. Hyderabad, the capital of Telangana, is now recognised as one of the leading IT hubs globally. It houses over 1500 iT/ITeS companies, both large and small, which together employ over 4.3 lakh professionals, besides providing indirect employment to over 7 lakh people. There has been robust growth in the performance of the IT/ITeS sectors in the state, since 2014-15. It can be witnessed from the given table. There has been a sharp increase in all parameters i.e., in ritunber of units, employment and exports of IT&ITeS in Telangana during 2014-15 to 2016-17.

Growth of IT and ITeS in Telangana
TS Inter 2nd Year Economics Study Material Chapter 10 Telangana Economy 3

In 2018-19, the total value of software and IT Product exports of the state accounted for Rs. 1,09,219 crore (US$ 15.6 billion). Telangana state contributes over 11% share ofthe country’s IT, exports and Hyderabad ranks 2nd in terms of total revenues from IT sector in the country.

IT Policy Rrame work :
Government of Telangana, in order to augment the growth in IT/ ITeS sector and attract investments and employment generation, has framed an ICT policy with an objective to make the state the most preferred technology investment destination in the country. The following are some important initiatives of IT and ITeS :

i) IMAGE Tower :
Government is establishing a dedicated work place for development of animation, gaming and VFX industry i.e., IMAGE Tower with state of the art infrastructure and services. IMAGE Tower is being developed in an area of 10 acres (in Raidurgam village,
E.R. district) with a project cost of Rs. 1,000 crore on a public private partnership (PPP) mode

ii) Telangana Fiber Grid (T-Fibre) Project :
Government of Telangana has initiated this project in 2015. Its vision is to establish a state-of-the-art network infrastructure that would facilitate the realization of Digital Telangana to 10 Zones (33 districts).

iii) Electronic Services Delivery (BSD) :
Electronic Services Delivery (ESD), Department of ITE&C, government of Telangana is the nodal agency for delivery of government services to citizens and business with focus on improving efficiency, transparency and accountability for the government service delivery. The obejctive is to provide smart, citizen centric, ethical efficient and effective governance facilitated by technology towards Digital Telangana.

iv) Telangana Academy for Skill and Knowledge (TASK) :
Government of Telangana has creaed a unique institution called Telangana Academy of Skill and Knowledge (TASK) to develop a skilled work force in IT and ITeS, life sciences, healthcare, aerospace, banking and financial services. It is setup as a non-profit organisation in partnership with academia and industry. TASK strengthens the quality of graduates coming out of degree and engineering colleges by imparting industry-ready skills, both technical and non-technical (soft skills).

A part from the above, the government of Telangana is developing IT incubation centres in Warangal, Karimnagar, Khammam and Nizamabad districts to ensure technology oriented jobs for youth.

Question 8.
Briefly explain the development and welfare programmes of the government of Telangana.
Answer:
After formation of the state, a number of programmes have been taken up by the Telangana Government to improve the living standards of poor people. These progress can be categorised as under.

A) Development Welfare Progermme for All:
1) Aasara Pensions Scheme :
‘Aasara’ pensions scheme is meant to protect the most vulnerable sections of society in particular the old and infirm, people with HIV-AIDS, widows, incapacitated weavers and toddy tappers, who have lost their means of livelihood with growing age, in order to support their day to day minimum needs required to lead a life of dignity and social security.

This Scheme was launched at Kothur in Mahabubnagar district on Nov 8,2014. The state government enhanced the Aasara monthly pension from Rs. 200 to Rs. 1000 for the old aged, widows, weavers, toddy tappers and AIDS patients and Rs. 500 to Rs. 1500 for disabled persons.

ii) Aarogya Lakshmi :
With ah aim to enhance the levels of nutrition in pregnant and lactating women, Telangana government is providing one nutritious meal everyday to pregnant women and the children below the age of six, living below poverty line, through Anganwadi centers. The scheme was launched on January 1,2015.

iii) Amma Vodi :
The government introduced this scheme with an objective to reduce infant and maternal mortality rates in state. Through this programme, financial as well as medical assistance and transport facility is provided to pregnant women before and women who deliver their babies in the government hospitals.

iv) Mission Bhagiratha :
It was launched on Aug 7,2016 in Komati Banda (V) Gajwel, Medak District. This programme was conceived to provide 100 litres per capita per day (LPCD) of treated and piped water in rural areas, 135 LPCD in municipalities, and 150 LPCD in municipal corporations.

v) Housing for Poor :
Through this programme the Telangana government is intending to provide quality and respectable housing to the poor. The ‘housing for the poor1 plan provides for two and three storied buildings with the 2 BHK flats in Hyderabad and other urban areas while they are to be built as independent houses in rural areas.

vi) Bice Distribution :
This programme was launched from 1st January, 2015. Telangana state Civil Supplies Corporation in supplying rice under PDS @ 6 kgs per person at Rs. 1 per kg without any ceiling on the number of members in the family. To arrive at the eligibility of the BPL families, the family income limit in rural areas has been increased to Rs. 1.50 lakh and in urban areas to Rs. 2 lakh.

B, SC/STi Development and Welfare Programmes :
1) SC and ST Special Development Fund: Through SC/STs special development fund (SDF) Act, 2017, government has formulated two budget heads, namely:
i) ‘SC Special Developoment Fund (SCSDF); and
ii) ‘ST Special Development Rind (STSDF)’.

2) Scheduled Castes Welfare :
In Telangana, the Scheduled Castes Development De-partment co-ordinates and monitors the implementation of the following SC welfare schemes.

a) Kalyana Lakshmi for SCs :
The government launched this scheme on 2nd October, 2014. A one-time financial assistance of Rs. 51,000/- was being provided to the brides family at the time of marriage to meet the marriage related expenses of a Telangana resident girl of over 18 years of age belonging to SC community with a parental income not exceeding Rs. 2 lakh, and further to Rs. 1,00,116 in 2018.

c) Land Purchase Scheme :
The government of Telangana launched this programme for the benefit of the poorest of the poor SC women families. Under this scheme, an extent of 15,044.35 acres of land has been purchased and distributed to 5,930 beneficiaries at a cost of Rs. 657.71 crore from 2014-15 to 2019-20.

3) Scheduled Tribes Welfare :
The government of Telangana launched the following schemes for the integrated development of the scheduled tribes :

(a) Kalyana Lakshmi for STs :
This programme was launched on 2nd October 2014. A one-time financial assistance of Rs. 1,00,116/- shall be granted at the time of marriage to each ST girl who attains the age of 18 years.

(b) Economic Support Schemes :
Under this scheme, financial assistance to tribal population is provided in the fields of agriculture, horitculture, fisheries, minor irrigation, animal husbandry and self-employment.

(c) Forest Rights Act, 2006 :
Under this Act, individual titles were distributed to 93,494 forest dwellers (tribals) covering an extent of 3,00,092 acres. The forest and right holders have right for self-cultivation and the land is non-transferable, inalienable, but heritable. During the year 2018-19, 91,927 farmers were distributed with an extent of 2.99 lakh acres under Rythu Bandhu scheme.

C. BCs Development and Welfare Programmes:
The welfare schemes launched by the state government for the welfare of BCs include:

1. Kalyana Lakshmi Scheme for BCs :
The government extended the scheme of Kalyana Lakshmi to backward classes (BCs) and economically backward classes (EBCs) in the year 2016-17.

2. Most Backward Classes Development Corporation :
It was established in 2017 to with a sharp focus on improving the social, educational and financial conditions of most backward classes (MBQ among BCs. Rs. 1,000 crore has been allocated in the financial year 2018-19 and 13,367 beneficiaries were identified.

D. Minorities Development and Welfare Programmes :
In order to improve the socioeconomic conditions of minorities the state government has formulated several schemes. Some of them sire as follows :

a) Bank Linked Subsidy Scheme :
The scheme is being implemented for minorities to setup viable self-employment business units. The financial assistance from the Telangana State Minorities Finance Corporation is by way of subsidy, which is linked to the credit component from banks.

b) Training, Employment and Skill Development :
The minorities department extends training and skill development and arranges self-employment for minority youth through the Minorities Finance Corporation. New schemes for training have been introduced in collaboration with NAC, department of youth affairs and SETWIN.

c) Shaadi Mubarak Scheme :
Under this scheme, the government gives a one-time .grant of Rs. 1,00,116/- to the eligible minority bride’s family at the time of marriage.

Short Answer Questions

Question 1.
Explain about sectoral growth rate trends of Telangana economy.
Answer:
Answer:
Annual Average Sectoral Growth Rates in GSVA of Telangana State :
The growth rates of primary, secondary and tertiary sectors will be measured in terms of Gross Value Added (GSVA) at basic prices. The constituents of these sectors include :

a) Primary Sector :
This sector consists of sectors like crops,’livestock, forestry and logging, fishing and acquaculture and mining and quarrying.

b) Secondary Sector :
This sector comprise of the sectors such as manufacturing, electricity, gas, water supply and other utility services and construction.

The sectoral analysis provides an outline about how well the sectors have performed in the previous years and are expected to perform in the current year.

Question 2.
Write about demographic features of Telangana state.
Answer:
Telangana State through changes in quantity and quality of population. As the size and quality of population shape human resource endowment. They have an angle bearing both on demand generation and supply creation aspects of goods and services. There are significant changes in the size of the population and other demographic features during seven census decade years from 1951 to 2011. The total population of Telangana more than doubled from 1.1 crore in 1951 to over 2.6 crores by 1981, climbing to 3.52 crores by 2011.

Population growth rate of Telangana state is marked lower than the growth rate at all India level. In the recent census decade, while Telangana registered and annual growth rate of 1.4%.

The age group consisting of 0-6 years denote child population. In Telangana, the share of child population marginally decreased from 14.2% in 2001 to 10.5% in 2011.

Question 3.
Discuss the Agricultural economy of Telangana.
Answer:
Agricultur sector is mainly rainfed and depends to a significant extent on the depleting gorund water resources. As nearly 55.49% percent of the state’s population is dependent on farm activity for livelihood. The share of agriculture sector in Gross State Value Added (GSVA) is 18.1% in current prices (15.6% in constant prices) of 2018-19 (FRE) and 18.6% (16% in constant prices) of 2019-20 (AE).

Telangana is the 12^th largest State in India in terms of geographical area with 112.08 lakh hectares of which about 60% of the area is arable. In the year 2018-19, about 48.98 lakh hectares area was under net cropped area and 60.59 lakh hectares was gross cropped area. Forest occupies 26.98 lakh hectares, accounting for 24.07% of the total geographical area. About 8.34 lakh hectares of land is put to non-agricultural uses, 15.78 lakh hectares is kept follow, 6.07 lakh hectares area is not fit for cultivation and the remaining 5.94 lakh hectares area is classified as of permanent pastures etc.

1. Net and Gross Area Sown :
The net area sown in 2018-19 was 46.60 lakh hectares representing 41.50 percent of geographical area spread across the districts.

2. Area under food and Non-food-Crops in Telangana :
Food crops broadly consist of cereals, millets, pulses and non-food crops include cotton, oil seeds, flowers etc. The food crops were cultivated in an area of 37.14 lakh hectares during the year 2017-18. The non-food crops were cultivated in an area of 23.45 lakh hectares during the year 2017-18.

Food crops account for lion’s share in total cropped area of the State. The share food and non-food crops in total cropped area was 53% and 47% respectiely in 2015-16 and it is 61.2% and 38.8%, resectively in the year 2018-19. In Telangana, there has been a gradual decline in
food crops from 70.8% in 2001-02 to 61.2% in 2018-19 mainly on account of decline in area under coarse grains.

3. Area under Food and Non-Food Crops in 2018-19 :
Gross area sown in Telangana during 2018-19 under kharif and rabi seasons was 57.75 lakh hectares. 45.0 lakh hectares area cultivated in kharif season in 2018-19, about 53.9 percent was under food crops and the rest 46.1 percent was under non-food crops. However, the share of food-crops was 87 percent with a cultivated area of 11.07 lakh hectares, out of the total cultivated area of 12.75 lakh hectares during rabi season.

4. Operational Landholdings :
The average size of the operational landholding in the state is 1.00 hectare (2.47 acres) in 2015-16 which is less than the national average size of 1.08 hectares and declined from 1.12 hectares in 2010-11.. It is noteworthy that the operational landholding size of marginal and small farmers constitutes about 80% of the total operational holdings in the state. There had been a decline in landholding size of semi-medium, medium and large categoreies in the year 2015-16, when compared with 2010-11.

5. Agricultural Sector Flagship Programmes of Telangana :
a) Rythu Bandhu :
Rythu Bandhu scheme is aimed at empowering the farmers of the state of Telangana by providing them with an investment support to relieve them from the burden of debt. It was launched on May 10th 2018. The government provides investment support for agriculture and horticultue crops by way of gmat of Rs. 4,000/- per acre to all farmers (pattadars) each season (Rs. 8,000 per annum) for purchase of inputs like seeds, fertilizers, pesticides, labour and other investments in the field operations of farmer’s choice for the crop season.

b) Rythu Bhima :
The government of Telangana launched Rythu Bima scheme on August 15, 2018. Its objectives is to provide financial relief and security to the family members/ dependents of the deceased farmer incase of his/her death. The scheme provides an insurance cover of Rs. 5 lakh to every farmer.

Question 4.
Explain the industrial development in Telangana.
Answer:
Industrial Sector in Telangana :
The state is one among the major industrial states in the country and it is ranked 6th in terms of industries and ranked 8th in terms of gross value added.from industries. The share of industrial sector contribution to GSVA at current prices was 17.4% (19.9% at constant prices) in 2018-19 (FRE) and it declined to 16.2% (18.7%) at current prices) in 2019-20 (AE).

As per Annual Survey of Industries data, in Telangana state the number of industries increased from 7,357 in 2008-09 to 10,279 in 2012-13, 11,068 in 2013-14, 11,995 in 2014-15 and 12,353 in 2015-16, registering a growth rate of 68 percent in number of factories during over 2008-09 and 3 percent ovef 2014-15 in the state. The total Gross Value Added (GVA) of manufacturing units in the state was Rs. 24,117 crore in 2008-09, which increased to Rs. 34,322 crore in the year 2014-15 and Rs. 44,840 crore in 2015-16 indicating a growth of about 85 percent over 2008-09 and about 31 percent over 2014-15.

1. MSME Sector in Telangana :
Micro, Small and Medium Enterprises (MSME) provides complementary products to large industries as ancillary units arid contribute enormously to inclusive growth and region balanced development of the state. This sector plays a pivotal role in providing employment opportunities at comparatively lower capital cost to those who are low skilled.

There has been a steady growth in the number of MSME registrations over the years in Telangana. As many as 8,435 units have commenced their operations since formation of the state, with an investment of about Rs. 11,847 crore by providing additional employment opportunities to about 1.59 lakh persons in all micro, small and medium units durint 2015-19.

2. New Industrial Policy of Telangana :
Telangana state, after emerging as the 29th state of the country, unveiled its new ‘Industrial Policy Framework, 2014’. The vision for iindustrialization of the state is “Research to Innovation; Innovation to Industry Industry to Prosperity”. The industrial policy framework is driven by the goal of “Innovate, Incubate, and Incorporate”., The core objective of this policy framework is to prpvide a business regulatory environment for ease of doing business in the State.

Question 5.
Write a note on TSGENCO are TRANSCO.
Answer:
a) Telangana State Power Generation Corporation Limited (TSGENCO) : The con-tracted capacity of Telangana state, including Generation Corporation of Telangana Limited (TSGENCO) and other plants as on 01.07.2019. is 16,201 MW, which includes the contracted capacity of private sector 7,739 MW, the state sector 5,825 MW, central sector 2,536 MW, inter-state 76 MW and joint sector 25 MW TSGENCO’s installed capacity of 5,825.26 MW comprises of thermal (3,282.50 MW), hydel (2,441.76 MW) and solar (1 MW).

Keeping in view the growing demand for power in Telangana state, TSGENCO has un-dertaken capacity addition programme by establishing two new thermal power projects of 5,080 MW and they are : Bhadradri Thermal Power Station (4 x 270 MW to be commissioned in 2019-20 and Yadadri Thermal Power Station (5 x 800 MW to be commissioned in 2020-21).

b) Transmission and Distribution of Energy in Telangana Transco :
After formation of the state, the Telangana state Transmission Corporation of Telangana Limited (TSTRANSCO) was constituted to take care of transmission needs of the state. A years after formation of the state, 112 numbers EHT substations, 833 numbers 33/11KV substations are comissioned and 2.54 lakh of distribution transformers are added (SEO-2020, GOT).

The state had a power deficit of around 2,482 MU during 2013-14. The energy requirement was 47, 428 MU. But available energy was only 44,946 MU. During 2014-15, the energy requirement was 50,916. MU and the available energy in the state was 48,788 MU from all the sources.

There are two distribution companies in the state namely, Telangana state Southern Power Distribution Company Limited (TSSPDCL) and Telangana State Northern Power Distribution Company Limited (TSNPDCL) that supply electricity to consumers in Telangana. As on 01-12-2019, there were a total of 1.53 crore service connections in the state. About 73 percent of energy consumption in Telangana is in the form of domestic consumption.

Question 6.
Write brief note on education profile of the state.
Answer:
According to the population Census, 2011 the literacy rate of Telangana is 66.54 percent. However, considerable variations are observed in literacy rates among different groups like rural and urban, within districts, age groups, social groups and male and female. The literacy gap between rural (57 percent) and urban (81 percent) areas is 24 percentage points and the literacy gap between male (75 percent) and female (58 percent) population is 17 percentage points. The literacy rates for the age groups of 7-14 years and 15-24 years in the state are higher than the national average. In the remaining age groups, the national averages are higher than that of state averages.

Education Profile of the state :
According to Socio Economic Outlook-2020 document of Telangana government, a total number of 40,597 schools are functioning in the state. Out of these 26,050 are run by state government, 3,269 are welfare/residential schools, 678 are aided schools, 10,369 are in the private sector, 180 are madarsas and the remaining 51 schools are run by central government in the State.

a) Enrolment :
During the year 2017-18, about 58.71 lakh children were enrolled in all the schools, of them 53 percent were enrolled in private schools, 47 percent in government schools including the schools, run by the central government, local bodies and aided schools.

b) Gross Enrolment Ratio (GER) :
Gross enrolment ratio determines the number of students enrolled in educational institutions i.e., schools, colleges, universities etc. In 2017-18, the gross enrolment rate among children in primary schools was 98.76 for boys and 98.05 for girls and in upper primary schools, it was 87.32 for boys and 88.47 for girls. Overall, the GER for girls was higher than hoys in upper primary schools in Telangana.

c) Pupil-Teacher Ratio (PTR) :
It indicates average number of pupils per teacher at a specific level of education in a given school-year. During 2018-19, the pupil-teacher ratiio observed was 18.90, 14.12 and 17.85 for primary, upper primary and secondary schools respectively. The overall PTR is 17.67 for the year 2018-19.

Question 7.
Discuss the status and prospects of residential institutions of Telangana state.
Answer:
To bring social equity and improve access to education for children of SCs, STs, BCs, minorities and differently-abled children, the state has been providing hostel and residential school facilities, supply of books and other provisions at free of cost.

A) Scheduled Castes Residential Schools :
Telangana Social Welfare Residential Edu-cational Institutions Society (TSWREIS) is running 268 (out of which 175 meant only for girls) residential educational institutions (from 5th standard to under graduate level) in the state for Scheduled Caste (SQ children. Of the 268 institutions, 134 were sanctioned after formation of the state.

B) Schedule Tribes Residential Schools :
a) Telangana Tribal Welfare Residential Educational Institutions Society (TTWREIS) (Gurukulams) :
There are 175 Gurukulams in the state, out of which 153 are residential schools and junior colleges and 22 are residential degree colleges for boys and girls. The total strength of the institutions is about 52 thousand students. The medium of instruction in these institutions is English,

b) Ashram Schools :
There are 321 ashram schools in the state with a total strength of about 92 thousand students; and

c) Government Primary Schools (GPS) :
Tribal Welfare Department is running 1,427 government primary schools with 1st to 3^rd or 5^th classes and around 22 thousand students are getting primary education as day scholars in these schools.

C) Backward Classes Welfare Residential Schools :
Mahatma Jyothiba Phule Telangana Backward Classes Welfare Residential Education Institutions Society (MJPTBCWREIS) is established to facilitate access to quality education for the students of backward classes (BCs) and economically backward classes (EBCs). The Society and the BC Welfare Department are running residential schools (261), residential junior colleges (19) for boys and girls and one residential degree college. The total sanctioned strength of all these institutions is 93,360.

D) Minority Residential Institutions :
Telangana Minorities Residential Educational Institutions Society (TMREIS) established with the objective of providing a high quality education for children belonging to the minority communities through residential schools. A total of 216 minority residential institutions including 12 colleges with 79,424 students are functioning in the state.

Question 8.
Describe health sector initiatives of Telangana state.
Answer:
Answer:
Education in Telangana :
Education is a crucial element in strengthening the human resources and economic development of a country. Education helps in creating more productive labour force. The 45^th Article of the Indian Constitution has laid the responsibility on the states to provide free and compulsory education to both boys and girls of the age group of 6 to 14 years.

c. Backward Classes Welfare Residential Schools :
Mahatma Jyothiba Phule Telangana Backward Classes Welfare Residential Education Institutions Society (MJPTBCWREIS) is established to facilitate access to quality education for the students of backward classes (BCs) and economically backward classes (EBCs).

Health Sector related Programmes of Telangana :
After formation of the state, Telangana government initiated several health related programmes. Some of them are presented here under :

Question 9.
Analyse poverty and unemployment situations in Telangana.
Answer:
Poverty is a multi-faceted phenomenon and is influenced by social, economic, political and partly by external factors. Poverty can be defined as a social phenomenon in which a section of the society is unable to fulfill even it basic necessities of life and thus deprived of the minimum level of living.

a) Tendulkar Expert Group Poverty Estimates :
In 1993-94 for poverty line estimation, annual per capita was assumed as Rs. 244 for rural and Rs. 282 for urban population for Telangana. Similarly, in 2011-12 the annual per capita for poverty line was assumed as Rs. 860 for rural and Rs. 1009 for urban population. The rural and urban poverty in Telangana between 1993-94 and 2011-12 were 49% and 30.5% respectively.

b) Rangarajan Committee Report on Poverty Estimates :
The poverty in Telangana is much lower than the Indian average. The percentage of poor in rural Telangana is 9.3 whereas the corresponding figure for India is 30.9% and the percentage of urban poor in Telangana is 11.1, where as it is 26.4 in India.

Unemployment in Telangana :
Unemployment may be defined as a situation in which the person is capable of working both physically and mentally at the existing wage rate, but does not get employment to work. It means a person who is willing to work at the existing wage rate does not get a job. It indicates a situation where the total number of jobs is less than the total number of unemployed in the country. It is a kind of situation where the unemployed persons do not find any gainful employment inspite of having willingness and capacity to work. In Telangana, agriculture sector provides employment to over 60 percent of work force. A moderate portion of population in the state gets livelihood and employment from, allied activities such as livestock and fishing.

Further, the presence of industries in the state are not widespread large amount of industrial units are located in and around Hyderabad and Rangareddy districts. The other districts in the state have no or little industrial presence and therefore, a limited qualified, skilled and semi-skilled work force are absorbed by industry. Rest, of the labour force including semi-skilled workers rely on primary sector for income generation. Though, urbanization opened up window of opportunities for workers in the state, there are hitches for urban sector to absorb all work forces. On the contrary, growth in tertiary sector nonetheless created increased number of employment particularly for skilled professionals.

Unemployment Rates in Telangana :
Unemployment rate in the state is below the national average rate of unemployment in 2011-12. Unemployment on the whole is more prevalent among females than males. The similar sort of pattern could be seen across urban and rural areas.

Question 10.
Discuss the importance of Kaleswaram project.
Answer:
Kaleshwaram Project: Kaleshwaram Project has been conceived from the erstwhile Dr. B.R. Ambedkar Pranahita-Chevella Sujala Sravanthi project. Originally, Dr. B.R. Ambedkar Pranahita-Chevella Sujala Sravanthi was proposed to utilize 160 TMC of allocated water of Godavari basin as per Godavari Water Dispute Tribunal (GWDT) award. A barrage was proposed at Tummidihetti (V) to divert 160 TMC of water to irrigate 16.40 lakh acres in the rstwhile 7 districts of Telangana state viz., Adilabad, Nizamabad, Karimnagar, Medak, Warangal, Nalgonda and Rangareddy, besides drinking water and industrial uses.

Further, it also planned to provide 10 TMC of drinking water to the villages enroute, 30 TMC of drinking water to twin Cities of Hyderabad and Secunderabad and 16 TMC of water for industrial use. The entire project works are divided into 7 links and 28 packages. Agreements concluded for all 28 packages during 2007-08 and 2008-09.

Construction of one barrage across river Godavari at Medigadda near Kaleshwaram, and two more barrages between Medigadda (Lakshmi barrage) and Sripada Yellampally Project at Annaram and Sundilla and to convey water form Sripada Yellampally Project to the command area spread over in 7 districts of Telangana (now 13 districts after re-organization of districts in the state) through components such as canals, tunnels, lift systems, reservoirs and sitributory network for irrigating an ayacut of 18,25,700 acres against the original proposed acres against the original proposed ayacut of 16,40,000 acres.

Further, it is proposed to stabilize the existing ayacut i other major projects viz., SRSP Stage-I, SRSP Stage-II, Flood Flow Canal, Singur and Nizamsagar projects to an extent of 18,82,970 acres (new ayacut 18,25,700 plus stabilisation ayacut 18,82,970=37,08,670 acres). Besides irrigation, drinking water (30 TMC for twin cities and 10 TMC for enroute villages) and water for industrial use (16 TMC) were also proposed.

The total estimated cost of Kaleshwaram Project is Rs. 80,000 crore and the total expen-diture incurred till 31-07-2019 is Rs. 51,434 crore.

Question 11.
Write about various sources of energy in Telangana.
Answer:
Energy Sector in Telangana :
Telangana being agriculture dependent economy, is one of the highest power intensive states in India, with a per capita power consumption of over 1,727 units (as per 2017-18) by recording 13.62 percent annual growth rate in power consumption, Telangana stands first in the country as against an All India per capita power consumption of 1,181 units (as per 2018-19). With regard to power consumption, Telangana consumption was 53,017 million units (MU) in 2016-17 and it rose to 60,237 MU in 2017-18. Similarly, per capita consumption in 2016-17 was 1,551 units while it was increased to 1,727 units in 2017-18.

The total installed capacity of erstwhile Andhra Pradesh was divided between the suc-ceeding states in the proportion of 53.89 percent (to Telangana) and 46.11 percent (to Andhra Pradesh). Accordingly Telangana’s installed capacity as on December 2016, was at 12,295.75 MW which includes state, central and private sectors. As per Power Sector, Jan.2018, Gol, report as on 31-01-2018, the installed capacity of Telangana state was 14,689.46 MW, which includes state (7572.65 MW), central (2036.85MW) and private (5079.96 MW) sectors.

The major power projects in Telangana state are :
National Thermal Power Corporation (NTPC) located in Ramagundam (Karimnagar district), Kothagudem Thermal Power Corporation (KTPC) situated in Palvoncha (Khammam district), Kakatiya Thermal Power Corporation located in Bhupalapally (Warangal district) while some of the major hydroelectricity power plants are located at Nagarjunasagar, Pochampadu, Singoor, Nizamsagar and Pulichintala.

Question 12.
Write about SC/ST welfare programmes of Telangana.
Answer:
SC/STs Development and Welfare Programmes : These programmes are discussed as under.

1) SC and ST Special Development Fund :
Through SC/STs special development fund (SDF) Act, 2017, government has formulated two budget heads, namely :
i) ‘SC Special Development Fund (SCSDF); and
ii) ‘ST Special Development Fund (STSDF)’ The ongoing programmes like Kalyana Laxmi, Sanna biyyam to the SC/ST hostels etc. for the welfare of SC/STs are provisioned under SCSDF and STsDF respectively.

2) Scheduled Castes Welfare :
In Telangana, the Scheduled Castes Development Department co-ordinates and monitors the implementation of the following SC welfare schemes :

a) Kalyana Lakshmi for SCs :
The government launched this scheme on 2^nd October, 2014. A one-time financial assistance of Rs. 51,000/- was being provided to the bride’s family at the time of marrriage to meet the marriage related expenses of a Telangana resident girl of over 18 years of age belonging to SC community with a parental income not exceeding Rs. 2 lakh. The financial grant has been enhanced from Rs. 51,000 to Rs. 75,116 in 2017 and further to Rs. 1,00,116 in 2018.

b) Ambedkar Overseas Nidhi Scheme :
Under this scheme the students belonging to SC community are provided with a scholarship grant for overseas study to the tune of Rs. 20 lakh subject to parental annual income limit upto Rs. 5 lakh. With this grant the students can pursue their higher studies in USA, UK, Canada, Australia, Singapur, France, Germany. Japan, Newzealand and South Korea. During 2018-19. 101 students have been selected under this scheme.

c) Land Purchase Scheme :
The government of Telangana launched this programme for the benefit of the poorest of the poor SC women families. Under this scheme, and extent of 15,044.35 acres’of land has been purchased and distributed to 5,930 beneficiaries at a cost of Rs. 657.71 crore.from 2014-15 to 2019-20.

3) Scheduled Uribes Welfare :
The government of Telangana launched the following schemes for the integrated development of the scheduled tribes :
a) Kalyana I akshmi for STs :
This programme was launched on 2nd October 2014. A one-time financial assistance of Rs. 1,00,116/- shall be granted at the time of marriage to each ST girl who attains the age of 18 years.

b) Economic Support Schemes :
Under this scheme, financial assistance to tribal population is provided in the fields of agriculture, horticulture, fisheries, minor irrigation, animal husbandry and self-employment.

c) Forest Rights Act, 2006 :
Under this Act, individual titles were distributed to 93,494 forest dewllers (tribals) covering an extent of 3,00,092 acres. The forest land right holders have right for self-cultivation and the land is non-transfefable, inalienable but heritable. During the year 2018-19, 91,927 farmers were distributed with an extent of 2.99 lakh acres under Rythu Bandhu scheme.

Very Short Answer Questions

Question 1.
Gross district domestic product.
Answer:
Gross District Domestic Product (GDDP) is the sum of the economic value of all final goods and services produced within the geographical boundaries of the district, counted without duplication during a specified period of time, usually a year. Hyderabad district tops in GDDP followed by Rangareddy Medchal-Malkajgiri and Sangareddy districts which stand at second, third and fourth positions respectively.

Question 2.
Per capita Income (PCI).
Answer:
Per capita income can be obtained by dividing National income with total population
P.I = National income/Total no. of population.

It is useful to know the standard of living of the people in a country.

There is a step rise in the PCI of the state from Rs. 91,121 in the year 2011-12 to Rs. 2,28,216 in the year 2019-20 (AE).

Question 3.
Child Population.
Answer:
The age group of consisting of 0-6 years denote child population. In Telangana, the share of child population marginally decreased from 14.2% in 2001 to 10.5% in 2011. It may be due to the impact of growing literacy, education, and higher increases besides adoption of family planning measures. The share of child population to total population in all most all districts is nearer to state share of 10.5% except in Mahaboobnagar where it is 17.4%.

Question 4.
Food and Non-food Crops.
Answer:
Food crops broadly consist of cereals, millets, pulses and non-food crops include cotton, oil seeds, flowers, etc.

Question 5.
Operational holding.
Answer:
The average size of the operational land holding in the state is 1.00 hectare (2.47 acres) in 2015-16 which is less than the national average size of 1.08 hectares and declined from 1.12. hectares in 2010-11. It is note worthy that the operational land holdings size of marginal and small farmers constitutes about 80 percent of the total. Operational holdings in the state.

Question 6.
Rythu Bandhu.
Answer:
Rythu Bandhu :
Rythu Bandhu scheme is aimed at empowering the farmers of the state of Telangana by providing them with an investment support to relieve them from the burden of debt. It was launched on May 10^th 2018. The government provides investment support for agriculture and horticultue crops by way of gmat of Rs. 4,000/- per acre to all farmers (pattadars) each season (Rs. 8,000 per annum) for purchase of inputs like seeds, fertilizers, pesticides, labour and other investments in the field operations of farmer’s choice for the crop season.

Question 7.
Rythu Bhima.
Answer:
Rythu Bhima :
The government of Telangana launched Rythu Bima scheme on August 15, 2018. Its objectives is to provide financial relief and security to the family members/dependents of the deceased farmer incase of higher death. The scheme provides an insurance cover of Rs. 5 lakh to every farmer.

Question 8.
MSME.
Answer:
MSME Sector in Telangana :
Micro, Small and Medium Enterprises (MSME) provides complementary products to large industries as ancillary units and contribute enormously to inclusive growth and region balanced development of the state. This sector plays a pivotal role in providing employment opportunities at comparatively lower capital cost to those who are low skilled.

Question 9.
TS – I pass.
Answer:
The government has enacted the “Telangana state industrial project Approval and self certification system (T.S. – I pass) Act 2014. To provide for an investor friendly environment in the state of Telangana based on the self certification by the entrepreneur”

Question 10.
Image Tower
Answer:
IMAGE Tower :
Government is establishing a dedicated work place for development of animation, gaming arid VFX industry i.e., IMAGE Tower with state of the art infrastructure and services. IMAGE Tower is being developed in an area of 10 acres (in Raidurgam village, R.R. district) with a project cost of Rs. 1,000 crore on a public private partnership (PPP) mode.

Question 11.
Asara pensions Scheme.
Answer:
This scheme introduced with a view to ensure secured,life with dignity for all the poor. It is meant for the old and infirm poeple with HIV – AIDS, widows; oldage people etc.

Question 12.
Telangana Fibre grid.
Answer:
Telangana Fiber Grid (T-Fibre) Project :
Government of Telangana has initiated this project in 2015. Its vision is to establish a state-of-the-art network infrastructure that would facilitate the realization of Digital Telangana to 10 Zones (33 districts).

Question 13.
Mission Kakatiya.
Answer:
The Telangana government has introduced a new scheme called “mission kakatiya”. The main tag of it is “manavooru – mana cheruvu”. The scheme envisages the revival and restoration of minor irrigation tanks including chain – link tank system in the villages of the state that facilitated most of the irrigation in Telangana prior to 1956. The government expected to solve the water scarcity of drought prone Telangana effectively.

Question 14.
Sex ratio in Telangana.
Answer:
It is defined as the number of females per 1000 male population. As per the 2011 census, the sex ratio was 988 females per 1000 male in Telangana, where as it was 943 females per 1000 rriales population in India. Thus, Telangana state has relatively more female population than that is recorded at the national level.

Question 15.
Gross Enrolment ratio.
Answer:
This concept determines the number of students enrolled in educational institutions that is schools colleges, universities etc. In 2017-18, the gross enrolment rate among children in primary schools was 98-76 for boys and 98.05 for girls and in upper primary schools it was 87.32 for boys and 88.47 for girls. Overall, the GER for girls was higher than boys in upper primary schools in Telangana. .

Question 16.
Scheduled caste residential schools.
Answer:
The Telangana social welfare residential Educational Institutions society (TSWREI) is running 268 (out of which 175 meant only for girls) residential educational institutions (from 5th standard to under graduate level) in the state for scheduled caste (SC) children of the 268 institutions. 134 were sanctioned after formation of the state.

Question 17.
Kanti velugu.
Answer:
Kanti Velugu :
People mostly tend to live with eye problems or postpone until it is too late. Particularly, the women and elderly persons neglect eye vision problems. To address this problem, the government has launched Kanti velugu programme with a vision to build avoidable blindness free Telangana through simple pair of glasses and cataract surgery.

Question 18.
Human development Index.
Answer:
The composite index of human development consists of three dimensions that arepercapita income, continuity of life and health standards, literacy and education,.

Question 19.
Arogya Lakshmi.
Answer:
Aarogya Lakshmi :
With an aim to enhance the levels of nutrition in pregnant and lactating women, Telangana government is providing one nutritious meal everyday to pregnant women and the children below the age of six, living below poverty line, through Anganwadi centers. The scheme was launched on January 1, 2015.

Question 20.
Unemployment.
Answer:
Unemployment may be defined as a situation in which the person is capable pf working both physically and mentally at the existing wage rate, but does not get employment to work. It indicates a situation where the total number of jobs is less than the total number of unemployed in the country. It means a person who is willing to work at the existing wage rate does not get a job.

Question 21.
Kalyana Lakshmi.
Answer:
To alleviate financial distress of SC/ST families, government had decided to sanction a one time financial assistance of Z 51,000/- at the time of marriage of each SC/ST girl. It is implemented on October, 2nd 2014.

Question 22.
Mission Bhagiratha.
Answer:
It was launched on Aug 7, 2016 in Komati Banda (V) Gajwel, Medak District. This programme was conceived to provide 100 litres per capita per day (LPCD) of treated and piped water in rural areas, 135 LPCD in municipalities, and 150 LPCD in municipal corporations.

Question 23.
BCs welfare schemes.
Answer:
The welfare schemes launched by the state government for the welfare of BC’s include.
a) Kalyana lakshmi scheme for BC’s. This scheme was extended to economically back- v ward classes in the year 2016-17.

b) Most backward classes development corporation was established in 2017 to with a sharp forms on improving the social, educational and financial conditions of most backward classes (MBQ among BCs. Rs. 1000 crore has been allocated in the finan- rial year 2018-19 and 13,367 beneficiaries were identified.

Question 24.
Minorities Welfare Schemes :
Answer:
The minorities they are Muslims, Christians, Sicks, Buddhists, Parsees and Jains constitute 14 percent of the total population of Telangana. (a) Bank linked subsidy scheme. The scheme is implemented for minorities for setup viable self employment business units.

(b) Training, employment and skill development the minorities department tends training and skill development and arranges self employment for minority youth through minority finance corporation, (c) Shaadi mubarak scheme, under this scheme the government one time grant of Rs. 1,00,116 to the eligible minority bride’s family at the time of marriage.

TS Inter 2nd Year Economics Study Material Chapter 9 Environmental Economics

November 16, 2022October 24, 2022 by Srinivas

Telangana TSBIE TS Inter 2nd Year Economics Study Material 9th Lesson Environmental Economics Textbook Questions and Answers.

TS Inter 2nd Year Economics Study Material 9th Lesson Environmental Economics

Essay Questions

Question 1.
Explain different types of pollution and examine their effects.
Answer:
Pollution :
Environmental pollution refers to the presence of mater (gas, liquid, solid) or energy (heat, noise, radiation) whose nature, location of quality directly or indirectly alters characteristics or processes of any part of environment, and causes (of has the potential to cause) damage to the condition, health, safety or welfare of animals, humans, plants or property. In short it is a term that refers to all the ways by which people pollute their surroundings.

1. Air Pollution :
Air pollution is a mixture of solid particles and gases in the air. The sources of air pollution are :

agricultural activities
Combustion
manufacturing processes
solvent usage; and
nuclear energy programmes.

Air pollution affects the respiratory system of humans, animals and birds. It causes diseases like T.B. and asthma. Air pollution affects food items, vegetables and fruits. Plants, crops and grazing lands are covered with layers of dust and land productivity decreases. Its effects are felt on monuments, buildings and art forms as particles of acid are spread out.

It damages the green house and there by the temperature on the earth increases, icy glaciers and polar regions melt down. Life of the living organisms become vulnerable. Acid rains are also due to air pollution and they damage the earth’s surface, buildings, trees, plants and wild life.

2. Water Pollution :
The process of altering the properties of water which makes it useless or harmful is called water pollution. It is defined as the addition of excess materials to water, which are harmful to living organisms. It is a change in the quality of water due to which it is unusable or dangerous. Fresh water contains dissolved materials like phosphates, oxygen, hydrogen, organic compounds, silt and micro organisms. Lack of balance between them is due to pollution. Main water pollutants are :

sewage and other oxygen demanding wastes infectious agents
exotic organic chemicals and
inorganic mineral and compounds.
radioactive waste
plastic pollution .
chemical fertilisers and pesticides.

Water-born diseases like cholera, typhoid and dysentry affect human health, especially, in the rural areas where safe drinking water is a problem. Water pollution decreases the agricultural productivity and degrades the natural fertility of the soil. Cost of production of some industries increases as they have to spend huge amounts to purify water they need. Water pollution kills the fish and thus damages the aquatic food reserves.

3. Noise Pollution :
Noise pollution refers to the physiological or psychological harm created by sound. Traffic, railways, industries, construction works, public gatherings, use of loud speaker, crackers, drums etc. are the sources of noise pollution. Loud or disagreeable sound is noise. Noise is a pollution component and it deteriorates the environment. Noise pollution affects human beings, animals and birds also. It damages the ear and causes temporary or permanent hearing loss, Prolonged exposure to noise pollution causes deafness. Some times noise pollution creates physiological disorders. It creates irritation and affects the brain and nervous system. Mental fatigue, lack of concentration and inability to think and act properly are the other effects. The efficiency of labour and their occupational performances decrease due to continuous exposure to noise.

Question 2.
In what way environmental degradation effects the economy? Suggest remedial measures to overcome this problem.
Answer:
Environmental degradation means the disintegration of the earth or the deterioration of the natural assets in the environment. It is any change or aggravation to nature’s turf which is undesirable. It occurs when earth’s natural resources are depleted as result of which extinction of some species, pollution in air, water and soil take place. Environmental degradation has become one of the largest threats to the world.

Effects of Environmental Degradation :

Human health is at the receiving end. Pollution has increased. Diseases like asthma, pneumonia and diarrhea. These are bringing about certairi atmospheric changes which are likely cause uncertain and irreversible hazards like green house effects and ozone deplection to future generations. Air bom, water borne and sound related health issues have been increasing.
Bio-diversity is important to maintain the balance of the eco-system. Environment degradation leads to loss of bio-diversity.
Ozone layer protects the earth from harmful ultraviolet rays. Environmental degrada-tion depletes the ozone layer. Harmful radiations are sent back to the earth.
Tourists visit a country to see and enjoy the nature, animals birds and lush green landscape. Environmental degradation discourages tourist traffic into a country.
Government is constrained to spend huge amounts to protect environment from degradation and this is an avoidable burden.
Environmental degradation can be prevented and taken care of the mother earth. People should be educated on the need to preserve and protect environment from degradation.

Question 3.
Explain the causes and consequences of various pollutions.
Answer:
Answer:
Pollution :
Environmental pollution refers to the presence of mater (gas, liquid, solid) or energy (heat, noise, radiation) whose nature, location of quality directly or indirectly alters characteristics or processes of any part of environment, and causes (of has the potential to cause) damage to the condition, health, safety or welfare of animals, humans, plants or property. In short it is a term that refers to all the ways by which people pollute their surroundings.

1. Air Pollution :
Air pollution is a mixture of solid particles and gases in the air. The sources of air pollution are :

agricultural activities
Combustion
manufacturing processes
solvent usage; and
nuclear energy programmes.

sewage and other oxygen demanding wastes infectious agents
exotic organic chemicals and
inorganic mineral and compounds.
radioactive waste
plastic pollution .
chemical fertilisers and pesticides.

Some times noise pollution creates physiological disorders. It creates irritation and affects the brain and nervous system. Mental fatigue, lack of concentration and inability to think and act properly are the other effects. The efficiency of labour and their occupational performances decrease due to continuous exposure to noise.

Question 4.
What are the objectives of environmental sustainability? Explain the im-portance of sustainable development.
Answer:
Sustainable Development: Economic development without destruction of the envi-ronment is called sustainable development. Such a development integrates environment in the process. It can be defined as “development meeting the needs of the present without compro-mising the ability of the future generations to meet their own needs”. Mere growth is not enough to enhance the human well-being; it is accepted that a balance between the use of resources and their regeneration sustains the process of development.

Objectives of Sustainable Development :

1. Increase of Growth or Income :
Sustainable development aims to increase the standard of living of all the sections of the society. Health, education, participation in public life, clean environment and promotion of equity for the future generations are included in improving standards of livings.

2. Continuity of Development :
Physical, human and natural capital are to be preserved and carefully used under sustainable development. It emphasizes both present and future de-velopment.

3. Controlling Degradation :
Development should not lead to environmental degradation affecting the quality of life. Development should not reduce productivity in the long run. It implies control of pollution. Quality of land, water, air and soil should be maintained for sustainable development, Current decisions on economic development should not impair the prospects of living standards of future”generations.

4. Protection of Bio-Diversity :
Sustainable development assigns priority to preserve the bio-diversity. All production activities are related to bio-diversity Genetic diversity, species diversity and eco-diyersity are to be maintained for sustained development.

Importance of Sustainable Development: Sustainable development practices protect wild life, forests, water bodies and biodiversity needed for life to continue on earth. The importance of sustainable development is as follows :

1. Change of Attitudes :
Sustainable development changes the attitudes of the people. Instead of abusing nature we must preserve and protect it. It promotes the attitude to use natural resources to satisfy our needs but not greed.

2. Eco-Friendly Innovations :
It encourages only eco-friendly methods and innovations for economic development.

3. Limits Economic Activities :
It limits the economic activities within the absorbing capacity of the environment.

4. Future Development :
It ensures economic well-being of the future generations by protecting the environment.

5. Scope for Increased Action by the Government :
Sustained development assigns greater role to the governance. The activities of the government under sustained development include:
a) community involvement,
b) decentralization,
c) positive incentives,
d) creation of new policy and administrative mechanism; and
e) encouragement to environmental workers and NGOs.

6. New Look to Growth :
Sustainable development gives a new meaning to economic growth in terms of quality of life.

7. Conservation of Resources :
Sustainable development harps upon the need to conserve resources for continuity and equality in development. It encourages regeneration of resources.

8. Preserves Bio-Diversity :
Sustainable development recognizes the importance of bio-diversity. Human survival depends oh the preservation and maintenance of bio-diversity. It encourages policies to control:
a) environmental degradation.
b) pollution.
c) over exploitation fo natural resources.
d) decline in the flora and fauna; and
e) global environmental disparities.

9. Balances Economic, Social and Environmental Dimensions of Development :
The three components of sustainable development are interlinked as shown below:
TS Inter 2nd Year Economics Study Material Chapter 9 Environmental Economics 1

10. Realization of the Importance of Nature :
Sustainable development helps the stake holders to realize the importance of nature. This earth is meant for all the living organisms, but not to human beings only. All of us should preserve it and hand it over to future generations.

Sustainable development reminds the humanity of the need to work with others to help, sustain and heal the earth. It stresses the need to protect and preserve environment with all its resources.

Short Answer Questions

Question 1.
What are natural resources?
Answer:
Natural Resources :
Resources are the means to satisfy human needs at a given time and place. Nature is a reservoir of different resources. These resources are used in production process to satisfy the consumption needs. Natural resources are defined as organic and inorganic matter provided outside the economic system which are manipulated by humans to furnish the raw materials needed to satisfy human wants.

Features of Natural Resources :

They are free gift of nature and persons only extract them.
The stock of the natural resources is fixed at a given point of time.
Some natural resources are hidden in nature and they come out only when persons explore them with technology.
The stock is fixed by nature in many cases.
The changes in the stock of natural resources are subject to natural and biological changes over a period of time.
With the development of technology and scientific knowledge new resources emerge from nature over a period of time.

Question 2.
What is the sustainable development?
Answer:
Economic development without destruction of the environment is called sustainable de-velopment. Such a development integrates environment in the process. It can be defined as development meeting the needs of the present without compromising the ability of the future generations to meet their own needs. Mere growth is not enough to enhance the human well being it is accepted that a balance between the use of resources and their regeneration sustains the process of development. Hence, development strategies today emphasis the development of the environment economy and the society together. Development goes on taking place if it is sustainable.

The concept of sustainable development was first used in 1980 by the world conservation strategy presented by the international Union for Conservation for Nature. The term “sustain-able development” was brought into common use by the Brundtland report.

Daly (1990) gave three rules for sustainable development which include :

Those resources which are renewable are not used at a rate which surpasses the rate of their regeneration.
Those resources which are not renewable are not used at a rate which surpasses the rate at which a substituting resource become available.
The rate of which polluting materials are disposed off does not surpass the carrying capacity Of the environment.

Question 3.
Why should we protect the environment?
Answer:
Need for Environment production :
The need for environmental protection can be explained here under:
1) Most of the developing countries including India depend on agriculture. Agricultural development and food security depend on environment. Good rains, climate, soil and quality seeds are made available by the environment. Over utilization of chemical fertilisers, insecticides and pesticides damage the environment andn in the long run, land loses its original fertility.

2) Forests and vegetation provide rains and balanced weathers. Forests regain water to maintain the ground water levels favourably. More trees should be planted to balance the depleted forests.

3) Environmental protection helps economic activities like mining, dairy, fisheries along with industries. A country can eliminate poverty by producing more goods in the long run by maintaining environmental balance.

4) Environmental protection contributes to social development by increasing health and wealth of a nation.

5) Environmental protection promotes human happiness. Environmental imbalances lead-ing to floods, earth quakes, famines, cyclones destroy the economy and society.

6) Over-use of natural resources by the present generation damages the interests and well being of the future generations. Environmental protection through sustainable development takes care of the future generations and their economic welfare.

7) Environmental protection ensures pollution – free living. Health and happiness of the humanity improve a lot in a no-pollufion situation.

8) Environmental protection helps to maintain bio-diversity and ecological balance. It also helps to maintain the ozone layer, glaciers and other endowments of nature in proper order.

Question 4.
Discuss the types of pollutions.
Answer:
Pollution :
Environmental pollution refers to the presence of mater (gas, liquid, solid) or energy (heat, noise, radiation) whose nature, location of quality directly or indirectly alters characteristics or processes of any part of environment, and causes (of has the potential to cause) damage to the condition, health, safety or welfare of animals, humans, plants or property. In short it is a term that refers to all the ways by which people pollute their surroundings.

1. Air Pollution :
Air pollution is a mixture of solid particles and gases in the air. The sources of air pollution are :

agricultural activities
Combustion
manufacturing processes
solvent usage; and
nuclear energy programmes.

sewage and other oxygen demanding wastes infectious agents
exotic organic chemicals and
inorganic mineral and compounds.
radioactive waste
plastic pollution .
chemical fertilisers and pesticides.

Question 5.
Bring out the relationship between environment and development.
Answer:
Economic development in the context of environmental degradation poses health related issues also to the poor. Environmental costs are not taken into account while calculating GNP. The basic reason for this lacuna is a historical absence of environmental consideration in the process of economic development. Long term national productivity is affected due to the damage to the environment. Rapid population growth and expanding economic activities are likely to damage the environment within which further economic activity would take place.

Environment provides the raw materials and proper climatic conditions for the economic activities. At the same time it absorbs the wastes discharged by the economic enterprises. Reckless and exploitative natue of the economic activity reduces the efficiency of environment to supply the needed resources. Over the years, the capacity of environment to absorb different wastes also decline. Economists like Kenneth E Bounding warned the world about the conse-quences of pressure in the interest of the future as well as the present generations. A balance between inputs to produce goods and the discharge of waste should be maintained. The quantitiy of wastes and emissions must be less, so that absorption by the environment can be feasible.

Environment performs three interlinked economic functions it supplies us both renewable and non-renewable resources it assimilates the waste and it provides’the life support services. These functions have positive values. Crisis arises when the environment fails to perform these three functions. Hence, economic functions of the. environment are to be viewed carefully. One should recognise that there are interlinkages between economic development and the environment.

TS Inter 2nd Year Economics Study Material Chapter 9 Environmental Economics 2

All the resources for economic development come from nature. Life on this earth survives only within environment. There is a necessity to conserve resources without decreasing the growth rates. Development projects involve ecological issues and depletion of the resources. So conservation programmes are to be planned while formulating social and economic objectives.

Economic development is to keep sustainability in view. Sustainable development aims to take care of future generations and environmental capital which includes pure air, safe drinking water, forest and mineral resources. Pollution of air, water, noise and vision is the direct dutcome of economic development. Environmental pollution is the externality of economic growth. Over production in a country creates air, water and noise pollution.

Economic policies concerned with agriculture and rural development should be environ-ment.friejidly. Farm practice, bio-diversity, limited use of chemical fertilizers, water harvesting and development of plantations be conceived in the interest of environmental protection and sustainable development.

Growing urbanization creates problems to the environment. Migration of rural people to urban centers has increased the slums. They create water, air and vision pollution. Sanitation becomes a major issue in the urban centers besides housing. Vehicular and industrial emissions pollute the environment. Urbanization as a result of rapid industrialization and growing economic activities damages the environment.

Grbwing consumerism in the process of development leads to over exploitation and misuse of natural resources. Depletion of ozone layer, global warming, acid rains and untimely floods are some of the problems due to production and excessive use of resources.

Environment provides the resources for economic development. At the same time it gets degraded through economic activities. A balance between these two is to be maintained by all the global partners.

Question 6.
Point out the reasons for environmental degradation.
Answer:
United Nations International Strategy for Disaster Reduction characterizes environmental degradation as the decrease in the limit of the earth to meet social and environmental degradation.

Reasons for Environment Degradation :
1. Land Disturbance :
Weedy plant species assume control over nature and eliminate the local greenery. Invasive species destroy land and environmental assets. Over grazing also disturbs the fertile turf and earth becomes hard. Land degradation and soil erosion are serious problems which India is facing, as nearly 40 percent of land is subjected to soil erosion through water and wind.

2. Pollution :
Air, water, land and noise pollutions are harmful for the environment. They destroy the quality in air, water and land. Sound pollution damages the ears and threatens the animals and birds. Rapid population growth also puts strain on the natural resources due to which environment degrades.

3. Solid and Hazardous Wastes :
Many cities, particularly in developing countries, generate more solid wastes than they can collect or dispose of. Even where provision for collection is satisfactory, safe disposal of collected wastes often remains a problem. It badly affects human health and productivity. In addition to spreading disease, solid and hazardous wastes pollute ground water resources. E-waste is another important and growing hazardous waste. Electronic waste is one of the fastest growing waste streams worldwide.

4. Soil Degradation :
One of the chief forms of soil degradation is soil erosion, which is often a result of wind and water erosion. Soil erosion denudes the agricultural land of its top fertile layer and thus affects agricultural productivity adversely. It also harms productivity by depositing silt in dams, irrigation systems and river transport channels and by damaging fish-eries. Salinisation and water logging are other serious forms of soil degration. If salinity level is exceeded, the land becomes unfit for cultivation.

5. Rangeland Degradation :
In general, rangeland degradation is reduction in the status of natural Vegetation. The main causes of rangeland degradation in India are irrational land use management practices leading to denudation of vegetation from rangelands which exacerbated by intermittent droughts has resulted in many parts of desertification. Rangeland degradation affects water quality because streams, rivers and lakes are strongly influenced1 by land scape characteristics of their watershed.

6. Loss of Biodiversity :
Biodiversity comprises of genetic information, species and eco-systems. It is an essential requirement for the maintanance of global food supply. Production activities depend on biodiversity. Biological diversity provides the cultural identity. Hence, loss of biodiversity jeopardises all this.

7. Deforestation :
Deforestation is cutting down of trees to provide space for more homes and industries. Trees in the forest are destroyed for fuel and to take up agriculture. Big river valley projects are also responsible for the clearance of the forests. Deforestation increases global warming by sending carbon back into environment.

8. Natural Causes :
Earth quakes, tidal waves, storms, tsunamis and wild fires crush animals and plant groups. They have immediate as well as long term effectgs on nature.

9. Industrialization and Over Production :
Science and technology have expanded pro-ductive capacities of the nations at the global level; Raw materials and other natural resources are exploited extensively to produce more. Replacement is not planned. Industries through smoke, sound, effluents degrade the environment.

10. Faulty Mining Practices :
Large scale extraction of minerals are creating serious environmental problems, ruining the country’s land, water, forest and air. The disposable mining waste, mineral dust from mines are constantly polluting the air and also reducing agricultural productivity.

Very Short Answer Questions

Question 1.
Types of Environment
Answer:
Environment is the combination of all physical and organic factors that act on living, being. These are three types of environment.

Physical environment
Biotic environment .
Social or Cultural environment.

Question 2.
Ecosystem.
Answer:
This concept was given by A.G. Tansely in the year 1935. An ecosystem is a region with specific land scape such as forest grassland, desert, plant and animals.

Question 3.
Air pollution.
Answer:
Air is the combination of various individual gases like oxygen and hydrogen.

The recessive concentration of contaminated substance in the air which adversely affects the well’being of the individuals, living organs and properly of all forms is called as air pollution.

Question 4.
Water pollution.
Answer:
Water is very essential for the existence of all the living organisms. Water.pollution is defined as the addition of some substances of factor present in water which degrades its quality. So that it becomes health hazard or unfit for use. Increased human and economic activities make the water impure for consumption.

Question 5.
Physical Environment.
Answer:
It is also known as abiotic environment and natural environment. It includes non-living or physical things like land, water, air and atmosphere. Climatic factors like sun beams, rain water etc., are included in this.

Question 6.
Environmental degradation.
Answer:
Depletion of potentially renewable resources. It means the disintegration of the earth or the deterrioration of the natural assets in the environment. It has become one of the largest threats to the world.

Question 7.
Sustainable development.
Answer:
Concepts of sustainable development :
Economic development without the destruction of the environment is called sustainable development. It can be defined as development meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Question 8.
Renewable and non-renewable resources.
Answer:
Natural resources which can be used permanently without depletion are called renewable resources. They are not exhaustible. Their stock is not fixed. These are also known as non-conventional resources. For example solar, wind, and tidal.

The natural resources which will exhaust by use are called nonrenewable resources. They cannot be regenerated. They are also called conventional resources example gold, silver, copper oil, gas, coal, etc.

TS Inter 2nd Year Economics Study Material Chapter 8 Foreign Sector

November 16, 2022October 24, 2022 by Srinivas

Telangana TSBIE TS Inter 2nd Year Economics Study Material 8th Lesson Foreign Sector Textbook Questions and Answers.

TS Inter 2nd Year Economics Study Material 8th Lesson Foreign Sector

Essay Questions

Question 1.
Examine India’s trade balance and balance of payments.
Answer:
Balance of Payment, (BOF) is a statistical record in the form of a balance sheet comprising all its transactions with rest of the world during any given period of time.

India’s Trade Balance and Balance of Payments : This can be studied under following heads.
TS Inter 2nd Year Economics Study Material Chapter 8 Foreign Sector 1

I. Trade Balance :
India experienced a negative balance or deficit in its balance of trade in almost all five year plans. The annual average trade deficit in First plan was Rs. 108 crore. It was Rs. 467 crore in Second plan. During Third plan it was Rs. 477 crore and it was Rs.36,363 crore and Rs. 1,49,841 crore during Ninth and Tenth plans respectively.

Value of foreign trade over the years focuses on the trends in India’s foreign trade. Value of foreign trade is equal to the value of imports plus exports.

a. Decadal Variation in the Value of Foreign Trade :
Value of imports and exports are added to account for the total value of foreign trade as stated earlier. As per the figures presented in Table-volume of foreign trade was Rs. 3,835 crore in 1960-61. It increased from Rs. 3,169 crore in 1970-71 to Rs. 19,260 crore in 1980-81. From then onwards, the value of trade increased at a higher pace to Rs. 75,751 crore in 1990-91 to Rs. 4,29,663 croere in 2000-01 and to Rs. 28,26,389 crore in 2010-11. It touched the peak level of Rs. 46,33,485 crore in 2014-15 and marginally decreased to Rs. 42,06,676 crore in 2015-16 and then increased to Rs. 49,57,548 crore in 2017-18 and again declined to Rs. 28,18,764 crore during the year 2019-20.

It is clear that in the two decades between 1960-61 and 1980-81 value of foreign trade rose by 579.4 percent. In other word, the increase in 1980-81 is 608 times to the value in 1960-61. Decadal increases during 1980-81 – 1990-91 was 293 percent while the increase during 1990-91 – 2000-01 was 467 percent. The increase in the following decade ending with 2010-11 was 558 percent. Increase in the value of foreign trade in 2015-16 by 9.2 percent. A marginal increase at 12 percent was recorded in 2017-18 over 2016-17 and again there was a decline at 41 percent in the year 2018-19 over 2017-18 and again declined to 3 percent in the year 2019-20 over the year 2018-19. Therefore, it can be stated that the value of foreign trade in India has been increasing at a higher rate over the years since 1960-61.

2) Decadal Growth of Imports :
Another significant feature of India’s foreign trade is the every growing imports. The total value of imports inl960-61 was Rs. 2,795 crore and it had increased to Rs. 12,549 crore in 1980-81 by 349 percent. Value of imports rose to Rs. 43,198 crore in 1990-91 and to Rs. 2,28,307 crore in 2000-01. The percentages of growth for these two decades were 244 and 428 respectively. Imports further rose to Rs. 16,83,467 crore in 2010-11 recording a growth of 637 percent over 2000-01. Value of imports touched the peak in 2014-15 at Rs. 27,37,087 crore and then marginally decreased in 2015-16 and 2016-17 and again declined to Rs. 17,01,997 crore in the year 2019-20 and the percent decline was 5 over the year 2018-19.

3) Decadal Growth of Exports :
The growth rate of exports has been sluggish in India over the years. The value of exports was Rs. 1,040 crore in 1960-61 and it had increased to Rs. 6,711 crore in 1980-81. The growth rate was 545.3 percent for the two decades. Value of exports increased to Rs. 32,553 crore in 1990-91 and then to Rs. 2,01,356 crore in-2000-01 and the decadal growth rates were 385 and 518 percent respectively. Value of exports increased to Rs. 11,42,922 crore by 468 percent in 2010-11 over 2000-01.

Exports in 2017-18 were the highest at Rs. 19,56,515 crore and then decreased to Rs. 11,16,767 crore in the year 2019-20. Indian exports recorded some increase with the export promotion policies of the government since the devaluation of rupee in 1966. But, the growth in the exports was inadequate when compared to the growth in imports. This disparity between exports and imports widened the trade deficit from year to year.

Unfavourable terms of trade for Indian agro-based goods, inadequate exportable surplus in the economy, protection policies of the developed countries, the long period of recession in the developed countries and regular depreciation of the exchange value of the rupee were the main factors responsible for the low growth of Indian exports.

4) Deficit in the Balance of Trade :
Higher growth of imports and sluggish growth of exports have led to mounting deficits in the balance of trade over the years in India. The country has recorded a small surplus only two tifties, 1972-73 and in 1976-77, ever since 1951. Deficit in the balance of trade was Rs. 1,755 crore in 1961 and it rose to Rs. 5,838 crore in 1980-81. The increase was 673 percent. The increase had been regular in 1990-91 and 2000-01. The deficit in 2010-11 was Rs. 5,40,545 crore recording a growth of 191 percent over 2000-01.

It reached the maximum level of Rs. 10,44,545 crore in 2017-18 and then decreased to Rs. 5,85,230 crore in 2019-20. The average annual deficit in the balance of trade during the First plan was Rs. 108 crores and it gradually increased to Rs. 7,720 crore during the Seventh plan. The years of deficits in the balance of trade in 2018-19 and 2019-20 had declined when compared to the deficit in 2017-18.

The trend in the decrease in the deficit due to import compression and export promotion during the Fourth plan could not be sustained and economy faced growing deficits in the balance of trade. Recurring depreciation of the rupee in terms of dollar has resulted in enhancing the value of imports due to which deficits are widening of late; the share of China in India’s trade deficit has increased from 20.3 per cent in 2012-13 to 43.2 percent in 2017-18 as most of the Chinese goods are dumped into the Indian markets. The Indian government is seriously thinking to levy anti-dumping taxes to counter the Chinese imports.

II. Balance of Payments :
It can be seen that the current account BoP deficit for First plan was Rs. 42 crore. During Second plan the deficit in BoP was Rs. 1,725 crore. The highly unfavourable BoP in this plan was due to heavy imports of capital goods to develop heavy and basic industries and the failure of agricultural production. India adopted the policy of import substitution as one of the instruments to achieve the objective of self-reliance. Accordingly, the government managed to restrict imports and succeeded in expanding exports. The net result was a surplus in the BoP for the first time to the tune of Rs. 100 crore due to a sharp increase in net invisibles. After that India experienced a deficit in all plan periods.

Question 2.
Describe the status of foreign direct Investment in India.
Answer:
Foreign Direct Investment in India :
It can bes said that the FDI, which was only US$ 129 million in the year 1991 increased to US$ 3557 million in 1997-98, but then it decreased to US$ 2155 million in the year 1999-2000. The said decline could be attributed to the East Asian crisis, which adversely affected capital flows to all emerging markets. During the year 2000-01. the inflows were encouraging. There was a positive increase in the value of FDI inflows which might be attributed to various reasons such as heavy demand of Indian consumers, liberalized government policy, communications facilities.

The FDI inflows increased to US$6130 million in the year 2001-02, but again fell to US$ 5095 million in 2002-03 and further to US$ 4322 million in 2003-04. In the year 2004-05, the inflows again raised to US$ 6052 million and further to US$ 22862 million in 2006-07 showing the global investment trend to the developing countries.

The recessionary slow down had also observed during the latter period and as such the infows fell to US$ 37746 million. Further the inflows increased to US$ 46552 million in the year 2011-12, which signifies the impact of liberalization on economy and gradual opening up of the capital account. At a time when the general outlook on FDI was buoyant, the FDI inflows dipped again to US$ 36,047 million in the year 2013-14. Various reasons have been caused for this sort of downfall like rise in corruption cases, unnecessary procedural delays, environmental related issues, and higher inflation rates during the period.

In addition to this, the issues prevailing domestically may also have an adverse affect on the long-term FDI flows to India. But in the year 2014-15 the FDI inflows once again rose to US$ 45,147 million, and further to US$ 55,559 million in the year 2015-16. But declined in the year 2016-17 and again rose in 2017-18 and 2018-19 to the tune of US$ 42,156 million and US$ 50,553 million respectively.

A major share of 87 percent of FDI inflows was contributed by these ten countries while only 13 percent was contributed by rest of the world. Of the total FDI inflows to India, 32 per cent of the total investment by Mauritius and thus emerged as the dominant source of FDI 20 percent of the total investment was made by Singapore and was the second dominant source of FDI inflows to India. However, Japan and Netherlands backed the third and fourth position by respectively contributing percent each. UK and USA both contributed 6 each percent each followed by Germany by contributing 3 percent. Cyprus, UAE and France with 2 percent each contributed to the FDI inflows.

Further, it can be said that Mauritius and Singapore both together contributed 52 percent of total FDI inflows to India. The reason for this may be that they offer tailor made solutions in offshore banking and low tax rate, and robust privacy. On top of that they also have double tax avoidance agreement (DTAA) with India wherein profits made in India are not subject to any taxes. Therefore, it had also been observed that Mauritius became an excellent route to direct any investment in India, and hence it has a lion’s share in our FDI and this might be due to the fact that money travels from India to Mauritius and then again back to India in the form of FDI.

Though, the total investment by Singapore ranks it at second position, but if we see the inflows in the year 2018-19, this has almost doubled in comparison to the inflows of the 2016-17 year. The reason for this sudden increase could be attributed to the cancellation of DTAA with Mauritius. Before that also the reason for low inflows from Singapore despite of the DTAA Treaty was that it had both objective and subjective restrictions on who gets the benefits of the treaty.

Year	Foreign Direct Investment	Annual Growth Rate
1991-92	129
1992-93	315	144
1993-94	586	86
1994-95	1314	124
1995-96	2144	63
1996-97	2821	32
1997-98	3557	26
1998-1999	2462	-31
1999-2000	2155	-12
2000-01	4031	87
2001-02	6130	52
2002-03	5095	-17
2003-04	4322	-15
2004-05	6052	40
2005-06	8962	48
2006-07	22862	155
2007-08	34844	52
2008-09	41903	20
2009-10	37746	-10
2010-11	36047	-5
2011-12	46552	29
2012-13	34298	-26
2013-14	36047	5
2014-15	45147	25
2015-16	55559	23
2016-17	39904	-28
2017-18	42156	6
2018-19	50553	20

An analysis of the recent trends in FDI flows at the global level as well as across regions/ countries suggest that India has generally attracted higher FDI flows in the line with its robust domestic economic performance and gradual liberalisation of the FDI policy as part of the cautious capital account liberalisation process. Even during the recent global crisis, FDI inflows to India did not show as much moderation as was the case at the global level as well as in other emerging market economies (EMFs). However, when the global FDI flows to EMEs recovered during 2010-11, FDI flows of global recovery. A panel exercise for 10 major EMEs showed that FDI is significantly influenced by openness, growth prospects, macro economic sustainability (International Investment Position), labour cost and policy environment.

Question 3.
What are the provisions of GATT?
Answer:
The first and second world wars badly affected the world economies and therefore, various countries imposed several restrictions on imports. As a result, international trade among the nations deteriorated significantly. So the allied powers thought of having a plan for new, more viable relations in the international economy. The Bretton Woods conference held in 1944 was the starting point for a new order. The International Monetary Fund (IMF), International Bank for Reconstruction and Development (IBRD) and International Trade Organisation (ITO) were thought of towards this end.

Although, a conference, held in Havana in 1947-48, established a charter for the ITO, it never came into existence. Instead, the General Agreement on Tariffs and Trade (GATT) came into being. The GATT came into force on January 1, 1948.

Objectives of GATT :
The major objectives of GATT are as follows :

To follow unconditional most favoured nations (MFN) principle;
To grant protection to domestic industry through tariffs only;
To carry on trade on the principle of non-discrimination, reciprocity and transparency; and
To liberalise tariff and non-tariff measures through multilateral negotiations.

Functions/Provisions of GATT :
1. Most Favoured Nations (MFN) Clause :
Article I of GATT deals with the most favoured nations arid forbids the contracting parties from granting any new preference. It means a county agrees not to give special treatment to any single nation than it gives to all the contracting parties. The MFN clause rules out any preferential treatment among nations as far as trade \ policy is concerned ie., concessions must be extended immediately to all other countries, so that all contracting parties benefit to the same extent. In the same way, if an action is taken by any country to protect domestic industry then it must be applied to all contracting parties.

2. Tariff Concessions :
Article H deals with basic tariffs, incorporating schedules of tariff concessions. The tariff concessions contained in GATT usually known as ‘bound’ rates came into force in 1948 for 3 years until the end of 1950.

3. Elimination of Quantitative Restrictions (QRs) :
According to Article XI, the contracting parties are prohibited from imposing the QRs, subject to the principal exception that a country might, in certain defined circumstances which a restricter for the developed countries, apply restrictions with the objective of protecting its external balance of payments. In general, such restrictions must be applied in non-discriminatory manner.

4. Safeguard Code :
Article XIX of the GATT provided emergency safeguard code. Under this, a country could impose a tariff or quota to restrain imports which caused or threatened serious injury to domestic producers.

5. Exceptions :
Article XX and XXI provided general and security exceptions towards the prohibitions of import quotas by contracting parties.

6. Subsidies and Countervailing Duties :
The rule on subsidies and countervailing duties were incorporated in a separate code negotiated in the Tokyo round of 1970s. Under these rules, export duties on manufacturing products were banned except in developing countries. Export subsidies for primary products were restricted only on the condition that they should not lead to the acquisition of more than an equitable share of world export trade. The agreement also contained provisions that authorised importing countries to take compensating action against trading partners found to be dumping goods in their markets of increasing rates through export subsidies.

7. Settlement of Disputes :
The greatest success of the GATT had been in the field of settlement of disputes among its members. Any member having complaint against the other member on the issue of violating the rules of the organisation brings its complaint to the annual meetings for settlement.

Question 4.
What are the provisions of Final Act of WTO?
Answer:
The final act prepared in December, 1993 was finally signed by member nations of GATT in April, 1994 and this paved way for the setting up of WTO. The WTO agreement was signed by 104 member nations of GATT and it came into force from January 1, 1995 and India became a founder member of the WTO by signing the WTO agreement on December 30, 1994. Its head quarter is in Geneva, Switzerland.

WTO Agreements for Provisions of Final Act :
1. Agreement on Agriculture (AoA) :
It is related to commitments in the area of market access, domestic support and export promotion. The members have to transform their nontariff barriers like quotas into equivalent tariff measures.

The WTO Agreement on Agricultural contains provisions in 3 broad areas of agriculture and trade policy:
a) Market access-abolishment of all non-tariff barriers such as quotas, variable levies, minimum import prices etc.

b) Domestic support reduction by 20 percent in developed and 13.3 percent in developing countries; and

c) Export subsidies-reduction of subsidy expenditure by 36% and volume by 21% in 6 years, in equal instalments for developed and developing countries by 24% and 14% respectively in equal annual instalments over 10 years.

2. Agreement on Trade in Textiles and Clothing (Multi-Fibre Arrangements) :
This provides for phasing out the import quotas on textiles and clothing in force under the multifibre agreement since 1974, over a span of 10 years i.e., by the end of the tranisition period on January 1, 2005.

3. Agreement on TRIMs :
The main provisions provided in the TRIMs text ensure that government shall not discriminate against foreign capital. In other words, the TRIMs text compels member countries to give national treatment to foreign capital.

4. Trade Related Intellectual Property Rights (TRIPs) :
Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement between the member nations. TRIPS agreement is aimed at harmonizing the intellectual property (IP) related laws and regulations worldwide. The TRIPS agreement accomplishes this motive by setting minimum standards for protection of various forms of IP. The nations that are signatory to the TRIPS agreement have to abide by these minimum standards in their national laws related to IP. The TRIPS agreement generally sets out the minimum standards regarding the grant of rights to the owner of IP, enforcement requirements in the national laws,and settlement of disputes and remedies to those whose IP rights get infringed.

5. General Agreement on Trade in Services (GATS) :
For the first time, trade in services like banking, insurance, travel, marine transportation, mobility of labour etc., was brought within the ambit of negotiations in the Uruguay round. The GATS provides a multilateral frame-work of principles and services which should govern trade in services under conditions of transparency and progressive liberalisation. It spells out certain obligations like grant of MFN’ status to the other member nations with regard to trade in services, maintenance of transparency and also a commitment for liberalisation in general terms.

6. Disputes Settlement Body (DSB) :
One of the unique features of WTO is its provision relating to dispute settlement mechanism. Settlement of disputes under GATT was never ending process. There was ample scope for procedural delays, objections could be raised at each stage of the dispute settlement process and final reports could be rejected by the offending party. The DSB setup under WTO, seeks to plug these loopholes and thus, provide security and predictability to the multilateral trading system. It has now been made to settle a dispute within 18 months.

Question 5.
Explain the impact of WTO on Indian Economy. How it is different from GATT?
Answer:
Impact of WTO on Indian Economy :
Being a founder member of the World Trade Organisation country, India would get immense benefits. At present, only just 5 percent of our tariff lines remain bound. With the finalization of the Uruguary round, about 68 percent of India’s tariff lines covering basically raw materials, components and capital goods, but excluding consumer goods, petroleum and fertilizers and some non-ferrous metals would have been bound. The expert view is that it is in the long term interest of India to have low duties on raw materials, components and capital goods since they satisfy the productive needs of the economy.

However, regarding the threat arising out of TRIPS, India has pointed out that exclusive marketing rights to be provided for patent holders would in no way has pointed out that exclusive marketing rights to be provided for patent holders would in no way dilute the national interest in such crucial areas as agriculture, drugs and pharmaceuticals as enough safe grounds had been built into the system to take care of the concern voiced by developing countries including India.

It is expected that dur country would stand to gain immensely from the membership of WTO. By and large, it can be said that there are different opinions over advantages and. disad-vantages for India joining WTO.

Advantages :
India is likely to derive the following benefits by joining WTO :
1) It is believed that India will obtain large gains in agricultre, forestry, fishery products and processed food and beverages.
2) India’s share in world exports may increase from 0.5 to 1 percent.
3) It is believed that India can gain US$ 2.7 billion extra in its exports per year.
4) The phasing out of multi fibre arrangement (MFA) by 2005 will benefit as its exports of textile and clothing will increase.
5) Improved prospects for agricultural export prices due to reduction of subsidies and tariffs.
6) India has the advantage of trade links with all other member countries without the need for bilateral agreements due to multilateral agreements provision of WTO.
7) By being a member of the WTO, India can benefit from International Trade centre jointly operated by WTO and UNO.
8) GATS is the another area where India can gain immensely in banking, insurance, telecommunications and shipping. There is ample of scope for global job opportunities.

Disadvantages :
The following are the major disadvantages for India by joining WTO :

The claim of increase in India’s exports due to expansion of world trade is not acceptable to many. They feel that flow of goods and services across the globe depends not much on trade restrictions, but on factors like infrastructure, technology, assured supply of exportable goods etc.
Critics state that the benefits due to reduction of trade barriers and expansion of market and world trade will accrue more to developed countries only.
WTO agreements relating to steep hike in prices of drugs and agricultural inputs will hamper the growth of these sectors in India.
The IPRs protection is anticompetition and anti-liberalisation and which may lead to monopoly of MNCs.

Short Answer Questions

Question 1.
Assess the role of international trade on Indian-economy.
Answer:
The role of international trade in economic development is highly significant. It plays a vital role for the development of world economies. It provides the urge to develop the knowledge and experience that makes development possible. The classical and neo-classical economists attached so much importance to international trade in a country’s development that they regarded it as an engine to economic growth.

1. Comparative Cost Advantage :
Foreign trade helps to produce those commodities which have comparatively cheaper cost than others. It results in less cost of production in producing a commodity. If all the countries adopt this procedure and produce those goods in which they have less comparative cost, will lead to availability of goods at a lower price. India also specialised in the production of those commodities in which it has comparative cost ad-vantages.

2. Market Expansion :
Foreign trade increases the scope of market because of domestic demand and foreign demand for the product. If the production of goods increases, average cost declines and price of goods declines as a result consumers will get different varieties of goods both in quantitative and qualitative terms.

3. Agricultural Development :
Agricultural development is the backbone of our economy. Foreign trade has played very imporant role for the development of our agriculture sector. Every year India exports rice, cotton, fruits and vegetables to other countries. The export of goods makes our farmers more prosperous. It inspires the spirit of development in them.

4. Competition :
International trade discourages the formation of local monopolies. The local producers cannot exploit the consumers because of fear of cheap imports. In the absence of imports, some local firms may create monopoly and charge very high prices.

5. Trade Policy :
Trade and commerce have been the backbone of the Indian economy right from the ancient times. Textiles and spices were the first products to be exported by India. From 1950s to the late 1980s, the country followed socialist policy resulting in protectionism and heavy regulations on foreign companies conducting trade with India. Average tariffs were more than 200 percent, extensive quantitative restrictions were imposed on imports, and stringent restrictions wre imposed on foreign investments. However, the country began to reform the economy since 1990s, through adoption of LPG policy.

6. Foreign Capital :
As part of economic reforms, India opened up its economy and allowed MNCs in the core sectors such as power and fuel, electrical equipments, transport etc. to allow foreign invesment upto 74 percent stake in Indian firms and even 100 percent stake in some firms.

Question 2.
Distinguish balance payments and balance of Trade.
Answer:
Balance of Trade Vs Balance of Payments :
Balance of trade (BoT) takes into account nly those transactions arising out of the exports and imports of the visible items, it does not consider the exchange of invisible items such as the services rendered by shipping, insurance, banking, payment of interest and dividend, and expenditure by tourists. Therefore, balance of trade is nothing, but the difference between the value of goods exported and imported. A crucial point to pote is both goods and services are counted for exports and imports, as a result of which a nation has balance of trade for goods (also known as the merchandise trade balance) and a balance of trade for services.

In equation form, the balance of payments (BoP) is Y = C + 1 + G + (X – M) which includes all transactions which give rise to or exhaust national income. The expression in the above equation denotes the balance. If the difference between exports and imports is zero, the balance of trade is balanced. If exports are greater than imports, the balance of trade is favourable, or there is surplus balance of trade. Favourable balance of trade indicates the good economic condition of the economy. On the other hand, if exports are less than imports, the balance of trade is in deficit or unfavourable. The difference between BoP and BoT are as follows :

Balance of Payments Vs Balance of Trade

Balance of payments (BOP)	Balance of liade (BoT)
1. It is a broad and comprehensive concept.	1. It is narrow concept.
2. It includes all transactions related to visible, invisible and capial transfers.	2. It includes only visible items.
3. It always balances itself.	3. It can be favourable or unfavourable.
4. BoP = Current Account + Capital Account + or – Balancing item (errors and omissions)	4. BoT = Net earnings of Exports- Net payments for imports.

Question 3.
Distinguish current account and capital account.
Answer:
The balance of payments denotes a record of a country’s total money receipts received from and payments made to abroad,the difference betweeen the receipts and payment is the surplus or deficit. If total receipts are greater than total payments, there will be surplus; and if total receipts are lesser than total payments, there would be deficit in balance of payments.

Components of Balance of Payments :
A country’s balance of payments is merely a way of listing international receipts and payments. In this sense, it is an application of double-entry book-keeping. Usually a country’s balance of payments consists of two accounts : a) current account and b) capital account. A simplified example is given in the following Table, to understand items of balance of payments of a country in much better way.

Cbnqponeiits of Balance off Payments
TS Inter 2nd Year Economics Study Material Chapter 8 Foreign Sector 2

The right side of Table-shows how the foreign currency is spent. The row 1 of the table indicates that the country has exported goods to a value of 1,100 and analogously row 5 shows that the country has imported goods to a value of 1,600. These two rows describe the country’s visible trade.

Row 2 indicates the receipts of the country from the sale of services to foreigners during the period in question. These may be in the form of shipping services, interest and dividends which citizens of the country earn on investment abroad, income through tourism. Such payments are regarded as payments made by foreigners. These payments are registered under exports of services or invisible exports. In a completely analogous way, row 6 denotes payments which residents of the country in question make to foreigners for similar services. The net difference between row 2 and row 6 is called as invisible trade balance.

The items under row 3 include unrequired receipts i.e., the receipts which the residents of a country receive for free without having to make any present or future payment in return. Examples of this kind are : Gifts which residents receive from foreigners, money sent by emigrants to their relatives indemnities, payments from developed to developing countries. In a purely analogous way, row 7 describes payments which the country in question makes as gifts, assistance, indemnities, etc.

Items under 1, 2, 3, 5, 6 and 7 enumerate all the payments and receipts made for the current period of time where items 4 and 8 refer to capital receipts and payments. The items of 4 include loans taken by the government of a country from other foreign governments, sale of stocks abroad, sale of gold to other countries etc. In all these instances, the country in question will acquire foreign currency. Similarly, if residents of the country in their turn were to acquire foreign assets, for instance in the form of land abroad or foreign shares, or if the government were to acqire foreign assets, for instance in the form of land abroad or foreign shares, or if the government were to lend money to a foreign government, this would give rise to an outflow of foreign currency and comes as a capial transfer under row 8.

Question 4.
Describe the functions of GATT.
Answer:
The general agreement on tariffs and trade (GATT) came into force on January 1, 1948.

1) Most Favoured Nation Clause :
The basic principle of GATT is that of non-discrimination, confined in article – I. Contracting parties accept the so-called most favoured nation clause. The MFN clause rules out any preferrential treatment among nations as far as trade policy is concerned.

2) Tariff Concessions :
Article II deals with basic tariffs, incorporating schedules of tariff concessions. The tariff concessions contained in GATT known as band rates came into force in 1948 for 3 years until the end of 1950.

3) Elimination of quantitative restrictions (QRS) :
According to article XI, the contracting parties are prohibited from imposing the QRs, subject to the principal exception that a country might, in certain defined circumstances which are stricter for the developed countries, apply restrictions with the objective of protecting its external BOP. In general, such restrictions must be applied in a non-discriminatory manner.

4) Safeguard code :
Article XIX of the GATT provided emergency safeguard code under this, a country could impose a tariff or quota to restrain imports which caused or threatened serious injury to domestic producers.

5) Exceptions :
Article XX and XXI provided general and security exceptions towards the prohibitions of import quotas by contracting parties.

6) Subsidies and countervailing duties :
The rule on subsidies and countervailing duties were incorporated in a separate code negotiated in the Tokyo round of 1970’s. Under these rules, export duties on manufacturing products were banned except in developing countries.

7) Settlement of disputes :
The greatest success of the GATT had been in the field of settlement of disputes among its members. Any member having compliant against the other member on the issue of violating the rules of the organisation brings its complaint to the annual, meetings for settlement.

Question 5.
Discuss the rounds of GATT.
Answer:
Eight rounds of negotiating conference took place between the participating countries from 1947 to the last year of GATT. This can be shown in the following table.
Chart : Rounds of GATT

In the table first six rounds of conference were related to curtailing tariff rates whereas the seventh was related to non-tariff issues. The eight round was entirely different and it was popularly known as Uruguay round.

Question 6.
Explain the objectives of WTO.
Answer:
WT.O. came into force from Ist January, 1995. It’s head quarter is Geneva, Switzerland.

Objectives :

Raising standard of living and income, promoting full employment, expanding production and trade and optimum utilisation of world resources.
Introduce Sustainable development – a concept which envisages the development.
Taking positive steps to ensure that developing countries, secure a better share in world trade.
Promote trade flows by encouraging nations to adopt non discriminatory and predictable trade practices.
Establish procedures for solving trade disputes among members.

Question 7.
Analyse the differences between GATT and WTO :
Answer:
Difference between GATT and WTO
The major differences between GATT and WTO are as follows :

GATT	WTO
1) It has no institutional foundation.	1) It is a permanent institution with its secretariat.
2) Its commitments were devised on a provisional basis.	2) Its commitments are full and permanent.
3) Its rules were applied to merchandise goods only.	3) In addition to merchandise its rules . are applied to services also.
4) The agreement provisions were multilateral with selective in nature and were not binding by members.	4) The agreement provisions are multilateral and binding on all members.
5) The dispute system was dilatory and not binding.	5) The dispute settlement mechanism is faster, automatic and binding on the parties.

Question 8.
Write a note on Agreement on Agriculture (AoA)
Answer:
It is related to commitments in the area of market access, domestic support and export promotion. The members have to transform their non-tariff barriers like quotas into equivalent tariff measures. The tariffs resulting from this transformation, as well as other tariffs on agricultural products are to be reduced on an average by 36 percent in the case of developed countries and 24 percent incase of developing countries. The reductions were required to be undertaken over 6 years in case of developed countries and 10 years incase of developing countries.

The W.T.O. agreement on Agriculture contains provisions in 3 broad areas of agriculture and trade policy:
a) Market access – abolishment of all non-tariff barriers such as quotas, variable levies, minimum import prices etc.

b) Domestic support – reduction by 20 percent in developed and 13.3 percent in developing countries, and

c) Export subsidies – reduction of subsidy expenditure by 36% and volume by 21% in 6 years, in equal instalments for developed and developing countries by 24% and 14% respectively in equal instalments over 10 years.

Very Short Answer Questions

Question 1.
FDI.
Answer:
It is a form of a long term international capital movement made for the purpose of productive activity and accompanied by the intention of managerial control or participation in the management of foreign firm.

Question 2.
Balance of Trade.
Answer:
A country’s balance of trade refers to the net difference between the value of exports and value of imports of merchandise only a given period.

Question 3.
Invisibles.
Answer:
The receipts of the country from the sale of services to foreigners during the period. These may be in the form of shipping services, interest and dividends, which citizens of the country earn on investment abroad.

Question 4.
GATT objectives.
Answer:

To follow unconditional most favoured nations principle.
To grant protection to domestic industry through tariffs.
To carry on trade on the principle of non discrimination, reciprocity.
To liberalise tariff and non tariff measures through multilateral negotiations.

Question 5.
WTO objectives.
Answer:

Raising standard of living and income and employment,
Introduce sustainable development.
Iaking positive steps to ensure that developing countries.
Promote trade flows by encouraging nations to adopt non discriminatory.
Establish procedures for solving trade disputes among members.

Question 6.
MFN.
Answer:
Any concession given to any nation was automatically extended to all the members countries of the GATT. MFN means Most Favoured Nations.

Question 7.
TRIP’S.
Answer:
It means Trade Related Intellectual Property Rights. It legally protects the intellectual property of an individual (or) a business firm (or) a nation against illegal usage by others.

Question 8.
TRIMS.
Answer:
The main provisions provided in the TRIM’S text ensure that government shall not dis-criminate against foreign capital. TRIM’S refers to Trade related investment measures. The TRIMs text compels member countries to give national treatment to foreign capital.

Question 9.
GATS.
Answer:
(General Agrement on Trade in Services) : It provides a multilateral frame work of principles and services which should govern trade in services under conditions of transparency and progressive liberalisation. ;

Question 10.
Export subsidies.
Answer:
It means a country may encourage its exports to foreign countries by granting subsidies on goods exported. A combination of tariffs against imports and countries for exports may elimination external deficit facing a country.

Question 11.
Balance of payments (BoP).
Answer:
It is a statistical record in the form of a balance sheet comprising all its transactions with rest of the world during any given period of time.

Question 12.
Dunkel Proposals.
Answer:
The Uruguay round negotiations were expected to complete in four years, but it took more than eight years of complex negotiations. Mr. Arthur Dunkel, the Director General of GATT compiled a very detailed document at this round popularly known as Dunkel proposals. This proposal culminated to the Final Act on December 15, 1993. This act led to formation of WTO. Some of the important areas contained in these proposals include; tariff and non-tariff measures, textile and clothing, agriculture, subsidies, multi trade agreements, trade related intellectual property rights (TRIPs), trade related investment measures (TRIMs) and general agreement on trade and services (GATS).

TS Inter 2nd Year Economics Study Material Chapter 7 Tertiary Sector

November 16, 2022October 24, 2022 by Srinivas

Telangana TSBIE TS Inter 2nd Year Economics Study Material 7th Lesson Tertiary Sector Textbook Questions and Answers.

TS Inter 2nd Year Economics Study Material 7th Lesson Tertiary Sector

Essay Questions

Question 1.
What is tertiary sector? Explain the importance of tertiary sector in India economy.
Answer:
In traditional setting, providing skills to satisfy human wants by barber, dhobi, carpenter, goldsmith, blacksmith etc., was considered as service. In modem economy, services became highly skilled and attractive, so, services ar contributing a major share to national income and in many countries, services are providing- employment to the major portion of labour force.

In modem economy the tertiary sector includes the following sub-sectors: trade, repair seirvices, hotels and restaurants, transport, storage, communication and services related to broadcasting, financial services, real estate, ownership of dwellings and professional services,
public administration, etc.

The services sector’s significance in the Indian economy has continued to increase as this sector now (2019) accounting for around 55 percent of total size of the economy and gross value added (GVA) growth, two-thirds of total FDI (2019) inflows and about 38 percent of total exports. The share of services sector now exceeds 50 percent of gross state value added in 15 out of the 33 states and UTs.

1) Contribution of Gross Value Added (GVA) :
In India the service sector has emerged as the major growth inducing sector. The share of service sector in gross value added (GVA) increased significantly from 49.4 percent in 2013-14 to 57.8 percent in 2019-20 (AE). The tertiary sector is assuning greater importance over the years with an average contgribution of about 58 per cent to the GVA, followed by the secondary and primary sectors with about 28 percent and 14 percent, respectively. However, the contribution of secondary sector (28.3% in 2019-20) and primary sector (13.9% in 2019-20) is declining over the years. According to Economic Survey of India-2019, contribution of major components of service sector in 2019-20 is as follows: trade, hotel, transport, storage, communication and services related to broadcasting is 18.1%; financial, real estate and professional services is 24.5%; and public administration, defence and other services is 15.2%.

2) Contribution To Employment :
Employment in modem service sector is highly skilled and high ranged earning one, especially, after the IT (Information Technology) revolution Average per Capita earning of service sector employees is very high when compared to employees of other sectors. The share of service sector in employment has increased from 17.3 per cent in 1950-51 to 26.5 percent in 2010 and further to 31.45 percent by 2018.

3) Exports :
The value of total service exports is increased from US $ 195.1 billion in 2017- 18 fo US $ 205.8 Billion in 2018-19 of which, software exports account for about 40 percent,’travel and transportation 23 percent and business services 19 percent, financial services 2 percent, communications 1 percent and insurance 1 percent. After deducting the value of services imports from balance of trade, the value of India’s favourable balance in services trade is US $ 81.9 billion in 2018-19.

4) Foreign Direct Investment (FPJ) in Service Seetor :
Gross foreign direct investment (FDI) equity inflows into service sector in 2018-19 was US$ 28,264 million. The share of service sector in gross FDI equity inflows into India is 64.6 percent in 2017-18 and 63.7 in 2018-19. An increase in net foreign direct investment (FDI) improves the Balance of Payments (BoP) position. The impressive improvement in balance of payment (BoP) position from March, 2014 to March, 2019 is mainly attributed to almost doubling of net FDI into the country during 2009-19. Net FDI inflows have continued to be buoyant in 2019-20.

Increasing FDI inflows in service sector is vital as it contributes over 60 per cent to the gross domestic product. Total FDI inflows to India from April, 2000 to September, 2019 are US $ 4.46 lakh million (Rs. 25.61)-lakh crore), nearly 50 percent of which belong to service sector.

Question 2.
Write about Tourism sector services in India.
Answer:
World Travel Organization defines tourism as “the activities of tourists travelling and staying in places outside thier usual environment for not more than one consecutive year for leisure, business and other purposes”. Indian government defines tourism as” a foreign passport holddr visiting and staying in India for more than a day but not more than a year for leisure, entertainment, business, medical purposes, religious, sports, conferences, seminars etc.” Tourism is a set of socio-economic activities carried out for tourists. There are two forms of tourism.

1) Domestic Tourism :
Domestic tourists are the residents of the country who travel within the geographical boundaries of their country. Traditionally, people use their vacations to visit religious places, pilgrimage centeres and historicasl places. The modem generation spend their vacations visiting wildlife sanctuaries, beaches, hill statiions, entertainment parks and resorts in the country.

2) International Tourism :
International tourists are the foreign passport holder visiting another country for business, leisure, fitness, wellnes, medical religious, spiritual, archaeo-logical, sports, conferences, seminars etc. They need visa, emigration and customs clearance of the government of the government of the country they are visiting.

The tourism sector, a major engine of growth, contributes to GVA, foreign exchange earnings and employment. In India, the tourism sector witnessed a strong performance from 2015 to 2017, with high growth in foreign tourist arrivals. However, foreign tourist arrivals growth has decelerated since then to 5.2 percent in 2018 and 2.7 percent in January-October 2019. This trend, however, is not unique to India, as the growth i international tourist arrivals globally also slowed from 7.1 percent in 2017 to 5.4 percent in 2018. Correspondingly!!, growth in foreign exchange earnings from tourism sector has slowed in 2018 and 2019 after registering strong growth until 2017, India has earned a total of US $ 24 billion foreign exchange during January-October 2019, with a growth of 2 percent.

About 7.68 million foreigners have visited India in 2014 and it increased to 10.56 millions by the year 2018. During the same period the number of international tourist arrivals (ITAs) to India increased from 13,11 millions to 17.42 millions while international tourist arrivals around the world increased from 1137 millions to 1401 millions. The share of India’s ITAs in world ITAs increased from 1.15 per cent in 2014 to 1.24 per cent by 2018. India’s rank in World’s ITAs Increased from 20^th to 22^nd India’s share in Asia Pacific’s ITAs increased from 4.86 percent to 5.1 percent. India’s rank in Asia Pacific’s ITAs increased from 8^th to 7^th.

India’s share in world tourism receipts increased from 1.57 percent to 1.97 percent (PE) India’s rank in world tourism receipts increased from 15^th to 13^th. India’s share in Asia Pacific’s tourism receipts has increased from 5.49 percent to 6.54 percent (PE). However, India’s rank in Asia Pacific’s tourism receipts remained same at 7 in 2014 and 2018.

State Level Sham of Tourism in GVA and Employment :
Looking at trends in tourism at the state level, the top five states attracting domestic tourists are Tamil Nadu, Uttar Pradesh, Karnataka, Andhra Pradesh and Maharashtra which accounted for nearly 65 percent of the total domestic tourist visits in the country in 2018. The top five states attractig foreign tourists were Tamil Nadu, Maharashtra, Uttar Pradesh, Delhi and Rajasthan, accounting for about 67 per cent of the total foreign tourist visits in the country in 2018.

The Ministry of Tourism along with the Natinal Council of Applied Economic Researcch (NCAER) prepared a tourism satellite account (TSA) following the methodology recommended by the UN World Tourism Organization. The state-wise share of tourism gross value added (TGVA) in state GVA and share of tourism employment in total state employment have been estimated in the draft report of Ministry of Tourism and NCEAR.

Government s Initiatives :
To facilitate international tourism, India introduced the e- Tourist Visa regime in September 2014 for 46 Countries. Prior to the launch of the scheme, the e-Visa facility was available for only 12 countries. The government further liberalized the visa regime in 2016, renaming it to e-Visa scheme with five sub-categories i.e. ‘e-Tourist Visa’, ‘e-Business Visa’, ‘e-Medical Visa’, ‘e-Conference Visa’ and ‘e-Medical Attendant Visa’. The e-Visa scheme is now available for 169 countries with valid entry through 28 designagted airports and 5 designated seaports. With this, foreign tourist arrivals to India on e-visas have increased from 4.45 lakh in 2015 to 23.69 lakh in 2018 recording nearly 21 percent year-on-year growth from the previous year.

Question 3.
Explain about IT-BPM (Information Technology and Business Process Management) services.
Answer:
Information Technology and Business Process Management (IT-BPM) Services :
Business process management (BPM) is a discipline involving any combination of modeling, automation, execution, control, measurement and optimization of business activity flows, in support of enterprise goals, spanning systems, employees, customers and partners wihtin and beyond the enterprise boundaries. The Indian IT-BPM industry has been the flag-bearer of India’s exports for the past two decades, as per Economic Survey of India, 2019, the exports from this industry is reached to about US$ 177 billion in March 2019.

The sector contributes significantly to the economy via employment growth and value addition. IT services constituted 51 percent of the IT-BPM sector in 2018-19, followed by software and engineering services (20.6 percent share) and BPM services (19.7 per cent share). Within the IT-BPM sector, IT services remained the dominant segment with about US$ 91 billion in revelues in 2018-19. Out of the IT sevices, digital revenues grew (year on year-YOY) more than 30 percent to reach US$ 33 billion.

Further, the IT-BPM sector can be divided into four major sub-sector as :

IT services,
software products and engineering services,
BPM,
hardware.

As per National Association of Software and Service Companies (NASSCOM), IT services occupy a major share with 51.2 percent, followed by software products and engineering services with 20.6 percent, BPM with 19.7 percent and hardware 8.5 percent in total value of IT- BPM services in 2018-19.

Exports of IT-BPM Sector :
A significant part (about 83 percent) of the IT-BPM industry continues to be export driven, with export revenues in excess of US$ 135 billion in 2018-19. During 2018-19, the revenue growth (YoY) for IT-BPM sector (excluding hardware)sofened to 6.8 percent from 8.2 percent in 2017-18. Out of the total US$ 135.5 billion in exports of the IT- BPM sector in 2018-19, IT services accounted for 55 percent of the exports, and BPM and software products and engineering services accounted for the remaining 45 percent with each accounting for almost half of the share. All three sub-sectors witnessed a pickup in export revenues in 2018-19, with IT services growing (YoY) by 7.3 percent, BPM services by 8.3 per cent and software products and engineering services by 11.2 percent.

Looking at export revenues by destination, USA accounts for the bulk of exports, amounting to US$ 84 billion, which is 62 percent of total IT-BPM exports (excluding hardware) in 2018-19. This is much larger than the share of exports going to UK, which is the second largest export market for IT-BPM services, with a share of around 17 percent. Europe (excluding UK) and Asia-Pacific account for 11.4 percent and 7.6 percent of the export earnings, respectively.

Government’s Initiatives :
A number of policy initiatives have been undertaken to drive innovation and technology adoption in the IT-BPM sector, including Start-up India and National Software Product Policy and removal of issues related to Angel tax, According to NASSCOM study, the Indian start-up ecosystem has been progressing, and is now the third largest in the world with 24 unicorns, though the gap with the largest (China: 206) and second largest (USA: 203) markets remains significant. Cities such as Bengaluru, Delhi-NCR, and Mumbai account for around 55 percent of the total startups in India.

Question 4.
Explain various kinds of transport systems in India.
Answer:
Transport sector helps the economy as the blood circulation system of a human body. Various means of transport are discussed as under.

1. Road Transport :
Road transport is the dominant mode of transportation in terms of its contribution in gross value added (GVA) and traffic share. The share of transport sector in the GVA for 2017-18 was about 4.77 percent, of which the share of road transport was the largest at 3.06 percent, followed by the share of he railways (0.75 percent), air transport (0.15 percent) and water transport (0.06 percent). Similarly, as per the National Transport Development Pollicy Colmmittee Report, as of 2011-12, road transport is estimated to handle 69 percent and 90 percent of the countrywide freight and pasenger traffic, respectively.

The Ministry of Road Transport and Highways (MoRTH) is mandated with the development and maintenance of road networks especially the national highways as well as the implementation of the motor vehicle act under which it formulate broad policies relating to road transport. As on March 31, 2018, India had a road network of about 59.64 lakh km. The total length of national highways was 1.32 lakh km as on March 1, 2019.

2. Railways :
Railway was nationalized in 1950. Indian Railways (IR) with over 68,000 route km is the third largest network in the world under single management. During the year 2018-19, Indian Railways carried 120 crore tonnes of freight and 840 crore passengers making it the world’s largest passenger carrier and 4th largest freight carrier. Railway safety is accorded the highest priority by Indian railways and steps are being undertaken on a continuous basis to prevent accidents and to enhance safety of the passengers.

Cleanliness and environmental Initiatives by Indian Railway :
Indian railways cover over 8,700 stations and carry around 230 lakh passengers daily with clientele of varied socio-economic backgrounds. Cleanliness is a continuous process and every endeavour is made to keep the stations and coaches in properly maintained and clean condition. Special cleanliness campaigns under SwaChh Bharat Abhiyan were launched by Indian Railways on October 2, 2014 and regualr intensive campaigns/drives have been organized since then.

Modernization of Stations :
Modernization/upgradation of railway stations in Indian railways is a continuous and on-going process. 1,253 stations have been indentified for development under Adarsh Station Scheme and are planned to be developed by 2019-320.

3. Air Transport :
India is the third largest domestic market for civil aviation in the world. Indan has 136 commercially-managed airports by Airports Authority of India (AAI) and 6 under public private partnetships (PPP) for operation, maintenance and development of airports. Air transport in India was nationalized in 1953 and India Airlines and Air India were established. Internal air transport Services were allocated to Indian Airlines and international services to Air India. The airline operations in India have scaled up their aircraft seat capacity from an estimated 0.07 annual seats per capita in 2013 to 0.12 in 2018. The comparable estimates for china, the second largest domestic market in the world, over this period were 0.33 in 2013 and 0.49 in 2018, while those of the United States of America, the largest domestic market, were 2.59 in 2013 and 2.95 in 2018.

Indian aviation re-established its resilience in the year 2019-20. A total of 43 airports have been operationalized since the scheme for operationalizing unserved airports (Udan) was taken up, of which 4 were done in FY 2019-20. On airport connectivity, India stood first along with 7 others (USA, China, Japan, UK, etc.) in the Global Competitiveness Report 2019 of World Economic Forum.

To ease the strain on existing airport capacities, 100 more airports are to be made operational by FY 2023-24. Besides using 46 idle airstrips, 16 private greenfield airports, 15 AAI airports, 31 heliports, and 12 waterdrowmes would be develolped. To continue with the high growth trajectory, the Govenment has been providing a congenial tenvironment so that the Indian cariers double their fleet from about 680 aircraft in 2019 to over 1,200 by FY 2023-24.

4. Water Transport :
Water transport connects canals, lakes, rivers, and backwaters wihtin the country. Shipping connects major ports of the country and the world. India with 5,000 km of river and canals has a vast potential for inland water transport, it is the cheapest and least polluting mode of transport. The five year plans discussed about integration of the major rivers, modemizaion of the boats and small ships and training skilled labour to develop inland water transport services. India has a coastal line of 7,156 km with 13 major ports and about 200 non-major ports. The share of shipping in total transport sector is 29%. Shipping is basically used to transport bulk transport item like petroleum products, coal etc.

As per Economic Survey of India-2019, India has a 0.9 percent share in world fleet as of January 2019. The total cargo capacity of Indian ports stood at 1,452.64 million tonnes per annum (MTPA) at the end of March 2019, more than doubling from 628.03 MTPA at the end of March 2010. Ports such as Paradip, Chennai, Vishakhapatnam, Deendayal (Kandla) and Jawaharlal Nehru port. JNPT had the highest cargo capacities as of March 2019. The total numbers of ships ownded by Indian companies stood at 1,414 as of August 2019, up from 1,040 om 2010. Growth in overall port traffic witnessed an acceleration between 2013-14 and 2016-17, but has decelerated since 2017-18.

Question 5.
Write an essay on the sources of energy in India.
Answer:
Energy Sector :
Energy is one of the most important building blocks in human development, and as such, acts as a key factor in determining the economic development of all the countries. Energy is available in many forms which is used either in production process or in consumption process. As per Economic Survey, 2019-20. India is the third largest energy cosumer in the world after USA and China in 2017 with a share of 5.8 per cent of the world’s primary energy consumption.

Sources of Energy :
Energy resources are all forms of fuels, used in the modem world, either for heating, the generation of electrical energy, or for other forms of energy conversion processes. The sources of energy can be divided into two subgroups:

I. Renewable Energy Resources :
Renewable energy is an energy that is produced from natural processes and continuously replenished.

Types of Renewable Energy :
1. Solar Energy :
The radiant light and heat energy from the sun is harnessed with the use of solar collectors. This collected solar energy is then used to provide light, heat and different other forms of electricity.

2. Wind Energy :
The energy we get from winds is known as wind energy. For this, windmills have been used for hundreds of years to pump out water from the ground. We use large tall wind turbines that allow winds to generate electricity. The natural airflow on the surface of the earth is used to run the wind turbines.

3. Hydroelectricity :
The kinetic energy from the flowing water is used to run the turbines which generate electricity. A tidal power which converts the energy of tides and wave power which captures the energy from the surface of the ocean waves for power generatin are other two forms of hydropower also have huge potential in electric power generation.

4. Geothermal Energy :
It is generated from the thermal energy which is stored in the earth. The heat energy is captured on sources such as hot springs and volcanoes and this heat is directly used by industries for heating the water and other purposes.

5. Bio-Energy :
This is derived from the biomass which is a type of biological material derived from living organisms. Biomass can be directly used via combustion to produce heat and indirectly it can be used to convert to bio-fuels. Biomass can be converted to other usable forms of energy such as transportation fuels like ethanol, biodiesel and methane gas.

According to Energy Statistics, 2020 (Minisry of Statistics and Programme Implementation, Gol), the total potential for renewable power generation in the country as on 31.03.2019 is estimated at 1097465 MW. This includes 68.25 percent of solar power, 27.54 percent of wind power and remaining is in the form of small hydro-power, biomass power etc.

The geographic distribution of the estimated potential of renewable power as on 31.03.2019 reveals that Rajasthan has the highest share of about 15% (162223 MW), followed by Gujarat with 11% share (122086 MW) and Maharashtra and Jammu & Kashmir with 10% share (113925MW and 112800 MW respectively), mainly on account of solar power potential except Gujarat where the share of wind power is the highest.

II. Non-Renewable Energy :
Non-renewable energy is that which does not renew itself at a sufficient rate for sustainable economic extraction in meaningful human time-frames. The non-renewable energy is energy from fossil fuels such as coal, crude oil; natural gas and uranium.

(A) Fossil Fuels: Fossil fuels are formed by the remains of animals and plants. Fossil fuel is divided into three categories as shown below :

1. Coal :
Coal deposits are mainly confined to eastern and south central parts of the country. The states of Jharkhand, Odisha, Chhattisgarh, West Bengal, Madhya Pradesh, Telangana and Maharashtra account for 98.09% of the total coal reserves in the country. The state of Jharkhand had the maximum share (25.88%) in the overall reserves of caol in the country. The state of Jharkhand had the maximum share (25.88%) in the overall reserves of coal in the country as on 31st March 2019 followed by Odisha (24.76%). Overall production of raw coal in India during the eyar 2018-19 was 730.4 million tonnes (MT) displaying a growth of 8.1 percent.

2. Crude Oil :
Due to excessive pressure, smaller organisms like zooplankton and algae are decomposed into oil. The estimated reserves of crude oil in India as on 31.03.2019 stood at 618.95 million tonnes (MT) against 594.69 million tonnes as on 31.03.2018. Geographical dis-tribution of crude oil indicates that the maximum reserves are in the Western Offshore (38%) followed by Assam (25.6%), whereas the maximum reserves of natural gas are in the Eastern Offshore(41%) followed by Western Offshore(23.4%).

3. Natural Gas :
The estimated reserves of natural gas in India as on 31.03.2019 stood at 1380.63 Billion Cubic Meters (BCM) as against 1139.57 BCM as on 31.03.2018.

(B) Nuclear Fuels :
The use of nuclear technology relying on fission requires naturally occurring radioactive material as fuel. Nuclear power provides about 6% of the world’s energy and 13-14% of the world’s elecricity.

1. Advantages of Non-Renewable Energy :
a) The non-renewable source of energy is affordable, for instance diesel and oil.
b) It is easily accessible and more compatible; and
c) the non-renewable source of energy is easy to store.

2. Disadvantages of Non-Renewable Energy :
a) The non-renewable energy cannot be replaced once their energy source is used up,
b) The by products of non-renewable energy cause environmental damages,
c) It also increases greenhouse gases.

Conventional and Non-Conventional Sources of Energy :
Energy resources can also be classified as conventional and non-conventional energy resources. The conventional sources of energy include firewood, straw, dried dung, coal, crude oil and natural gas, Thermal energy and hydro-power are conventional energy resources. Where as non-conventional sources of energy include solar energy, wind energy, tidal energy, geothermal energy, nuclear energy and bio-energy.

Question 6.
Write about Telecom sector services.
Answer:
Telecom Sector :
The science and technology of communication at a distance by transmission of electrical impulses, electromagnetic waves, or optical pulses, as by telephone, radio, television, or computer network is called Telecom sector. Total telephone connections in India grew by 18.8 percent from 9,961 lakhs in 2014-2015 to 11,834 laksh in 2018-19. As on 30 September 2019, the total subscription stood at 11,943 lakhs of which 5,147 lakhs connections were in the rural areas and 6,796 lakhs in the urban areas. Landline telephone connections were at 206 lakh while the number of wireless telephone connections stood at 11,736 lakh at the end of September 2019. The wireless telephony now constitutes 98.27 percent of all subscriptions whereas share of landline telephones now stands at only 1.73 percent.

The overall teledensity in India sands at 90.45 percent, the rural teledensity being 57.35 per cent and urban teledensity being 160.71 percent at the end of September 2019. The private sector dominates with a share of 88.81 per cent (10,606 lakh connections) at the end of September, 2019 while the share of public sector was 11.19 per cent (1,336 lakhs connections). Internal and broadband penetration in India has kept a rapid pace. The number of internet subscribers (both broadband and narrowband put together) stood at 6,653 lakhs at the end of June 2019 as compared to 2,516 lakhs in 2014.

The number of mobile internet subscribers was 6,436 lakhs at the end of June 2019 while the number of wireline internet subscribers was 217 lakh. Total broadband connections increased by about ten times, from 610 lakhs in 2014 to 5,946 lakhs in June 2019. This has accelerated the growth in internet traffic; with a data usage touching the highest ever level of 462 lakhs tera bytes in the year 2018.

Challenges :
There are 4 major players in the sector-3 in the private sector and Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) in the public sector, operating in mutually exclusive zones. Since, 2016, the sector has witnessed substantial competition and price cutting by the Telecom Service Providers (TSPs) creating financial stress in the sector. As a result, the sector is experiencing consolidation. While some operators have filed for bankruptcy, others have merged, in their quest to improve viability. The price of data in the country is among the lowest in the world.

The average revenue per user (ARPU) for GSM based mobile services has also gone down substantially from Rs. 126 in June 2016 to Rs.74.30 in June 2019. BSNL and MTNL are also affected by the tariff war that has impacted their cash flow resulting in mounting losses. The government has drawn up a plan to revive these PSUs. The revival plan consists of several measures including reduction of staff cost through Voluntary Retirement Scheme, allotment of spectrum for 4G services, monetization of land/building, tower and fiber assets of BSNL/MTNL, debt restructuring through sovereign guarantee bonds and ‘in-principle’ approval for merger of BSNL and MTNL.

Telecom Infrastructure and Connectivity :
1) Bharat Net :
For achieving the goal of developing broadband highways as part of the digital India campaign, the government is implementing the flagship Bharat Net programme in a phased manner for providing broadband connecivity to all the 2.5 lakh gram panchayats (GPs) in the country. The project envisages an optimal mix of optical fibre, radio and satellite media.

2) Public Wi-Fi Access :
Public Wi-Fi hotspots ensure last-mile delivery of broadband to users and are much easier to scale than adding new mobile towers.

3) Towers and BTS :
The number of Mobile Base Transceiver Stations (BTS) saw a rise from 7.9 lakh in 2014 to 21.8 lakh (in July 2019) while Optical Fibre Cable increased from 7 lakh km to around 14 lakh km during the same period.

4) Project for Left Wing Extremism (LWE) Areas and North East Region :
The Department of Telecom executed a project for providing Mobile Services in 2,335 locations in Andhra Pradesh, Bihar, Chattisgarh, Jharkhand, Maharashtra, Madhya Pradesh, Odisha, Telangana, Uttar Pradesh and West Bengal, which are affected by Left Wing Extremism (LWE) with an outlay of Rs. 4,781 crores.

Short Answer Questions

Question 1.
Write about growth of service sector in India.
Answer:
In traditional setting, providing skills to satisfy human wants by barber, dhobi, carpenter, goldsmith etc. was considered as service. In modern economy the tertiary sector includes the following subsectors trade, repairs, hotels, restaurants, transport storage communication, banking, insurance and growth.

Growth of Service Sector :
Increase in production of goods and services during a particular period is considered as growth. Here, we are dealing with the growth of services. Not with standing the recent underperformance, the service sector continues to outperform agriculture and industry sectors, contributing around 58 percent to the total GVA. The growth of service sector can be understood by looking at Table given below

Growth of Tertiary Sector in India in Constant Prices (2011-12 Prices) (%)
TS Inter 2nd Year Economics Study Material Chapter 7 Tertiary Sector 1

As per the above table it is evident that the annual growth of service sector in India is around 7 percent during the period from 2017-18 to 2019-20 in constant prices. Growth of service sector is 7.5 percent in 2017-18, 6.9 percent in 2018-19 and 7.5 percent in 2019-20. Within services, the growth of trade, hotels, transport, communication and services related to broadcasting decreased from 7.8 percent in 2017-18 to 5.9 percent in 2019-20. The growth rate of financial, real estate and professional services moderately increased from 6.2 per cent in 2017-18 to 6.4 per cent in 2019-20. The growth rate of public administration, defense and other services decreased from 11.9 percent in 2017-18 to 9.1 percent in 2019-20.

Question 2.
Analyse trends in growth rates and performance of key sub-sectors of services sector.
Answer:
Services Sector Performance at the State and UT Level :
The share of services sector in Gross State Value Added (GSVA) is highest in union territory Chandigarh followed by Delhi. In the case of states, we can see highest share of services sector in GSVA in Karnataka followed by Manipur, Telangana and Kerala. In contrast, the share of services in GSVA in 2018-19 is lowest in Sikkim followed by Gujarat, Madhya Pradesh and Chattisgarh.

With respect to growth rate of service sector, the average annual growth of service sector from 2014-15 to 2018-19 is highest in newly formed state of Telangana with 11.2 percent followed by Karnataka 10.5 percent and Andhra Pradesh 9.8 percent. The lowest annual average growth is recorded in Tripura at 3.0 percent followed by Sikkim 4.4 percent and Nagaland 4.9 percent. This was analysed in the following table.

Services Sector Performance at the State and Union Territory Level

State	Services Sector State Share in GSVA* in 2018-19 (percent)	Services Sector 5-year Average Growth (percent YoY)**
Chandigarh*	86.7	7.3
Delhi	84.1	8.8
Andaman and Nicobar Islands*	68.1	8.6
Karnataka	65.4	10.5
Manipur”	65.1	6.3
Telangana	64.7	11.2
Kerala*	62.7	6.4
Bihar	61.1	9.0
Jammu & Kashmir*	58.3	5.5
Meghalaya*	59.0	7.5
Maharashtra*	57.6	8.1
West Bengal	57.5	9.2
Tamil Nadu	54.2	6.9
Nagaland*	54.1	4.9
Haryana	50.8	9.2
Uttar Pradesh	48.8	7.7
Puducherry	48.5	6.0
Assam*	47.8	6.9
Mizoram*	46.8	7.8
Punjab	46.5	7.2
Rajasthan	45.0	7.3
Jharkhand	44.8	8.7
Andhra Pradesh	43.0	9.8
Himachal Pradesh	42.8	7.6
Arunachal Pradesh*	42.5	9.0
Odisha	41.8	8.4
Uttarakhand	40.5	9.5
Tripura*	39.7	3.0
Goa	38.0	8.4
Chhattisgarh	37.1	5.9
Madhya Pradesh	35.9	6.7
Gujarat*	35.7	8.6
Sikkim	26.8	4.4

Performance of India’s Key Sub-Sectors of Services :
Most prominent sub-sectors of India’s services at present are business process management (BPM), aviation, telecom, tourism and shipping.

As per this table, revenue from BPM services increased from US$ 118.6 billion in 2014-15 to US$ 161.8 billion in 2018-19 of which value of exports increased from US$ 97.7 billion to 135.5 (estimated). During the same period number of airline passengers increased from 115.8 million to 135.5 million of which international passengers increased from 45.7 million to 63.9 million. The wireless phone subscriptions increased from 969.9 million to 1161.8 milion, wireless internet subscriptions increased from 283.3 million to 615 million. Foreign tourist arrivals increased the performance of these subsectors was analysed in the table given below

Performance of India’s Key Sub-Secotors of Services
TS Inter 2nd Year Economics Study Material Chapter 7 Tertiary Sector 2

Question 3.
Write about service sector contribution to GSVA (Gross State Value Added) and to employment in India.
Answer:
Tertiary Sector in a Modern Economy :
In modern economy the tertiary sector includes the following sub-sectors : trade, repair services, hotels and restaurants, transport (including railways, roadways, water, air ways and services incidental to transport), storage, communication and services related to broadcasting, financial services, real estate, ownership of dwellings and professional services, public administration, etc.

1) Contribution to Gross Value Added (GVA) :
In India the service sector has emerged as the major growth inducing sector. The share of service sector in gross value added (GVA) increased significantly from 49.4 percent in 2013-14 to 57.8 percent in 2019-20 (AE). The tertiary sector is assuming greater importance over the years with an average contribution of about 58 percent to the GVA, followed by the secondary and primary sectors with about 28 percent and 14 percent, respectively. However, the contribution of secondary sector (28.3% in 2019- 20) and primary sector (13.9% in 2019-20) is declining over the years. According to Economic Survey of India-2019, contribution of major components of service sector in 2019-20 is as follows: trade, hotel, transport, storage, communication and services related to broadcasting is 18.1%; financial, real estate and professional services is 24.5% ; and public administration, defence and other services is 15.2%.

2) Contribution to Employment :
Employment in modem service sector is highly skilled and high ranged earning one, especially, after the IT (Information Technology) revolution. Average per capita earning of service sector employees is very high when compared to employees of other sectors. The share of service sector in employment has increased from 17.3 percent in 1950-51 to 26.5 percent in 2010 and further to 31.45 percent by 2018.

Question 4.
What is national infrastructure pipeline 2020-25?
Answer:
Infrastructure :
The facilities which help for direct product activities are called infrastructure. E.g. : Transport, electricity, water, communication etc.„ are called economic infrastructure while education and health facilities are called social infrastructure. Inadequate transport infrastructure leads to bottlenecks both in the supply of raw materials as well as movement of finished goods to the market place. The price that farmers get for their produce is depressed if there is no connectivity through good quality rural roads, which in turn keeps rural incomes, depressed negating the fruits of high overall growth performance. For all these reasons, provision of adequate infrastructure is essential for and for making growth inclusive. India recently launched the National Infrastructure Pipeline for the period FY 2020-25.

National Infrastructure Pipeline 2020-2025 :
Investment in infrastructure is necessary for growth. To achieve the GDP of $5 trillion by 2024-25, India needs to spend about $1.4 trillion (Rs. 100 lakh crore) over these years on infrastructure. The challenges is to step-up annual infrastructure investment so that lack of infrastructure does not become a binding constraint to the growth of the Indian economy. To implement an infrastructure programme of this scale, it is important that projects are adequately prepared and launched. To draw up the National Infrastructure Pipeline (NIP) for each of the years from financial year 2019-20 to financial year 2024-25, an inter-ministerial task force was setup in September 2019.

NIP is expected to enable well-prepared infrastructure projects which will create jobs, improve ease of living and provide equitable access to infrastructure for all, thereby making growth more inclusive. The NIP has projected total infrastructure investment of Rs. 102 lakh crore during the period FY 2020 to 2025 in India. As per the NIP, central government (39 percent) and state government (39 percent) are expected to have equal share in funding of the projects followed by the Private sector(22 percent).

The NIP captures the infrastructure vision of the country for the period financial year 2020-2025. This is the first-ever exercise undertaken in the country. However, it is recognized that financing of the NIP would be a challenge. It is hoped that a bouquet of well-prepared projects would attract invesment from central and state governments, urban local bodies, banks and financial institution and private investors, both local and foreign.

Question 5.
What are the types of renewable energy sources?
Answer:
Types of Renewable Energy :
1. Solar Energy :
The radiant light and heat energy from the sun is harnessed with the use of solar collectors. This collected solar energy is then used to provide light, heat and different other forms of electricity.

3. Hydroelectricity :
The kinetic energy from the flowing water is used to run the turbines which generate electricity. A tidal power which converts the energy of tides and wave power which captures the energy from the surface of the ocean waves for power generation are other two forms of hydropower also have huge potential in electric power generation.

4. Geothermal Energy :
It is generated from the thermal energy which is stored in the earth. The heat energy is captured on captured on sources such as hot springs and volcanoes and this heat is directly used by industries for heating the water and other purposes.

Question 6.
What are the types of non-renewable energy sources?
Answer:
Fossil Fuels :
Fossil fuels are formed by the remains of animals and plants. Fossil fuel is divided into three categories as shown below :

1. Coal :
Coal deposits are mainly confined to eastern and south central parts of the country. The states of Jharkhand, Odisha, Chhattisgarh, West Bengal, Madhya Pradesh, Telangana and Maharashtra account for 98.09% of the total coal reserves in the country. The state of Jharkhand had the maximum share (25.88%) in the overall reserves of caol in the country. The state of Jharkhand bad the maximum share (25.88%) in the overall reserves of coal in the country as on 31st March 2019 followed by Odisha (24.76%). Overall production of raw coal in India during the eyar 2018-19 was 730.4 million tonnes (MT) displaying a growth of 8.1 percent.

3. Natural Gas :
The estimated reserves of natural gas in India as on 31.03.2019 stood at 1380.63 Billion Cubic Meters (BCM)f as against 1139.57 BCM as on 31.03.2018.

Nuclear Fuels :
The use of nuclear technology relyig on fission requires naturally occur-ring radioactive material as fuel. Nuclear power provides about 6% of the world’s energy and 13-14% of the world’s elecricity.
1. Advantages of Non-Renewable Energy :
a) The non-renewable source of energy is affordable, for instance diesel and oil.
b) It is easily accessible and more compatible; and
c) The non-renewable source of energy is easy to store.

2. Disavantages fo Non-Renewable Energy :
a) The non-renewable energy cannot be replaced once their energy source is used up,
b) The by products of non-renewable energy cause environmental damages; and
c) It also increases greenhouse gases. .

Question 7.
Describe the structure of banking in India.
Answer:
Banking India :
The organized banking system broadly comprises of Reserve Bank of India, the monetary authority of the country, scheduled commercial banks and scheduled co: operative banks. Scheduled commercial arjd co-operative banks are those banks with a paid up capital of not less than Rs. 5 lakhs and are entered in the schedule B of RBI. They work in the interest of their depositors. Commercial banks work on the principle of profit motive. Co-operative banks are based on the cooperative principle of serving their own members.

Commercial banks mobilise savings. They lend these savings as short term investments. All commercial banks were established as private banks. 20 private banks with large deposits were nationalized in two phases in 1969 and 1980. Regional Rural Banks (RRB’s) were established in 1975. They are commercial banks but their area of operation is confined to rural areas. Their objective is to mobilise deposits and provide credit to small and marginal farmers, agricultural labourers, small entrepreneurs and artisans in rural areas.

Co-operative banking system is hierarchical in functioning. Under the central co-operative ebank all the state co-operative banks function. Under the state co-operative bank, district co-operative banks function. Primary co-operative societies are located in villages and work under District Co-operative Banks in ech district.

1. Reserve Bank of India (RBI) :
Reserve Bank of India (RBI) was established in 1935 and nationalized in 1949. As central bank of the country, RBI acts as bank of issue, banker to the government, banker’s bank, controller of credit, custodian of foreign exchange reserves and controlling authority of all financial institutions. It also concentrates to control inflation.

2. Commercial Banks :
Inl950-51, there were 430. In 2007 there were 172 commercial banks of which 27 were in public sector. State Bank of India is the leading public sector bank and had 6 associate banks. In April 2017, State Bank of India (SBI) merged five of its subsidiaries and Bharatiya Mahila Bank (BMB) with itself. In April, 2020 government implemented the merger of 10 public sector banks into four.

Question 8.
What are the major objectives of LIC? (Life Insurance Corporation)
Answer:
Life Insurance Corporation of India (LIC) :
The Mission of LIC is to explore and enhance the quality of life of people through financial security. The products and services provided should give ‘competitive returns’ to the policy holders and also ‘supply resources’ for economic development. LIC insurance plans include pension plans, health insurance, group insurance, unit linked insurance, children growth fund, etc. The endownment policies and money back policies cover risk as well as provide attractive bonus.

Major Objectives of LIC :

To spread life insurance to rural areas and socially, economically backward sections of population covering risk of life at reasonable cost.
To maximise savings by making insurance linked savings attractive.
To provide security to policy holders money with higher returns.
To invest policy holders money keeping in view of the advantage to investors and community.
To maintain economy in operation and full realization of investors money.

Question 9.
Assess the importance of space sector.
Answer:
Space Sector :
In the recent years both developed and developing countries are investing funds on R&D activities related to space sector and India is no exception in this respect. India’s expenditure on space programme activities include design and development of a series of launch vehicles and related technologies, satellites and related technologies for earth observation, telecommunication and broadband, navigation, meteorology and space science, R&D in space sciences, and most recently, planetary exploration. In 2018, India spent about US$ 1.5 billion on space programmes, but India’s expenditure on space sector when compared to USA (US$ 19.5 billion), China (US$ 11 billion) and Russia (US$ 3.3 billion) was much less.

India’s space sector programmes include (a) satellite communication-with INSAT (Indian National Satellite) System/GSAT (Geosynchronous Satellites) system it addresses the needs for telecommunication, broadcasting and satellite-based broadband infrastructure in the country, (b) earth observation by using space-based information for weather forecasting, disaster man-agement, national resource mapping and governance, and (c) satellite-aided navigation including GAGAN and NavIC (Navigation with Indian Constellation).

GAGAN, a join project between Indian Space Research Organisaion (ISRO) and the Air-ports Authority of India (AAI), augments GPS coverage of the region to improve accuracy and integrity for civil aviation applications and better air traffic management over Indian airspace. NavIC, a regional navigation system has also been established for providing Position, Navigation and Timing (PNT) services.

Globally space activity is undergoing tremendous changes. A marked shift has been ob-served in engagement of space activities by government and private agencies. The government agencies are pursuing national needs and national security with space explorations while private agencies are investing in space exploration materials. ISRO identified following areas for attracting private investments in the space sector.

Production of polar satellite launch vehicle (PSLV).
Satellite integratin and assembl.
Production of composite materials.
Production of solid, liquid, cryogenic and semi-cryogenic propellants; and ‘
production of electronic packages, testing and evaluation for avionics and satellite subsystems.

Very Short Answer Questions

Question 1.
Tertiary sector.
Answer:
It is the third major sector of the economy. It is the fastest growing sector in the economy with largest share in GDP. It supplies the supportive service to the primary and secondary sectors. So, it is the provider of supportive services required for economic development. It is called tertiary sector.

Question 2.
Infrastructure.
Answer:
The services which require for the development of the economy are known as Infrastructure. An unbrella term for service activities in the economy. These are of two types :
a) Economic Infrastructure. (Transport, Banking, insurance, energy, communication)
b) Social infrastructure. (Health education, generation).

Question 3.
Water transport.
Answer:
Water transport is the another important means of transport system for passenger and freight. Water transport in India is of two types. They are : 1. Inland water transport 2. International water transport.

Question 4.
Source of energy.
Answer:
Economic growth depends on the availability and use of energy. The higher the percapita income the higher is the energy consumption. The sources of energy can be divided into two types they are:
a) renewable sources of energy (solar, wind, Hydal ISO thermal and Bio energy

b) non-renewable energy sources (fossil fuel-coal, crude oils, natural gas and nuclear fuels-radio active material. Energy resources can also be classified as conventional (wood, straw, dried dung, coal, crude oil and natural gas, thermal energy and hydro power) non-conventional energy sources (wind energy, solar energy, tidal energy and bio energy)

Question 5.
Fossil Fuels.
Answer:
Fossil fuels are formed by the remains of animals and plants fossil fuel divided into three categories. 1) Coal 2) Crude oil 3) Natural gas.
Tertiary sector. Water transport. Fossil Fuels.

Question 6.
What is Bharat Net?
Answer:
For achieving the goal of developing broadband highways as part of the digital Indian campaign, the government is implementing the flagship Bharat Net Programme in a phased manner for providing broadband connectivity to all the 2.5 lakhs Gram Panchayats in the country. The project envisages an optimal mix of optical fibre, radio and satellite media.

Question 7.
Commercial banks.
Answer:
Commercial Banks :
In 1950-51, there were 430 banks in 2007, there were 172 commercial banks of which 27 were in public sector. State Bank of India is the leading public sector bank and had 6 associate banks. In April 2017, State Bank of India (SBI) merged five of its subsidiaries and Bharatiya Mahila Bank (BMB) with itself. In April, 2020 government implemented the merger of 10 public sector banks into four.

Question 8.
IRDA.
Answer:
Insurance Regulatory Development Authority of India (IRDA) :
IRDA Act was passed in 1999. IRDA was constituted as an autonomous body. It was given statutory status in 2000 to regulate and develop the insurance industry. IRDA has the duty to regulate, promote and ensure orderly growth of insurance and reassurance business.

LIC and GIC are the investment institutions to that mobilize large public savings. They use part of the funds for long term investment in corporate sector. Because of their large mobilizaion of contractual dealings they are very powerful in stock exchange.

Question 9.
GIC.
Answer:
It means General Insurance Corporation of India. It was established in the year 1972. It provides fire, marine, motor, health and other Insurances. General Insurance is also known as non-Life Insurance.

TS Inter 2nd Year Economics Study Material Chapter 6 Industrial Sector

November 16, 2022October 23, 2022 by Srinivas

Telangana TSBIE TS Inter 2nd Year Economics Study Material 6th Lesson Industrial Sector Textbook Questions and Answers.

TS Inter 2nd Year Economics Study Material 6th Lesson Industrial Sector

Essay Questions

Question 1.
Explain the pattern of Industrial development in India.
Answer:
Pattern of Industrial Development in India :
The pattern of industrial development in India was determined by the state of economy in which the British left us. The British had used India as a source of cheap raw materials and a lucrative market for their finished products and they had not made any effort to develop the infrastructure. After getting independence, India immediately felt the need for capital goods and it was decided to promote the rapid growth of capital goods industries.

Almost till the end of the Third Five Year Plan, India had to import a variety of capital goods including iron and steel, transport equipment and Various kinds of machinery. But, the situation has radically changed now. India is now in a position to export these capital goods even to the technologically advanced countries of western Europe, America and Russia.

A significant feature of industrial development in India has been the phenomenal growth of the public sector. This sector comprises public utility services like the railways, road transport, post and telegraph, power and irrigation projects, departmental under takings of the central and state governments including the defense production establishments, and a number of other industrial undertakings which are wholly supported by the central government.

The public sector now contributes about one-fifth of the share of industrial sector in the national income knd the surpluses earned by it form an important source of non-tax revene of the government. It also offers job opportunities to large number of people.

With the initiation of the Indian five year plans in 1951, it was imperative that the perspective change in favour of industrial development of India as well as simultaneous development of agriculture. Development of agroindustries, village industries and small scale enterprises form an essential part of industrial development process.

According to the state-wise analysis of the absolute figures of working capital, employment and number of factories, Maharashtra continues to remain at the top. Next fo it Tamil Nadu followed by Gujarat, erstwhile Andhra Pradesh and Uttar Pradesh in respect of number of factories and workers employed. However, in terms of working capital, Gujarat occupies second place followed by Tamil Nadu, Uttar Pradesh, Karnataka, erstwhile Andhra Pradesh and Haryana.

It is heartening that due to the concerted effors made by the government for industrial development, India became the 6th industrialized country of the world having achieved a re-markable distinction in production of a variety of products and generation of employment. But unplanned efforts by the central and state governments did not control the emergence of uneven industrial development in the country.

Question 2.
Analyse the nature of Industrial growth in India.
Answer:
Industrial Growth in India :
It is a well-known fact that British government never intended to develop the industries in our country during pre-independence period. After independence, the people of this country expected high hopes from the government for the betterment of their life. It is the industrial development which provides basic infrastructure necessary for the development of the economy as a whole. Industrial Policy Resolution, 1948 and the Industries (Development and Regulation) Act, 1957 gave an idea of the attitude’ of the government with regard to the development of industries. But, it was only the adoption of planning in 1951 which created a favourable atmosphere for the development of industries in India.

A large number of industries have been established in the post-independehce Ihdia in private, public and joint sectors. There are a lot of industrial resources afnd raw ihateiials avilable in India. For instance, Bhilai, Bokaro, Rourkela, Ranchi, Jamshedpur, RenUkoot emerged as major centers during the first one and a half decades of independence.

However, later on, industrialization at medium and small scale was taken up in all the states. The main sectors of industrialization today are electronics, transport and telecommunications. Compared to advanced countires, industrialization in India has to develop at a much faster rate. About 10 percent of the total workers are employed in the organized industrial sector. Both private and public sectors have grown side by side since independence.

The state enterprises and public sector undertakings rate into heavy losses, and this puts a question mark on the capabilities of the Indian state and its approaches in managing its own establishment. A debate started on private-public sector partnership. The debate titled in favour of die private sector. Many of the government enterprises were handed over to private entrepreneurs and industrialists. Privatization has entered in a selected way in the transport sector, including roads, railways and airways.

Large-scale industries started in the first fifteen years of planning in India. Rate of industrial growth was fluctuating between 2 and 12 percent. However, India has observed a steady industrial progress after 1967. The enduring factors which have contributed to the growth are vast natural resources, economic surplus, large labour force, high urban concentration, and concentration of surplus within a small social group, availability of trained personnel, a stable political structure and powerful means of state economic control. Today, India is one of the top developing countries compared to the countries of Africa and South America.

However, production of luxury goods, control of monopolies, sluggish rate of agricultural development have come as obstacles in industrial development. Despite these factors, investments in private sector have been increasing.

Collaborations with industrially advanced countries like the USA the UK, Russia, France, Germany, Italy, Japan are a clear testimony of India’s industrial porgress. A boost has been given to the development of small-scale industries too during various plans. India today is a global market, India and China are considered as the fast developing countrie in the world.

In twentieth century when science and technology have gained unquestionable supremacy, the level of the industrial development of a country has become the yardstick to be applied to judge i,ts actual development.

The development of the economy can be measured with the help of different criteria such as, the growth rate in industrial output, industry’s contribution to national income and two employment. A close application of these criteria divides the planned period into two distinct phases, the first upto 1965-66 and the second from 1965-66. The economy took rapid strides during the first three five year plans, but slowed down later. Since, industry’s contribution to national, income and its capacity to generate employment have displayed similar trends, we cannot describe our industrial development as spectacular though there has been a spurt of new industrial complexes all over the country.

Question 3.
Comment on the Industrial development during the Five year plans in India.
Answer:
Industrial Growth in India: The real growth and development of the industrial sector in India started during the period of five year plans.

First Five Year Plan (1951-56) :
The main thrust of the first five year plan Was on agricultural development. Therefore, the emphasis was on increasing capacity of the then existing industries rather than the establishment of new industries. Cotton, woollen and jute textiles, cement, paper, news – print, power – looms, medicines, paints, sugar, vanaspati (vegetable oil), chemical and engineering goods and transport equipment show some progress.

Second Five Year Plan (1956-61) :
Great emphasis was laid on the establishment of heavy industries during the second five year plan. The main thrust of industrial development was on iron and steel, heavy engineering, lignite projects and fertilizer industries, Three new iron and steel plants were located in Bhilai, Durgapur and Rurkela.

Third Five Year Plan (1961-66) :
There Was emphasis on the expansion of basic industries like iron and steel, fossil – fuel and machine building. The Ranchi Machine Tool and three more HMT units were established. Machine building, locomotive and railway coach making, ship-building, air – craft manufacturing, chemicals, drugs and fertilizer industries also made steady progress. .

Annual Plans (1966-69) :
The period between 1966 and 1969 was the period of annual plans. The industrial period could not make much progress during the annual plans period.

Fourth Five Year plan (1969-74) :
During this plan, there was much emphasis on the agro – based industries such as sugar, cotton, jute, vanaspati, metal based and chemical industries. It was during this plan, much progress was made in alloys, aluminium, automobile tyres, electronic goods, machine tools, tractors and special steel. Efforts were also made to accelerate the process of industrial dispersal.

Fifth Five Year Plan (1974-79) :
The main stress in this plan was on rapid growth of steel plants, export-oriented articles and goods of mass consumption. The steel plants at Salem. Vijayanagar and Visakhapatnam were proposed to create additional capacity. The Steel Authority of India Ltd. (SAIL) was constituted. Moreover, drug Manufacturing, oil refining, chemical fertilisers and heavy engineering industries made steady progress.

Sixth Five Year Plan (1980-85) :
The main emphasis in the sixth five year plan was on producting goods to exploit the domestic and international markets. To achieve this objective industries like aluminium, automobiles, electric equipment, thermostats were given the priority. Production targets were achieved in industries like commercial vehicles, drugs, TV receivers, automobiles, cement, coal, jute industry, non – ferrous metals, textiles, railway wagons, sugar industry etc.

Seventh Five Year Plan (1985-90) :
The main thrust of the seventh five year plan was on high – techand electronic industries. Industrial dispersal, self employment, exploitation of local resources and proper training were the preference areas of the plan.

Eight Five Year Plan (1992-97) :
The period between 1990 and 1992 was the period of annual plans. There was a major change in the industrial policy of the government of India which was initiated in 1991. The policy of liberalization was adopted for the investment of foreign multinationals. Emphasis was given on the removal of regional imbalances and encouraging the growth of employment in small and tiny sectors.

Ninth Five Year Plan (1997-2002) :
The main emphasis during this plan was on cement, coal, crude oil, consumer goods, electricity, infrastructure, refinery and quality steel products.

Tenth five year plan (2002-07) :
During this plan, the main emphasis was on ;

The modernization, technology, upgradation, reducing transaction costs and increasing exports;
To enhance exports and to increase global competitiveness; and
To achieve balanced regional development.

Eleventh Five Year Plan (2007-12) :
This plan document entitled “Towards faster and more inclusive growth” gave priority to industry, infrastructure and employment. The plan recognized that there should be rapid industrial development that brings faster reduction in poverty, generates employment and ensures essential services such as health and education to all sections of the society.

Twelfth Five Year Plan (2012-17) :
The planning commission’s focus on instilling ‘incluSive growth1 is making headway. The plan is expected to create employment through developing India’s manufacturing sector and move the nation higher up the value chain is a boon for industry, the planning commission indicated that it aims to have industry & manufacturing related activities grow by 11% during this plan period, contrasted to 8% over the previous 11th five year plan.

However in 2014, the 65 years old planning commission was dissolved and a think tank, NITI (National Institution for transforming India). Aayog took in its place.

Question 4.
What are the reasons for industrial backwardness in India.
Answer:
Industrial Backwardness :
The industrial development is the indicator of economic development. The industrial backwardness results in economic backwardness. Consequently the quality of life of people is very bad and poverty level is very high.

The most backward districts lie in eastern Uttar Pradesh, Assam, Western Rajasthan, Central Plateau region of Telangana, Western ghat region and adjacent plateau region of Kerala.

Causes of Industrial Backwardness :
1. British Rule policy :
It rulers utilized the natural resources of India for their own economic development. They did not establish the industries in India. This policy affected industrial development badly. They used the raw material of this area in their own countries, which caused a huge loss to India.

2. Lack of Mineral Resources :
There is a lack of mineral resources like oil and coal which are necessary for industrial development. So, the rate of industrial development is very slow in India because it is facing the problem of mineral shortage.

3. Lack of Capital :
The rate of savings is low due to low percapita income in India. Due to low savings, rate of investment is very low. It is the main obstacle for industrialization.

4. Lack of Credit Facilities :
There is a shortage of credit facility by financial institutions which provide credit to the industries according to the needs of the industry.

5. Lack of Foreign Exchange :
There is a lack of foreign exchange which is the most important factor for the import of modem technology for industrial sector. It is the main problem for industrial development that India has to pay the debts and also to import the technology.

6. Lack of Technical Experts :
It is unfortunate that there is lack of skilled persons in India. It is the major drawback for the industries, A heavy amount is paid to the foreign experts and Indian skilled persons are working abroad for a higher return.

7. Lack of Transport Facility :
The transport system is less developed in India. The available facilities are costly and inadequate. Roads and railway transport conditions are miserable.

8. Lack of Industrial Research :
Due to lack of research and development facilities, invention did not take place in the production techniques which has increased the cost of production and reduced the demand for production.

9. Energy Crisis :
These is a shortage of electricity for industries because the sources of power are limited in the country.

10. Increase in Taxes :
Heavy taxes have been imposed on the industrial production. Heavy import and export duties have also discouraged the industrial production.

11. Limited Market :
Our domestic market has been limited. On the other hand, the quality of product is very poor and Indian products are unable to compete in the international market. So, the limited nature of domestic and international markets is also one impediment for faster rate of industrial development.

12. Attitude of the Labour :
The quality of labour is poor and the spirit of work is absent. Political parties also use them for their own benefits. It has discouraged the industrial prpduction.

13. Defective Planning :
There is a lack of effective planning in industrial sector. There is no c-ordination among the different wings of industrial sector. It increases the cost of production.

Question 5.
Discuss the features of Industrial Policy Resolutions 1948 and 1956.
Answer:
Industrial Policy Resolution :
Industrial policy is a statement which defines the role of government in industrial development, the place of the public and private sectors in industrialization of the country, the relative role of large and small industries and the role of foreign capital.

Industrial Policy Resolution, 1948 :
The Industrial Policy Resolution, 1948 was passed when our constitution was not adopted ahd there was no legal frame work.

The Government of India announced its Industrial policy Resolution (IPR) on April 6,1948 where by both public and private sectors were involved towards industrial development. Accordingly the industries were divided into four broad categories.

a) Exclusive state monopoly :
This includes the manufacture of arms and ammunition, production and control of atomic energy and the ownership and management of railway transport. These industries were the exclusive monopoly of the Central Government.

b) State monopoly for new units :
This category includes coal, iron and steel, aircraft manufacture, ship building, manufacture of telephone, telegraphs and wireless apparatus (ex-cluding radio receiving sets) and mineral oils. New undertakings in this category could hence forth be undertaken only by the State.

c) State Regulation :
This category included industries of such basic, importance like machine tools, chemicals, fertilizers, non-ferrous metals, rubber manufactures, cement, paper, newsprint, automobiles, electric engineering etc, which the central government would feel nec-essary to plan and regulate.

d) Unregulated Private Enterprise :
The industries in this category were left open to the private sector, individuals as well as to co-operatives.

Industrial Policy Resolution, 1956 :
Further, in December 1954, the Parliament adopted the, ‘Socialistic Pattern of Society’ as the goal of economic policy which called for the state or the public sector to increase its sphere of activity in industrial sector and thus prevent concen-tration of economic power in private hands. In view of all these developments, a new industrial policy was announced on 30th April, 1956. The main features of this industrial policy resolution of 1956 were as follows.
1) Classification of Industries :
Industries were classified into three types which are indicated below. .

i) Schedule A contained 17 industries :
All new units in these industries, where their establishment in the private sector has already been approved, would be setup only by the state.

ii) Schedule B contained 12 industries :
Such industries would be progressively state owned, but private enterprise is expected to supplement the efforts of the state in . these fields.

iii) The remaining industries fell in Schedule category. The future development of these industries had been left to the initiative and enterprise of the private sector.

2) Assistance to private sector :
while the industrial policy of 1956 sought to give domi-nant role to public sector, at the same time it assured a fair treatment to the private sector. The policy said that the state would continue to strengthen and expand financial institutions that extend financial assistance to private industries and co-operative enterprises. The state would also strengthen infrastructure to help private sector.

3) Expanded role of cottage and small scale industries :
The industrial policy laid stress on the role of cottage and small scale industries for generating larger employment opportunities making use of local man power and resources and reducing regional inequalities in industrial development. It stated that the government would continue pursuing a policy of supporting such industries through tax concessions and subsidies.

4) Balanced industrial growth among various regions :
The industrial policy helped to reduce regional disparities in industrial development. The policy stated that facilities for development will be made available to industrially backward areas. The state, apart from setting up more public sector industries in these backward areas, will provide incentives such as tax concessions, subsidized loans etc. To the private sector to start industries in these backward regions.

5) Role of. foreign capital :
The industrial policy of 1956 recognized the important role of foreign capital in country’s development. The foreign capital supplements domestic savings. It provides more resources for investment and relieves pressure on balance of payments.

6) Development of managerial and technical cadres :
The industrial policy noted that the program of rapid industrilization in India will create large demand for managerial and technical personnel.

7) Incentives to Labour :
The industrial policy recognized the important role of labour as a partner in the task of development. The policy therefore, put emphasis on the provision of adequate incentives to workers and improvement in their working and service conditions.

The industrial policy 1956, thus, provide a comprehensive framework for industrial de-velopment in India. However, this policy has been criticized on the grounds that by enormously expanding the field of public sector, it had drastically reduced the area of activity for the private sector.

Question 6.
Critically examine the Industrial Policy Resolution, 1991.
Answer:
The Government of India announced a sensational industrial policy in parliament on 24 July, 1991. Later this was come to known as new economic policy. The architect of this policy was then Finance Minister and the present Prime Minister of the country, Dr. Manmohan singh.

1991 Industrial Policy is also known as the liberalised economic policy or Rao – Manmohan model or the LPG model.

Objective :

Liberalising the industrial sector from all kinds.of legal and administrative controls.
Mediating the indian economy with the global economy known as globalisation.
Generation of more employment opportunities by enlarging and strengthening the private sector.
Increase in the capacity of the Indian economy to compete and face the competition at the international level.
Reduction in the economic inequalities.
To increase the economic growth rate.
To enhance the industrial production capacity.

Important Elements :
The following are the important elements in the industrial policy 1991.

1. industrial licensing policy :
The 1991, industrial policy abolished industrial licensing for all, but for 18 industries. Again in 2002, licensing is compulsory for only 5 industries.

2. Gradual dilution of public sector :
The 1956 resolution had reserved 17 industries for the public sector. The 1991 industrial policy reduced this number to 8. Now, only 3 industries are reserved exclusively for the public sector.

3. Foreign investment :
Foreign direct investment is permitted upto 100 percent on the automatic route in 34 most important industries. The new industrial policy resolution prepared a specified list of high technology and high investment priority industries.

4. Foreign technology :
In the case of 34 important industries mentioned to have direct foreign investment, where in technology can also be imported, which was made easy. The amount is limited to one crore for importing the technology. Government permission is not required to import the managerial expertise.

5. Amendment to MRTP Act :
The new industrial policy scrapped the threshold limit of assets in respect of MRTP and dominant undertakings. On the recommendations of the S.VS Raghavan committee in 2002, MRTP Act was abolished and in its place competition act was declared.

6. Wider Extensive Licensing :
In 1985 the wider extensive licensing policy permitted the industries to use now machinery without obtaining the Government permission. The industrial units need not obtain separate licenses when there is close resemblance in production process.

7. Wider definition to industry :
The definition of industry is widened under the 1991 industrial policy. The services related to industry and trade units are also brought under the purview of industry.

8. Special package to small, tiny and village industry :
The Government announced a special package to the small, .tiny and village industry. The investment limit to the tiny sector was increased from ₹ 2 lakh to ₹ 5 lakh. Because of this reason many small industries in big cities got recognition as the tiny sector.

9. Medium scale industries :
The maximum investment limit to the medium scale industries is ₹ 10 lakh.

10. Liberalised industrial location policy :
As a departure from the earlier locational policy for industries, the new industrial policy provided that in locations other than cities of more than 10 lakhs population, there will be no requirement of obtaining industrial approvals from the centre, except for industries subject to compulsory licensing.

Critical Analysis :
I. Positive Impact :

Creativity and innovation have become the order of the day. Industries started concent rating on research and development to bring out creativity.
The focus is on total equality which is to be maintained at all levels right from the manufacture of goods till it reaches the customer.
Free flow of foreign capital on account.
Employment opportunities in MNCs.
Increase in standard of giving.

II. Negative impact:

Though competition for domestic industries.
Opposition from trade unions.
Unemployment.
Indiscriminate use of natural resources of domestic country by MNCs.
Distortions in production structure.

Question 7.
Explain the economic reforms introduced in India since 1991.
Answer:
Liberalization, Privatization and Globalizatio (LPG) :
The important features of the economic reforms were as follows.

I. Liberalization :
The new economic policy introduced a number of liberalization measures to remove the unnecessary controls a’nd regulations on the industrial sector. Liberalization refers to the removal of restrictions on trade and industry. The main objective of liberalization was to unshackle the industrial sector from the cobwebs of unnecessary bureaucratic controls.

The main features of liberalization policy were as follows :

I. Abolition of Industrial Licensing :
The new industrial policy of 1991 abolished the industrial licensing for all the industries except for a selected 18 industries due to security and strategic concerns. These included industries manufacturing hazardous chemicals and industries that could cause environmental pollution.

2. Removal of Restrictions :
All industries, other than those 18, could setup and sell shares without any restrictions; they could expand their business and start a new product line without the need of obtaining any license.

3. Relaxation of MRTP Restrictions :
The MRTP Act aimed at controlling monopoly practices to pevent concentration of economic power. It also aimed at preventing unfair and re-strictive trade practices to protect consumer’s interest. Prior to introduction of reforms, a number of restrictions were imposed on industries with an investment of Rs. 100 crore or more under the Monopolies and Restrictive Trade Practices (MRTP) ACt.

The MRTP Act has now t?een replaced by the Competition Act, 2002, which came into effect from 2009. The Competition Act checks all anti-competitive practices and prohibits abuse of dominance. In order to protect consumer interest at large, it aims at promoting and sustaining competition in the market.

4. Foreign Investment :
The 1991 reforms reduced a number of procedural bottle necks for foreign investments. Approval was given for foreign direct investment upto 51 percent of equity in high priority industries. The liberalization measures enhanced the investment ceiling on small scale industries. Industries were also allowed to raise invesments from abroad with simple procedures.

5. Foreign Technology :
Automatic approval was provided to Indian industries with respect to foreign technology agreements, especially in the case of high priority industries, Permissions were not required for hiring foreign technicians and experts and for foreign testing of indigenously developed technologies.

II. Privatization :
Privatization refers to the introduction of private ownership in public sector enterprises. The privatization measures introduced during the economic reforms reduced the number of industries reserved exclusively for public sector from 17 to 18. The government’s holding in public sector enterprises was sold to increase private participation.

Many public-sector units were incurring losses due to inefficiencies in management and lack of innovation and investments in research and development. Privatization measures enabled the use of modem technology and improved the quality of service and led to efficient utilization of resources.

Various privatization measures introduced in India included :

Transfer of ownership of public sector units, either fully or partly, to private hands through denationalization.
Transfer of control to the private sector through disinvestment policies.
Opening of areas that were exclusively reserved for public sector.
Transfer of management to the private sector through franchising, contracting and leasing.
Limiting the scope of the public sector.

III. Globalization :
Globalization may be defind as the integration of the domestic economy with the world economy with the objective of facilitating free movement of goods, services, people, ideas, technology etc. It refers to the opening up of the economy to international competition.
The major features of globalization measures as undertaken in 1991 were :

1. Reduction of Trade Barriers :
Trade barriers restrict free flow of goods and services between countries. With the introduction of globalization measures, these restrictions were reduced. Globalization created an environment for smooth exchange of goods and services between India and other nations.

2. Promotion of Foreign Direct Investment :
With the introduction of globalization, many Indian industries were opened to foreign direct investment. India became a favourable investment destination for foreign investors due to the low cost of production and availability of cheap labour resources. The efficiency of the banking sector also improved because of the competition from foreign banks.

The government of India further initiated a series of measures to promote foreign technical collaborations incase of high priority industries and for import of foreign technology. Foreign Investment Promotion Board (FIPB) was set upto facilitate foreign direct investments in India.

3. To Encourage Efficiency :
Globalization encouraged domestic industries to become more competitive and efficient to face competition at the global level. The domestic industries had to produce quality goods at low cost to compete with the cheaper and superior quality goods of he foreign producers.

4. Diffusion of Technology :
Globalization provided an opportunity to India to have an access to global technology. It made diffusion of knowledge faster. India could utilize the tech-nologies of developed countries without much investment in research and development.

Question 8.
What do you mean by privatisation ? Discuss the reasons for its implementation in India.
Answer:
The privatization wave in India, which was a part of the economic reforms of 1991, in-creased the role of private sector and restricted the public sector to priority areas which included

Physical and social infrastructure
Mining and oil exploration
Manufacture of producs that were of strategic importance and where security concerns were involved like in the case of manufacture of defense equipment, and
Investments in technologies that required huge outlay and where private sector investment was inadequate.

Privatization measures were introduced in India as part of the economic reforms in 1991 for the following reasons :
1. To Reduce the Burden of the Government :
The public sector companies created the base for industrial growth in India. However, a number of public sector companies were incurring continuous losses due to delay in completion of projects and rise in the cost of production. Many public sector units were only functioning to protect the interests of the labourers. Privatization offloaded this burden from the government and reduced the strain on resources.

2. To Promote Efficiency :
Many public sector companies were also struggling due to inefficient management, lack of transparency and corruptive practices. Poor industrial relations and over staffing reduced the productivity, causing losses to these units. The measures got rid of these problems and enabled the public sector units to achieve optimum productivity.

3. To Enhance Investment Opportunities :
Privatization helped in reducing the incon-sistencies in management and improved the economic status of many public sector units. This brought in good returns and attracted investments.

4. To facilitate Growth of infrastructure :
Privatization of industries led to the growth of industrial sector on modem lines. The private enterprises, to provide competitive products and services, initiated and facilitated improvement of the infrastructure.

5. To Reduce Unnecessary Bureaucratic Interventions :
Privatization reduced unnecesssary government intervention in the management, thereby giving the private enterpries more autonomy in management and operations. This enhanced their efficiency and profitability. Elimination of restrictions effectively reduced corruption and improved productivity.

Question 9.
What are small and cottage industries? State the characteristics of small scale industries.
Answer:
Small scale industries are the industrial units having fixed investment in plant and machinery, whether held on ownership basis (or) lease basis (or) hire purchase basis and the investment is more than ₹ 25 lakhs, but not exceeding ₹ 1 crore.

Characteristics of Small Scale Industries :
i) Ownership :
Ownership of small scale unit is with one individual in sole proprietorship (or) it can be with a few individuals in partnership.

ii) Management and Control :
A small scale unit is normally a one man show and even in case of partnership the activities are mainly carried out by the active partner and the rest are generally sleeping partners. These units are managed in personalized fashion. The owner is actively involved in all decisions concerning business.

iii) Area of operation :
The area of operation of small units is generally localized catering to the local (or) regional demand. The overall resources at the disposal of small scale units are limited and as a result of this, it is forced to confine its activities to the local level.

iv) Technology :
Small industries are fairly labour intensive with comparatively smaller capital investment than the larger units, Therefore, these units are more suited for economies where capital is scarce and there is abundant supply of labour.

v) Gestation period :
Gestation period is that period after which teething problems are over and return on investment starts. Gestation period of small scale unit is less when compared to large scale unit.

vi) Flexibility :
Small scale industries are highly reactive and responsive to socio-economic conditions. They are more flexible to adopt changes like new method of production, introduction of new products.

vii) Resources :
Small scale units are use local (or) indigenous resources and such can be located any where subject to the availability of these resources like labour and raw materials.

viii) Dispersal of units :
Small scale units use local resources and can be dispersed over a wide territory. The development of small scale Units in rural and backward areas promotes more balanced regional development and can prevent the migration of job seeks from rural areas.

Question 10.
Describe the role of small scale industries in Indian Economy.
Answer:
In a developing country like India, the role and importance of small scale industries is very significant in terms of poverty eradication, employment generation, rural development and creating regional balance in promotion and growth of various development activities.

It is estimated that this sector has been contributing at present about 40% of the gross value of output produced in the manufacturing sector and the generation of employment by the small scale sector is more than five tijnes to that of the large scale sector.

1) Small Scale Industries Generate Employment Opportunities :
The basic problem that is confronting the Indian economy is increasing pressure of population on the land and the need to create massive employment opportunities.

2) Enhance Mobilization of Resources and Entrepreneurial Skill :
Small scale industries can mobilize a good amount of savings and entrepreneurial skills from rural and semiurban areas remain untouched from clutches of large industries and put them into productive use by investing in small scale units.

3) Facilitate Equitable Distribution of Income :
The small scale industries ensure equitable distribution of income and wealth as the Indian society is largely characterised by more concentration of income and wealth in the organized sector keeping unorganized sector undeveloped. This is mainly due to the fact that small industries are wide spread and are having large employment potential.

4) Regional Dispersal of Industries :
People migrate from rural and semi urban areas to the urban areas and highly developed centers in search of employment and sometimes to earn a better living which ultimately leads to many evil consequences of over-crowding, pollution, creation of slums, etc. This problem of Indian economy is better solved by small scale industries which utilize local resources and brings about dispersion of industries in the various parts of the country, thus promotes balanced regional development.

5) Provide Opportunities for Development of Technology :
Small scale industries have tremendous capacity to generate (or) Absorb innovations. They provide ample opportunities for the development of technology and technology in return creates an environment conductive to the development of small units. It also facilitates the transfer of technology from one to other. As a result, economy reaps the benefits of improved technology.

6) Utilize Indigenous Organizational and Management Capabilities :
Small scale industries make better use of indigenous organizational and management capabilities by drawing a pool of entrepreneurial talent that is limited in the early stages of economic development. They provide productive Outlets for enterprising independent people. They also provide a seed bed for entrepreneurial talent and a testing ground for new ventures.

7) Promote Exports :
Small scale industries have registered phenomenal growth in their exports over the years. They contribute about 40% of India’s total exports. Thus, they help in increasing the country’s foreign exchange reserves there by reducing the pressure on country’s balance of payment.

8) Support the Growth of Large Industries :
The small scale industries play an important role in assisting bigger industries and projects, so that the planned activity of development work is timely attended. They support the growth of large industries by providing components, accessories and semifinished goods required by them. Infact, small industries can breathe vitality into the life of large industries.

9) Maintain Better Industrial Relations :
Better industrial relations between employer and employees help in increasing efficiency of employees and reducing the frequency of industrial disputes. The loss of production and man – days are comparatively less in small scale industries. There are hardly any strikes and lock outs in these industries due to good employee -employer relationship.

Question 11.
Examine the problems of small scale industries in India.
Answer:
Problems faced by the small scale industries in India :
The various constraints and problems faced by the small scale industries are explained below.

1) Finance :
It is the lifeblood of an organization and non organization can function effectively in the. absence of adequate funds. Small scale industries are facing acute shortage of finance in India. The scarcity of capital and inadequate availability of credit facilities are the major causes of this problem.

2) Raw Material :
It is important to note that small scale industries normally tap local sources for meeting raw material requirements. These units have been facing numerous problems like availability of inadequate quantity, poor quality and even supply of raw material is not on regular basis. All these factors adversely affect the functioning of these units.

3) Idle capacity :
It is a fact that there is under utilization of installed capacity to the extent of 40 to 50 percent incase of small scale industries. Various causes of this under utilization are shortage of raw material problem associated with funds and even availability of power. Small scale units are not fully equipped to overcome all these problems as is the case with the rivals in the large scale sector.

4) Technology :
Indian small scale entrepreneurs are not fully exposed to the latest technology. Moreover, they lack requisite resources to update or modernize their plant and machinery. Due to obsolute methods of production, they are confronted with the problems of less production in’inferior quality and that too at higher cost. They are in no position to compete with their better equipped rivals operating modern large scale units.

5) Marketing :
Small scale industries are also exposed to marketing problems in Our country. They are not in a position to get first – hand information about the market i.e., about the competition, tastes, liking, disliking of the consumers and prevalent fashion. With the result, they are not in a position to upgrade their products keeping in mind market requirements.

6) Infrastructure :
infrastructure aspects adversely affect the functioning of small scale units. There is inadequate availability of transportation, communication, power and other facilities in the backward areas. Inadequate and inappropriate transportation and communication network will make the working of various units all the more difficult All the factors are going to adversely affect the quantity, quality and production schedule of the enterprises operating in these areas. Thus, the operations will become uneconomical and unviable.

7) Project Planning :
Another important problem faced by small scale entrepreneurs is poor project planning in India. These entrepreneurs do not attach much significance to viability studies. They do not bother to study the demand aspect, marketing problems, sources of raw materials and even availability of proper infrastructure before starting their enterprises. Project feasibility analysis, covering all these aspects in addition to technical and financial viability of the projects, is not at all given due weightage.

8) Skilled Manpower :
A small scale unit located in a remote backward area may not have problem with respect to unskilled workers, but skilled workers may not be available there. The reasons are; firstly, skilled workers may be reluctant to work in these areas and secondly, enterprise may not afford to pay the wages and other facilities demanded by these workers.

9) Managerial Competence :
Many small scale units have turned sick due to lack of managerial competence on the part of the entrepreneurs. An entrepreneur is required to undergo training and counseling for developing his managerial skills.

Question 12.
What is Industrial finance? What are the major sources of Industrial finance in India?
Answer:
Finance is the life and blood of any industry. The amount of finance required by industrial establishments to carry out their production activity is known as industrial finance. The finance can be mobilized by the industrial concerns for investing in fixed and working capital from different sources.

a) Internal Self – Finance :
One source, quantitatively of big importance, is the saving of the unit itself. It may be the household, the business or the government. Normally the household not only invests out of its own savings, but it also has surplus which it lends to other units via, financial institutions, like banks, capital market etc.

b) Equity, Debentures and Bonds :
A large part of finance for fixed assets comes from different types of equity or shares such as ordinary cumulative and non – cumulative preference shares. These shares bear risks of different degrees and are tailored to suit the temperament of different investors. Often industrial companies also get long – term finance through the issues of debentures and bonds.

c) Public Deposits :
Another source is public deposits. It is also a debt – instrument, mostly for short – term finance. Under this system people keep their money as deposit with these companies or managing authorities for a period of six months, a year, two years, three years or so. Depositors receive a fixed interest.

d) Loans from Banks :
Commercial banks can also provide funds for meeting Short – term needs or for meeting working capital. Loans are given against the guarantee of government securities and stocks with companies. Loans are advanced in the form of overdraft and cash credit. Commercial banks are generally reluctant to put their money in the purchase of shares.

e) Indigenous Bankers :
Inspite of the establishment of new financial institutions, indigenous bankers also provide financial help to a few large scale industries, particularly during the time of stress, both for fixed capital and working capital.

f) Foreign capital :
As a supplement to domestic finance, external capital too has been made use of in meeting the needs of industrial finance, mostly for long – term needs. This has taken several foreign institutions dike the World Bank) extended to the government.

g) Development Finance Institutions :
Established with the help of the government to fill in the gap in industrial finance and to promote the objective of planning, these institutions cater to the needs of large and small industries. These institutions provide huge quantity of finances for setting up of new industries, for meeting their several needs and in several forms. These institutions also ensure and monitor the use of finance in pre-planned directions. As such, they fit well with the modem scenario of industrial development. The following are the most important development banks in india.

i) Industrial Development Bank of India (IDBI) :
IDBI provides credit and other facilities for industrial development in the country. It provides long term finance for green field projects, as also for modernization, expansion and diversification. It has structured various products such as equipment finance, asset credit and corporate loans in order to cater to the needs of its corporate clients.

ii) Industrial Finance Corporation of India (IFCI) :
IFCI’s operations principally comprise project finance, financial services and corporate advisory services. Through, its subsidiaries or companies, IFCI provides custodial and investor services, rating and venture capital services.

iii) Industrial Credit and Investment Corporation of India (ICICI) :
ICICI plays a facilitating role in consolidation in various sectors of the Indian industry, by financing mergers and acquisitions. The ICICI groups financing and banking operations, both wholesale and retail, have been integrated into a single company effective to from May 2002.

iv) Industrial Investment Bank of India (IIBI) :
UBI offers a variety of financial products such as project finance, short duration non – project asset-backed financing and working capital, other short term loans to companies.

v) Infrastructure Development Finance Company Limited (IDFC) :
IDFC Ltd. was incorporated in 1997, conceived as a specialized institution to facilitate the flow of private finance to commercially viable infrastructure projects through innovative products and processes. Energy, telecommunications, information technology, integrated transportation, urban infrastructure and food and agribusiness infrastructure constitute the current areas of operation measures for IDFC Ltd.

vi) Small Industries Development Bank of India ( SIDBI) :
SIDBI offers refinance, bill re-discounting, lines of credit and resource support mechanism to route assistance to SSI sector through a work of banks and state level financial institutions. SIDBI also offers direct finance for meeting specific requirements of SSI sectors. It underates a wide range of promotional and developmental measures for rural poor.

Short Answer Questions

Question 1.
Explain the structure of Indian Industry.
Answer:
Structure Of Indian Industry :
In India, industries can be structured on the following basis.

Structure in terms of usage :
a) Basic Industries :
These industries produce capital goods i.e, heavy engineering and machine building industries.

b) Industries producing consumer goods :
These industries produce consumer goods such as cotton textiles, leather goods, salt, sugar, paper, and other industries.

c) Industries producing intermediate goods :
These industries produce coal, cement, steel, power, alcohol, chemicals, and other industries.

Structure by type of ownership :
a) Public sector undertakings :
These are the undertakings owned, managed, and controlled by government. Ex : Air India Ltd, ONG.C, HPCL.

b) Private sector undertakings :
These are the undertakings owned, managed and controlled by private individuals or firms. Ex : Reliance industries Ltd.

c) Joint sector undertakings :
Joint sector consists of business undertakings wherein the ownership, control and management are shared jointly by the government, the private entrepreneurs and the public at a large. Ex : Cochin refineries.

Structure by size of the capital :
a) Large Industries :
The investment is more than ₹ 10 crores, but less than ₹ 100 crores in these industries.

b) Medium Industries :
The industry whose investment is more than ₹ 5 crores, but less than ₹ 10 crores in manufacturing units is called medium industry. This limit is ₹ 2 crores to ₹ 5 crores in service enterprises.

c) Mega Industries :
In these industries, the investment limit is more than ₹ 100 crores.

d) Micro Industries :
The industry whose investment is less than ₹ 25 lakhs in manufacturing units is called micro industry. This limit is ₹ 10 lakhs in service enterprises.

Question 2.
Identify the major industries in India.
Answer:
Major Industries in India.
The major industries in India are described as follows :

1. Textile Industry :
The textiles and apparel industry in India is the second largest employer in the country providing employment to about 45 million people. The domestic textiles and apparel industry contributes 2.3% to India’s GDR accounts for 13% of industrial production and 12% of the country’s export earnings (2018 – 2019). Although cotton textile mills are located in over 80 towns and cities of India, yet its larger concentration is found in Maharashtra, Gujarat, West Bengal, and Uttar Pradesh.

2. Sugar Industry :
Sugarcane is most important commercial crop and it is occupying about 5.0 million hectares in area in India: Sugar industries in India remain regulated and are a source of livelihood for about 50 million farmers and their families. It provides direct employment to over 5 lakhs not only for skilled labour, but also to semi-skilled labour in sugar mills and allied industries across the nation.

3. Cement Industry :
India is the second largest cement producer in the world and accounted for over 8 percent of the global installed capacity as of 2019. Cement production reached 337.32 million tonnes (MT) in 2018-19. The cement production capacity is estimated to touch 550 MT by 2020. Of the total capacity, 98 percent lies with the private sector and the rest with public sector. The top 20 companies account for around 70 percent of the total cement production in India. There are 210 large cement plants in the century. Of these 77 are located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu.

4. Iron and Steel Industry :
Iron and steel industry is one of the most important industries in India. This is a feeder industry whose products are used as raw material for other industries. In 2018 and 2019, India became the 2^nd largest producer of crude steel in the world after China. The iron and steel industry in India contributes around 2 percent of the Gross Domestic Product (GDP) and its weight in the index of industrial production (IIP) is 6.2 per cent.

5. Indian Pharmaceuticals Industry :
India is the largest provider of generic drugs globally. Indian pharmaceutical sector industry supplies over 50 percent of global demand for various vaccines, 40 percent of generic demand in the US and 25 percent of all medicines in UK. Presently over 80 percent of the antiretroviral drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by Indian pharmaceutical firms.

Indian pharmaceutical sector is expected to grow to US $ 100 billion and medical device, market expected to grow US $ 25 billion by 2025.

The drugs and pharmaceuticals sector attracted Cumulatiwe FDI inflows worth US$ 16.50 billion between April 2019 and March 2000, according to data released by the Department for Promotion of Industry and Internal Trade (DPIIT).

6. Mining Industry :
India ranks fourth in terms of iron ore production globally. Production of iron re in 2018 – 19 stood at 229 million tons. India has around eight percent of world’s deposits of iron ore. India became the world second largest, crude steel producer, in 2018-19 with production 111.2 million tons. According to Ministry of Mines, India and the 7th largest bauxite reserves around 2,908.85 million tons in 2017-18. Aluminium production stood at 2,43 MT in 2018-19.

7. Indian Automobile Industry :
India became the fourth largest auto market in 2018-19 with sales increasing 8.3 percent year-on-year to 3.99 million units. It was the seventh largest manufacturer of commercial vehicles in 2018-19. The two wheelers segment dominates the market in terms of volume owing to a growing middle class and a young population. Moreover, the growing interest of the companies in exploring the rural markets further aided the growth of the sector. The industry saw a 25.5 percent jump in Foreing Direct Invesment (FDI) from 2017-18 to 2018-19.

8. Indian Oil and Gas Industry :
India’s economic growth is closely related to energy demand. Therefore, the need for oil and gas is projected to grow more, thereby making the sector quite conductive for investment. The government of India has adopted several policies to fulfill the increasing demand. The government has allowed 100 percent foreign direct investment (FDI) in many segments of the sector, including natural gas, petroleum products and refineries, among others. Today, it attracts both domestic arid foreign investment, as attested by the presence of Reliance Industries Ltd (RIL) and Cairn India. India had 4.5 thousand million barrels of proven oil reserves at the end of 2018 and produced 39.5 million tons in 2018.

Question 3.
State the elements of Industrial Policy Resolution-1977.
Answer:
Industrial Policy Resolution, 1977 :
In March 1977, the Janata Party assumed power at the Centre. On 23^rd December 1977, the Janata Government announced its new industrial policy by way of a statement in the Parliament.

The main elements of this new policy were :

Small scale sector was classified into three categories viz :
a) cottage and household industries,
b) tiny unit with less than Rs. 1 lakh investment, and
c) small scale industrial unit with an investment upto Rs. 10 lakhs.
District Industrial Centres were to be setup in each district to beep in the development of small scale and cotage industries.
Handloom sector was given preference over power loom and mill sectors.
For reduction in regional imbalance, shifting of industries to backward areas was to be assisted and establishment of new industries in urban areas was to be avoided.
Special fiscal concessions were proposed for export oriented units.
Takeover of sick units would be on a selective basis.
Special attention was to be given to the promotion of tiny sector, namely units with investment of Rs. 1 lakh and situated in towns / villages with a population not exceeding Rs. 50,000/-.
Large house would have to rely on their own internally generated resources for financing new projects or expansion of the existing ones.
The public sector would be strengthened with the responsibility of encouraging the development of a wide range of ancillary industries, and contributing to the growth of decentralized production by making available its expertise in technology and management to small scale and cottage industry sectors.
In order to promote technological self-reliance, the policy recognized the necessity for continued inflow of technology in sophisticated and high priority areas where Indian skills and technology were not adequately developed.

Question 4.
What are the major features of Industrial Policy Resolution, 1991?
Answer:
In June 1991, congress government took over charge and the wave of reforms and liberalization were observed in the economy. In this new atmosphere of economic reforms, the government announced a new industrial policy on July 24, 1991. This new policy deregulates the industrial economy in a substantial manner. The government announced a series of initiatives in the new industrial policy as outlined below :

Features of Policy :
The features of the policy are as follows.
1. Abolition of Industrial Licensing :
In a major move to liberalize the economy, the new industrial policy abolished all industrial licensing irrespective of the level of investment except for certain industries related to security and strategic concerns, and social reasons.

Now, there are only 6 industries for Which licensing are compulsory as amended in February 1999. These are alcohol, cigarettes, hazardous chemicals, drugs and pharmaceuticals, electronics, aerospace and defense enquipment, and industrial explosives.

2. Public Sector’s Role Diluted :
Seventeen industries were reserved for the public sector since 1956. This number has now been reduced to three. They are: i) arms and ammunition and allied items of defense equipment, ii) atomic energy and iii) rail transport.

3. MRTP Actg 1969 :
This Act has been amended to remove the threshold limits of assets in respect of Monopolies restrictive trade practices (MRTP) companies and dominant un-dertakings. The new industrial policy also states that the government will undertake review of the existing public enterprises in low technology, small scale and non-strategic areas. Sick units will be referred to the Board for Industrial and Financial Reconstruction (BIFR) for advice about rehabilitation and reconstruction.

4. Free Entry to Foreign Investment and Technology :
The government is committed to promote increased flow of Foreign Direct Investment (FDI) for better technology, modernization, exports and for providing products and services of international standards. Therefore, the policy of the government has been aimed at encouraging foreign investment particularly in core infrastructure sectors, so as to supplement national efforts.

5. Liberalized Industrial Location Policy :
The new industrial policy provides that in locations other than Cities of more than 1 million population, there will be no requirement of Obtaining industrial approvals from the center, except for industries subject to compulsory licensing.

6. Removal of Mandatory Convertibility Clause :
A large part of industrial investment in India is financed by loans from banks and financial institutions. These institutions have followed a mandatory practice of including a convertibility clause in their lending operations for new projects. This has provided them an option of converting part of their loans into equity, if felt necessary by their managements. The new industrial policy has provided that henceforth financial institutions Will not impose this mandatory convertibility clause.

Question 5.
Write a note on the National Manufacturing policy.
Answer:
National Manufacturing Policy (NMP), 2011 of India :
The contribution of the manufacturing sector in Indian GDP was about 16-17% during 2011-12, which is much below its potential and in comparison of other big economies of the Asian continent. In order to bring about a quantitative and qualitative change and to give necessary impetus to the manufacturing sector, the Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce and Industry notified the National Manufacturing Policy (NMP) in November 2011 with the objective of enhancing the share of manufacturing in GDP to 25% and creating 100 million jobs over a decade or so.

Objectives of National Manufacturing Policy (NMP) :
Following are the main objectives of NMP:

The share of manufacturing sector in GDP to rise by 25% in 2022,
Increase in the rate of employment creation in manufacturing sector for creation of 100 million additional jobs by 2022.
Enhanced global competitiveness of Indian manufacturing sector through efficient policy support.
Launch of the Make in India program in 2014 with the aim of attracting business to make investments in manufacturing sector in India.,
To setup national investment and manufacturing zones (NIMZ) using clean energy efficient technology.
Industrial townships ae proposed to be self-governing and autonomous bodies under the constitution,
Infrastructure will be financed appropriately by the central government through viability gap funding, and
To improve access to finance for SMEs in manufacturing sector.

Question 6.
Discuss the major features of globalisation measures as initiated in 1991.
Answer:
National Manufacturing Policy (NMP), 2011 of India :

Globalization :
Globalization may be defind as the integration of the domestic economy with the world economy with the objective of facilitating free movement of goods, services, people, ideas, technology etc. It refers to the opening up of the economy to international competition.

The major features of globalization measures as undertaken in 1991 were :
1. Reduction of Trade Barriers :
Trade barriers restrict free flow of goods and services between countries. With the introduction of globalization measures, these restrictions were reduced. Globalization created an environment for smooth exchange of goods and services between India and other nations.

2. promotion of Fbreign Direct Investment :
With the introduction of globalization, many Indian industries were opened to foreign direct investment. India became a favourable investment destination for foreign investors due to the low cost of production and availability of cheap labour resources. The efficiency of the banking sector also improved because of the competition from foreign banks.

3. To Encourage Efficiency :
Globalization encouraged domestic industries to become more competitive and efficient to face competition at the glpbal level. The domestic industries had to produce quality goods at low cost to compete with the cheaper and superior quality goods of he foreign producers.

4. Diffusion of Technology :
Globalization provided an opportunity to India to have an access to global technology. It made diffusion of knowledge faster. India could utilize the technologies of developed countries without much investment in research and development.

Question 7.
Write a note on demonetization in India.
Answer:
Demonetization :
Demonetization is a situation where the Central Bank of the country (Reserve Bank of India) withdraws the old currency notes of certain denomination as an official mode of payment.

On November 8, 2016, the central government announced that the existing higher denomination currency (Rs. 500 and Rs. 1,000)would cease to be legal tenders. It said this is government biggest push to fight black money and end corruption.

The government also introduced new Rs. 500 and Rs. 2,000 notes and urged people to move towards cash-less economy. This is not the first time that demonetization has been implemented in India. In 1936, Rs. 10,000, which was the highest denomination note, was introduced, but demonetized in 1946. Though, it was re-introduced in 1954 but later, in 1978, the then government in its intensive move to counter the black money, introduced the High Denomination Banks Act (Demonetization) and declared Rs. 500, Rs. 1,000, and Rs. 10,000 notes illegal.

A lot of analysis in India and abroad claimed that demonetization of November 2016 failed to do what it was supposed to do and its impact turned out to be more protracted than initial expected.

Even from the point of view of promoting digital money, the government need not 86 ‘ percent of all currency out of circulation. Further studies pointed out that very little black money was caught.

The Reserve Bank of India on August 30, 2017 released its report on demonetization. In the report, it said 99 percent of the banned notes came back into the banking sysem which trashes all claims of the central government that the move will flush out the black money and counterfeit currency. With 99 percent currency back in the system, the failure of demonetization hints two things: either the black money held in cash was very low or the government failed to implement the demonetization efficiently and all the black money held in Rs. 500 and Rs. 1,000 bank notes laundered back to the banking sysem.

Question 8.
Why is (QST) introduced in Indio? state its impact of Indian economy.
Answer:
Goods and Services T&x (GST) :
Goods and Services Tax (GST) is an indirect tax which has replaced many indirect taxes in India. The GST Act was passed in the Parliament on 29th March 2017. The act came into effect on 1st July 2017. The goods and services tax in India is a comprehensive, multistage, destination-based tax that is levied on every value addition. In simple words, GST is an indirect tax levied on the supply of goods and services. This law has replaced many indirect tax laws that previously existed in India. GST is one indirect tax for the entire country.

Impact of GST OP Indian Economy :
This impact of GST on Indian economy is explained below:

GST reduces tax burden pn producers and fosters growth through more production. The earlier taxation structure, pumped with myriad tax clauses, prevents manufacturers from producing to their optimum capacity and retards growth. GST takes care of this problem by providing tax credit to the manufacturers.
Different tax barriers, such as check posts and toll plazas, lead to wastage of unpreserved items being transported. This penalty transforms into major costs due to higher needs of buffer stock and warehousing costs. A single taxation system eliminates this roadblock.
There is more transparency in the system as the customers will know exactly how much taxes they are being charged and on what base.
GST adds to the government revenues by extending the tax base.
GST provides credit for the taxes paid by producers in the goods or services chain. This is expected to encourage producers to buy raw material from different registered dealers and its hoped to bring in more vendors and suppliers under the purview of taxation.
GST removes the custom duties applicable on exports. The nation’s competitiveness, in foreign markets will increase on account of lower costs of transaction.

Question 9.
Indicate the measure to solve the problem of smull scale industries,
Answer:
Goods and Sendees Tax (GST) :
The important measures to solve the problems of cottage and small scale industries :
1) Credit facilities :
The government should provide the credit to small and cottage industries at lower rate interest. Further, commercial banks should also provide lays to develop the industries.

2) Industrial Estates :
The government has setup number of industrial estates in different cities and towns. These areas have been provided Various facilities like roads, banking, marketing and transport to encourage the small scale industries.

3) Testing laboratories :
The government has established the testing laboratories to maintain the prescribed standard of product of cottage industries.

4) Supply of Designs :
The government is also providing the new models and designs to the producers to improve the quality of cottage industry.

5) Publicity :
The government has setup the display centres and showrooms inside and outside the country to increase the sales of cottage industry products.

6) Facilities of Raw material :
The government imports raw material for cottage Industries from abroad and provides them at lower price to encourage them.

7) Purchase of cottage industry prnduct :
The government also purchases finished products from them and sells the same in showrooms display centres inside and outside the countiy for creations demand.

8) Protection Against Foreign competitions :
The government has also provide protection to have industry by imposing, heavy duties on the imports still there is a need for further protection smuggling should be controlled.

9) Established of training institutions :
The government has set by various situations like industrial, vocational commercial and polytechnic institutions to provide qualified technical workers to the cottage and small scale industries.

10) Handicrafts centres :
Handicrafts, development centres have been setup to promote the handicrafts.

Question 10.
Suggest the. measures for survival and growth of small seals industries.
Answer:
Suggestions for Survival and Growth of Small Seale Industries :
Small scale iridustries are occupying a very important place in the industrial structure of the Indian economy.

Following remedial measures are suggested for the sustainable growth of small scale industries in India :

The government should conduct detailed survey of the existing small scale industries and draw up productive program for them.
The government has to make necessary arrangements for imparting proper training to workers engaged in small scale units.
The government should make provision for making available of proper and sufficient quantity of raw material at reasonable rates.
It is necessary to further liberalize the rules and practices of banking and other financial institutions supplying credit to small scale industries, so that they can arrange adequate credit required for the purpose.
The government should take adequate measures for the development of infrastructure in terms of roads, electricity, drainage and water supply particularly in the unorganized sector where the small scale industries are poorly served.
The government should establish effective marketing organizations to remove the comparative disadvantages vis-a-vis large scale units in the field of marketing.
The small scale industries should conduct research on the techniques of production and thus try to improve the techniques of production and make the industries to adopt mod* em and sophisticated technology in their units.
The entrepreneurs should maintain the quality and standard of their output produced on par with similar products of large units.
The government should take measures in lowering the rates of duty and provide export incentives to small entrepreneurs.

Thus, if all these steps are taken at proper time and spirit, small scale industries will come out successfully from the problems and continue their stay in the economy.

Very Short Answer Questions

Question 1.
Extractive industry.
Answer:
It concerned with extraction out goods from the soil, air, water. Products of extractive industries come in raw from and they are Used by manufacturing and construction industries for producing finished products. Ex : Coal, mineral, oil industry etc.

Question 2.
Construction Industry.
Answer:
This industry is different from all other types of industry because incase of other goods industries can be produced at place and sold at another place. This industries take up the work of construction of buildings.

Question 3.
Index of Industrial production.
Answer:
The index of industrial production (IIP) comprises three components of industry, i.e., mining, manufacturing and electricity. It also categorized by ‘use based classification’.

Question 4.
Textile Industry.
Answer:
This industry covers a wide range of activities ranging from generation of raw materials such as jute, wool; silk and cotton to greater value added goods such as readymade garments prepared from different types of man made or natural fibers. It provides job opportunity to over 45 million individuals thus playing a major role in the nation economy.

Question 5.
Iron and steel industry.
Answer:
Indian steel industry is a 400 years old. It is the fourth largest in the world. It provide employment opportunities to more than 0.6 million people. The key players in steel industry are Steel Authority of India (SAIL), Bokaro Steel Plant, TISGO etc.

Question 6.
Industrial backwardness.
Answer:
The industrial backwardness results in economic backwardness. The most backward districts lie in eastern U.P, Assam, Western Rajasthan Telangana etc.

Question 7.
Industrial policy resolution-1956.
Answer:
The 2^nd plan gave high priority to industrial development aimed at setting up a number of heavy industries such as steel plant capital goods industries etc. Inview of all these developments a new industrial policy was announced on 30^th April 1956.

Question 8.
Industrial, policy resolution -1977.
Answer:
The industrial policy 1956, failed expanding the field of public sector, it had drastically reduced the area of activity for the private sector. This was adversely affect the industrial growth of India by reducing private initiative and enterprises. So in March 1977, the Janata Party government anounced it new industrial policy by way of a statement in the parliament.

Question 9.
Industrial policy resolution – 1980.
Answer:
The congress govt in 1980 was announced a new industrial policy. The main features of this policy is revitalization of the public sector, economic federalism, promotion of rural industries, removed of regional imbalances etc.

Question 10.
Liberalisation.
Answer:
It refers to relaxation of previous government restrictions usually in area of social and economic policies thus, when government liberalised trade it means it has removed the tariff, subsidies and other under employment restrictions on the flow of goods and services between the countries.

Question 11.
Small industries development bank of India (SIDBI).
Answer:
SIDBI offers refinance, bill re-discounting, lines of credit arid resource support mechanism to route assistance to SSI sector through a Work of banks and state level financial institutions. SIDBI also offers direct finance for meeting specific requirements of SSI sectors. It underates a wide range of promotional and developmental measures for rural poor.

Question 12.
Industrial Finance.
Answer:
The amount of finance required by industrial establishments to carryout their production activity is known as industrial finance. The finance can be mobilised by the industrial concerns for investing in fixed and working capital from different sources. Finance is the life and blood of any industry.

Question 13.
Global market.
Answer:
The market in which the goods arid services of one counry are traded (purchased and solve to people of other countries. It is the activity of buying or selling goods and services in all countries of the world or the value of the goods and services sold. The explosive growth of the online company is forcing businesses of all sizes to compete in a global market.

Question 14.
Public and private sector.
Answer:
Public sector is usually comprised of organisations that are owned and operated by the government and exist to provide services for its citizens, organisations in the public sector do not seek to generate profit.

Private sector is the part of the economy, sometimes reffered to as the citizeji sector, which is owned by private individuals or groups, usually as a means of enterprise for profit, rather than being owned by the state.

Question 15.
Make in India.
Answer:
The ‘Make in India’ initiative was launched in September 2014 as a part of a wider set of nation-building 2014 as part of a wider set of nation-building’initiatives. Devised to transform India into a global design and manufacturing hub. In this programme, companies are boosted to set up their plans in India. Make in India was a timely response to a critical situation.

TS Inter 2nd Year Economics Study Material Chapter 5 Agricultural Sector

November 16, 2022October 23, 2022 by Srinivas

Telangana TSBIE TS Inter 2nd Year Economics Study Material 5th Lesson Agricultural Sector Textbook Questions and Answers.

TS Inter 2nd Year Economics Study Material 5th Lesson Agricultural Sector

Essay Questions

Question 1.
Explain the importance of agriculture in Indian Economy.
Answer:
Importance of Agriculture in I nidian Economy :
1. Share of Agriculture in GDP or GVA :
At the time of the First World War, agriculture contributed two-thirds of national income. After the initiation of planning in India, the share of agriculture has declined due to the development of the secondary and tertiary sectors. In 1950-51 the share of agriculture and alllied activities in gross domestic product (GDP) was 56.5% and it declined to 24.7% in 2000-01 and further to 13.9% in 2012-13.

The value of GVA of agriculture and allied sectors increased from Rs. 20.94 lakh crore in 2014-15 to Rs. 30.47 lakh crore in 2019-20(PE). The share of agriculture sector as percentage of GVA decreased from 18.2 percent in 2014-15 to 16.5 percent in 2019-20 (PE). Further during the same period, the share of crops dec reased from 11.2 percent to 10 percent, the share of livestock increased from 4.4 percent to 4.9 per cent, the share of forestry & logging decreased from 1.5 percent to 1.2 percent while the share of fishing marginally increased from 1.0 per cent to 1.1 percent. In developed countries like USA and the UK around 2% of GDP only is derived from agriculture sector.

2. Providing Employment :
The number of people engaged in agriculture increased from 98 million in 1951 to 235 million in 2001. In terms of percentage, people working on land came down from 70 in 1951 to 59 in 2001. During the period 2008-11, agriculture provided employment to 46% of the male workers and 65% of the female workers. Overall, 49 percent workforce engaged in agriculture by the year 2011. Employment in agriculture in India was reported at about 43% in 2019.

3. Providing Raw Materials to Industries :
Agricullture provides raw materials to various leading industries. Sugar, jute, cotton textiles, vanaspati, flour mills, plantations and food processing industries depend on agriculture directly. Many other industries depend on agriculture indirectly. Many small scale and cottage industries depend upon agriculture for their raw materials.

4. Market for Industrial Products :
Since more population of developing economies live in rural areas, increased rural purchasing power is a stimulus to industrial development. If measures are taken to expand agricultural output and productivity, the income of the rural sector will increase. Hence, the demand for industrial produts increases and the process of industrial development will get a boost up.

5. Capital Formation :
Unless the rate of capital formation increases to a higher level, economic development cannot be achieved. As agriculture sector happens to be is the largest sector in developing countries, it will play an important role in pushing up the rate of capital formation. If it fails to do so, whole process of economic development will suffer. Generation of surplus from agriculture will ultimately depend on the agricultural productivity.

6. Provision of Food Security and Poverty Reduction :
According to the Food and Agriculture Organization (FAQ) and the United Nation.s Organization (UNO), hunger, malnutrition and under weight are main problems in India. To overcome these issues, development of agriculture sector is required. Since agriculture continues to be a source of livelihood and food security for a majority of low income poor and vulne rable sections of the society, its role in poverty reduction is self-evident. The experience indicates that 1% growth in agriculture is at least 2 to 3 times more effect in reducing poverty than the same growth in non-agricultural sectors. A growing surplus of agricultural produce is needed even to control inflation.

7. Agriculture Exports :
India occupies a leading position in global trade of agricultural products. However, its total agricultural export basket accounts for a little over 2.15 per cent of the world agricultural trade. What is note worthy is that since the economic reforms began in 1991, India has remained consistently a net exporter of agri-products, touching Rs. 2.7 lakh crore exports and imports at Rs. 1.37 lakh crore in 2018-19. Agricultural products such as tea, sugar, oil seeds, tobacco, spices, etc. are the main iterns of exports of India in 1950-51, the proportion of agricultural goods exported comes to 50% of our exports and exports with agricultural content contribute another 20%.

Question 2.
Describe the causes for low productivity in agriculture.
Answer:
There are many causes for low productivity in Indian agriculture which can be explained under general causes, institutional causes and technical causes.
1) General Causes :
1) Social Environment :
The social environment of villages is an obstacle in agricultural development. Majority of india farmers are illiterates, superstitious, conservative and non – responsive to new agricultural techniques. But the fact is with in their limitations, the indian farmers use their resources efficiently.

ii) Population Pressure on Land :
Population pressure is heavy on land, non – agricultural sectors are unable to absorb the total workers. So, pressure on land is increasing continuously. In 2011, out of 349 millions rural working populaton 263 million workers were employed in agricultural sector. Increasing population pressure on land is parthy responsible for subdivision and fragmentation of holdings, productivity is small uneconomic land holdings is low.

iii) Land Degradation :
Nearly half of the country’s land (329 millions hectares) is de-graded. 43% of the land suffers from high degradation resulting in 33-67 percent yield loss. 5% of the land is so damaged that it is unusable. Soil degradation is a major foctor for low agricultural productivity in many regions of the country.

iv) Inadequate Infrastructure :
Inadequate infrastructural facilities such as roads, communications, marketing, credit, power and drainage will lead to low agricultural productivity.

2) Institutional Causes :
i) Land Tenure System :
Highly exploitative zamindari system drained out the capacity willingness and enthusiasm of the farmers to increase production and productivity. Regulation of rent, security of tenure, ownership rights for tenants did not change the position of tenants better. In this situation productivity cannot be increased.

ii) Size of Holdings :
The average size of land holdings in india is very low. In 2010-11, 85% of total land holdings had a size of less them 2 acres, so, the cultivation on them can be only by labour intensive techniques, and scientific cultivation with improved implements, seeds etc., may not be possible. The existance of uneconomic land holdings is also the cause for low agricultural yield.

iii) Lack of Entrepreneurship :
Agricultural sector is devoid of full entrepreneurship and competition in their agricultural operations. All the developed nations have the enterprise system.

iv) Deficiency of Investment: It is another problem in the agricultural sector. The CSO (Central Statistical Organization) does not consider investment as the essential component of rural infrastructure. Electrification, development of roads, investment in storages and tele-communications are excluded.

3) Technical Causes :
i) Poor Techniques of Production :
Most of the India farmers are using outdated production techniques. Use of fertilisers and new high yielding varieties of seeds is also limited. Still, agriculture is traditional and there, productivity is low.

ii) Inadequate Irrigation :
Among the various inputs, the most important is irrigation to which the modem agricultural technology is closely tied. In india in 2010-11, out of 199 million hectares of gross cropped area only 89 million hectares of land had irrigation facilities. Thus, 45% of gross cropped area had irrigation facilities.

iii) Environmental Factors :
Severe soil erosion, degradation due to heavy rains, floods and deforestation, water logging, improper drainage, ground water depletion, drought and global warming reckless use of fertilizers and pollution of soil water and air are also contributing to low productivity in agriculture.

Question 3.
Write about the main components of land reforms in India.
Answer:
Components of Land Reforms :
The three main constituents of land reforms are explained as follows :

1) Abolition of Intermediaries :
There were mainly three forms of land relations in pre-independence India. They are : zamindari system/jagirdaiy system, mahalwari system and rytwary system which were initiated and implemented by Britishers. Except rytwary system in which there is direct relation between farmer and state all other systems are intermediary systems in which middle men in the form of zamindar/jagirdar are present in between cultivator of land and state. These middle men used to exploit farmer as well as they used to cheat state also. Because of this middle men system in land relations, agriculture became an exploitative ground. Accordingly, all state governments were instructed to enact the laws to abolish the intermediaries.

2) Tenancy Reforms :
A tenant is a person who cultivates land of the land owner owing portion of production to owner of land. But the owing portion called rent was very high and sometimes/ in some areas it was even two third of the total production. There was no security to tenant from the landlord. The continuation of tenancy is left to the mercy of land owner. To reform this land relation system, the following measures were suggested to the state. The sug-gested measures were regulation of rent, security of tenure and ownership rigents to tenents.

3) Ceilings on Land Holdings :
Fixing a statutory limit on the maximum land that a family can have under its ownership is called ceiling. Surplus over the ceiling is taken by the government for redistribution to the landless and marginal farmers. Ceiling on land holdings act has been initiated in different states since 1960.

The following are some of them :

Ceiling limit is to be lowered to 18 acres of wet land and 54 acres of land without irrigation facilities.
Family with 5 members is taken as a unit to determine the ceiling. Extra land is allowed for extra members.
Exemption from the ceiling are to be reduced.
The related Acts to be kept out of the purview of the civil courts.
Scheduled Castes and Scheduled Tribes are to be given priority in the distribution of surplus land.
Lands under plantation crops like tea, rubber and coffee are exempted from the Ceiling.

4) Consolidation of Land Holdings :
The government has encouraged consolidation to solve this problem. Under this reform Punjab, Haryana and Maharashtra states could provide economic holdings to a considerable number of farmers with small and fragmented holdings. By September 2001, only 1,633 lakh acres were consolidated. Farmers in many states have not come forward to co-operate and therefore the consolidation has been slow.

5) Co-operative Farming :
This is not a reform and depends on voluntary spirit. Farmers in an area join their small holdings by pooling lands. Co-operative farm is managed by an elected body and it has the advantages of large scale farming with government support. However, co-operative farming has not been effective due to different reasons like lack of motivation, dominant natur role of the big farmers, inefficient administration, improper distribution of produce and the treatment of small farmers as wage labourers.

Question 4.
Explain Self-Sufficiency in food grains and Food Security in India.
Answer:
The Indian planners, right from the beginning, realized the need to attain self-sufficiency in food grains as one of the important goals of planning.

When India suffered very severe droughts during 1965 and 1966, the then American President, Lyndon Johnson, restricted food aid to monthly basis under the Public Law (PL) – 480 Programme. The government of India under Prime Minister, Mrs. Indira Gandhi went in for seed – water – fertilizer policy popularly known as the green revolution. This policy ushered in a revolution in food production in India and dispensed with food grains imports altogether. India achieved self-sufficiency in food grains by the year 1976 and since then, Indian imports of cereals have remained neglibible. India’s food grains production reached to 285 million tons in 2018-19 from 50 million tons in 1950-51.

Though, India has achieved self-sufficiency in food grains, as per the Expert Group headed by SD Tendulkar, the percentage of poor living below poverty line for the year 2011-12 was 21.9 and as per the Expert Group headed by Dr. C. Rangarajan (2014) the population living below the poverty line was 454 million in 2009-10 and 363 million in 2011-12. Thus, in India though there is physical availability of food grains at national level the economic access is missing.

Question 5.
Assess the impact of New Agricultural Strategy in India.
Answer:
Impact of New Agriculture Strategy / HYVP on Indian Economy

Though, green revolution is the ultimate result of new agriculture strategy / HYVP, we can find out some other impliations of this process too as follows :
i) Increase in Agriculture Productivity / Production :
Due to new agriculture strategy, an enormous increase in agriculture productivity and production took place in India due to the adoption of modem agriculture inputs and which is termed as green revolution. We have seen this increase under the heading of increase in agriculture produc-tivity/production of major crops in India. By the year 1976. India became self-suffi-cient in food grain production.

ii) Employment :
The adoption of new agricultural strategy has led to substantial increase in area under crops, production of food grains and agricultural productivity. This technology has given a boost to agricultural employment because of diverse job opportunities created by multiple cropping. Labour intensive crops like rice, sugarcane, potato, vegetables, and fruits have increased the job opportunities in agricultural sector. The agriculture-retailing is developed into a big business now.

iii) Improvement in Farmer’s Income :
Farmers especially, in Kerala, Madhya Pradesh, Andhra Pradesh, Tamil Nadu, Gujarat, Punjab, Haryana and Himachal Pradesh had good chances of improving their incomes. Green revolution facilitated the farmers to follow simple but scientific and technical ways like grading the product in the field itself. Selling directly to the retail companies by avoiding middlemen also helped to increase in farmer’s income after new agricultural strategy as organized retailers have provided better remuneration to the farmers.

iv) Improvement in Exports :
India used to import huge basket of food grains prior to green revolution which became the rare case in post – green revolution period. Agriculture exports increased with green revolution. The value of exports of agriculture and allied products was Rs. 284 crores in 1960-61 and it increased to Rs. 2.7 lakh crore by 2018-19.

Question 6.
Examine the sources of agricultural credit in India.
Answer:
Sources of Agricultural Credit :
The sources of agricultural credit available to Indian farmers can be classified into two types :

A. Non-Institutional Sources :
Non-institutional sources include money lenders, land lard, traders, commission agents, relatives, friends etc. In 1951-52, non-institutional sources contributed 93 percent of financial requirements of farmers whereas the government could contribute only 7 percent. The money lenders and landlords supplied credit for both productive and unproductive purpose. They are easily accessible to farmers at any point of time. But this source has many defects in it. Interest rates are not uniform and exorbitant (18 to 50 percent). Often small farmers are cheated and their lands are appropriated. The landless labourers are forced to become bonded slaves.

B. Institutional Sources :
Since the private / non-institutional source of credit is defective and exploitative, the government followed a multiagency approach consisting of co-operatives, commercial banks and regional rural banks which knwon as institutional credit to provide cheaper and adequate credit to farmers. The basic objectives of this approach are :

to ensure timely and adequate flow of credit to the farming sector;
to reduce and gradually eliminate the money lenders from the rural scene; and
to make available credit facilities to all regions of the country.

i) Co-operatives :
The co-operative movement was initiated way back in 1904 through the establishment of co-operative credit societies to relieve rural people from their indebtedness. The co-operative credit societies in India have been organized into short-term and long-term structures. The short-term co-operative credit structure is based on a three tier structure. At the lowest tier are the Primary Agricultural Credit Societ-ies (PACS) and these are organized at village level.

At the second tier, the District Co-operative Credit Banks (DCCBs)-are organized at the district level. At the third and at apex tier, the State Co-operative Banks (SCBs) are organized at the state level. The SCB coordinates the extension of short and medium term loans to farmers through DCCB and PACS. In addition to short and medium term loans, the long term credit requirements of the farmers are provided through PCARDBs and SCARDBs.

ii) Commercial Banks :
The share of commercial banks in the provision of agricultural credit was very meager in 1950s. It was just 0.9 percent in 1951-52 and 0.7 percent in 1961-62. The advances to agriculture by commercial banks aggregated to only Rs. 162 crores in 1969. But after nationalization of banks in 1969 and later in 1980, not only the number of branches of commercial banks increased at rural level but also the amount of advances to agriculture increased massively. The share of public and private sector commercial banks put together at present accounted for more than 70 percent of the institutional credit provided to agriculture.

iii) Regional Rural Banks (RRB):
As the commercial banks failed to fill the geographical gap in the availability of credit not covered by the co-operatives, the Working Group on Rural Banks headed by Sri M. Narasimham recommended for the establishment of RRBs to bridge the gap in the provision of loans to small and marginal farmers, landless labourers, artisans and other rural residents of small means. Consequent upon the recommendations of the working group, 5 RRBs were set up initially on 2nd October, 1975.

In the recent past, government of India fixed institutional credit flow target to agri-culture sector in respect of all of the above stated institutions in our country. The agricultural credit flow target for 2019-20 has been fixed at Rs. 13,50,000 crore.

iv) National Bank for Agriculture and Rural Development (NABARD) :
Reserve Bank of India had set up the Agricultural Refinance Development Corporation (ARDQ to provide refinance support to the banks to promote agricultural development. With the widening of the role of bank credit from agricultural development to rural development, the government proposed to have a broad-based organization at the apex level to support and guide the credit extending institutions. Accordingly, NABARD was set up in July, 1982 by subsuming ARDC.

Question 7.
What are the defects in agriculture marketing? Explain measures taken by the government to overcome the defects of agriculture marketing.
Answer:
Defects of Agricultural Marketing in India Due to inadequate storage facilities farmers are forced to sell their agriculture surplus immediately after harvesting irrespective of supply/demand position in market. Further, due to inadequate transportation facility, the farmer is forced to sell the goods to local traders/money lenders, commission agents with lower than market prices. In the mandis, the farmers are deceived by the use of wrong weights and rriea- sures. They are also cheated by brokers and traders. The farmer has to pay wighing charges, unloading charges, charges for separation of impurities in the produce and many other miscellaneous undefined and unspecified charges. Due to lack of proper grading system farmer is not getting remunerative price.

Government Measures :
The measures taken by the government of India to overcome the defects of agriculture’marketing.

1) Regulated Markets :
In order to eliminate unhealthy market practices and to protect the interests of the farmers by ensuring remunerative prices, State Agricultural Produce Marketing Act was enacted for the establishment of regulated markets. Accordingly, in 1951 more than 200 regulated markets were established in India and at present about 7,246 regulated markets are functioning in the country. Regulated markets aim at the development of the market structure to :

Ensure remunerative prices to the producer of agricultural commodities;
Narrow down the price spread between the producer and the consumer,and
Reduce non-functional margins of the traders and commission agents,

2) Grading and Standardization :
Improvements in agricultural marketing system cannot be expected unless grading and standardization of agricultural produce is made. The government has done much to grade and standardize many agricultural goods. Under the Agricultural Produce Act, 1937, the government has set up grading stations. The graded goods are stamped with the seal of the Agricultural Marketing Department AGMARK and these goods will have a wider market and command better prices.

3) Warehousing Facilities :
The Central Warehousing Corporation (CWQ was setup in 1957 for the storage of agricultural produce. The states have setup the state warehousing corporations for the same. Food Corporation of India (FCI) was also setup at the national level. As on 31.12.2018 the total storage capacity available with Food Corporation of India (FCI), Central Warehousing Corporation (CWC) and state agencies is 851.54 lakh metric tonnes (LMT) comprising 724.79 LMT in covered godowns and 126.75 LMT in cover and plinth (CAP) storage.

4) Market Information :
The government has initiated a number of steps to provide the information about the prices prevailing in different markets to farmers. The prices prevailing in markets are broadcast daily by All India Radio. Trends in market prices are reviewed weekly in special programmes and talks are organized by AIR and Doordarshan. A kisan cedi center (KCC) with toll free no. 1800-180-1551 was set-up to help the fanners in all aspects.

5) Support Prices :
The government announces minimum support prices and procurement prices for various agricultural commodities from time to time in a bid to ensure fair returns to farmers. These prices are fixed in accordance with the recommendations of the Commission for Agricultural Costs and Prices (CACP).

6) Other Measures :
The following measures are also necessary to make agricultural marketing beneficiary to the farmers :

Improving the physical connectivity (roads and communications).
Improving the economic connectivity (banks and financial institutions)
Improving the electronic connectivity (pohfme, internet cables etc).
Restriction on sale of produce outside the regulated markets.
Reducing the cost of transportation.
Encouraging Rythubazaars (A Center for Direct Sale to Consumer by Farmer).
Promoting the use of standard weights and measures.
Development of warehousing facilities in villages and rural areas.

Question 8.
Examine the causes of rural indebtedness and its remedial measures in India.
Answer:
Rural Indebtedness :
In India about 70 percent of the people are living in villages. It is found that these people spend higher proportion of their borrowed money for unproductive purposes. Consequently they are unable to repay the old debts. Whenever there is a little or no access to institutional sources. They go to usurious money lenders, who are immediately avail-able in their villages. They borrow money at higher rate of interest at the cost of their assets and get caught in the evil clutches of the money lenders. .

Estimations of Rural Indebtedness :
Many institutions and individuals have estimated the magnitude of indebtedness in rural areas. In 1951-52, the amount indebted by the rural households was estimated at Rs. 913 crores. All India Debt and Investment Surveys have estimated that it was Rs. 3,848 crores in 1971, Rs. 6,193 crores in 1981, Rs. 22,211 crores in 1991 and Rs. 1,11,468 crores in 2002 (NSSO 59th Round). According to this survey the total indebted amount both in rural and urban put together was Rs. 1,76,795 crores in 2002. The NSSO conducted All India Debt and Investment Survey from January 2013 to December 2013.

Causes of Rural Indebtedness :

The following are the causes of rural indebtedness :

The main cause of indebtedness of the farmers is their poverty, low level of savings and crop failures.
Borrowed funds for making improvements on land.
Borrowed funds for unproductive activities / purposes.
Debt inheritance of the parents.
Dependence on nOn-institutional sources.
Inadequate support prices for the crops.
Increasing cost of cultivation.

Remedial Measures to Reduce Rural Indebtedness :
Rural indebtedness with its magnitude and dimensions is causing many problems in rural areas. It is breeding poverty. It is also leading to distress sales of agricultural products and the farmers are left with food insecurity. Therefore, rural indebtedness should be reduced by adopting the suitable remedial measures. The following remedial measures are suggested to reduce rural indebtedness.

To enact appropriate legislations to scale down the old debts / ancestral debts of small farmers.
To increase the network of co-operatives, commercial banks and RRBs to reduce the dependence of the rural people on money lenders.
To provide timely and adequate credit to small, marginal farmers and rural artisans.
To give due importance to rural poor under priority sector lending by banks.
Consumption loans should be provided by the public sector commercial banks to weaker sections.
Mortgaging the lands to money lenders must be avoided.
Rebate for one Jime settlement of dues may be enhanced.
Coverage of women farmers under micro finance methodology should be increased.

Union government and state governments are frequently implementing loan waiver schemes to address the problem of rural indebtedness. State government of Telangana introduced Rytu Bandhu scheme under which an amount of Rs. 10,000 (initially it was Rs. 8,000) is given per acre per year in two installments to all types of land owners. Union government of India is also implementing the Pradhan Mantri Kisan – Samman Nidhi to (PM – KISAN) farmer families under which Rs. 6,000 is given per acre per year in three equal installments as minimum income support.

Question 9.
Write about the main elements of agricultural price policy.
Answer:
The Agricultural Prices Commission was setup in January, 1965 to advise the govem- ment on price policy of major agricultural commodities. It kept a view of evolving a balance and integrated price structure in the perspective of the overall heeds of the economy and with due regard to the interests of the producer and the consumer. Since March 1985, the Commission has been known as Commission for Agricultural Costs and Prices (CACP).

Main Features of Agricultural Pricing Policy
The salient features of the agricultural pricing policy are as follows :
1) Institutions :
The government has set uyp two institutions to implement the price policies. They are:
i) Agriculture Price Commission (1965) :
This commission advices the government regarding agriculture price policy, also determines minimum support prices (MSP) and procurement prices of agriculture products. Since March 1985, the Commission has been known as Commission for Agricultural Costs and Prices (CACP).

ii) Food Corporation of India (1965) :
It organizes procurement of food grains at prices determined by government and their sale through public distribution system.

iii) Fixation of Minimum Support Prices (MSP) :
The government determines minimum support prices of many agriculture products such as wheat, rice, maize, every year based on recommendations made by Commission for Agricultural Costs and Prices (CACP).

2) Maximum Price Fixation :
Government also determines maximum prices for certain agriculture products. The government sells many agriculture products such as grain, sugar, rice etc., through fair price shops under public distribution system (PDS).

3) Procurement Prices :
The prices at which government, procures food grains for the purpose of public distribution system and to maintain buffer stocks are called procurement prices. To prevent change in prices of agriculture products beyond a certain limit, government maintains buffer stock of goods. This is done by Food corporation of India (FCI). When price of food grains starts increasing, government starts selling food grains from buffer stock at spe-cific prices. As a result, increase in price of food grain can be checked. Fbrther, buffer stock operations aim at eliminating unduly low prices consequent to bumper crops.

Question 10.
Write the measures to provide food security in India.
Answer:
Measures to Provide Food Security in India

To tackle the quantitative and qualitative aspects of the food security problem, the govemment of India has relied on the following three food-based safety nets :

i) Public Distribution System (PDS):
Under PDS, food grains are provided with fair prices through fair price shops. Now it is Targeted PDS under which targeted poorest of the , poor first served.

ii) Integrated Child Development Services (ICDS):
Under ICDS, pre-school children are given free food through pe-school centers (Anganwadi).

iii) Mid-Day Meals (MDM):
Under MDM, school going children are gien free lunch.

iv) Food Security Legislation :
As an integrated approach in providing food security in India, government of India enacted National Food Security Act (NFSA) in July, 2013 which gives legal entitlement to 67% of the population to receive highly subsidized food grains. Under the Act, food grain is allocated @ 5 kg per person per month for priority households category and @ 35 kg per family per month for Antyodaya Anna Yojana (AAY) families at a highly subsidized prices of Rs. 1/-, Rs. 2/- and Rs. 3/- per kg for nutri-cereals, wheat and rice respec-tively. Coverage under the Act is based on the population figures of Census, 2011.

The Act is now being implemented in all 26 State/UTs and covers about 81.35 crore persons. The annual ‘ allocation of food grain under National Food Security Act and Other Welfare Schemes is about 610 Lakh Metric Tons. Pregnant ladies would be entitled to get free food from Anganwadi during the pregnancy period and six months after the delivery and would also be entitled to get a maternity’benefit of Rs. 6,000. Children from six month to six years of age would also be entitled to get free food from Anganwadi. Children in the age group of 6-14 years studying up to middle class would be given free lunch. If the government fails to provide food grains to the eligible people it will have to provide food security allowance.

Short Answer Questions

Question 1.
Explain the growth pattern in agricultural sector.
Answer:
Growth of Agriculture :
This concept can be studied under two heads as follows :

i) Pattern of Growth in Agriculture :
At the time of independence, India’s agriculture was in a State of backwardness, Farmers were in heavy debt and they did not have the knowledge to use proper equipment, good seeds and chemical manures. Except in certain irrigated areas, they were dependent on rain fall and monsoons. Productivity per hectare and per worker was extremely low. The country was not self-sufficient ih food grains and had to depend on imports of food grains. Over 70% of our working population was engaged in cultivation.

India had adopted planning process to develop the economy. First Five Year Plan (1951-56). Third Five year Plan (1961-66) and Fourth Five Year Plan (1969-1974) gave priority to agriculture sector by allocating highest percentage of resources to agriculture sector. India also implemented the land reforms to develop the agriculture. India has adopted New Agriculture Strategy in the year 1966-67 by supplying new agriculture inputs like high yielding variet-ies of seeds, chemical fertilizers, pesticides etc., due to which India became the self-sufficient in food grain production by the year 1976.

At an average, India’s agriculture growth remained at around 3.5% during low growth period (1950-51 to 1969-70; around 3.5 percent/per annum and termed as Hindu Rate of Growth), and at around 5% during medium growth period and at around 7% high growth period of Indian economy (1991-92 to 2019-20 around 7 per annum) High growth rate of Indian economy during reforms is being pooled by service sector’s growth and mainly due to information technology (IT) revolution.

ii) Growth in Productivity and Production of Major Crops :
Though productivity and production level of major crops were very low immediately after independence, it increased by seventies due to “new agriculture strategy” adopted during sixties which is termed as Green Revolution.

If we take food grains production, its productivity increased from 522 kg per hectare in 1950-51 to 2299 kg per hectare in 2018-19(PE). During the same period rice productivity increased from 688 kg to 2659 kg, wheat productivity increased from 663 kg to 3507 kg, maize productivity increased from 547 kg to 2966 kg. Pulses productivity increased from 441 kg to 806 kg. Oil seeds productivity increased from 481 kg to 1265 kg. Overall, during the period 1950-51 to 2018-19, wheat productivity increased nearly 6 folds whereas pulses productivity registered a two fold growth. If we look at the trends in production during the period from 1950-51 to 2018-19, food grains production increased from 50.8 million tonnes to 285 million tonnes.

Rice production increased from 20.5 million tonnes to 116.4 million tonnes. Wheat production increased from 6.4 million tonnes to 102.2 million tonnes. Maize production increased from 1.7 million tonnes to 27.2 millioni tonnes. Pulses productioni increased from 8.4 million tonnes to 23.4 million tonnes. Oil seeds productioni increased from 5.1 million tonnes to 23.4 million tonnes. Again in production of major crops too, highest increase took place in wheat production whereas lowest increase took place in pulses production.

Question 2.
Write about trends in production of major agricultural crops in India.
Answer:
Trends in production of major agricultural crops :
Though productivity and production level of major crops were very low immediately after independence, it increased by seventies due to “new agriculture strategy” adopted during sixties which is termed as Green Revolution.

This can be studied with help of the table given below.
TS Inter 2nd Year Economics Study Material Chapter 5 Agricultural Sector 1

If we look at the trends in production during the period from 1950-51 to 2018-19, food grains production increased from 50.8 million tonnes to 285 million tonnes. Rice production increased from 20.5 million tonnes to 116.4 million tonnes. Wheat production increased from 6.4 million tonnes to 102.2 million tonnes. Maize production increased from 1.7 million tonnes to 27.2 million tonnes. Pulses production increased from 8.4 million tonnes to 23.4 million tonnes. Oil seeds production increased from 5.1 million tonnes to 23.4 million tonnes. Again in production of major crops too, highest increase took place in wheat production whereas lowest increase took place in pulses production.

Various initiatives of central and state governments like land reforms, new agriculture strategy (green revolution), technology missions of pulses, oil seeds, free and subsidized inputs distribution such as electricity, seeds, fertilizers, water (irrigation), machinery and strengthening marketing and financing infrastructure etc., helped to achieve this agriculture growth.

Question 3.
What are the trends in agricultural productivity in India? Explain.
Answer:
Productivity needs average production per hectare. India’s agriculture productivity is still low where compare. India’s productivity with same advanced country. The trends relating to agricultural productivity in India can be studies as under with the help of the following table.
TS Inter 2nd Year Economics Study Material Chapter 5 Agricultural Sector 2

The table shows the growth pattern of India’s agriculture productivity and production. If we take food grains production, its productivity increased from 522 kg per hectare in 1950-51 to 2299 kg per hectare in 2018-19 provisional estimates (PE). During the same period rice productivity increased from 688 kg to 2659 kg, wheat productivity increased from 663 kg to 3507 kg, maize productivity increased from 547 kg to 2966 kg. Pulses productivity increased from 441 kg to 806 kg. Oil seeds productivity increased from 481 kg to 1265 kg. Overall, during the period 1950-51 to 2018-19, wheat productivity increased nearly 6 folds whereas pulses productivity registered a two fold growth.

Question 4.
What are the reasons for inadequate implemention of land reforms in India?
Answer:
Land Reforms :
Government’s direct intervention to bring about the changes in agrarian structure is called land reforms. Land reforms facilitate the redistribution of land with a view to safeguard the interests of land less households, small and marginal farmers. It brings about the introduction of economic and non-economic changes relating to land and the development of agriculture. After independence the Government of India has introduced land reforms for the reconstruction of rural economy with equity and social justice.

Poor implementation of land reforms are as follows :
1) Loop holes in the Acts :
There are loopholes in the land reform acts. Big landlords with their financial and political power are able to retain their ownership on land by using the loopholes.

2) Lack of political Will :
The political parties in power have not evinced real interest in the implementation of theV acts as they did not want to annoy the big landlords and therefore diluted the acts.

3) Passive Nature of the Beneficiaries :
Marginal and small farmers and landless labourers don’t aware of their rights and ongoing process. Most of them are illiterates and ignorant. They have little awareness about reforms which benefit them, Their failure to de-mand their due is one of the main causes for poor implementation of land reforms.

4) Bureaucracy :
Indian bureaucracy, trimmed and trained under the colonial rule, has been apathetic to the land reforms and cause of the rural poor. They have-not shown keen interest in implementing the reforms.

5) Legal Hurdles :
Some of the big landlords have approached the courts of law by taking advantage of the loopholes in the law.

6) Non-Availability of Land Records :
For decades, land records have not been main-tained property in India. Implementation without land records has become a difficult task.

7) As a State Subject :
Agriculture is a state subject. Different states responded with different degree to implement land reforms. No uniformity in their action to the issue. National Council for Land Reforms was established in 2008 but no positive change in the process has been seen.

8) Delay in the Followup Action :
There has been enourmous delay in taking follow up action. All the land declared surplus was not taken by the government and whatever land taken under the ceiling act was not distributed in total. Further, the beneficiaries have not been provided other ancillary help like credit and other inputs, though ownershp rights have been conferred on them.

Question 5.
What are defects of Nan-Institutional sources of agricultural credit?
Answer:
The financial requirements of the Indian farmers can be classified into three types depending upon the period and purpose for which they need funds : (a) They may need funds for a short period of less than 15 months for the purpose of cultivation. This may include purchase of seeds, fertilizers, fodder etc. (b) They may require finance for medium term period ranging from 15 months to 5 years for making improvement on land, buying cattle, agricultural implements etc. (c) They may also require finance for long term period for more than five years to develop the land to provide irrigation facility, to purchase heavy machinery etc.

The financial requirements of the Indian farmers can further be classified into productive and unproductive purposes. The productive loans include for purchase of seeds, fertilizers, buying cattle and agricultural implements, digging wells/tube wells, whereas unproductive loans include for performing marriages, social ceremonies, religious functions, festivals etc.

Non-institutional Sources :
Non-institutional sources include money lenders, land lords, traders, commissioni agents, relatives, friends etc. In 1951-52, non-institutional sources contributed 93 percent of financial requirements of farmers whereas the government could contribute only 7 percent. The money lenders and landlords supplied credit for both productive and unproductive purposes. They are easily accessible to farmers at any point of time. But this source has many defects in it. Interest rates are not uniform and exorbitant (18 to 50 percent).

Often small farmers are cheated and their lands are appropriated. The landless labourers are forced to become bonded slaves.

Question 6.
What are the causes of rural indebtedness?
Answer:
Rural Indebtedness :
In India about 70 percent of the people are living in villages. It is found that these people spend higher proportion of their borrowed money for unproductive purposes which can give them any income. Consequently they are unable to repay the old debts. Whenever there is a little or no access to institutional available in their villages. They borrow money at higher rates of interest at the cost of their assets and get caught in the evil clutches of the money lenders. The indebtedness increases year by year and makes the rural people permanently indebted.

Causes of Rural Indebtedness :
The following are the causes of rural indebtedness.

The main cause of indebtedness of the farmers is their poverty, low level of savings and crop failures.
Borrowed funds for marketing improvements on land.
Borrowed funds for unproductive activities / purposes.
Debt inheritance of the parents.
Dependence on non-institutional sources.
Inadequate support prices for the crops.
Increasing cost of cultivation.

Question 7.
Explain are functions of NABARD.
Answer:
National Bank for Agriculture and Rural Development (NABARD) :
Reserve Bank of India had set up the Agricultural Refinance Development Corporation (ARDQ to provide refi-nance support to the banks to promote agricultural development. With the widening of the role of hank credit from agricultural development to rural development, the government proposed, to have a broad-based organization at the apex level to support and guide the credit extending institutions. Accordingly, NABARD was setup in July, 1982 by subsuming ARDC.

Functions of NABARD :
NABARD performs the following functions :
a) Refinancing the banks for extending loans for investment and production purpose in rural areas.

b) Provides loans to state governments, non-government organizations (NGOs), panchayat raj institutions for the development of rural infrastructure.

c) Supports credit innovations of NGOs and other non-formal agencies.

d) Extension of formal banking services to the unreached rural poor by self-help groups (SHGs).

e) Promoting participatory watershed development for enhancing productivity and prof-itability of rain fed agriculture in a sustainable manner.

f) Preparation of credit plans for identification of exploitable potentials under agriculture and other activities available of development through bank credit, g) Inspectioni of RRBs arid co-operative banks other than PACS.

Question 8.
What are the defects of agriculture marketing in India?
Answer:
Due to non-availability of storage facilities about 10 to 20 percent of agricultural produce is eaten away by rats and insecticides further, due to inadequate transportation facility, the farmer is forced sell the goods to money lenders, commission agents in mandis; and could not get fair price. The existence of more number of intermediaries betweeri the farmer and the ultimate consumer is another chronic problem where by intermediaries could realize more money.

In the mandis the farmers are deceived by the use of wrong weights and measures. They are also cheated by brokers and traders. The farmer has to pay weighing charges, unloading charges, charges for separation of impurities in the produce and many other miscellaneous undefined and unspecified charges. There is no proper grading system and hence the farmer is not getting fair price.

Government Measures :
1) Regulated Markets :
In order to eliminate unhealthy market practices and to protect the interests of the farmers by ensuring fair prices, the government proposed the state agricultural produce marketing Act for the establishment of regulated markets. Accordingly, in 1951 more than 200 regulated markets were established in India and at present about 7,246 regulated markets are functioning in the country. Regulated markets aim at the development of the market structure to:

Ensure remunerative prices to the producer of agricultural commodities;
Narrow down the price spread between the producer and the consumer; and
Reduce non-functional margins of the traders and commission agents.

2) Grading and standardisation :
Improvements in agricultural marketing system cannot be expected unless grading and standardization of agricultural produce is made. The government has done much to grade and standardize many agricultural goods. Under the agricultural produce Act, 1937 the government has setup grading stations. The graded goods are stamped with the seal of the agricultural marketing department AGMARK and these goods will have a wider and command better prices.

3) Ware housing facilities :
To prevent distress sale by the farmers, particularly by the small and marginal farmers godowns have been setup in villages and towns. The Central Ware-housing Corporation (CWC) was setup in 1957 for the storage of agricultural produce. The states have setup the state warehousing corporations for the same purpose Food Corporation of India (FCIJ was also setup at the national level.

4) Market Information :
The government has initiated a number of steps to provide the information about the prices prevailing in different markets to farmers. The prices prevailing in markets are broadcast daily by all India Radio – Trends in market prices are reviewed weekly in special programmes and talks organized by AIR and Doordarshan.

5) Support prices :
The government announces minimum support prices and procurement prices for various agricultural commodities from time to time in a bid to ensure fair returns to farmers. These prices are fixed in accordance with the recommendations of the Commission for agricultural Gosts and Prices (CACP).

6) Other Measures :
The following measures are also necessary to make agricultural marketing beneficiary to the farmers :

Improving the physical connectivity (roads and communications).
Improving the economic connectivity (banks and financial institutions).
Improving the electronic connectivity (Phone, internet cables etc).
Restriction on sale of produce outside the regulated markets.
Reducing the cost of transportation.
Encouraging rythu bazars.
Promoting the use of standard weights and measures.
Development of warehousing facilities in village and rural areas.

Question 9.
State the objectives of agricultural pricing policy.
Answer:
Objectives of Agricultural Pricing Policy :
The objectives of agricultural pricing policy vary from country to country depending upon the place of agriculture in national economy. Generally, in developed countries, the major objective of price policy is to prevent drastic fall in agricultural income, but in developing economies, it is multi-task oriented as mentioned below:

to meet the domestic consumption requirements;
to provide price stability in the agricultural product;
to ensure reasonable relation between the prices of food grains and non-food grains;
to ensure reasonable relationship between the prices of agricultural commodities and manufactured goods;
to smooth seasonal and cyclical fluctuations of prices of agricultural commodities;
to remove price differences between the regions; .
to make available food to consumers at the time of shortage;
to increase the production and exports of agricultural products;
to provide raw materials to the industries at reasonable prices;
to prevent exploitation of farmers from intermediaries, who may purchase products at a very low price in the absence of price policy.

Very Short Answer Questions

Question 1.
Share of agriculture in the National Income.
Answer:
After independence the share of agriculture has declined due to the development of the secondary and tertiary sectors. In 1950-51 the share of agriculture and allied activities in gross domestic product was 56.5% and it declied to 24.7%. In 2000-01, and furniture to 13.9% in 2012-13, again it was inversted to 16.5 in 2019-20 (provisional estimates).

Question 2.
Share of agriculture in Employment.
Answer:
The number of people engaged in agriculture was increased from 98 millions in 1951 to 236 millions in 2001. Agriculture provide employment to 46% of the male workers and 65% of the female workers.

Question 3.
Relation between Agriculture and industry.
Answer:
Agriculture provides raw materials to various leading industries. Sugar, jute, cotton tex-tiles, vanaspati, flour mills, plantations and food processing industries depend on agriculture directly. Many other industries depend on agriuclture indirectly. Many small scale and cottage industries depend upon agriculture for their raw materials.

Question 4.
Irrigation.
Answer:
Irrigation infrastructure is a must to increase the agriculture productivity as irrigation facilitates nearly three-fold increase in agriculture productivity per annum and per hectare. Irrigation along with improvement in power supply largely contributes to increase in productivity.

Question 5.
Agricultural Productivity
Answer:
Productivity of a crop is measured by the average production.of that crop per hectare of the cropped area. However India’s agriculture productivity is still veiy low when we compare India’s productivity with same.

Question 6.
Land degradation.
Answer:
Land Degradation: Nearly half of the country’s land (329 millions hectares) is degraded. 43% of the land suffers from high degradation resulting in 33-67 percent yield loss. 5% of the land is so damaged that it is unusable. Soil degradation is a major foctor for low agricultural productivity in many regions of the country.

Question 7.
Abolition of interference.
Answer:
There were mainly three forms of land relations in pre-independence India. They are : zamindari system/jagirdary system, mahalwari system and rytwary system which were initiated and implemented by Britishers, Except rytwary system in which there is direct relation between farmer and state all other systems are intermediary systems in Which middle men in the form of zamindar/jagirdar are present in between cultivator of land and state. These middle men used to exploit farmer as well as they used to cheat state also. Because of this middle men system in land relations, agriculture became an exploitative ground. Accordingly, all state governments were instructed to enact the laws to abolish the intermediaries. „

Question 8.
IAOP.
Answer:
It means intensive Agriculture District Programme. This was introduced in the year 1964. This programme was introduced in 7 districts. This programme is also known as package programme.

Question 9.
Green Revolution.
Answer:
Green Revolution :
This programme was introduced in the year 1965. Acheiving high produce and productivity in the farm sector, by using hybrid seeds, fertilizers, pestisides and machines etc is called green revolution. At first this term was used by William S. Gand.

Question 10.
PACS.
Answer:
The Co-operative credit societies in India have been organised into short-term and long term structures. At the lowest level the primary agriculture co-operative credit soceiteis (PACS) and these are organised at village level. There are 92.432 primary Agriculture Credit societies for short term credit structure.

Question 11.
Regional Rural Banks. (RABs)
Answer:
RRB’s are set up on 2nd October, 1975. If is bridge the gap in the provision of loans to small and marginal farmers, landless labourers, etc. 2012-13 it provided 10%.

The agricultural credit flow target for 2019-20 has been fixed as Rs. 13,50,000 crore.

Question 12.
Micro Finance.
Answer:
Micro Finance is’the provision of financial services to low income clients pr solidarity lending groups including consumers and self employed, who rationally lack access to banking , end related services. It lovers a wide range of credit, savings, insurance, remittance and also non financial services like training and counselling.

Question 13.
Self help groups (SHG’s)
Answer:
This is the bank led micro finance changed which was initiated by NARARD in 1992.

Under the self help group model, the numbers usually women in villages are encouraged to the form groups of around 10-15. The numbers contribute their savings in the group periodically, and from these savings small loans are provided to the members.

Question 14.
Grading
Answer:
The government has done much to grade and standardize many agricultural goods. Under the agricultural produce Act 1937. The government has set up grading stations. The graded goods are stamped with seal of AGMARK.

Question 15.
Warehousing facilities.
Answer:
The central ware housing corporation was set up in 1957 for the storage of agricultural 1 produce. The states have set up the state ware housing corporations and at nartional level food . corporation of india setup.

Question 16.
CACP. (Commission for Agricultural Costs and Prices)
Answer:
This commission was established in the year 1985. This commission advices the govern-ment regarding agriculture price policy, also determines MSP and procurement prices of agri-cultural products.

Question 17.
Minimum suport prices. (MSP)
Answer:
Minimum support prices (MSP) for major agricultural products are fixed by Government every year prior to sowing season to assure the remunerative prices to farmers. MSP for major agricultural products are fixed by the government each year, after taking into account the recommendations of CACP.

Question 18.
Maximum Price Fination.
Answer:
Government determines maximum prices for certain agricultural products. The govern-ment sells many agricultural products such as grain, sugar, rice at fair prices under public distribution system.

Question 19.
Butterstock.
Answer:
It is a reserve Of a commodity that can be used to offset price fluctuatives and in case of natural disaster or unsourcessness energies. It is an attempt to use commodity storage for the purpose of stabilising prices in an entire economy or an individual or commodity market. It is generally maintained for essential commodities and necessities like foodgrains, pulses.

Question 20.
Food Security.
Answer:
World Development Report (1986) defined food security as access by all people at all times to enough food for an active, healthy life. Food and Agriculture organiation (FAO, 1983) defiend the food security as ensuring that all people at all times have both physical and economic access to basic food they need.

Question 21.
Food Security legislation.
Answer:
Government of india issued on ordinance on july 5, 2013 guaranteeing food security to the people of india. The new low could provide a legal entitlelent to subsidized food grains ot the people as par the law, the beneficiaries would be provided food grains at subsidised prices.

Question 22.
Food Corporation of India. (FCI)
Answer:
Food Corporation of India was established in the year 1965. This commission organises procurement of food grains of prices determined by government and their sale through public distribution system.

TS Inter 2nd Year Economics Study Material Chapter 4 Planning and NITI Aayog

November 16, 2022October 23, 2022 by Srinivas

Telangana TSBIE TS Inter 2nd Year Economics Study Material 4th Lesson Planning and NITI Aayog Textbook Questions and Answers.

TS Inter 2nd Year Economics Study Material 4th Lesson Planning and NITI Aayog

Essay Questions

Question 1.
What are the major objectives of planning in India? Give an evaluation of the same.
Answer:
Planning of the development programmes under the central government was accepted and the Planning Commission was setup in March 1950 to formulate a plan for the most effective and balanced utilization of the resources in the country. Planning era, thus,; started in independent India in 1950.

The Planning Era :
With the formulation of the First five year plan, India embarked upon the programme of planned economic development of the country. The First five year plan covered the period 1951-56 followed by the Second Plan (1956-61) and the Third Plan (1961 – 66). Later plan holiday was adopted due to the impact of external shocks such as hostilities with Pakistan and severe drought conditions for two years. The country adopted annual plans for 1966-67, 1967-68,1968-69. Planning was renewed with the Fourth Plan in 1969 for the period of 1969 – 74. Then came the Fifth Plan (1974-79) which didn’t complete its full term because of the changes of the party in power. Janata Government came to power and launched Sixth Plan covering the period 1978-83.

Again with the change in the government in 1980 a new Sixth Plan was started for the period 1980 – 85 followed by the Seventh Plan (1985-90). The Eighth Plan was to begin from April 1990 but, could not be finalized and again annual plans were implemented for two years. Eighth Plan was launched in 1992 covering the period 1992 – 97 followed by the Ninth Plan covering the period 1997-2002 and the Tenth Plan .covering the period 2002-07. Eleventh Plan was launched for the period 2007 – 12. The Twelfth Plan started on April, 2012 and cover, the period 2012-17.

Major Objectives :
Although from one five year plan to another five year plan, some of the aims difered; a few important long term socio economic objectives recurred in all the five year plans. These are : 1. Economic growth, 2. Self reliance, 3. Balanced regional development, 4. Enhancement of the employment opportunities, 5. Reduction in income inequalities, 6. Elimi-nation of poverty, 7. Modernization and 8. Inclusiveness and sustainability of growth.

The objective of economic growth continues to be an important objective including in the 12^th five year plan which aims to achieve 8% gross domestic produt (GDP) growth per annum. In each five year plan, different priorities were laid down. For example while the First and Second five year plans prioritized agriculture and industries respectively, the Sixth plan prioritized unemployment reduction and that of faster growth of economy in the Seventh plan. The 10th five year plan prioritized agriculture, roads and infrastructure. The Eleventh and. Twelfth five year plans laid focus on faster, sustainable and more inclusive growth.

On the whole, India completed twelve five year plans (1951-2017). Various objectives stressed under five year plans are given here under :

Major Objectives under Different Plans (1951 – 2012)

Plans	Plan Period	Major Objectives
I	1951 – 56	Agriculture and irrigation development
II	1956 – 61	Development of large scale industries
III	1961 – 66	Self-sufficiency in food grains production
IV	1969 – 74	Steady growth, self-reliance and gareebi hataoo
V	1974 – 79	Poverty eradication & self – reliance
VI	1980 – 85	Poverty eradication through providing gainful employment
VII	1985 – 90	Increase in food grain production and productivity
VIII	1992 – 97	Human resource development
IX	1997 – 2002	Equality, economic growth with social justice
X	2002 – 2007	Equality, social just ice, enhancement in the quality of human resources
XI	2007 – 2012	Inclusive growth
XII	2012 = 2017	Faster, sustainable and more inclusive growth

Question 2.
Review the performance of five year plans in India in relation to the objectives.
Answer:
The achievements of the economy in the post – independent era under five year plans are briefly reviewed hereunder in relation to the major objectives of successive five year plans.

Economic Growth :
During the first half of the 20^th century there.was a near stagnation in per capita income while the growth in national income was minimal. There was a steady growth in both gross domestic product (GDP) and GDP per capita during the second half of the 20^th century.

During the palnning era the growth in national income was I percent per annum. This is composed of hardly 0.3 percent of growth rate in agriculture and 2 percent in industry. The growth in per capita income during the planning era was 0.2 per cent per annum. Between 1900-01 and 1946-47, at 1938-39 constant prices, national income for the undivided India increased from Rs. 15.4 billion to Rs. 24.9 billion by 60 percent, whereas per capita income from Rs. 54 to Rs. 60 by a mere 11 percent. A study revealed that between 1950-51 and 2004-05, at constant prices, gross domestic product (GDP) increased by 1,000 percent while gross domestic product per capita increased by 250 percent. Against this backdrop an attempt is made to assess the pattern of economic growth during the planned period of 1951-2017.

The following Table provides data pertaining to the targets fixed under different plans and the actual growth rate achieved.

Growth performance in the Five Year Plans, (at 1993-94 Prices)
NNP at Factor Cost (Percent per Annum)
TS Inter 2nd Year Economics Study Material Chapter 4 Planning and NITI Aayog 1

Trends in the growth rates and contribution of different .sectors to gross domestic prod- ‘ uct. (GDP), over a period of time are briefly presented here under:

1. The average growth rate during the period of First to Eleventh Plan works out to be about 4.5 percent. This is quite a considerable achievement compared to 1 percent growth during the pre-independence period as stated earlier.

2. Agriculture has been growing at 2 – 3 percent during the plan periods as against 0.3 per cent growth during the pre-independence period.

3. Spectacular industrial progress has been made during the plan periods. The industrial growth rate is recorded at 6-8 percent which is nearly 3 to 4 times higher than the 1′ growth rate during pre – independence period.

4. The trend growth rate during the first three decades of economic planning was extremely modest at the rate of 3.5 percent for annum. In the later phase of 1981 – 2013. the growth rate was recorded at 5.9 percent per annum.

5. It is clear that there was a sharp acceleration in the rate of growth since 1980.1twent almost unnoticed. It came ito the limelight in the early 2000s. A majority of scholars opined that the structural break in the economic performance of independent India ocured around 1980. The growth was impressive, not only in comparison with the part in India but also in comparison with the performance of most developed countries in the world.

6. As per the Ministry of Statistics and Programme Implementation, composition of agriculture industry and service sectors during 2018-19 at 2011-12 prices are 14 – 39 per cent, 31.46 percent and 54.15 percent respectively.

7. In developed economies, the industrial and service sectors contrihbute a major share in GDP, with agriculture accounting for a relatively lower share. During the progres of growth over the years, the Indian economy too experienced and improvement i the shares of industry (31.46 percent) and services sectors (54.15 percent) in overall GDP. However, the share of the agricultural secor in GDP has been continuously declining and it came down to 14.19 percent in 2018 – 19. It is a cause of worry, as the Indian agriculture has been in crisis with crop holidays and farmers suicides.

8. Service sector is the largest sector of India. At 2011-12 pricesffcervice sector accounts for 54,15 percent in gross value added (GVA) during 2018-19. It reflects the structural transformation of the economy as it mvoes to a somewhat higher level of develop- t ment, However, one should think about the sustainability of this pattern of growth. The real failure, throughout the secong half of the 20th century, was India’s inability to transform its growth into deelopment, which Would have brought about aft improvement in the living conditiofts of common people.

Question 3.
Explain the growth performance during the five year plans.
Answer:
The growth performance during five year plans in India can be studied as under.

1. Self – Reliance :
The Fourth plan (1969-74) set before itself the two principal objectives of “growth with stability” and “progressive achievement of self-reliance”. Even in the subsequent plans, planned development enabled India to be self sufficient in most of the important sectors and productive activities, it is no small achievement to note that India is the only country with self – sufficiency to a considerable extent among the 115 developing countrie of the world

2. Balanced Regional Development :
Regional disparities in development have been a major concern throughout the plan period. The Planning Commission of India has sought to tackle the probelm of regional disparities in three ways :
a) the recognition of backwardness as a factor to be taken into account in the transfer of financial resources from the centre to the states.
b) Special area development programmes directed at development of backward areas, and
c) Measures to promote private investment in backward areas.

3. Enhancement of Employment Opportunities :
The extent of unemployment in the country at the start of the planning and its reduction over the years shows how eradication of unemployment is being undertaken. As per the 68th round of National Sample Survey Organisation (NSSO); unemployment rate according to usual principal status (UPS) was 2.7 per cent for 2011-12, while it was 3.7 percent according to current weekly status (CWS) and 5.6 percent according to current daily status (CDS). It implies that high degree of intermittent unemployment is there in India. Rural unemployment in the form of seasonal unemployment is higher than urban unemployment.

4. Reduction in Income Inequalities :
As per the world development indicators in 2013, the, net worth of 100 richest Indians is as high as one sixth of India’s GDP During the whole plan period, income inequalities have not been reduced in India. In the post reform period, especially last one and half decades income inequalities have been further widening.

5. Elimination of Poverty :
During the plan period, various measures were introduced by the government to reduce the problem of poverty in the country. Provision of essential food items and kerosene through the public distribution system (PDS) at subsidized prices, rural and urban employment programmes, free educstion, health and housing facilities are some key government programmes in thi direction. The government has also proposed food securiy legislation according to which food at affordable prices would be made available to the people living below the poverty line.

6. Modernisation :
The term modernisation means a variety of structural and institutional changes in the economic activities. India has given importandce to science, technology and rationalization during the plan period to improve productivities. ‘New agricultural strategy’ in the form of green revolution was introduced in the Third five year plan. From the Seventh plan onwards technological advances were given priority under modernisation.

7. Inclusiveness and Sustainability of Growth :
Inclusive growth is a broader concept covering economic,social and cultural aspects of development. The major components of inclusive growth in India are : (i) agriculture growth, (ii) employment generation and poverty reduction, (iii) reduction in regional and other disparities and (iv) achieving an equitable growth.

The objective of inclusiveness is reflected in the adoption of 26 monitarable targets at the national levle related to 1) income and poverty 2) education 3) health 4) women and children 5) infrastructure and 6) environment. The Twelfth five year plan specifically stated the need for environmental protection. Inclusiveness primarily aims at providing economic benefits to higher to neglected marginalized sections so that the economy can move towards an equitable growth.

Question 4.
Explain the causes for regional Imbalances and suggest remedial measures to reduce the same.
Answer:
The situation of coexistence of relatively developed and economically backward states and regions with the states with in the states is referred to as regional inbalances or regional disparities.

Causes of Regional Imbalances in India :
The regional imbalances became hurdles for national integration, economic growth and overall development. Backward states/regions develop the feeling of dissatisfaction and development becomes lopsided.

British rule :
in India was responsible for some regions to be backward. Maharashtra and West Bengal were the two states preferred by the British. The three presidency towns Viz, Calcutta, Bombay and Madras attracted most of the industries and the rest of the country remained industrially backward. British rule through land revenue paperized the rural people and drove them into poverty.

Geographical Conditions :
Land, soil, mountains, rivers influence economic growth. Even today hilly and mountain areas remain backward in UP, Himachal Pradesh and Jammu & Kashmir. Agricultural prosperity along with the agro activities depend the geographical condi-tions of the area. Good rainfall and favourable climate help economic development and contribute for higher agricultural output. Regions with unfavourable climate conditions suffer from low agricultural and industrial activity.

Private Investment: Since the scope of profits is high. The reasons for concentration of industries in Mumbai, Calcutta and even in Chennai are due to the factors like availability of skilled labour, infrastructural facilities and well developed financial institution.

Natural resources :
Play a vital role in regional imbalances. Some regions are endowed with quality natural resources, while otherwise in short supply. Regions with more natural resources can develop fast and linkages can be maintained. Some areas/states have developed t infrastructure facilities like roads, electricity, telecommunications, railway and water ways, They develop at higher rate than those lacking them.

Policy issues and suggestions for reducing regional imbalances :

Investment should be increased in backward states for higher economic growth arid reduction in the incidence of poverty. Private capital is also to be channelized into the backward regions for which infrastructure, technology and skilled labour are to be developed by the centre and state government.
Backward states need to concentrate on the development of physical infrastructure, health facilities, training and education.
Less developed states have to initiate policies to reduce growth rate of population in their efforts to encourage economic growth.
Agriculture is in a state of crisis so many backward states. Investment in irrigation, credit facilities and remunerative prices are to be provided to encourage the growth of agricultural output.
Technology has an important role in reducing regional imbalances both in agriculture and industry. Hence technology needs to be developed to suit the needs of the back-ward areas.
Employment should be expanded to reduce poverty in the backward states. In this connection increase in the guranteed days at employment under MGNREGA needs to be enhanced especially in the tribal and most backward areas.
The social sector allocation and performance should be improved in the backward regions. The allocation in the past reform period have come down at the national level.
in the poor states SC, STs and other neglected sections of the society should be made participatory in the process of development.
Governance to be effective and transparent in the backward regions.
Based on the available resources, cottage, house hold and small scale industries should be promoted in the backward regions through subsidies, tax concessions, training and monitoring.

Additional Questions :

Question 5.
Describe the nature objecives, organisation structure of national Institution for transforming India (NITl) Ayog,
Answer:
National Instituion for Trans forming India (NITI) was established by the Government of India as a replacement for the Planning Commission on January 1, 2015. It was formed on the basis of extensive consultations across the stakeholders viz state governments, relevant institutions, experts and the people at large. NITI Aayog has not come into existence all of a sud-den.

NITI Aayog shifts the focus towards cooperative federalism. It hopes to replace the one way centre – to – state flow of policy with ’cooperative federalism’. The NITI Aayog will now recommend policies. Their implementation will be upto governments. Importantly, unlike the Planning Commission, the NITI Aayog does not have the power of allocation central funds to states. This will now be done by the Finanfce Ministry.

Nature of NITI Aayog

The Planning Commission era witnessed centre-to-state one way flow of policy. NITI Aayog seeks genuine and continuing partnership of centre and Indian states.
It will emerge as a “think – tank” to provide strategical and technical advice to the central and state governments.
It helps to evolve, promote and stregthen cooperative federalism believing that strong sates make a strong nation.
It develops mechanisms to formualte village level plans and integrate them at higher levels of government.
It ensures that all sections of socieyt would benefit adequately from economic processes.
It will create knowledge, innovation and entrepreneurial support through collaboratins,
It acts as a paltform for resolution of inter-sectoral and inter-departmental issues to accelerate development.
It is to monitor and evaluate the implementation of progrmmes and focus on upgradation and capacity building.

Objectives of NITI Aayog :

To change the role of the government from provider of the firs and last resort to that of an “enabler”.
To focus on a mix of agricultural production with food security at the base to benefit the farmers.
To ensure that India is an active player in the deliberations on the global issues.
To utilize the economically vibrant middle class in the process of production to realize their potential, in full.
To leverage entrepreneurial, scientific and intellectual human capital.
To incorporate the non – resident Indian community in the process of development.
To enhance the use of modem technology in the growing urban centers for making them secure habitats.
To promote good governance through the use of technology.

Organisational Structue of NITI Aayog
It is an organization, a network of expertise focusing on functionality, flexibility and domain knowledge.

I. Its organization consists of :
1. Chairperson :
Prime Minister

2. Vice-chairperson :
To be appointed by the Prime Minister

3. Members : (i) Full time members (ii) Part time members :
Two from research institutions / leading universities on rotational basis.

4. Ex-officio Members :
Maximum four from the union council of ministers to be appointed by the Prime Minister.

5. Chief Executive Officers :
To be appointed by the Prime Minister for a fixed tenure in the rank of secretary to the Government of India.

NITI Aayog works in close co-operation, consultation and co-ordiantion with the state governments and central ministers.

II. The Governing Council comprises of the chief ministers of all state and governors of union territories.

III. Regional Councils address specific issues and contingencies impacting moe than one state or region. Regional councils have specified tenures. They evolve strategies and overall implementation. They are headed by one of the chief ministers of the group. They also have central ministers, experts and academic institutions as members. They have a support cell in the NITI Aayog secretariat.

Question 6.
Describe the census for the Rural-urban divide and explain the remedial measures to reduce the rural urban divide.
Answer:
Causes for the Rural-Urban Divide :
Rural urban imbalances have excised since recorded history in India. However they have come out in a greater dimension at present confronting the development process.

Three different types of factors contribute to the disparities :

A. Natural Differences :
Historically cities and towns have grown where natural resources, waer and good climate were avilable. This historical advantage has helped the urban centres to develop better infrastructure over the years. Industries, business, educatinal and health facilities have also been expanded in the cities and towns owing to the favourable conditions. These factors create the rising differences between urabn and rural areas.

B. Non-Economic Factors :
Values, traditions joint family and attitudes affect social and economic mobility. Social restrictions, caste system, fatalistic attitude and feeling of inferiority discourage mobility and innovative spirit in the rural areas. On the other hand, in the urban areas heterogeneous individuals in higher density of population live in a spirit of competition with no sentiments. Urban people specialize in production and find demand for their products in big amrkets. All these contribute for economic development.

C. Policies of the Government :
Disparities between rural and urban areas are also due to the urban bias in development policies of the government. Huge amounts of money have been spent on the development and maintenance of infrastructure in the cities and towns. Sometimes the incomes of the rural farmers are affected due to the policy of the government to favour the urbanites. Governments also spend more on services like health and education in the urban centers neglecting the rural areas.

D. Other Factors :
Rural India suffers from illiteracy, higher infant mortality rates, more anemic women and children, lack of transport and communication facilities, low level of incomes, uncertain wage employment days, shortage of drinking water facility and lack of hospital facilities. They feel that even the poor in the urban areas are better than many of them.

Remedial Measures :
The government of India hs initiated a variety ©f programmes for the development of rural India and to reduce the urban – rural divide. The Bharath Nirman Programme aims to develop rural infrastructure and create irrigation, road connectivity, hous-ing, water supply, electrification and telephone facilities.

The following remedial measures also ensure the development of rual areas and arrest urban migration.

a) NREGA scheme is to porovide training to the rural youth in different vocational and service sectors. Such a scheme had already been undertaken by states like Rajasthan and Assam, where the results are encouraging.

b) Marginal farmers and small farmers are to be provided with credit facilities to discourage money lenders and commission agents. Crop insurance schemes should be made effective and remunerative prices to the farmers should be ensured.

c) Private investment in infrasstructure in the rural areas may be encouraged by the government wherever possible. Private and public participation in infrastructure development ‘ in rural areas can be activised.

d) Rural youth should be provided with quality education, training and skill formation so that self employment can be enhanced. It is unfortunate that India spends less than 2 percent of GDP on health care. Public health system in the rural areas is ineffective and has lost its credibility. Improvement of health – care would definitely increase productivity and the social security scenario in the rural areas.

Short Answer Questions

Question 1.
Write a note on Nm Aayog. or discuss the functions of NITI Aayog.
Answer:
National Institution for transforming India. (NITI) Aayog was established by the government of India as replacement for the planning commission on January 1, 2015. It was formed on the basis of extensive consultatios across the stakeholders like state governments, relevant institutions, experts and the people at large.

Functions of NITI Aayog :

It will facilitate to transform India into cooperative and competitive federalism. “National agenda” is provided to the prime minister and chief ministers for development along with priorities and strategies.
It introduces bottom – up model through decentralized planning. It prepares vision and scenario plans for the states and nation.
It prepares domain strategies with experts to assist the central and state ministries. It serves as a knowledge and innovation hub by accumulating and disseminating research and best practices.
It augurs an integrated and holistic approach to development. It also resolves inter state and inter – sectoral conflicts.
It serves as the nodal agency for harnessing global expertise and resources. It acts as a consultant to the central and state governments on policies, programmes and skills in governance.
It enables capacity building and technology upgradation.
Finally it monitors the implementation of the policies and programmes and evaluates their impact.

Question 2.
What is planning? Explain the MPCs of planning.
Answer:
Every country has its economic planning in some degree with its own methods of implementation. Economic planning implies deliberate control and direction of the economy by a control authority for the purpose of achieving definite targets and objectives within a specified period of time.

As per Todaro, economic planning may be described as “The conscious governmental error to influence, direct and in some cases, even control changes in the principle economic variables consumption, investment, savings, exports, imports etc. of a certain country or region over the course of time in order to achieve a predetermined set of objectives, the essence of economic planning is summed up in these nations of government influence, direction and control”.

A plan is simply a document a blue print, an action oriented model. But planning includes the blue print and the efforts to achieve the goals; The essence of planning is scientific choice and systamatic thinking and economic efforts to achieve the choices. Planning is for the economy as a whale in a given period of time to achieve certain objectives. National priorities and basic needs decides the objectives. Resources are to be mobilized and allocated in the planning process of different sectors. Planning is for both production and distribution, based on the national goals which are technically called plan objectives.

Question 3.
Explain the measures taken by the government for balanced regional development.
Answer:
Balanced Regional Development: It implies the extension of the economic progress to the backward areas and wide spread diffusion of industry. It does not mean equal development of the different regions in the country.

Measures taken by the government for balanced regional development: The regional imbalances became hurdles for national integration, economic growth and overall development. Backward states/regions develop the feeling of dissatisfaction and development becomes lopsided.

British rule :
In India was responsible for some regions to be backward. Maharashtra and West Beqgal were the two states preferred by the British. The three presidency towns Viz, Calcutta, Bombay and Madras attracted most of the industries and the rest of the country remained industrially backward. British rule through land revenue paperized the rural people and drove them into poverty.

Geographical Conditions :
Land, soil, mountains, rivers influence economic growth. Even today hilly and mountain areas remain backward in UP, Himachal Pradesh and Jammu & Kashmir. Agricultural prosperity along with the agro activities depend the geographical conditions of the area. Good rainfall and favourable climate help economic development and con-tribute for higher agricultural output. Regions with unfavourable climate conditions suffer from low agricultural and industrial activity.

Private Investment :
Since the scope of profits is high. The reasons for concentration of industries in Mumbai, Calcutta and even in Chehnai are due to the factors like availability of skilled labour, infrastructural facilities and well developed financial institution.

Natural resources :
Play a vital role in regional imbalances. Some regions are endowed with quality natural resources, while otherwise in short supply. Regions with more natural resources can develop fast and linkages can be maintained. Some areas/states have developed infrastructure facilities like roads, electricity, telecommunications, railway and water ways. They develop at higher rate than those lacking them.

Policy issues and suggestions for reducing regional imbalances :

Investment should be increased in backward states for higher economic growth and reduction in the incidence of poverty. Private capital is also to be channelized into the backward regions for which infrastructure, technology and skilled labour are to be developed by the centre and state government.
Backward states need to concentrate on the development of physical infrastructure, health facilities, training and education.
Less developed states have to initiate policies to reduce growth rate of population in their efforts to encourage economic growth.
Agriculture is in a state of crisis so many backward states. Investment in irrigation, credit facilities and remunerative prices are to be provided to encourage the growth of agricultural output.
Technology has an important role in reducing regional imbalances both in agriculture and industry. Hence technology needs to be developed to suit the needs of the backward areas.
Employment should be expanded to reduce poverty in the backward states. In this connection increase in the guranteed days at employment under MGNREGA needs to be enhanced especially in the tribal and most backward areas.
The social sector allocation and performance should be improved in the backward regions. The allocation in the past reform period have come down at the national level.
In the poor states SC, STs and other neglected sections of the society should be made . participatory in the process of development.
Governance to be effective and transparent in the backward regions.
Based on the available resources, cottage, house hold and small scale industries should be promoted in the backward regions through subsidies, tax concessions, training and monitoring.

Question 4.
Explain briefly different concepts of planning.
Answer:
There are different types of planning in the literature of economics. Some of he major concepts ae explained here under :
1. Planning under Capitalism :
Capitalism is driven by market forces, freedom of enter-prise and choice of the customers. Profit motive and self interest guide capitalism. Capitalism and planning never go together as they differ conceptually. The state may intervene by providing basic facilities and control law and order for the smooth functioning. Moreover in the modem world, there is no country which is purely capitalist in nature.

2. Planning in a Mixed Economy :
In a mixed economy, public secor and private sector coexist. India is a good example for a mixed economy. In a mixed economy the central planning authority prepares the plan and the private sector should also comply with it. Through planning process private sector is assisted, contgrolled and regualted in he interets of plan objectives.

3. Planning under Socialism :
A socialist economy must necessarily have economic plans. The central planning authority mobilizes the resources and allocates them to different sectors in accordance with the plan objectives. Market forces has no role in resources allocation. Economic plans are implemented in letter and spirit in socialist economies.

4. Democratic Planning versus Authoritarial Planning :
In democratic planning, the stae will not control all the means of production. It helps the masses an takes the public opinion. Objectives and targets of the plan are fixed by considering the opinions of the people. Freedom in economic activities is allowed in democratic planning. Authoritarian planning is nothing but socialist centralized planning. In this type, the entire economy is directed and
controlled by the planning authority.

5. Centralised and Decentralised Planning :
Centralized planning was adopted in the former Soviet Russia. It is a socialist planning. Decentralized planning is ‘planning in a mixed economy’ like India. Important decisions are taken by the planning authority and freedom in given to the units in execution. In a decentralized planning system, coordination among the units in executio is ensured.

6. Planning from Above and Below :
Under planning from above, the central planning authority prepares the plans for the nation and forwards them to the regional units. They have to implement the plans as they are. Planning from below is based on local needs and conditions. People at the grassroots leel particiapte and prepare regional plans. All these regional plans are Consolidated and a national plan is proposed and this type of planning is more realistic and democratic.

7. Perspective Planning and Annual Planning :
Perspective planning is long term planning in which targets are set for a period of 15 – 20 years or 25 years. It s a blue print of development o be undertaken over a longer period. Perspective plan is normally split into short term plans of 3 – 5 years. A perspective plan ensures continuity in planning. Each short term plan is again divided into annual plans for operational purposes. Annual plans are subdivided into annual allocations and targets for implementation. Strictly speaking annual plans are the real worksheets of the economy in a particular year.

Very Short Answer Questions

Question 1.
Balanced Regional Development.
Answer:
lt implies the extension of the economic progress to the backward areas and wide spread diffusion of industry. It does not mean equal development of the different regions in the country.

Question 2.
Inclusive growth.
Answer:
Inclusive growth refers to both the pace and the patem of the economic growth. This concept stresses the inclusiveness of th higher to scheduled population in the growth process, which is respected to bring in several, other benefits as well to the economyh. -It the bottom 20% share can increase to 5 to 10% at lease, then it ca be termed as incljsive growth.

Question 3.
Pearsons for rural – urban imbalances.
Answer:
Reasons for Growth of Urbanisation :
The growth of urbanization in India is mainly due to the imbalances between urban and rural areas in different aspecs prompting rural people to migrate to cities and towns.

Rural people go to urban centres and settle there because of the following reasons :

Rural areas fail to provide non – agricultural employment. Employment opportunities ae more in urban centers. So rural labour migrate in search of means of livelihood.
Industrial expansion and growth of service sectors attract educated and skilled rural youth to the urban areas.
Transport, communication, educational and health facilities assure a comfortable living and hence some of the rural people migrate to urabn centre.
Urban centers give scope for anonymous living with little interference in the personal issues and some sections migrate with the hope of a peaceful living.
Life in the urban centers attracts some of the rural people to migrate.

Question 4.
Democratic planning and authoritarian planning.
Answer:
Democratic Planning versus Authoritarial Planning :
In democratic planning, the stae will not control all the means of production. It helps the masses an takes the public opinion. Objectives and targets of the plan are fixed by considering the opinions of the people. Freedom in economic activities is allowed in democratic planning. Authoritarian planning is nothing but socialist centralized planning. In itheis type, the entire economy is directed and controlled by the planning authority.

Question 5.
Perspective planning and an Annual planning.
Answer:
Perspective Planning Annual Planning :
Perspective planning is long term planning in which targets are set foHa period of 15 – 20 years or 25 years. It s a blue print of development o be undertaken over a longer period. Perspective plan is normally split into short term plans of 3 – 5 years. A perspective plan ensures continuity in planning. Each short term plan is again divided into annual plans for operational purposes. Annual plans are subdivided into annual allocations and targets for implementation. Strictly speaking annual plans are the real worksheets of the economy in a particulare year.

Question 6.
NITI Aayog.
Answer:
National Institution for transforming India. (NITI) Aayog was established by the government of India as replacement for the planning commission on January 1, 2015. It was formed on the basis of extensive consulratios across the stake holders like state govenments, relevant institutions, experts, and the people at large.

TS Inter 2nd Year Economics Study Material Chapter 3 National Income, Poverty and Unemployment

November 16, 2022October 23, 2022 by Srinivas

Telangana TSBIE TS Inter 2nd Year Economics Study Material 3rd Lesson National Income, Poverty and Unemployment Textbook Questions and Answers.

TS Inter 2nd Year Economics Study Material 3rd Lesson National Income, Poverty and Unemployment

Essay Questions

Question 1.
Explain the trends in National Income of India.
Answer:
National income trends reflect the progress of the economy over time. The structural change in the composition of national income by industrial origin is the consequence of the process of economic growth initiated duripg the plans. At present, service sector is the pre-dominant source of the national income in India. National income is produced in public sector as well as private sector. Prior to 1951, the share of public sector was very small. Since the inception of planning, the share of public sector in national income has gradually increased.

A study of trends in national income is necessary to understand the impact On economic growth in India. It would be, therefore, better if the trends in national income and changes in the structure of national product are analysed over the last 68 years.

Trends in Net National Product and Per Capita Income :
National income figures at constant prices, become comparable, but they conceal the population effect. To eliminae the ‘ effect of growth of population, per capita national product or per capita income Is calculated. Whereas the growth of the net national product at constant prices is an index of the total productive effort on the part of the community and indicates the rate of growth of goods and services in the economy. The growth of per capita income at constant prices is an indicator of the change in the standard of living of the people.

Plan – wise study of growth of real income in India, however, does indicate an encourag-ing fact that although the annual rate of increase in national income was pretty low at 3.5 percent pere annum during the first three decades of economic planning, it has risen to 5.9 per cent per annum since 1980-81. The description of the national income trends during the past seven decades clearly highlights the main features of growth in this country. They are erratic growth, growth rate at best being modest, post-1991 reform growth being less fragile.

From the time India switched ovedr to economic planning, the net national product has continued to grow, despite erratic growth in agricultural produtin and shortfalls in the industrial output. There is no doubt that this is an encouraging development in an economy, which had suffered long spells of stagnation under the British. However, assessment of the performance of an economy can more accurately be made by examing the trends in per capita national income which is the same thing as per capita net national product at factor cost.

The data given in Table shows that during the 68 years (1950-51 to 2017-18), the Net National Income increased from Rs, 2,69,724 crore to Rs. 1,14,04,413 crore at coinstant prices, whereas at current prices the net national income increased from Rs. 9,829 crores to Rs. 1,47,10,563 crore in the same period. The per capita income also increased from 7,513 in 1950-51 to Rs/ 86,668 in 2017-18 at consan price. Even a current prices. It increased form Rs. 274. Rs. 274 to Rs. 1,12,835 in the same period. It can be said there is an increasing trend both in NNP and per capita NNP since the inception of planning.

Net National Income at Factor Cost and Per capita NNI
TS Inter 2nd Year Economics Study Material Chapter 3 National Income, Poverty and Unemployment 1

The growth rates of national income and per capita income are presented in Table. During the 30 – year period (1950-51) to 1980-81), the annual rae of growth of national income (1999-2000=100) was of the order of 3.5 per cent and that of per capita income was merely 1.4 percent. Calcualted at current prices, the annual rate of growth of net national product was of the order of 9.0 percent and that of per capita income was 6.7 percent.

Growth Rates Of National Income and Percapita Income (Percent)
TS Inter 2nd Year Economics Study Material Chapter 3 National Income, Poverty and Unemployment 2

During the first 10 years of planning (1950-51 to 1960-61), net national product increased at an annual rate of 4.2 percent and the performance of the economy declined thereafter. During 1960-61 and 1970-71, the rate of growth of NNP came down to 3.5 per cent and that per capita NNP to 1.2 per cent per annum. In the subsequent 10-year period (1970-71 to 9 1980-81), the rate of growth of NNP was 2.9 per cent and that of per capita NNP slumped down to 0.6 pet cent per annum.

There was a very perceptible improvement in growth rate during the eighties. During 1980-81 and 1990-91, net national product showed a growth rate of 5.2 per cent per annum and the per capita NNP (at 1999 – 2000 prices) improved on an average by 3.0 per cent per annum. This Hindu rate of growth, to use the phrase of late Prof. Raj Krishna. During 1990-91 to 2000 – the order of 5.5 percent per annum and that of NNP per capita was 3.4 percent. During the two decades (1980 – 81 and 2000 – 01), the average annual growth of NNP was 5.6 percent and tght of per capita NNP was 3.2 percent. It implies that the economy has performed better during these two decades as compared with the earlier three decades.

During 2000-01 and 2004-05, NNP growth rate accelerated to 6.4 per cent and per capita NNP grew at the rate of 4.7 per cent per annum (at 1999-2000 prixces). During 2004-05 and 2013-14 we find further acceleration in the NNP growth rate to 7.3 percent and that of per capita income to 5.8 percent (at 2004-05 oruces). This implies a further acceleration in the growth of national income at a higher level. This is a very healthy development.

Question 2.
Briefly examine the sectoral contributions to the National Income.
Answer:
National income is the value of all final goods and services produced in a year in a country. This concept is used as an indicator of economic development of a country.

Sectoral Contribution of National Income :
The study of national product by the sectoral contribution explains the anatomy of the economic structure. The analysis of sectoral contribution is equally important as of the trends in national income. The structural change in the composition of national income by industrial origin is the consequence of the process of eco-nomic growth initaiated during the plans.

It can be said that at present service sector is the predominant source of the net domestic product (NDP) in India. In the past, it has contributed about 1/3 share to NDP. The share of agriculture has declined enormously. The broad trends in the changing composition of the domestic production are the following :

1. Contribution of the Primary Sector :
The primary sector consists of agriculture, for-estry and logging, and fishing. During the post – independence period, the share of the primary sector in the net domestic product (NDP) has varied from the maximum of 57.2 percent in 1950-51 to the minimum of 13.9 percent in 2013 -14 and the increased to 16.1 percent in 2018 – 19, Thus, over the years, share of the, primary sector in net domestic product declined. The main cause of the fall in the share of agriculture is the structural transformation that had been taking place. In recent years, the country’s economy has undergone some structural changes. Informtion Technology (IT), communications, transport, trade, banking, insurance and other service sector have grown faster than agriculture and this fact is reflected in the estimates of net domestic product by industry of origin.

2. Contribution of the Secondary Sector :
The secondary sector comprises pf, miningn and quarrying, manufacturing, construction, electricity, gas and water supply has shown a steady increase from 15 percent in 1950-51 to 23 percent in 1980-81 and 29.6 percent in 2018-19.

3. Contribution of Tertiary Sector :
The share of tertiary sector which includes IT, trade, transport, storage, communications, banking insurance, real estate, communituy and personal services had improved from 25 percent in 1950-51 to about 54.3 percent in 2018-19. This can be attributed to the share of trade, transport and communications. The expansion of transport, especially road transport, IT and communications was the major contributor to this increase.

By and large, from the aforesaid analysis, it can be surmised that ther is a sudden jump of the Indian economy to pass on to the stage of a post-industrial service economy without com-pleting the phase of industrialization. The changing structure of national income needs to be further stmgthened by stepping up the programme of industrializaion. This does not imply a neglect of agricultue, industrialization of the economy with emphasis on agro-based industries and industries supplying inputs to agriculture is a sine-qua-non for a faster growth of the economy.

Question 3.
Discuss the growth rates of national income and percapita income during the five year plans.
Answer:
Annual growth rates of national income and percapita income during the plans have been presented in the following Table. During the First Plan, annual average growth rate of NNP was 4.4 percent (at 1999-2000 prices), which declined to 3.8 percent during the Second Plan. However, during the third plan, annual average increase in antional income slumped down to 2.6 per cent which was just sufficient to neutralize the growth of population. This is indicated by the fact that there was 0.4 percent of growth of per capia income during the Third plan.

This was largely the consequence of a serious drought in 1965-66 and thus the growth rate got depressed. This was followed by another drought year as also a business recession. After 1967-68 the economy started picking up and the growth rae showed signs of improvement. During the Fourth Plan (19679-74) period, the average annual rate of growth of national income declined to 3.1 percent and that of real per capita income to 0.8 percent per annum. The sharp increase in prices during 1972 – 73 and 1973 – 74 and the shortfalls in production on account of lower utilisation of capacity were the principal factors responsible for a lower growth rate during the Fourth Plan.

Annual Growth Rates in Various Plans
TS Inter 2nd Year Economics Study Material Chapter 3 National Income, Poverty and Unemployment 3

During the Fifth Plan (1974-79) the average annual increase in national income was of the order of 4.9 percent and that of per capita income was 2.6 percent. On the whole, the performance of the economy during the Fifth Plan can be considered very satisfactory. India’s national income registered a growth rate of 5.4 percent during the Sixth Plan (1980 – 85) wutg a oer caouta ubcine growth rate of 3.1 percent. During the Seventh Plan (1985 – 90), India’s NNP grew on the average at the rate of 5.5 percent per annum and the annual growth of per capita NNP was 3.3 per cent, Obviously, Seventh Plan achieved its objective of 5 percent growth rate of NNP along with 3 per cent targeted growth rae of per capita NNP.

During the Eighth Plan (1992 – 97) NNP growth rate of order of 6.7 percent has been achieved with a per capita growth of about 4.5 per cent. This healthy trend needs to be sustained. During the Ninth plan (1997 – 2002), NNP growth was 5.3 per cent with a per capita growth of about 3.3 per cent. During the Tenth Plan (2002 – 07), NNP growth was 7.8 percent-the highest recorded so far, During Eleventh Plan, rate of grwoth of NNP remained 7.6 percent and 6.2 percent in per capita NNP. During twelfth plan, rate of growth of NNP was 8 percent.

On viewing the performance of the economy between 1950 – 51 and 2012 -13 in the light of the goal set out in the First and Second Plans, it turns out to be desappointing. The rate of increase in per capita net national product has not only remained low but despite six decades of economic planning, is still unsteady and erratic. There were years of spurts in per capita net national product, but there were also some years in which it either declined or remained con-stant. Further, years of spurts in per capita net naional product were the same in which agricuF tural production had increased significantly, and the periods in which per capita net national product had either declined or fluctuated around the level achieved in the preceding year were, not different from those marked by bad weather resulting in crop failures.

Question 4.
How do you reduce inequalities in distribution of income and wealth.
Answer:
Unequal distribution of income and wealth in the economy among the people is knowii as Income and wealth inequalities. ‘
Remedial measured to reduce income and wealth inequalities : Reducing Income In-equalities :

1) Land Reforms and Redistribution of Agricultural Land :
It is a well – known fact that income inequalities in the rural sector emanate mainly from the concentration of agricultural land. Before the abolition of the zamindari system most of the land belonged to the absentee landlords who appropriated a large portion of the agricultural production while the tiller of the soil got hardly enough for subsistence. Thus, legislative measures were undertaken to abolish landlords and other intermediaries and ceilings on holdings were fixed. As a consequence, even now about 40 percent of the agricultural land belongs to top 5 percent of the rural house holds.

2) Control over Monopolies and Restrictive Trade Practices :
Control of monopoly tendencies is considered necessary of reducing income inequalities. The Monopolies and Re-strictive Trade Practices Act (MRTPA) was passed at late as 1969. Now with the increasing stress on liberalisation in the industrial sector.

3) Employment and wage policies :
Until the fourth five year plan, the employment objective was not taken seriously. However, since the beginning of the fourth plan some special programmes were undertaken such as the crash scheme for rural employment etc. These programmes were shortlived as they were undertaken in an adhoc manner The IRDP and allied programmes such as Training of Rural Youth for Self – Employment (TRYSEM) and Development of Women and Children in Rural Areas (DWACRA) have been restructured into a single self – employment programme called Swamajayanti Gram Swarozgar Yojapa (SGSY) from April 1999. This is the most ambitious scheme introduced in the post – independence period to alleviate poverty.

4) Social Security Measures :
Although the country does not have a comprehensive social security system, yet there are some social security provisions which are expected to help the workers in the organised sector. The most comprehensive social security measure, however, is the employees state insurance act which entitles the insured workers to medical benefits, disability benefits for the: period of sickness, maternity benefit and benefits to dependents.

5) Minimum Needs Programme :
Since the beginning of the 1970s a very influential section of development economists has started asking for the pursuit of the minimum needs programme in developing countries. Since the sixth five year plan, the government has been providing free or subsidised services through public agencies which are expected to improve the consumption levels of those living below the poverty line and thereby improve the productive efficiency of both the rural and urban workers.

6) Programmes for the uplift of the rural poor :
The hardcore of the poverty is to be found in the rural areas. The poorest sections in the rural areas belong to the families of landless agricultural labourers, small and marginal farmers, rural artisans, scheduled castes and scheduledtribes.

7) Taxation :
The taxation structure and the degree of progression in the rates of direct tastes one gets the impression that the Indian tax system is progressive and has been designed to prevent concentration of wealth in a few hands.

Question 5.
Explain the incidence of unemployent in India.
Answer:
Unemployment refers to the people those who are willing and able to work at the existing market wage rate are unable to find emloyment.

Unemployment in developing countries is both open and disguised. Like all other devel-oping countries, India presently suffers mainly form structural unemployment which exists in open and disguised forms. During the 1951-2011 period, population in this country increased at an alarming rate of around 2.1 per cent per annum and with it the numer of people coming to the labour market in search of jobs also rose rapidly, whereas employment opportunities did not increase most of the time correspondingly due to slow economic growth. Hence, there has been “an increase in the volume of unemployment from one plan period to another.” This un-employment, on account of its very nature, can be eliminaed only by introducing certain radical reforms in the structure of the economy.

Although the reforms were introduced in 1991, yet the year 1991 – 92 was particularly a depresed year and the reform process really got a going by 1993 – 94. Thus, 1993 – %4 to 2004 – 2005 – the 11 – year period can be considered as the period of liberalisation. It may be noted that all categories of unemployment showed a declining trend during the period 1977 – 78 to.1993 – 94, but the trend got reve rsed during 1993 – 94 and 2004 – 05.

Unemployment as measured by UPS criterion declined from 4.23 percent in 1977 – 78 to 2.56 percent in 1993 – 94, but indicated an increase to 3.06 percent in 2004 – 05, In 2011 – 12, unemployment on UPS criterion was estimated to be 2.7 percent. Even the most comprehensive measure of unemployment, viz., current daily status (CDS) unemployment rate declined from 8.18 percent in 1977 – 78 to 6.03 percent in 1993-94, but the declining trend was reversed and unemployment increased to 8.28 percent in 2004 – 05. In 20\11 – 12, rate of unemployment on same situation can be observed with respect to both urban, arid rural areas. However, it may be noted that whereas CDS rate for urban areas increased very slightly from 7.43 percent in 1993-94 to 8.28 per cent in 2004 – 05.

Though we notice a declline in unemployment rates in 66th Round of NSSO, it does not seem to be any deviation-front the earlier trend. This is so because between 2004 – 2005 and 2009 – 10 we find addition to labour force to be only 9.2 million which is much less than the earlier period. The same phenomenon could be observed in all measures of unemployment both in the rural and urban areas. This underlines the relative neglect of the rural economy in the first phase of economic reforms. Usual Principal Status (UPS) measures open unemployment throughout the year, but current daily status (CDS) besides taking into account open unemployment also measures under – employment. From the data it becomes obvious that whereas the UPS rates are modest, the CDS rates are quite high.

As against unemployment rate of 10.34 per cent in 1977 – 78 in urban areas, the rural unemployment rate 7.70 percent. There was a significant fall in therural unemployment rate, in 1987 – 88 to 5.3 per cent, but the urban unemployment rate was jof the order of 9.4 per cent, signigicatly higher. After 1993 – 94, in the period of liberalisation rural lunemployment rate again increased to 8.28 percent, signigicantly higher. After 1993 – 94, itn the period of liberalisation increased to 8.28 per cent during 1993 – 94 to 2004 – 05. High levols of unemployment in the urban areas could be explained by a larger proportion of organized s ector unemployment which forces people to either remain employed or unemployed, since the chances for getting engaged in low productive activities are relatively fewer.

As against this, the; rural areas indicat higher levels of disguised unemployment. Gradual and continuous decline of urban unemployment rates till 1993 – 94 and even a very Marginal increase in 2004 – 05 may be due’ to greater attention being given to urban areas in the development process, but (the increase in unemployment rates in rural areas may be due to the neglect of rural area in the post-reform period It may be also be due to a shift in the composition of employment from self – employment casual labour.

It can be said that in the usual status (PS + SS), unemployment rates were 5.8 percent among males and 3.8 percent among females in rural areas, while t he rates were 7.1 percent among males and 10.8 percent among females in urban areas. In the case of current wekly status, the unemployment rates were 8.8 percent among males and 7.7 percent among females in rural areas while the rates were 8.8 per cent among males and 7.7 percent among females and 12.8 per cent among females in urban areas.

Question 6.
Explain the remedial measures of poverty and unemployment in India.
Answer:
Remedial Measures of Poverty & Unemployment – Government Initiatives : Since poverty and unemployment are inseparable, the policy measures for reducing unemployment are equally applicable for the removal of poverty. In 1950s and 1960s Indian planners believed in the trickle – down theory. Accoriding to this view, poverty alleviation was a gradual and automatic process as the economy grew. Accordingly, employment generation was accepted as a goal of development planning. However, a faster growth with special emphasis on employ-ment-intensive sectors like the small – scale industry was considered adequate to generate, employment of the order required to take care of the problem.

Following the publication of the Bhagwati Committee report in 1973, the Government took various measures to provide em-ployment and alleviate under-employment. Unfortunately, the trickle – down theory failed to eradicate poverty and unemployment rather poverty and unemployment increased over the years. This led the planners to adopt four board categories of programmes in stages for poverty alleviatiqn.

Resources and income development programmes for the rural poor.
Special ara development programmes.
Work programmes for the creation of supplementary employment opportunities and
The minimum needs programme to improve the consumption levels’of the poor in order to raise their productive efficiency.

1. Resource and Income Development Programmes :
A number of programmes have been in operation in the country since 1970, and some are introduced recently. They aim at improving the economic conditions of the rural poor and to increase their income. Special programmes in this category such as Small Farmers and Development Agency (SFDA), Marginal Farmers and Agricultural Labour Agency (MFAL), Integrated Rural Development Programme (IRDP) etc. were introduced to develop the resources and incomes of the rural poor.

2. Special Area Development Programmes :
In this category are included such programmes as Drought Prone Area Programme (DPAP), Desert Development Programme (DDP), Hill Development Programme were aimed at developing areas with specific purposes, forestry, dairy development to raise the inicomes of the weaker sections of those areas.

3. Programmes for Creating Supplementary Employment:
The third category includes Employment Generation or National Rural Employment Generation Programmes such as National Rural Employment Programme (NREP) Rural Landless Employment Guarantee Programme and the Food for Work Programme (FWP), Prime Minister Inrtegrated Urban Poverty Eradication Programme (PMIUPEP) which am at creating supplementary employment to the poor. The NREP is rechristened as MGNREGP (Mahatma Gandhi National Rural Employment Generation Programme).

4. Mininum Needs Programmes :
The fourth category includes minimum needs programme, 20 poing programme which aim at improving the xonsumption levels of te poorer sections in order to raise their productive eficiency. This includes the elementary education, helath, water supply, roads, electrification, housing, and nutrition to both rural urban poor.

In recent years, a two pronged strategy was introduced by the government towards a solution to the problem of poverty in India viz;
a) the expansion of sectors which promise higher labour abosorption; and
b) empowering the poor with education, skill formation and health so that they can enter into the sectors which require higher competence and provide better remuneration which enable the poor to cross the poverty line.

Amartya Sen’s entitlement approach emphasises the above aspects. Various strategies have been utilized at the central and state leel to eradicate poverty. Some of the important strategies have been mentioned to indicate how the state countered the severity of existence of povrty in the country. They are:

Adoption of a strategy of pro-poor growth instead ofemphasizing liberalisation and GDP growth,
Stimulating agricultural growth,
Increasing ghe productivity and job quality of the un-organised sector,
improving the share of wages in the process of growth to achieve poverty reduction,
Empowerment of the poor through education and skill formation,
Empowerment through provision of better health facilities,
Empowering the poor through provision of housing.
Empowerment through skill formation for expanding IT sector, and
Progjding employment through MGNREGP

Question 7.
Write a note on views of Abhijit Banerjee on poverty.
Answer:
Abhijit Vinayak Banerjee :
(Bom February 21,1961, Mumbai, India, Indian – born Am erican economist who, with Esther Duflo and Michael Kremer, was awarded the 2019 Nobel Pirize for Economics for helping to develop an innovative experimental approach to alleviate global poverty. Banerjee is a professor in Massachusetts Institue of Technology (MIT).

Banerjee, Duflo, and Kremer applied their experimental approach in many areas, includ-ing education, health and medicine, acces to credit and the adoption of new technologies to find the real causes behind poverty.

According to Benerji and Duflo, extremely poor are underfed and weak % and earn bairely enough to cover their basic needs which they always try to fulfill in the least expensive way. Historically, poverty lines in many countries were originally set to capture exactly. This definition of poverty at the budget needed to buy a certain amount of calories, plus some other indispensable purchases. A “poor” person was by definition someone without enough to eat.

1) Among productive assets, land is the one that many people in the rural surveys seem to own though there are enormous country-to-country variation. Apart from land, ex-tremely poor households in rural areas tend to own very little by way of durable goods, including productive assets.

2) The extremely poor spend very little on education. The expenditure on education gen-erally hovers around 2 percent of household budgets. The reason for spending low is that children in poor households typically attend public schools or other schools that do not charge a fee. In countries where poor households spend more on education, it is typically because government schools have fees.

3) Many poor households have multiple occupations. For instance, a person actually has more than one occupation like both a business and a labour’s job. This multiplicity of occupations in urban areas is found in many other countries as well, though not every-where. This pattern Of multiple occupations is stronger in rural areas.

4) Poor families do seek out economic opportunities, but they tend not to get too specialized. This lack of specialization has its costs. Many of these poor households receive most of their earnings from these outside jobs, despite only being away for 18 weeks of the year on average. As short – term migrants, they have little chance of learning their jobs better or ending up iin a job that suits their specific talents or being promoted. Even the non – agricultural businesses that the poor operate typically require relatively little specific skills.

5) The availability of physical infrastructure to the poor like electricity, tap water, and ‘ even basic sanitation varies enormously across countries. Some governments provide reasonable access to both electricity and tap water to the extremely poor. Generally, access to electricity and tap water is greater for the urban poor than the rural poor.

6) In most low-income countries, there has been some attempt to make sure that poor households have access to primary schools and basic health centers. For example, most Indian villages now have a school within a kilometer, and there is a health subcenter for every 10,000 people. However, the quality of the facilities that serve the poor tends to be low, even when they are available, and it is not clear how much they actually deliver.

The low quality of teaching in public schools has clear effect on learning levels as well. In India, despite the fact that 93.4 per cent of children aged between 6- 4 are enrolled in schools a recent nationwide survey found that 34.9 per cent of the children aged between 7-14 cannnot read a simple paragraph at second – grade level. Mvoeover, 41.1 percent cannot do subtraction, and 65.5 percent cannot do division. Even among children in grades 6 to 8 in government schools, 22 percent cannot read a second – grade text.

Short Answer Questions

Question 1.
Bring out the share of public and private sectors in GDP of India.
Answer:
The activities of the public sector were restricted to a limited field like irrigation, power, railways, communications and some departmental undertakings. After independence, the area of activities of the public sector expanded at a very rapid speed.

TS Inter 2nd Year Economics Study Material Chapter 3 National Income, Poverty and Unemployment 4

National income is produced in public sector as well as in private sector. Prior to 1951, the share of public sector was very small. With the introduction of five year plans there was; a gradual increase in the economic activities of the state. As a result, the share of public sector in national income has gradually increased.

The public sector accounted for 8 percent of the GDP in 1950-51, is share in 2000-01 had risen to 23.2 percent. However, it declined to 21.7 percent in 2005-06 and further to 20.2 per-cent in 2008-09 and again there is a slight increase to 21.2 percent in 2009-10. Thus, the publtic sector accounts about one – fifth of the national income. Though, this is largely due to a rapid expansion of the public sector enterprises, the private sector still occupies a dominant position in the economy.

After the introduction of economic reforms, the share of private sector in the national income increased to 76.8 percent in 2000-01, 79.8 percent in 2008-09 and reduce marginally to 78.8 percent in 2009-10.

Question 2.
Examine the causes for inequalities in the distribution of income and wealth.
Answer:
1) Inequalities in land ownership :
There was concentration of landed property in India during the British period on account of the zamindary system. The Zamindary system was; abolished immediately after independence, yet the concentration of land ownership could not be broken.

2) Concentration of Assets in the private corporate sector :
There is an extreme con -centration of economic wealth and power in the hands of large industrialists and they have succeeded in acquiring massive assets over time. They have been aided in their efforts by the; easy availability of finance from banks and other financial institutions, besides equity capital which they raise from the market.

3) Inequalities in Professional Training :
Incomes of business executives, engineers, information technologists, physicians, lawyers and other professionals are often high and from this fact it emanates the false notion that income inequalities arise from professional competence (or) lack of it.

4) Inflation and the price rise :
Since the mid – 1950s, prices have been rising continuously eroding the real income of the working class, while the industrialists, traders, and farmers with large marketable surplus have benefited a great deal from this inflationary process.

5) Inequity in credit facilities :
In India, there is inequality in credit facilities which acentuates the inequalities arising from an unequal distribution of wealth. Business firms and individuals having an access to the formal capital markets manage to obtain finance on very favourable terms, while vast mass of small and marginal farmers, agricultural labourers and artisans depend heavily on money lenders who charge an exorbitant rate of interest and also exploit these poor people in a number of ways.

6) Urban Bias in Private Investment :
While 70 percent of the population in this country lives in rural areas, about 70 percent of private investment goes to industries in urban areas. Therefore, there is a distinct urban bias in the pattern of private investment. This urban bias tsikes the form of highly mechanised projects in which the share of wages in value added is relatively low. This naturally leads to inequality in income distribution.

7) The Role of the Government :
Though the state is often proclaimed as a precursor and initiator of economic change in India, the fact is that the state investment essentially plays a supportive rote to private investment (especially the large and capital intensive enterprises). This is due to fact that the state depends for its support on the same social forces which own the wealth of the country and supply the technicians, administratory and the dominant political groups.

Question 3.
Examine the different types of unemployment.
Answer:
unemployment is a situation where the persons those who are willing and able to work at the current wage rate are unable to get work.

Types of unemployment :
1) Structural Unemployment :
This type of unemployment is associated with economic structure of the country. When demand for labour falls short to the supply of labour due to rapidly growing population and their immobility, the problem of unemployment appears in the , economy. Rate of capital formation which again limits the employment opportunities. This type of structural unemployment is of long run nature.

2) Under – Employment :
Those labourers are under – employed who obtain work but their efficiency and capability are not utilized at their optimum and as a result they contribute in the production upto a limited level. A country having this type of unemployment fails to exploit the efficiencies of their labourers.

3) Disguised Unemployment :
A person does not contribute anything in the production process if can be removed from the work without affecting the productivity adversely, he will be treated as disguisedly unemployed. The marginal productivity of such unemployed person is zero. Agriculture sector of under developed / developing economies possesses this type of unemployment on a large scale.

4) Open Unemployment :
when the labourers live without any work and they don’t find any work to do, they come under the category of open unemployment. Educated unemployment and unskilled labour unemployment are included in open unemployment. The migration from rural to urban areas in search of work is very often found in India which is an example of open unemployment.

5) Educated Unemployment :
Even when a person who is educated / trained and skilled fails to obtain a job suited to his qualifications, he is said to be educated unemployed. Presently this type of unemployment has become a problem for developing economies, particularly for India.

6) Frictional Unemployment :
The temporary unemployment which exists during the period of transfer of labour from one occupation to another is called frictional unemployment. It arises due to the imperfections of labour market. Imperfections in labour market are reflected in the ignorance of labour about job opportunities.

7) Seasonal unemployment :
It appears due to a change in demand based on seasonal variations. Labour do not get work round the year. They get employment only in some seasons in the year. Indian agriculture ensures employment for only 7-8 months and labourers remain unemployed in the remaining period. This temporary type of. employment gives birth to seasonal unemployment.

8) Cyclical unemployment :
The main cause of it is the slackness in business activities. This type of unemployment is generally witnessed in the developed countries.

9) Technological Unemployment :
When the introduction of new technology causes displacement of workers, it is called technological unemployment.

10) Non employment :
The people who are working in their household activities or unorganised sector in developing countries are treated as non – employment category persons.

Question 4.
Analyse the causes for unemployment in India.
Answer:
Causfis of Unemployment :
The foregoing analysis of enemployment in India has made it evidently clear that most of the unemployment in this country is structural. Some of the main causes ae mentioned hereunder:

Some of the main causes of unemployment are mentioned here under :
1) Jobless Growth :
During, the first decades of economic planning, the GDP growth rate was as low as 3.5 percent per annum. In this period, employment increased at a reasonable rate of 2 percent per annum. However, thereafter, while the GDP growth rate picked up considerably, employment growth rate registered a sharp fall. Infact, while employment growth was as high as 2.82 percent per annum over the five year period 1972-73 to 1977-78, it fell to only 1.02 percent per annum over the five year period 1993-94 to 1999-2000. The country witnessed a phenomenon of jobless growth in the period of 1990s.

2) Increase in Labour force :
Since independence, death rate has rapidly declined and the country has entered the second stage of demographic transition. The rate of population growth rose to 2.2 percent per annum during the 1960s, and as a consequence, rate of increase in labour force also rose to 1.9 percent per annum. During the period 1983 to 1993 – 94 both demographic and social factors further raised the rate of growth of labour force.

3) Inappropriate Technology :
In India, while capital is a scarce factor, labour is available in abundant quantity. Under these circumstances, if market forces operate freely and efficiently, the country would have labour – intensive techniques of production, However, not only in industries, but also in agriculture, producers are increasingly substituting capital for labour.

4) Inappropriate Educational System :
The Educational system in India is defective. It is in fact, the same educational system which Macaulay had introduced in this country during the colonial period. To Gunnar Myrdal, India’s educational policy does not aim at development of human resources. It merely produces clerks and lower cadre executives for government and private concerns. With the expansion in the number of institutions which impart this kind of education, increase unemployment is inevitable

5) Neo – Liberal Economic Policy :
With the introduction of neo-liberal structural reforms in India since the early 1990s, income inequalities have increased. Growing income inequalities generally lead to demand constraint recession and unemployment.

Consequences of Unemployment :
1) Loss of Human Resources :
The problem of unemployment causes loss of human resources. Labourers waste their maximum time in search of employment.

2) Increase in poverty :
Unemployment deprives a man of all sources of income. As a result he grows poor. Therefore, unemployment generates poverty

3) Social Problems :
Unemployment breeds many social problems and social security is jeopardized.

4) Political Instability :
Unemployment gives birth to political instability in a country. Unemployed persons can easily be enticed by anti social elements. They lose all faith in democratic values and peaceful means.

5) Exploitation of labour :
In the state of unemployment, labourers are exploited to the maximum possible extent. Those labourers who get work have to work under diverse conditions of low wages. All this tells upon efficiency of labourers.

6) Standard of living :
In times of unemployment, the competition of jobs and regotiation power of individual decreases and thus also the living standard of people with the salaries, packages and income reduced.

7) Employment Gaps :
To further complicate the situation, the longer the individual is out of job the more difficult it becomes of find one. Employers find employment gaps as negative aspect. No one wants to hire a person who has been out of work for some time even when there’s no fault of the individual persons.

8) Lose of skill’s usage :
The unemployed is not able to put his / her skills to use. And in a situation where it goes on for too long the person may have to lose some of his / her skills.

Question 5.
Explain the consequences of the problem of unemployment.
Answer:
Causes of Unemployment: The widespread unemployment in urban as well as in rural India is a complex problem caused by many factors. Unemployment affects not just the person himself but also his / her family apd in the long-run the society where he lives. Unemployment brings with it despair, unhappinelss and anguish. The major consequences of the problem of unemployment are as follows :

Consequences of Unemployment :
1) Loss of Human Resources :
The problem of unemployment causes loss of human resources. Labourers waste their maximum time in search of employment.

2) Increase in poverty :
Unemployment deprives a man of all sources of income. As a result he grows poor. Therefore, unemployment generates poverty

3) Social Problems :
Unemployment breeds many social problems and social security is jeopardized.

6) Standard of living :
In times of unemployment, the competition of jobs and regotiation power of individual decreases.and thus also the living standard of people with the salaries, packages and income reduced.

8) Lose of skill’s usage :
The unemployed is not able to put his / her skills to use. And in a situation where it goes on for too long the person may have to lose some of his / her skills.

Question 6.
Examine the causes for poverty in India.
Answer:
Poverty can be defined as a social phenomenon in which a section of the society is unable to fulfill even its basic necessities of life.

Causes for poverty :
The causes for poverty in India are as follows.
1) Concentration of Economic Power :
In India, the income gap has a significant urban – rural bias and these income differences have increased over the 1990’s. Consequently, the phenomenon observed in the Indian economy is : It has started growing, the rich are reaping the benefits of development. Thus, inequalities in income and wealth, concentration of economic power were the reasons for the rich becoming richer and poor becoming poorer.

2) Under – Exploitation of Natural Resources :
To improve the standard of living of the people in the country, it is essential that we should achieve higher rate of growth in national income. To increase the national income, the natural resources in the country must be fully and profitably exploited. In our country there is under – exploitation of natural resources. Therefore, inspite of 60 years of planning experience, still 19.3 pejrcent of the population live below the poverty line.

3) Heavy population pressure :
The main problem jin India is the high level of birth rates coupled with a falling level of death rates. The averageannual growth rate of population from 1951-2001 was 2.1 percent. The fast rate of growth of population necessitates a higher rate of economic growth in order to maintain the same standard of living of the population. To maintain a rapidly growing population, the requirements of food, clothing, shelter, medicine etc. rise. A high growth rate of population and low growth! rate of national income will bring down the percapita income, which means the percapita expenditure will also come down.

4) Unemployment :
In India, labour is an abundant, factor and consequently, it is very difficult to provide gainful employment to the entire working population. Unemployment is structural and results in deficiency of capital. This result in the unemployment and poverty in the country. With an increase in the number of unemployed persons, the incidence of poverty also increase.

5) Poor Education :
Another major cause of poverty is the low educational attainments of the poor. These educational differentials are one of the main factors for relatively lower levels of income among the poor. The earnings of arts, science, commerce graduates were nearly six times as compared with those of illiterates and 3.5 times as compared with those with primary level education.

6) Low consumption of Essentials :
Another important cause of the poverty in India is the low availability of essential commodities. The consumer goods shortage is responsible, for low level of standard of living. There is a wide disparity in the consumption levels of the top rich and the bottom poor.

7) Inflation :
Rising prices are another cause of poverty. When prices rise, the purchaging power of money falls and it leads to impoverishment of the lower middle and poorer sections of the society. Thus, the inflationary pressures further increase the poverty in the country.

8) Low Technology :
Low level of technology is also responsible for the poverty in India. Not only in manufacturing processes and agricultural production, techniques are far below the developed economies, but even making skills, the capacity to organize production units, and financial markets are low level. As a result of low technology, percapita productivity remains at a low level.

9) Capital Deficiency :
The development of the economy depends on capital information in the country. In India most of the poeple are illiterate and unskilled. They used outmoded capital equipment as methods of production. They practice subsistence farming, lack mobility and have little connections with the market sector of the economy.

10) Failure of five year plans :
The basic objective of planning is the provision of a national minimum of level of living. The garibi hatao (remove poverty) slogan of Mrs. Indira Gandhi could be provided a meaningful content only if measures were taken to remove poverty. The fact that even after 5 decades of planning, 19.3%. of population is living under the conditions of poverty is a sad commentary on our planning.

11) Liberalisation, privatisation and Globalisation model of development :
This model by passes agriculture and agro-based industries which are a major source of generation of employment for the masses. This strategy has less trickle -down effect on the economy, there fore, poverty may increase in the country.

12) Social Factors :
In India, people are caught in the vicious circle of the poverty due to the prevalent socio – cultural institutions. In order to fulfill social obligations and observe religious ceremonies form cradle to grave, people spend extravagantly. Besides, illiteracy, igarance, religious ideas, casteism and joint family system prevented people from adopting modem ideas and techniques where by they could increase their income and reduce poverty.

Question 7.
Discuss the consequences of the problem of poverty.
Answer:
When a substantial segment of a society is deprived of minimum level of living and con-tinues at a base subsistence level, that society is said to be plagued with mass poverty.

consequences of the problem of poverty : The adverse effects of the problem of poverty are mentioned here under.

1. Unequal opportunities :
Generally, haves avail all better opportunities with the aid of money arid supremacy of resources while the poor class always remained deprived off even the basic needs. Consequently, the poor are more severely effected.

2. Concentration of Economic Power :
Another far – reaching consequence of poverty is that it leads to the concentration of economic power in a few pockets. The rich people make use of their economic powers to attain the political power.

3. Inefficiency :
Due to the prevalence of the poverty. The poor do not get opportunities of education and other specialized training. Without proper understanding and skill, there is overall inefficiency in the production process.

4. Problem of Unemployment :
The problem of poverty leads to the problem of unem-ployment in the country as the poor do not have many opportunities to employment. A high unemployment rate can impede a country from progressing in all aspects.

5. Income Inequalities and Insecurity :
The problem of poverty leads to the growth of income inequalities. Ftirther, it creates the feeling of insecurity.

6. Society :
Poverty also has social effects. Many people living in poverty are homeless, which puts them on the streets. Homelessness and high crime rates impact a country’s people and can create many problems within a society.

7. Malnutrition :
The most common effect of poverty is malnutrition. This is especially seen in children of poor families. People living in poverty rarely have access to highly nutritions foods. Sometimes people in poverty are malnourished simply because they do not eat enough of anything.

8. Health :
One of the most severe effects of poverty is the health. This ranges from occurence of diseases to lesser life expectancy and a greater expenditure on medicine.

9. Education :
Education is largely affected by poverty. Many people living in poverty are unable to attend school from a very early age. Families may not be able to afford the necessary clothing or school supplies.

Question 8.
Bring out some of the poverty alleviation programes under taken by the government.
Answer:
Strategy of Poverty Alleviation and Employment Generation Programmes :
A careful examination of the poverty alleviation programmes reveals that the planners have made the assunption that the poor constitute a homogeneous category. The planners made no attempt to segment the group in terms of common characteristics and their requirements.

At present there seems to be littel integration in transfer to assets and skills approach and employment approach. It is suggested that in future there has to be greater coordination between these two elements of poverty alleviation programme. A major limitation of the existing poverty alleviation strategy is that it has no programmes for those households who neither have assets nor skills and in addition, do not have any able bodied adult memebr and thus cannot benefit from wage employment programmes. For such a category, separate policy measures would be required.- Obviously these destitutes are to be covered under social security schemes.

1) Under the Seventh Plan, the basic emphasis was on productive employment rather than the alleviation of poverty.

The programmes for poverty alleviation were viewed as supplementing the basic plan for overall growth. Therefore in the Seventh Plan poverty alleviation was not in focus. The planners claimed that the Seventh Plan policies were formulated after a careful analysis of lessons from performance of various poverty alleviation programmes. The Seventh Plan aimed at reducing the percentage of the population below the poverty line from 39.9 percent at the beginning of the Plan period to 28.2 percent by 1990.

2) Elimination of poverty was one of the major objectives of the Eighth Plan. The plan-ners had hoped to realise this objective by pursuing employment – oriented growth strategy. Hence, expansion of employment opportunities and augmentation of pro-ductivity and income levels of both the underemployed and unemployed poor were ade the principal instruments for achieving this goal during the Eighth Plan.

3) The Ninth Plan relied essentially on the trickle-down effects of economic growth for povrty alleviation. It nevertheless recognised the role of anti-poverty programmes.

4) The Tenth Five Year Plan sought to achieve a faster reduction in poverty rate by redressal of regional imbalances for which aggregate growth target was broken State-wise. Thus, the Tenth Plan also like the Ninth Plan relied on the tickle-down effect of economic growth for poverty alleviation.

5) The Eleventh Five Year Plan also emphasised rapid growth of the economy to achieve reduction an poverty. However, it emphasised that this growth must be better balanced to rapidly create jobs in the industrial and services sector.

6) The Twelfth Five Year Plan emphasises faster, sustainable and more inchlusive growth. According to the planners, while the objective of development is broad – based improvement in the economic and social conditions of our people, rapid growth of GDP is an essential requirement for achieving this objectie.

Two reasons are cited in support of this contention.

a) rapid growth of GDP produces a larger expansion in total income and production which, if the growth processes sufficiently inclusive, will directly raise living standards of a large section of the population by providing larger employment opportunities and other income enhancing activities.

b) rapid growth generates higher revenues which help to finance critical programmes of poverty alleviation and inclusiveness like Mahatma Gandhi National Rural Employ-ment Guarantee Scheme (MGNREGS). Sarva Shiksha Abhiyan (SSA), Mid – Day Meals (MDMs), integrated Child Development Services (ICDS), National Rural Health Mis-sion, (NRHM) etc.

Question 9.
Analyse the different concepts of poverty.
Answer:
Concept of Poverty :
Poverty can be defined as a social phenomenon in which a section of the society is unable to fulfill even its basic necessities of life. When a substantial segment of a society is deprived of minum level If living and continues at a bare subsistence level, that society is said to be plagued with mass poverty. The countries of the third world exhibit invariably the existence of mass poverty.

Types of Poverty
There are two types of poverty common in economic literature; the absolue poverty and the relative poverty. ,

1. Absolute Poverty :
In the absolute standard, minimum physical quantities of cereals, pulses, mik, butter etc are determined for a subsistence level and then the price quotations are converted into monetary terms for the physical quantities. Aggregating all the quantities in-cluded, a figure expressing percapita consumer expenditure is determined. The population whose level of income or expenditure is below the figure considered to be the absolute poverty.

2. Relative Poverty :
According to the relative standard, income distribution of the population in different fractile groups is estimated and a comparison of the levels of living of the top 5 to 10 percent with the bottom 5 to 10 percent of the population is called relative poverty, or It is the absolute poverty with which we are concerned when we talk of the problem of poverty in India. Advanced countrie such as the USA, UK, have succeeded in removing absolute poverty for their people, but relative poverty, prevails even in these countres because of uneven distribution of imcome.

3. The Poverty Gap Index :
The poverty gap index is defined by the mean distance below the poverty line expressed as a proportion of that line. The poverty gap .thus measures the transfer that would bring the income of every poor person exactly up to the povety line, therby eliminating the poverty. In this way the poverty gap relflects the depth of poverty, as well as is incidence, the povery gap index is claculated with the help of the following principle.

TS Inter 2nd Year Economics Study Material Chapter 3 National Income, Poverty and Unemployment 5

4. Human poverty Index :
Human Development Report 1997 introduced a Human Poverty Index (HPI) in an attempt to bring together in a comosite index the different features of deprivation in the quality of life to arrive at an agregate judgement on the extent of poverty in a community. Human Development Report 2010 introduced the concept of Mltidimensional Poverty Index (MPI) to replace HPI. The MPI is the product of the multidimensional poverty head – count and the average number of deprivations each multidimensionally poor household experiences. It has three dimensions mirroring the HDI – health, education and living standards-which are reflected in 10 indicators.

Question 10.
Briefly examine the incidence of poverty in India.
Answer:
Incidence of Poverty in India : The Planning Commission provided estimates of the incidence of poverty since the early 1970s. As stated earlier, it determined the poverty line for rural population at Rs. 49.63 per capita per month while for urban population, poverty line was fixed at Rs. 56.64 per capita per month. These poverty lines were updated over time keeping price changes in view.

Rangarajan panel suggested to the goernment that those spendig more than Rs. 972 a month in rural areas and Rs. 1,407 a month in urban areas in 2011-12 do not fall under the definition of poverty. Thus, for a family of five, the all-India poverty line in terms of consump-tion expenditure, as per the Rangarajan committee, would amount to Rs. 4,860 per month in rural areas and Rs. 7,035 per month in urban areas. If calculaed on a daily basis, this translates into a per capita expenditure of rs. 32 per day in ruaral areas and Rs. 47 in urban areas in 2011-12.

As per the Tendulkar methodology for 2011-12, the poverty line was Rs. 816 in rural areas and Rs. 1,000 in urban areas, which if calculated on a daily basis comes out at Rs. 27 per day in rural areas and Rs. 33 in urban areas. The Tendulkar Committee had pegged this at Rs. 4,080 and Rs. 5,000 respectively. Estimates for the years 1973-74, 1983-84, 1993-94 and 2011 – 12 are presented in the following Table along with poverty lines in these years.

Percentage of Population ISelow the Poverty Line
TS Inter 2nd Year Economics Study Material Chapter 3 National Income, Poverty and Unemployment 6

According to this table, more than half of the populatin was below the poverty line in 1973 – 74. Over the four decade period 1973-74 to 2011-12 there was a perceptible decline in the incidence of poverty – from 59.4 percent in 1973-74 to 21.92 percent in 2011 -12. However, in view of the fact that the populatin had increased considerably over the period, it can be safely concluded that the absolute number of poor people did not decline. This analysis is as per the data of Hand Book of statistics, RBI, Indian economy, 2018-19.

Very Short Answer Questions

Question 1.
National Income.
Answer:
The value of final goods and services produced in year in a country is known as national income. This concept is used as an indicator of economic development of a country.

Question 2.
Percepita income.
Answer:
If we divide National Income of a contry with countries population. We get per – capita – income. This can be explained as follows.
TS Inter 2nd Year Economics Study Material Chapter 3 National Income, Poverty and Unemployment 7
India’s per capita Income is Rs. 1,12,835 at current year prices.

Question 3.
Unemployment.
Answer:
Unemployment means when a labourer does not obtain employment opportunity despite his willingness to work on existing wage rate.

According to keynes unemployment in developed economics to be the result of an defi-ciency in effective demand, the nature of unemployment in developing countries like India is disguised unemployment in nature. These economies also face the problem of Inflation side by side with the problem of unemploymet.

Question 4.
Chromic under employment.
Answer:
This concept also known as usual principal status employment. It is measured in number of persons that is persons who remained unemployed for a major part ot the year. This measure is more appropriate to those in search of regular employment. This is also referred to as open unemployment.

Question 5.
Weekly status unemployment.
Answer:
Persons who did not find even an hour of work during the survey week.

Question 6.
Structural unemployment.
Answer:
When demand for labour falls short to the supply of labour due to rapidly growing populatin and their immbility, the problem of unemployment appears in the economy. This type of unemployment is of long run nature Indian unemployment is basically related to this category.

Question 7.
Seasonal unemployment.
Answer:
Seasonal unemployment is contipued to the agricultural sector because nature predomi-nates agriculture. The demand for agricultural labour increases at the time of sowing and harvesting which provides employment for six to eight months and for the remaining period most of the agricultural workers remain unemployed.

Question 8.
Open unemployment.
Answer:
When the labourers live without any work and they don’t find any work to do, they come under the category of open unemployment. Educated unemployment and unskilled labour unemployment are included in open unemployment.

Question 9.
Educated unemployment.
Answer:
Even when a person who is educated / trained and skilled fails to obtain a job suited to his qualifications, he is said to be educated unemployed. Presently this type of unemployment has become a problem for developing economies, particularly for India.

Question 10.
Cyclical unemployment.
Answer:
The main cause of cyclical unemployment is the slackness in business activities. This type of unemployment is generally witnessed in the developed countries.

Question 11.
Disguised unemployment.
Answer:
A person whose marginal productivity zero or when more people are engaged in a job than actually required. We find his type of unemployment in agriculture in developing countries.

Question 12.
Frictional unemployment.
Answer:
The temporary unemployment which exists during the period to transfer of labour from one occupation to another is called frictional unemployment.

Question 13.
Non – employment.
Answer:
The people, who are working in their house hold activities or unorganised sector in de-veloping countries are treated as non – employment category.

Question 14.
Under employment.
Answer:
Under utilisation of labour time of workers, some of the workers classified as usually employed do not have work throughout the year due to seasonality in work or their labour time is not fully utilised.

Question 15.
Technological unemployment.
Answer:
When the introduction of new technology causes displacement of workers. It is called technological unemployment.

Question 16.
Poverty line.
Answer:
It refers to cut – off level of annual income of the household, poverty line is estimated separately bhsed oh nutritional diet of rural and urban areas, average consumption extendition of the poor / poverty line in this way, the poverty gap reflects the depth of poverty as well as its incidence.

Question 17.
Poverty gap.
Answer:
poverty gap thus measures the transfer that would bring the income of every poor person exactly up to the poverty line, there by eleminating the poverty. In this way the poverty gap results the depth of poverty, as well as its incidence. The poverty gap index is calculated with the help of following principle.
Poverty line – Average consumption
poverty gap = Poverty line

Question 18.
Absolute poverty.
Answer:
A person whose income is so meagre (or) low. It means the person is living below the subsistance level is known as absolute poverty.

Question 19.
Relative poverty.
Answer:
The people with lower income are relativele poor compared to the people with higher income. Even though they may be living above the minimum level of subsi scheme.

Question 20.
Multi dimensional Poverty Index (MPI)
Answer:
This concept was introduced by human development report – 2010 by replacing the HPI. The MPI is the product of the multi poverty head court and average number of deprivations each multidimensionally poor household experiences. It has three dimensions mirroring the HDI they are health, education and living standards.

TS Inter 2nd Year Economics Study Material Chapter 2 Demography and Human Resource Development

November 16, 2022October 22, 2022 by Srinivas

Telangana TSBIE TS Inter 2nd Year Economics Study Material 2nd Lesson Demography and Human Resource Development Textbook Questions and Answers.

TS Inter 2nd Year Economics Study Material 2nd Lesson Demography and Human Resource Development

Essay Questions

Question 1.
Explain the theory of demographic transition.
Answer:
Theory of Demographic Transition :
The theory of demographic transition was propunded by W.S. Thomson and F.W Notestein. They explain the theory in three stages. This theory explains the effects of changes in birth rate and death rate on the growth rate of population.

According to the ‘theory of demographic transition’, every country passes through three stages in which birth and death rates are typically associated with economic development. First Stage: Jn the first stage, the country is backward and both birth and death rates are high. High birth rate is matched by ap equally high death rate, and thus, the population remains more or less stable. Death rate are high in the first stage of agrarian economy on account of poor dites, primitive sanitation, absence of effective medicl aid, low level of standard of living, poor housing conditions, absence of opportunities for education and unscientific and irrational outlook.

Birth rates are also high in this stage due to lack of education, superstitions, social beliefs and customs about the size of family and early manages. In this stage, the actual growth rate of population (birth rate – death rate) is not high, because, high birth rate is balanced by high death rate. This stage prevailed in India before 1921.

Second stage :
This stage is characterised by rapid growth of population due to substantial reduction in the mortality rate and no corresponding decline in the birth rate. With the beginning of the process of development, the living standards improve, the education expands, medical and health facilities increase and the state makes special efforts to check the contagious diseases. Rise in income levels enable the people to improve diet. All these factors bring down the death rate.

But due to agrarian society with no mass education, attitude of the people towards the size of family does not change radically. So, the birth rate remains high. Thus, high birth rate and rapidly falling death rate contribute to high growth rate of population. In this stage, population increases at an alarming rate and economists call it as population explosion. India and faced this situation during the period 1951 – 1991.

Third stage :
Economic development rapidly changes the character of the economy from an agrarian to Industrialized one. Industrialisatioln compels people to change their attitudes towards the size of family and they recognise the merits of samll family. Education helps the people in right way of thinking. For working women, upbringing of children is not an easy task. People want to maintain reasonable standard of living. All these reinforce people’s desire to have smaller families. So, birtha rate declines significantly. The characteristics of the third stage ae low birth rate, low death rate, small family and low growth rate of population.
TS Inter 2nd Year Economics Study Material Chapter 2 Demography and Human Resource Development 1

In the above figure the time for different staages is taken on the horizontal axis and annual birth and death rates per 1,000 population on the vertical axis. In the first stage, 0 to T, birth and death rates are high and growth rate of population is very much low. But, in the second stage, T to Tj, though the death rate is falling, birth rate is remaining high and this leads to higher growth rate of population and its result is population explosion. However, in the third stage, after Tp both birth and death rates are falling and again growth rate of population will be low and population increases at a slow pace.

Question 2.
Examine the trends of population growth in India. ,
Answer:
India possesses 2.4% of the total land area of the world, and with its population of 1.3 billions in 2017 it has a share of 17.6% in the world population. India is the second largest country in terms of population size after China. India accounts for only 7.3% of world GDP in 2017. These facts indicate that the pressure of population on the land in India is very high.

According to 1901 Census, India’s population was 236 million and according to 2011 Census, the popoulation was 1210 million and it was 1.3 billions in 2017. In a period of 116 years, the population of the country has increased by 1064 million.and growth trends of India’s populatin during 1891 – 2011.

a) During the first phase of 30 years (1891 to 1921), India’s population grew from 236 million in 1891 to 251 mollion in 1921 i.e., just by 15 million. The compound annual growth rate was 0.19% per annum for the period. Birth and death rates were more or less equal during this period.

b) During the second phase from 1921 to 1951, India’s population grew from 251 million in 1921 to 361 million in 1951 i.e., by 110 million. The compound annual growth rate of population was 1.22% which was considered as moderate. The main reason for this was a decline in death rate from 49 per thousand population to 27 per thousand population and a very small decrease in birth rate from 49 per thousand population to 27 per thousand population and a very small decrease in birth rate from 49 per thousand population to 40 per thousand population. India had entered into the second phase of demographic transition during this period with a steady but low growth rate of population. The year 1921 is regarded as great dividing year of population because of decrease in population and a turning point for the increase in the growth rate of population.

c) During the third phase from 1951 to 1981, the population of India grew from 361 million in 1951 to 683 million in 1981. There was a record growth of population by 322 million in this.30 years. The compound annual growth rate of 2.14% is nearly double the growth rate of the previous phase. Due to the planning, many measures of death control were undertaken. This resulted in a further and sharp decline of death rate to a level of 15, but the birth rate fell very slowly from 40 to 37 during this period. So, there was a population explosion during this pahse.

d) During 1981 to 2011, India’s total populatio increaed from 683 million to 1210 million indicating an increase of 77% during the 30 year period. The annual average rate of growth of population during this period was 1.84%.

1. Birth Death and Infant Mortality Rates :
The growth of populatin was .checked by the high birth and high death rates in India before 1921. Birth rate during 1901-1921 fluctuated vetween 46 and 49 per thousand papulation and the death rate between 44 and 49. So, the growth of population was little or negligible. After 1921, a clear fall in death rate is noticeable. Death rate which was at 48.6 per thousand in 1911- 20 came down to 7.1 per thousand in 2010-11.

But, the birth rate showed a slight decline initially and due to family planning drive birth rate also declined to 21.8 per thosand in 2010 – 11. There is a steady fall in the infant mortality. In the second decade of the 20th century, infant mortality rate was 218 per 1,000 live births and it is 47 per 1,000 live births in 2010. Over the years, maternal mortality has also declined. Itwas 210 per 1 lakh live births in 2007 – 2009.

2. The sex Ratio :
The sex ratio is defined as the number of females per 1.000 males. The sex ratio declined from 972 in 1901 to 946 in 1951 and to 927 in 1991. It is a disturbing feature. Subsequently there is a marginal improvement in the sex ratio. It is increased to 933 in 2001 and to 940 in 2011. Kerala alone shows a higher proportion of females of 1,084 per 1,000 males in 2011. In Punjab and Haryana, females account for 893,and 877 per 1,000 males in 2011 respectively which are at the bottom. Poverty, higher female infant mortality rates, high mortality rates among women in reproductive ages and sociological factors including a bias against female births are responsible for declining sex ratio.

3. Age Composition :
The study of age composition is useful in determining the proportion of labour force in the total population. The working age of the population is considered as 15 – 60 years, the proportion of child population in the 0 – 14 years age group is 35.6% in 2001 and this is lower than the earlier figures. The working age pertains to 15 – J60 yearws is called as productive age group. Both the child population and old population are dependent of the productive age group.

Both the child population and old population are dependent on the productive age group for their maintenance and sustenance, there is a decline in the dependency load of the population and increase in the share of the productive age group. Demographic dividend is likely to manifest in the gradual increase in the working age group of 15 – 60 years. A recent report from the UN population Fund estimages that India’s working age population will reach 65% by 2030. India will also enjoy the longest demographic dividend compared to any other country till 2055.

Question 3.
What are the causes for rapid growth of population in India?
Answer:
In India, the population has increased rapidly due to a steady decline in the death rate while birth rate remained high and this led to population explosion. Examination of causes for decline in the death rate and high birth rate is necessary.

Causes of Population Explosion :
Mainly there are three causes for a rapid growth of populatioon of a country: i) a high birth rate, ii) a relatively lower death rate and iii) immigraion. Immigration does not have much impact on India’s population growth.

I. Causes of Decline in the Death Rate :
1. Elimination of Famines :
Recurrence of famines in India under the British rule was a major cause of high mortality rate. Since independence, the situation has considerably improved as the famines have not occured on a large scale and the problems due to droughts have been met.

2. Control of Epidemics :
Cholera, small pox and malaria were the major causes of epidemics before independence. Now, small pox is eradicated completely and cholera and malaria are very much under control. There has been some decline in the incidence of tuberculosis, but, still it is a major killer in India.

3. Other Factors :
Factors such as supply of drinking water, sanitation and hygiene, spread of education, expanded medical facilities, immunisation, poverty eradication programs and improvement in living standards will reduce mortality rate.

II. Causes of High Birth Rate :
The birth rate is high in India. Except in the states of Kerala, Tamil Nadu and Goa, birth rate has not declined significantly in India due to a number of economic and social factors.

A. Economic Factors : Three economic factors namely :
1. Predominance of Agriculture :
In agrarian societies, children have never been considered as an economic burden. The peaks of productive activity in agriculture require more labour. Hence, in a predominantly agricultural economy of India, bigger families exist.

2. Urbanisation :
Due to staggering industrialisation, the process of urbanisation is slow in India and it failed to generate social forces which reduce, the birth rate.

3. Poverty :
Poverty in under developed countries results in high fertility. At a lower income level of the family, the benefits of having an additional child to the family generally exceed the cost of his upbringing. The poor have no other economic asset than their own labour. Hence, they assume that mote the number of earners in the family, the moe family earnings. The lower survival rate also reinforces the preference for children. Thus, poverty is a major factor which works against the acceptability of family planning programme by the poorer sections.

B. Social Factors :
Universality of marriage, lower age at the time of marriage, religious and social superstitions, joint family system, lack of education and a very limited use of contraceptives are some of the social factors which limit the decline in fertility.

1. Universality of Marriage :
Marriage is both a religious and a social necessity. With the spread of education, attitude of people towards marriage will change and some may decide not to marry. But, in a slow moving society where education is also not spreading fast, the above situation can not be expected.

2. Lower Age at the Time of Marriage :
The relatively lower age at the time of marriage is responsible for high fertility. Mean age at marriage for females is 18.3 years and for males 22.6 years in 2001 in India. Due to this, fertility is bound to remain high.

3. Religious and Social Supersititions :
Due to religious and social superstitions, many people prefer to have children irrespective of their economic position. Children are regarded as God given and preordained.

4. Joint Family System :
The joint family system induces young couples to have children, though they are unable to support them. Because, their economic burden is borne by the earning members. However, the process of disintegration of joint family system has not only started, and it reached to its peak level.

5. Lack of Education :
According to 2011 Census, 74% of the population is literate in India. The percentage of literacy among women is much lower i.e., 65.5% as compared to 82.1% among men. Education alone can change the attitude of the people towards family, marriage and birth of a child. Illiterate people cannot be exposed to rational ideas. There is an inverse relationship between education and fertility.

6. Use of Contraceptives :
Though the government is carrying the idea of family planning and contraceptives are made available, the response is not encouraging from certain sections due to lack of education and religious dogmas. With the expansion of education, people will certainly develop a preference for a smaller family.

Question 4.
What are the measures required to control population explosion?
Answer:
Remedies for population Explosion :
Three fold measures are required to deal with the population explosion. These are as followed. .
I. Economic Measures
1. Expansion of the Industrial Sector :
Industrial workers are aware of the difficulties in getting employment and are interested in restricting the size of their family. They realise that in order to raise their standard of living they must restrict the size of their family. Hence, rapid industrialization is required.

2. Creation of Employment :
Urbanisation and industrialisation are mutually interdependent. We have to create more job opportunities in cities and villages and this may be a powerful check on the growth of population. The housing problem and the cost of upbringing of children in urban areas usually prohibit people from having big families.

3. Equitable Distribution of Income and Removal of Poverty :
Once the poor people start getting basic amenities of life, they have no economic compulsion to have more children and their attitude towards the size of family will undergo a change. For this, equitale distribution of income and right to work with living wage are necessary.

II. Social Measures :
Population explosion is not only an economic problem but also a social problem. Many causes of population explosion are deep rooted in the social life. Social evils must be curtailed to bring down the birth rate.

1. Education :
Most educated people delay their marriage and prefer samll family. Education, by making a frontal attack on orthodoxy and superstitions, induces people to practise family planning. When boys and girls go to schools and colleges, marriages will be delayed and this reduces the reproductive span of women. The link between female literacy and fertility is clear. But the 2011 Census has shown that the female literacy rate is 65.5% as against the male leteracy rate of 82.1%.

2. Status of Women :
The position of women is inferior to that of men both socially and economically. That is why, educatilon is less among women and hence, they are quite indifferent to family planning. People will not shed wrong notions such as preference for male child, unless the status of women improves. In a backward society, women have no choice regarding her children.

3. Age of Marriage :
Fertility depends on the age of women at marriage. In India, average age at marriage is low. Under the Child Marriage Restraint Act, 1903, the minimum age of marriage was 18 years for men and 15 years for women. In 1978, this act was amended to raise the minimum age to 21 years for men and 18 years for women. But, an effecive implementation of legal enactments is impossible due to fears in rural areas about the safety of unmarried girls, illiteracy, lack of knowledge about laws and inadequate registration system.

III. Family Planning Programme
Importance of the family planning programme as a device to control population explosion is now universally recognised. Widespread use of contraceptives has contributed most to China’s success. About 85% of married women of child-bearing age use contraceptives in China a against 41% in India. The following aspects have to be discussed in this respect.

1. Public Information Programme :
For raising the level of consciousness, couples in the reproductive age are to be informed about the usefulness of family planning. The government is using all media to publicise the importance of family planning. Once they catch the idea of family planning, they themselves starty practising it.

2. Incentives and Disincentives :
The government has introduced different schemes in which incentives are given to those who accept family planning. Cash prizes have given some inducement to the people to go for sterilisation. In India family planning is voluntary. During the emergency, some excesses were committed and forcible sterilisations were done. In fact, atleast for some time, compulsory family planning is required.

3. Family Planning Centres :
Establishment of family planning centres is an integral part of family planning programme. These centers provide various clinical facilities needed for family planning. Contraceptive distribution centres are also playing very important role.

4. Research :
Research in the field of demography, communication action, reproductive biology and fertility control must be given priority. The government of India has realised this to obtain maximum results.

Question 5.
Describe the occupational distribution of populatin in India.
Answer:
Occupational and Sectoral Distribution of Population in India:
The occupational structure of a country refers to the distribution of its population according to different occupations. Occupations are divided into three types :
i) Agriculture, animal husbandry, forestry, fishery, etc. are collectively known as primary activities. They are primary as their products are essential for human existence and these are carried on with the help of nature,
ii) Manufacturing industries, both small and large scale,- are known as secondary activities,
iii) Transport, communications, banking and finance services are tertiary activities and these help the primary and secondary activities.

Economic Development and Occupational Distribution :
Transfer of population from agriculture to industry and eventually to services is considered as an index of economic development. Colin Clark argues that “a high average level of real income per head is always associated with a high proportion of the working population engaged in tertiary industries, low real income per head is always associated with a low proportion of the working population engaged in tertiary production and a high percentage in primary production”. According to Hans Singer, economic development will be achieved by transforming a 85% agricultural dependent country in to just 15% agriculturally dependent country.

Occupational Distribution of Working Population in India :
Over the period 1951 to 2010, agriculture remained the main occupation of the people, Over the period 1951 to 1971, the percentage of labour force engaged in primary sector remained unchanged at around 72%. There is a major change in the period 1991 – 2010 with the percentaghe of labour force in the primary sector falling to 51% in 2010 from 67% in 1991.

After independence, the process of industrialisation was accelerated and the absolute number of persons getting employment in the secondary sector substantially increased. Since the population growth is rapid, and the rate of industrial growth fell short of expectations, transfer of labour force from primary sector to secondary sector and to services sector did not take place. In 2010. 22% of the working population is employed in the secondary as against 11% in 1951. During the period 1991 – 2010 the proportion of labour force in the secondary sector increased significantly from 13% to 22%.

The proportion of workers employed in the tertiary sector increased over the 60 years from 1951 to 2010.27% of the working population is employed in teh tertiary sector aas against 17% im 1951.

It is clear that over the first four decades of planning (1951 – 1991), the occupational structure of Indiain population almost remained unchanged. Only in the later two decades (1991 – 2010) some important changes are visible. In India, due to rapid growth of population, traditional agriculture with low labour productivity and slow pace of industrialisation, occupational structure has not undergone significant changes.

Question 6.
Explain the new population policy, 2000.
Answer:
National Population Policy, 2000 :
The National Population Policy, 2000 outlined immediate medium and along term objectives. The immediate objective is to meet needs of contraception health infrastructure, health personnel and to provide integraged services for basic reproductive and child health care. The medium term objective is to reduce the total fertility rates to the replacement level by 2010. The long term objectives is to stabilise the population by 2046. A.D.

Reduction of infant mortality rate below 30 per 1,000 liver births.
Reduction of maternal mortality rate below 100 per 1,00,000 live births.
Universal immunisation.
Achieve 80% deliveries in regular dispensaries, hospitals and medical institutions with trained staff.
Access to information, contgain AIDS, prevention and control of communicable diseases.
Incentive to adopt two child small family norm.
Facilities for safe abortions to be increased.
Strict enforcement of Child Marriage Restraint Act and! Pre – Natal Diagnostic Tech-niques Act.
Raising the age of marriage of girls not earlier than 18, and preferably raising it to 20 years (or) more.
A special regard for women who marry after 21 and opt for a terminal method of contraception after the 3 second child.
Health insurance cover for those below the poverty line who undergo sterilization after having t®w children.
Achieve universal access to inforamtion, counselling and services for fertility regularisation and contraception.
Bring about convergence in implementation of relat3d social sector programmes to make family welfare a people centred programme.

The National Commission on population has been set up to review the implementation of the National Population Policy from time – to – time. State level commission on population also have been setup with the objective of ensuring the implementation of national population policy.

Question 7.
Examine the role of education in eonomic development.
Answer:
Role of Education in Economic Development: Education and skill training are important for human resource development.

1) Education and economic development :
Investment in education promotes economic development. According to Todaro and Smith, education helps to increase knowledge and skill and so that more productive labour force can be created. Employment and income earning opportunities will increase due to education. Educated leaders can be created. Education provides skill and encourages modern attitudes.

2) Reduction of income inequalities :
Universal education will improve the human ca-pabilities of the people and helps them in increasing their earnings.

3) Rural development :
Education provides knowledge to the rural people and they can overcome ingnorance and superstitions. If the farmers are educated they will adopt new agricultural techniques. Education provides skill to the people to set up cottage industries and this reduces disguised enemployment.

4) Family planning :
Education enlightens people of the need to improve their standards of living and so to restrict the size of their families. Education serves as the best method of family planning in the long run aned it is also proved. If more women are educated and seek employment, fertility ratges will decline as upbringing to children becomes difficult for women employees.

5) On – the Job Training :
Many firms provide on-the-job training to their workers, because improvement in human capital increases the roductivity of physical capital. On – the – job training increases the skill and efficiency of workers and so increases in productivity and production.

Spill over income gains to the present and future generation, the meeting of skilled man-power requirements, research in science, promotion of responsible behivious, political stability, transmission of cultural heritage etc., are also possible in the society due to increased education.

If people don’t get suitable education, they not only forego much mofe at present but also in the future.

Question 8.
Describe the health policies and programmes adopted in India.
Answer:
Health Policies in India :
On the basis of recommendations by the Health Survey and Development Committee (More Committee, 1946) and the Health Survey and Planning Committee (Mudaliar Committee, 1961), the government of India prepared ing the health standard.

Objectives of this programme :

Provision for the control of epidemics
Providing health services; and
Training of employees in the health department and the development of primary health centres in rural sector.

During the 9^th and 10^th Five yedr plans, efforts were intensified to improve the health status of population by optimising coverage and quality of care. Eleventh Five year plan proposed a comprehensive approach that covers individual health care, public health, sanitation, clean drinking water, access to food and knowledge of hygienes and feeding practices. The plan set the following targets to be achieved by the end of plan period (2011 -12).

Reducing maternal mortality rate to 100 per 1 lakh live births.
Reducing infant mortality rate to 28 per 1,000 live births.
Reducing total fertility rate to 2.1.
Providing clean drinking water to all by 2009.
Reducing malnutrition among children of age group of 0 – 3 years by 50 percent.
Reducing anemia among women and girls by 50%.
Raising sex ratio for age group of 0 – 6 years to 935 per 1,000 by 201 -12 and 950 by 2016-17.

In India, life expectancy at birth was 41.2 years for the dedcade 1951-61 and improved to 68.5 years as per census 2011. Infant mortality rate is 47 per 1,000 live births in 2010 as against 146 per 1,000 in 1951. During 2001 – 03 maternal mortality rate was 301 per 1 lakh live births and it was reduced to 200 by 2010. Improving birth attendance and midwifery facilities at a rapid rate are required to reduce maternal mortality rate in India. Total fertility rate (total number of live births by a woman during her entire reproductive period) in the early 1950s was 6.0 and it has come down to 2.4 in 2011.

Health Programmes in India :
The 11^th Five year plan aimed for inclusive growth by introducing National Rural Health Mission and National Urban Health Mission.

i) National Rural Health Mission (NR HM) :
This intends to increase access and utilizztion of quality health by strengthening healht infrastructure. It was planned to have (i) 5 lakh Accredited Social Health Activists (ASHAs) by 2008, (ii) All sub – centres functional with 2 Auxiliary Nurse Midwives (ANMs) by 2010. (iii) All Primary Health Centres (PHCs) to be provided 3 staff nurses for 24 hours on all days by 2010. (iv) 6,500 Community Health Centres to be establisghed, strengthened with 7 specialists and 9 staff nurses by 20121 (v) 1,800 Taluka Hospitals and 600 District Hospitals to be strengthened by 2012. (vi) Mobile Medical Units for each district by 2009.

ii) Janani Suraksha Yojana (JSY) :
This scheme has the dual objectives of reducing maternal and infant mortality by promoting institutional deliveries. It is 100% centrally sponsored, and integrates cash assistance with medical care. A gradual approach of increasing istitutional capacity and encouraging institutional deliveries will ensure success of the scheme. Under NRHM, out of 184.25 lakh institutional deliveries in the country (as on 1st April, 2007), JSY beneficiaries Were 28.74 lakhs.

iii) National Urban Health Mission (NUHM) :
This programme covers all cities with a population of 1 lakh and above.

In relation to health, the 2018-19 Union Budget announced a flagship National Health Protection Scheme to cover over 10 crore poor and vulnerable families, approximately 50 crore beneficiaries, providing coverae upto Rs. 5 lakh per family per year for secondary and tertiary care hospitalization. This will be the World’s largest government funded health care programme. The revised estimate for the National Health Insurance Programme Rashtriya Swasthya Bima Yojna (RSBY) for Financial year 2018 -19 was Rs. 2,700 crore, and the allocation in the Union Budget for Financial year 2019 – 20 is Rs. 6,556 crore.

iv) Clean Drinking Water and Sanitation :
Unsafe drinking water increases the risk of diseases and malnutrition and water – borne diseases which effect health adversely. That is why, clean drinking water is a vital necessity. Lack of sanitation is directly responsible for several water borhne diseases.

According to World Development Indicators (2008), access to improved water source was available to 86% of the population in 2004. According to World Bank, 33% of the population in India had access to improved sanitation facilities in 2004.

A big initiative of the NDA government has been the Swachh Bharat Mission (SBM) launched on October 2, 2014 with the goal of making India Open Defecation Free (ODF) by October 2019. The main aim of SBM has been the construction of toilets. Official statistics by the Ministry of Drinking Water and Sanitation claim that as of January 2019, 92.2 million toilets had been built since the inception of SBM, leading to a 98 percent rural sanitation coverage with 604 districts and 5,52,000 villages declared ODF.

Question 9.
What are the different indices to measure human development? Explain them.
Answer:
The United Nations Development Programme (UNDP) introdeuced the HDI in its first Human Development Report, 1990, under the guidance of Mahbub – UI – Haq, an economist from Pakistan.

UNDP Human Development Report, 1997 descruves human development as “the process of widening people’s choices and the level of well – being they achieve. Regardless of the level of development, the three essential choices are to lead a long and healthy life, to acquire knowledge and to have access to the resources needed for a decent standard of living.

According to Mahbub – U1 – Haq, “the difference between the economic growth and the human development schools is that the first exclusively focuses on the expansion of only one choice income – while the second embraces the enlargement of all human choicex – whether economic, social, cultural of political”.

HDI measures the average achievement in three basic dimensions of human development and these are : (i) a long and healthy life as measured by life expectancy at birth, (ii) knowledge as measured by the adult literacy rate and the gross enrolment ratio and (iii) a decent standard of living as measured by GDP per capita (PPP US$).

Before calculating HDI, an index for each of the three dimensions is creatd. For this, maximum and minimum values are chosen for each indicator as given below.
TS Inter 2nd Year Economics Study Material Chapter 2 Demography and Human Resource Development 2

Performance in each dimension is expressed as a value between 0 and 1 by applying the formula given below :
TS Inter 2nd Year Economics Study Material Chapter 2 Demography and Human Resource Development 3

The HDI is calculated as a simple average of the dimension indices.

According to HDR 2011, countries are grouped under four categories :
(1) countries in the HDI range 0.8 and above are in the very high human development group, (2) countries in HDI range 0.7 to 0.8 are in the high human development group, (3) countries in the HDI range 0. 5 to 0.7 are in the range of medium human development group, and (4) countries in the HDI range less than 0.5 are in the low human development group.

India which was ranked at the 134^th position in HDI in 1975 had improved its rank to 128 in 2005, but in 2011 its position slipped again to 134^th rank. Norway ranked first and Australia ranked second in 2011.

India was at 135^th position in HDI out of 187 countries in 2013. As per annual HDI – 2019. report, India ranked at the 129^th position in 2018 out of 189 countries.

Human Development Report, 1995 introduced two global gender indices. These are : (1) Gender related Development Index (GDI) and (2) Gender Empowerment Measure (GEM).

The GDI attempted to capture achievements through the same set of basic capabilities as included in the HDI – life expectancy, educational attainment and income. HDI will be adjusted for gender inequality.

The Gender Empowerment Measure (GEM) indicates whether women are able to participate actively in economic and political life. It focuses on political participation (women’s share in parliament seats), economic participation (share in higher level and professional positions) and power over economic resources (income gaps).

2) Human Poverty Index (HPI) :
Human Development Report, 1997 introduced the concept of Human Poverty Index. This index concentrates on deprivation in three essential elements of human life already reflected in HDI – longevity, knowledge and a decent living standard. HDR, 2009 used the following variables for calculating HPI : (i) percentage of people expected to die before age of 40 years, (ii) percentage of adult illiterates, (iii) percentage of people with access to health services and to safe drinking water and (iv) percentage of malnourished children under five years.

3) Gross National Happiness Index :
Countries like Bhutan are measuring their development with gross national happiness index. There is a need to bring a change in the existing method of measuring the development.

Gross National Happiness has been devised by Bhutan as an alternative indicator for GDP to measure progress or development. The term Gross National Happiness (GNH) was coined by the Fourth king of Bhuta, Jigme Singye Wangchuck in the 1970’s, The concept implies that sustainable development should take a hollistic approach towards notions of progress and give equal importance to non – economic aspects of wellbeing. The GNH index is constructed based upon a multidimensional methodology known as the Alkire – Foster method.

The concept of GNH is explained by four pillars :
good governance, sustainable socio-economic development, cultural preservation and environmental conservation. These four pillars are further classified into nine domains : Psychological wellbeing, health, educatin, time use, cultural diversity and resilience, good governance, community vitality, ecological diversity and resilience, and living standards. All domains are weighted equally.

Question 10.
Explain the views of Amartya Sen on Human Development.
Answer:
Views of Amartya Sen on Human Development :
Amartya Sen is the first Indian who won the Nobel Prize of Economics. Amartya Sen’s book “Development as Freedom” was published in 1999. He argues that the development is the process of expanding human freedoms that people enjoy.

Sen says that freedom is both the primary end and the principal mean of development. For this, he gives two reasons :
(i) the only acceptable evaluation of human progress is enhancement of freedom and (2) the achievement of development is dependent on the free agency of people. Growth of GNP or of Individual incomes can be very important as means to expanding the freedom enjouyed by the people, Freedom depends on other determinants also, such as social and economic arrangements (facilities for education and health care) and political and civil ritghts (the liberty to participate in public discussion and scrutiny). Industrialization or technololgical progress or social modernization can substantially contribute to expanding human freedom, but freedom depends or other influences also.

Freedom creates growth. Freedom is a principal determinant of individual initiative and social effectiveness. It enhances the ability of individuals to help themselves. Raising human capability improves the choices, well – being and freedom of people and also their role in influencing social change and economic production, /economic security derives from freedom. The institutional arrangements are also influenced by the freedoms, though the liberty to participate in social choice and in the making of public decisions.

He mentions five freedoms :
political freedom, economic facilities, social opportunities, transparency guarantees and protective security. Political freedoms (free speech and elections) help to promote economic security. Political freedom and civil rights have to be achieved as a direct good in their own right, but not thorugh the achieving GDP growth. Economic facilities (opportunities for participation in trade and production) will help to generate personal abundance and public resources for social facilities. Social opportunities (education and health) facilitate economic participation. Freedom of different kinds can strengthen one another.

Sen advocates government measures to support these freedoms by providing public education, health care, social safety nets, good macro economic policies, productivity and environment protection.

Development requires the removal of sources of unfreedoms : poverty, tyranny, poor eco-nomic opportunities, soeial deprivation, neglect of public facilities and repression by States.

According to Sen, the basic concern of human development is our capability to lead the kind of lives we have reason to value rather than the usual emphasis on increasing GDP per capita incomes.

Short Answer Questions

Question 1.
Explain the trends of Birth and death rates in India.
Answer:
The growth of population was checked by the high birth and high death rates in India before 1921. Birth rate during 1901 – 1921 fluctuated between 46 and 49 per thousand and the death rate between 44 and 49. So, ;the growth of population was little or negligible. After 1921. a clear fall ini death rae is noticeable. Death rate which was at 48.6 per thousand in 1911 – 20 came down to 7.2 per thousand in 2010 -11. But, the birth rate showed a slight decline initially and due to family planning drive birth rae also declined to 22.1 per thousand in 2010 = 11.

For the last sixty years, there is a steady fall in the infant mortality. In the second decade of the 20^th century, infant mortality rate was 218 per 1,000 live births and it is 47 per 1,000 live births in 2010, Over the years, maternal mortality has also declined. It is 210 per 1 lakh births in 2007 – 2009.

Thus, the high growth rate of population can be explained in terms of high birth rate but a relatively fast declining death rate. Kerala, Tamil Nadu, Andhra Pradesh, West Bengal, Karnataka, Maharashtra and Punjab have achieved a birth rate below 20 per 1,000. These state are in the 3^rd staghe of demographic transition. But, Haryana and Gujarat which occupied a high place in India in terms of per capita income far behind in reduction of birth rate. Uttar Pradesh, Rajasthan, Bihar and Madhya Pracjesh have a very high birht rate in the range of 25 – 31 per thousand.

These states are in the 2nd stage of demographic transition. It is not easy to bring down the birth rate, when the socio-economic conditions favour a larger family. Still, family planning has not become a way of life for many people. People’s attitudes towards marriage, family, family planning must change to achieve a substantial decline in the birth rate.

Question 2.
Explain the sex ratio in India.
Answer:
The sex ratio is defined as the number of females per 1,000 maks. Explains the sex ratio in IUndia. The sex ratio declined from 972 in 1901. to 946 in 1951 and to 927 in 1991, It is a disturbing featue. Subsequently there is a marginal improvement in the sex ratio. It is increased to 933 in 2001 and to 940 in 2011. Kerala alone shows a higher proportion of females of 1,084 per 1,000 males in 2011. in Punjab and Haryana, females account for 893 and 877 per 1,000 males in 2011 respectively which are at the bottom. Poverty, highte female infant mortality rates, hnigh mortality rates among women in reproductive ages and sociological factors are responsible for declining sex ratio.

Question 3.
Describe the family planning programme in India.
Answer:
Family Planning Programme

Importance of the family planning programme as a device to control population explosion is now universally recognised. Widespread use of contraceptives has contributed most to China’s success. About 85% of married women of child-bearing age use contraceptives in China a against 41% in India. The following aspects have to be discussed in this respect.

Question 4.
What is the relation between economic development and occupational distribution .
Answer:
Transfer of population from agriculture to industry and eventually to services is considered as an index of economic development. Colin Clark argues that “a high average level of real income per head is always associated with a high proportion of the working population engaged in tertiary industries, low real income per head is always associated with a low proportion of the working population engaged tertiary production and a high percentage in primary production”.

A.G.B. Fisher also said the same :
‘We may say that in every progressive economy there has been a steady shift of employment and investment from the essential primary activities to secondary activities of all kinds and to a still geater extent into tertiary production”. Simon Kuznets also observed the sae and says that when the development of a country takes place, the percentage of population engaged in primary sector shifts to industry and later to service sector. According to Hans Singer, economic development will be achieved by transforming a 85% agricultural dependent country in to just 15% agriculturally dependent country.

Occupational Distribution of Working Population in India :
Data provided in reveals that, over the period 1951 to 2010. agriculture remained the main occupation of the people. Over the period 1951 to 1971, the percentage of labour force engaged in primary sector remained unchanged at around 72%. There is a major change in the period 1991 – 2010 with the percentaghe of labour force in the primary sector falling to 51% in 2010 from 67% in 1991.

Question 5.
Explain the concept of Human resource development and its importance.
Answer:
Theodore W. Schutlz has argued that investment in education enhances human capital formation. It production is carried out without it and only with the help of unskilled and unedu- • cated labour, the production will fall catastrophically from its existing level.

Any activity which augments man’s productive capacity contributes to the human resource develoopment. Schultz listed the following five such activities :

Health facilities and services, all expenditures which affect the life expectancy, strength and stamina, and the vigour and vitality of the people;
On-job training including old style apprenticeships organised by firms;
Formaly organised education at the elementary, secondary and higher levels;
Study programmes for adults which are not organised by firms including extension programmes notably in agriculture; and
Migration of individuals and families to adjust to changing job opportunities.

Amartya Sen also emphasizes the importance to be given to human resource development, where in he utilises entitlement and capability approach. Entitlements of individuals, especially women, can increase through education as it is considered as an asset and capability refers to one’s own wellbeings as healthy people can contribute a lot for the development of an economy. Here also health care systems where women’s health should be properly taken care, as they usually suffer from certain disabilities from childhood due to lack of proper nutrition and more usually suffer from certain disabilities from chilhood due to lack of proper nutrition and more attention should be bestowed on improving their capabilities for their active work participation.

Importance of Human Resource Development :
Education is moe important as it contributes most to the development of human resources.

Human resources development plays an important role in economic development. Effective use of physical capital itself is dependent upon human resources. Technical, professional and administrative people are required to make effective use of material resources. That is why, more investment in human resources is required, Countries are not developed due to underdevelopment of human resources. The general masses in these countries are either illiterate or with very low level of education, many are unskilled and untrained, and their general health is very poor. The development of human resources and the process of economic development both proceed together and reinforce one another.

Question 6.
Explain the National Health Policy, 2017.
Answer:
The National Health Policy, 2017 envisages providing larger package of assured compre-hensive primary health care through the health and wellness centres. The policy aims to attain the highest possible level of health and well – being for all through a preventive and promotive health care and universal access to quality health services without anyone having to face financial hardship, This would be achieved through increasing acess, improving quality and lowering the cost of health care delivery.

The highlights of the policy are (i) assurance based approach, (ii) micronutrient deficiency, (iii) Make-in-India initiative, and (iv) application of digital health. One of the mandates of the NHP, 2017 is the use of information technology towards health, care.

Key Targets of the National Health Policy, 2017, are as follows :

Increase health expenditure of government from the existing 1.15 per cent to 2.5 per cent of the GDP by 2025.
Increase life expectancy at birth from 67.5 years to 70 years by 2025.
Reduction of total fertility rate (TFR) to 2.1 national and sub – national level by 2025.
Reduce infant mortality rate (IMR) to 28 by 2019. In 2016 the IMR was 34 per 1000 live births.
To redice the prevalence of blindness to 0.25% 1000 by 2025 and disease burden by one third from current levels.
Incease utilization of public health facilities by 50% from current levels by 2025.
More than 90% of the newborn are fully immunized by one year of age by 2025.
Ensure skilled attendance at birth above 90% by 2025.
Relative reduction in prevalence of current tobacco use by 15% 2020 and 30% by 2025.
Access to safe water and sanitation to all by 2020 (Swachh Bharat Mission).
Increase the share of stat on health to more than 80% of their budget by 2020.

Question 7.
Explain the method to construct Human Development Index.
Answer:
UNDP Human Development Report, 1997 describes human development as “the process of widening people’s choices and the leel of well-being they achieve. Regardless of the level of development, the three essential choices are to lead a long and healthy life, to acquire knowledge and to have access to the resources needed for a decent standard of living. Ohter choices highly valued by many people, range from political, economic and social freedom to opportunities for being creativbe and productive and enjoying self respect and guaranteed human rights”.

According to Mahbub-UI-Haw, “the difference between the economic growth and the human development schools is that the first exclusively focuses on the expansion of only one choice income – while the second embraces the enlargement of all human choices – whether economic, social, cultural of political”.

Construction of Human Development Indes (HDI) :
HDI measures the average achievement in three basic dimensions of human development and these are : (i) a long and healthy life as measured by life expectyancy at birth, (ii) knowledge as measured by the adult literacy rate and the gross enrolment ratio and (iii) a decent standard of living as measured by GDP per capita (PPP US$).

Before calculating HDI, an index for each of the three dimensions is created. For this, maximum and minimum values are chosen for each indicator as given below :

Indicator	Maximum Value	Minimum Value
1. Life Expectancy at Birth	85	25
2(i). Adult Literacy Rate	100	0
(ii) Gross Enrolment Ratio	100	0
3. GDP Per Capita (PPP US $)	40,000	100

The HDI is calculated as a simple average of the dimension indices.

According to HDR 2011, countries are grouped under four categories :
(1) countries in the HDI range 0.8 and above are in the very high human development group, (2) countries in HDI range 0.7 to 0.8 are in the high human development group, (3) countries in the HDI range 0.5 to 0.7 are in the range of medium human development group, and (4) countries in the HDI range less than 0.5 are in the low human development group.

India was at 135^th position in HDI out of 187 countries in 2013. As per annual HDI – 2019. report, India ranked at the 129^th position in 2018 out of 189 countries.

Question 8.
What do you mean by Gender Related Development Index (GRDI) and Human Poverty Index (HPI)?
Answer:
Gender Related Indices : Human Development Report, 1995 introduced two global gender indices. These are : (l) Gender related Development Index (GDI) and (2) Gender Empowerment Measure (GEM).

The GDI attempted to capture achievements throught the same set of basic capabilities as included in the HDI – life expectancy, educational attainment and income. HDI will be adjusted for gender inequality. The greater the gender inequality in basic human development, the lower GDI compared to HDI. The greater the difference between HDI and GDI, the more is the inequality. Near gender equality exists in Norway, Canada, United States, United Kingdom, Japan, Sri Lanka, China and Indonesia and gender inequality exists i Saudi Arabia, Pakistan, Iran, India and Nigeria. There is a greaer awareness in the world about gender inequality and efforts are being made to reduce gender inequality. Women movements are promoting and working for gender equality.

The Gender Empowerment Measure (GEM) indicates whether women are able to participate actively in economic and political life. It focuses on political participation (women’s share in parliament seats), economic participation (share in higher level and professional opositions) and power over economic resources (income gaps).

Human Poverty Index (HPI) :
Human Development Report, 1997 introduced the concept of Human Poverty Index. This index concentrates on deprivation in three essential elements of human life already reflected in HDI – longevity, knowledge and a decent living standard. HDR, 2009 used the following variables for calculating HPI : (i) percentage of people expected to die before age of 40 years, (ii) percentage of adult illiterates, (iii) percentage of people with access to health services and to safe drinking water and (iv) percentage of malnourished children under five years. Human Poverty Index for developingh countries reveals the existence of high value of HPI in Niger, Bangladesh, Pakistan and India.

Question 9.
Explain the concept of gross national happiness Index.
Answer:
Gross National Happiness Index : Countries like Bhutan are measuring their development with gross national happiness index. There is a need to bring a change in the existing method of measuring the development.

Gross National Happiness has been devised by Bhutan as an alternative indicatror for GDP to measure progress or development. The term Gross National Happiness (GNH) was coined by the Fourth king of Bhutan, Jighme Singye Wangchuck in the 1970’s. The concept implies that sustainable development should take a holistic approach towards notions of progress and give equal importance to non – economic aspects of wellbeing. The GNH index is constructed based upon a multidimensional methodology known as the Alkire – Foster method.

The concept of GNH is explained by four pillars :
Good governance, sustainable socio – economic development, cultural preservation and enviromental conservation. These four pillars are further classified into nine domains : Psychological wellbeing, health, education, time use, cultural diversity and resilience, good governance, community vitality, ecological diversity and resilience, and living standards. All domains are weithted equally. The domains represent 33 indicators (variables) of Wellbeing. The weights of the various variables in a domain are unequal. In general, subjective indicartors have been given lower weights than objective indi-cators.

In happiness, averages do not count and that is why, within each indicastor, a ‘sufficiency target’ is set. A person is considered ‘happy’ under this indicator when the ‘sufficiency’ level is achieved. Based on answers for the 33 indicators, judgement is given how a person is happy in the following way.
Sufficiency in 77% – 100% of the indicators : deeply happy.
Sufficiency in 66% – 76% of the indicators : extensively happy.
Sufficiency in 50% – 65% of the indicators : narrowly happy.
Sufficiency in 0% – 49% of the indicators : unhappy or not – yet – happy.

Very Short Answer Questions

Question 1.
Birth rate.
Answer:
It is the Ratio of number of births per 1,000 population in a year. Birth rate during 1901 – 1921 fluctuated between 46 to 49 per 1,000 population. Birth rate declined to 21.8 per 1,000 in the year 2010 – 11.

Question 2.
Death rate.
Answer:
It is the Ratio of deaths per 1,000 population in a year. The death rate during 1901 -1921 fluctuated between 44 and 49 per 1,000 population. It was 48.6 per 1,000 population in 1911 – 20. It was reduced to 7.1 per 1,000 in 2010 – 11.

Question 3.
Infant mortality rate.
Answer:
It is the ratio of number of deaths per 1,000 bom children in a year. In the second decade of the 20^th century, this rate was 218 per 1,000 live birth and it is 47 per 1,000 live births in 2010.

Question 4.
Maternal Mortality Rate.
Answer:
‘It is the ratio of numer of delivery deaths for, lakh women in a year, over the years maternal mortality rate has also declined. It was 210 per 1 lakh live births in 2007 – 09.

Question 5.
Sex ratio.
Answer:
It is the number of females per 1,000 males. This ratio was declined from 972 in 1901 to 946 in 1951 and 927 in 1991. It is increaed to 933 in 2001 and 940 in 201. Poverty, higher female infant mortality rates, high mortality rates among Women in reproductive ages are responsible for declining sex ratio.

Question 6.
Population explosion.
Answer:
Population increases faster than food supply and this imbalance leads to over population and this is called “population explosion”.

In the second stage’ of the theory of demographic transition, due to substantial reduction in the mortality rate and no corresponding decline in the birth rate, rapid growth of population exists. In this stage population increases at an alarming rae and economists called it “population explosion”. India had faced this problem during the period 1951 – 1991.

Question 7.
Contraceptives.
Answer:
Contraceptives are one of the family planning method to control population. The family planning centres provide contraceptive distribution centres.

Question 8.
Literacy rate.
Answer:
The reading and writing skills of a person is known as literacy. The literacy rate Can be studied with the help of following formula.
TS Inter 2nd Year Economics Study Material Chapter 2 Demography and Human Resource Development 5

The literacy rate is improved form 18 percent in 1951 to 74 percent in 2011. similarly male leteracy improved from 27 percent to 82 percent and female literacy from a percent to 66 percent in the same period.

Question 9.
National Rural Health Mission.
Answer:
This scheme was introducedd during 11th plan. It intends to increases access and utilisation of quality health by stregthening health infrastructure. It was planned to have accredited social Health activistis (ASHA’s) by 2008. All sub centres functional with 2 auxilliary nurse midwines (ANMs) by 2010. mobile medical unit for each district by 2009.

Question 10.
Janani Suraksha Yojana.
Answer:
Janani Suraksha Yojana :
This programme was started in the year 2005. This scheme is meant for promoting health and nutrition to women and child. It has 2 objectives.

Reducing Infant Mortality Rate
Reducing Maternal Mortality Rate.

It is a gradual approach of increasing istitutional capacity encouraging institutional deliveries will ensure success of the scheme.

Question 11.
National Urban Health Mission.
Answer:
It is intended to meet health needs of uraban poor, particularly the slum dwellers and other marginalized dwellers who may be in slums or citites. This programme covers all cities with a population of 1 lakh and above.

Question 12.
Gender empowerment measure.
Answer:
This focuses on women’s participation in economc and political life and their power over econonmic resources. This concept also indicates whatever the women’s share in parliament seats, share in higher level and professional positions, and income gaps.

Question 13.
HumcCn poverty Index (HPl)
Answer:
The concept was introduced by the human development report 1997. This index concentrates on deprivation in three essential elements of human life already reflected in HDI that is longivity, knowledge, and a decent living standard. HDR 2009, used the following variables for calculating HPI, percentage of people expected to die before age of 40 years, percentage of adult illeterates, percentage of people with access to health services and to safe drinking water.

TS Inter 2nd Year Economics Study Material Chapter 1 Economic Growth and Economic Development

November 16, 2022October 22, 2022 by Srinivas

Telangana TSBIE TS Inter 2nd Year Economics Study Material 1st Lesson Economic Growth and Economic Development Textbook Questions and Answers.

TS Inter 2nd Year Economics Study Material 1st Lesson Economic Growth and Economic Development

Essay Questions

Question 1.
Explain the concepts of economic growth and economic development. What are their differences?
Answer:
In common parlance the two terms – economic growth and economic development connote the same meaning and there appears to be no difference between them. Generally, economic growth refers to the problems of developed countries and economic development to those of under developed countries. But some economists have drawn a line of demarcation between economic growth and economic development.

Economic growth :
According to C.R Kindleberger, “Economic growth means more out-put, while economic development implies both more output and changes in the technical and institutional arrangement by which it is produced and distributed”. The word growth is primanly of quantitative significance, while the word development is of both quantitative and qualitative significance.

Economic Development :
‘Economic development’ is a wider concept than the concept of ‘economic growth’. Development includes not only economic growth but also certain other positive changes in other spheres of life. In fact, it includes development in all spheres. Economic development is closely associated with the concept of economic growth. It implies progressive changes in the socioeconomic structure of a country, where a sustained rise in livihg standards as well as an equitable growth to be achieved.

Economic growth is a necessary but not sufficient condition of economic development. Economic development is a normative concept. The definition of economic development given by Michael R Todaro is an increase in living standards, improvement in self-esteem needs and freedom from oppression as well as a greater choice.

According to United Nations Expert Committee, “Development concerns with not only man’s material needs but also the improvement of the social conditions of his life. Development is, therefore not only economic growth, but also growth plus change – social, cultural, institutional and economic.

According to Michael P. Todaro “Development must be conceived as a multidimensional process involving major changes in social structures, popular attitudes and national institutions as well as the acceleration of economic growth, the reduction of inequality and the eradication of poverty”. John Friedmann defines development as “an innovative process leading to the structural transformation of social system”.

Question 2.
Explain the objectives of economic development.
Answer:
The major objectives of economic development countries like India can be mentioned as here under :

1. High Rate of Growth :
All the developing economies including countries such as China and India are striving hard to achieve high rates of economic growth. For instance all the Indian Five Year plans have given primary importance to higher growth of real national income. During the first three decades of planning, the rate of economic growth was not so encouraging in our economy. Till 1980, the average annual growth arate of Gross Domestic Product was 3.75 per cent jagainst the average annual growth rate of pooplation at 2.5 percent. Hence the per capita income grew only around 1 per cent. But from the 6th plan onwards, there has been considerable change in the Indian economy.

In the Sixth, Seventh and Eighth plans the growth ratge was 5.4 per cent, 5.8 per cent and 6.8 per cent respectively. The Ninth Plan, started in 1997 targeted a growth rate of 7 per cent per annum and realized only 5.35 per cent average GDP growth. In the later years, the economy achieved even a high rate of growth of 9 per cent. Though this is considered to be a relatively high rate of growth, China achieved even 10 per cent rate of economic growth in first decade of 21st century. For the Twelfth plan (2012-17) target Us 7.9 per cent average growth. From 2014-15 to 2018-19, GDP has grown at 7.5 per cent.

2. Economic Self-Reliance:
Self reliance means to stand on one’s own. legs. In the Indian economic context, it implies that dependence on foreign aid should be as minimum as possible. At the beginning of planning, we had to import food grains from USA to meet our domestic demand. Similarly, for accelerating the process of industrialization we had to import capital goods in the form of heavy machinery and technical know – how. For improving infrastructural facilities like roads, railways, power, the country had to depend on foreign aid to raise the rate of investment.

As excessive dependence on foreign sector may lead to economic colonialism and in this regard the planners rightly mentioned the objective of self – reliance from the Third Plan onwards. In the Fourth Plan much emphasis was given to self-reliance, particularly in the production of food grains. In the Fifth Plan, our objective was to earn sufficient foreign ex-change through export promotion and import substitution. India has made remarkable progress in achieving self-reliance. In later years, most of the developing economies such as China, Brazil, South Africa, South Korea, Vietnam and some of the other African, Asian and Latin American countries are aiming to achieve self-reliance.

3. Social Justice :
Social justice means equitable distribution of the wealth and income of the country among different sections of the society. In India, we find that a large number of people are poor, while a few lead a luxurious life. Therefore, another objective of development is to ensure economic and social justice and to take care of the poor and weaker sections of the society. The five year plans in India have highlighted four aspects of social justice. They are :

i) Adherence to democratic principles in the political structure of the country.
ii) Establishment of social and economic equity and removal of regional disparities;
iii) Putting an end to the process of centralization of economic power and simultaneously attaining decentralization of power; and
iv) Efforts to raise the conditions of backward and depressejd classes.

4. Modernization :
Modernization aims at improving the standard of living of thepeople by adopting a better scientific technique of production, by replacing the traditional backward methods and by bringing changes in the rural structure and institutions. These changes aim at increasing the share of industrial output in the national income, upgrading the quality of products and diversifying the Indian industries. Further, it also includes expansion of banking and non-banking financial institutions to agriculture and industry. It envisages modernization of agriculture including implementation of land reforms. Currently modernization is taking place due to phenomenal growth of information technology sector. Land reforms either of radical nature or modest nature have been implemented in most of the developing countries, especially in countries like China, Vietnam and India.

5. Economic Stability :
Economic stability is ensured wh£n a non-inflationary full employment growth occurs in a country. After the Second Plan, the price level started increasing in India for a long period of time. Therefore, the planners have tried to stabilize the economy by properly controlling the rising trend of the price level. The progress in this direction has been satisfactory. Broad objective of economic development has been a non-inflationary self- reliant growth with social justice.

6. Sustainable Development :
The Brundtland Report defined sustainable development as “meeting the needs of the present generation without compromising the needs of future generations”. Sustainable development means that development should ‘keep going’.

Sustainable development aims at accelerating economic development in order to conserve and enhance the stock of environmental, human and physical capital without making future generations worse off. The damaging effects of economic development on environmental degradation can be reduced by a judicious choice of economic and environmental policies and environmental investments. Choice between policies and investments should aim at harmonising economic development with sustainable development.

7. Inclusive Growth :
The inclusive growth as a strategy of economic development received attention owing to a rising concern that the benefits of economic growth have not been equitably shared. The inclusive growth stresses the inclusiveness of the hitherto excluded population in the growth process, which is expected to bring in several other benefits as well to the economy. The concept of inclusion should be seen as a process of including the excluded marginalized sections of the population whose share in the total income remained relatively at a low level, for instance bottom 20% of the population getting a share of 2 to 3% of the national income. Hence, by adopting inclusive growth strategy, if the bottom 20% share can increase to 5-10% at least, then it can be termed as inclusive growth.

Question 3.
Explain the Indicators of economic development.
Answer:
The Economic Development Indecators are ae follows .

1. Real National Income :
One of the methods to measure economic development is in terms of an increase in the economy’s real national income over a long period of time. Higher real national income is the index of higher level of economic development and vice-versa. The division of global economy into developed and developing countries is based on the real national income. This is not a satisfactory indicator due to the following reasons : (a) The price changes have to be ruled out while calculating real national income.

But variations in prices are inevitable. A short period rise in national income does not constitute economic developnjent. (b) It fails to take into consideration changes in the growth of population. If a rise in real national income is accompanied by a faster growth in population, there will be no economic development but retardation, (c) It does not reveal the social costs to society, (d) It explains nothing about the distribution of income in the economy, (e) There are certain conceptual difficulties in the measurement of GNP.

2. GNP Per Capita :
Some economists have taken per capita real income as an economic development indicator on the basis of the increase in per capita real income of the economy over a long period. The increase in per capita real income of any’country shows an increase in economic growth rate of the country rather than economic development. Economic development includes changes in many spheres besides a rise in per capita real income. This indicator emphasizes that for economic development, the rate of increase in real per capita income should be higher than the growth rate of population.

3. Welfare :
Other indicator of economic development is econqmic welfare. Economic development is regarded as a process whereby there is an increase in the consumption of goods and services of individuals. According to Okun and Richardson, economic development is “a sustained, secular improvement in material well-being, which we may consider to be reflected in an increasing flow of goods and services”.

4. Social Indicators or Basic Needs :
Certain economists have tried to measure economic development in terms of social indicators. Social indicators are referred to as the basic needs for development. Basic needs focus on alleviation of poverty by providing basic human needs to the poor. The direct provision of basic needs such as health, education, food, water, sanitation and housing affects poverty in a shorter period and with fewer monetary resources than GNP/GNP per capita strategy. Basic needs lead to a higher level of productivity and income through human development in the form of educated and healthy people.

Norman L.Hicks and Paul P.Streeten consider six social indicators for basic needs.

Basic Needs	Indicators
1. Health	Life expectancy at birth
2. Education	Literacy signifying primary school enrolment as percent of population
3. Food	Calorie supply per head
4. Water supply	Infant mortality and percentage of . population with access to portable water.
5. Sanitation	Infant mortality and percentage of population with access to sanitation.
6. Housing	None

5. Physical Quality of Life Index (PQLI) :
It was invented by M.D. Morris in 1979. He constructed a composite Physical Quality of Life Index relating to 23 countries for a comparative study. This is a non-income indicator of economic development because this uses physical quality of life as ah indicator. This method of measuring economic development is based on the following three things. They are: (i) life expectancy, (ii) infant mortality rate, and (iii) basic literacy. This index mesures performance in meeting the most basic needs of people. This index represents basic needs such as health, education, drinking water, nutrition and sanitation.

6. Human Development Index (HDI) :
Mahbub-Ul-Haq developed the Human Devel-opment Index and UNDP incorporated it in its first Human Development Report in 1990. Since then, the UNDP is presenting the measurement of human development in its annual report.

Human Development Index (HDI) is a modem indicator of economic development. It is a statistical tool used to measure a country’s overall achievement in its social and economic dimensions. The following indicators are required to construct HDI:

Life expectancy at birth.
Education – adult literacy, combined gross enrolment ratio.
Real GDP per capita based on purchasing power parity in terms of dollar.

For the construction of HDI, an index is created for each of these indicators with fixed minimum and maximum values for each of these indicators as shown below :

Life expectancy at birth, 25 years and 85 years.
Adult literacy rate, 0% and 100%.
Combined gross enrolment ratio, 0% and 100%
Real GDP per capita (PPP) $100 and $40,000.

India’s HDI value is shown in the following table :

Year	HDI Value
1990	0.427@
1995	0.546
2001	0.472
2002	0.595
2007	0.612
2010	0.519
2013	0.586
2017	0.640 @
2018	0.647 β

7. Gender related Development Index (GDI) :
The HDR, 1995 introduced two global gender indices. These are Gender related Development Index (GDI) and Gender Empowerment Measure (GEM). The GDI is a composite, index which measures the average achievement of population in the same dimensions as the HDI while adjusting for gender inequalities in the level of achievement in the three basic aspects of human development. It uses same variables as the HDI, disaggregated by gender.

The greater the gender inequality in human development, the lower the GDI compared to HDI. The greater the difference between HDI and GDI, the more is the inequality. There is a greater awareness in the world about gender inequality and efforts are being made to reduce gender inequality. Women movements are promoting and working for gender equality.

8. The Social Progress Index (SPI) :
The SPI measures the extent to which a country provides for the social and environmental needs of their citizens. Fifty four indicators in the areas of basic human needs, foundations of well-being, and opportunity to progress show the relative performance of nations. The index is published by the non-profit Social Progress Imperative, and is based on the writings of Amartya Sen, Douglass North, and Joseph Stiglit2. The SPI measures the well-being of a society by observing social and environmental outcomes directly rather than the economic factors. The social and environmental factors include wellness, equality, inclusion, sustainability and personal freedom and safety.

9. Multi – dimensional Poverty Index (MPI) :
First introduced in 2010, it is an attempt designed to illustrate the many deprivations faced by the mpst severely disadvantaged. The MPI requires a household to be deprived in multiple indicators at the same time. A person is multi-dimensionally poor if the weighed indicators in which he or she is deprived add up to at least 33 per cent. The MPI is closely linked to the Millennium Development Goals and includes ten components.

Possession of some assets,
Nutrition
Child morality
Access to drinking water,
Access to sanitation
Access to a safe room,
Access to electricity
Access to an improved cooking oil,
Years of schooling
Children enrolled in school

10. Economic Growth :
It measures the annual increase in GDP, GNP and GDP per Capita or GNP per capita.

11. Gross National Happiness Index :
Countries like Bhutan are measuring their development with gross national happiness index. Hence, there is a need to bring a change in the existing method of measuring the development.

Question 4.
Explain the factors hindering economic development.
Answer:
1. Inadequate Natural Resources :
Developing countries are too populous. As such, serious shortage of land is a common phenomenon, which leads to many damaging effects. With lesser lands, there will be significant fall in cultivation activities, which are the main source of income in poor countries. This is being made worse with low level of technology, which could have helped them to produce on a mass scale.

a) Untapped Resources :
Many poor countries (Sub Saharan African) are blessed with natural resources. However, most of them are untapped. The reason is lack of research and development which may lead to low discovery of mineral deposits.

b) Inefficiently Managed Resources :
Many poor countries do not achieve both productive and allocative efficiency. Productive inefficiency exists due to absence of competition, contracts and projects are awarded to family members or to the persons having political patronage and government adopting a closed economy policy. Someone else can still be made better off without making someone else worse off. But globalization had changed the pattern of utilization of economic resources, where competition is encouraged and resources are flowing into the fields which are being efficiently managed.

2. Lower Rate of Growth of Human Capital :
Developing countries have low allocation of budget on education and health sector. Low spending on education means many will be unskilled. Lesser availability of healthcare means lower life expectancy, more days taken off as leave resulting in lower output and loss of workforce at productive age. In this regard Amartya Sen’s entitlements approach is noteworthy where education acquires a considerable amount of importance as a causative factor for capabilities of individuals where they can qualitatively contribute to development of the nation. Since LDCs have a dearth of critical skills and knowledge, physical capital cannot be utilised productively.

3. Lack of Infrastructure :
Due to many reasons, infrastructure development is far left behind. Nothing much has been done to improve the facilities like power, credit, telecommunications and transportation, which are key Services that will attract investment. Roads, bridges, harbours and railways are in less desirable condition and may adversely affect the timely delivery of goods.

1.4.4 Vicious Circles of Poverty :
Since an underdeveloped economy lacks the proper and modem means of economic development, its economic development becomes an uphill task. This situation can be summed up as “a country is poor because it is poor”.

The basic vicious circle stems from the fact that in developing countries total productivity is low due to deficiency of capital, market imperfections, economic backwardness and underdevelopment. The vicious circles operate both on the demand side and the supply side. The demand side of the vicious circle is that the low level of real income leads to a low level of demand which leads to a low rate of investment and hence back to deficiency of capital, low productivity and low income.

The following figure shows the supply side of the vicious circle is that the low pro-ductivity is reflected in low real income. This means low savings which lead to low invstment and to deficiency of capital. This leads to low level of productivity arid back to low income.
TS Inter 2nd Year Economics Study Material Chapter 1 Economic Growth and Economic Development 1

With structural changes, the vicious circles in many developing countries can be avoided and even some of the newly liberated African Countries are slowly heading in the growth path.

5. Low Rate of Capital Formation :
In LDCs the masses are poor, mostly illiterate and unskilled, use outdated equipment and production methods. Their marginal productivity is low which leads to low real income, low saving, low investment and to a low rate of capital formation. Small sums which they may be able to save are often hoarded or used in purchasing gold etc. Most of the savings are only from the high income group and these do not flow into productive channels due to their conspicuous consumption.

6. Socio – Cultural Constraints :
Social institutions and attitudes, traditional beliefs and values, rigid stratification of occupations, motives to save and invest, money spent to meet social obligations, nepotism, inefficient and bad administration, bribery, social attitude towards education, prejudice against manual work, oriental religions, high value for leisure and blind force of fate etc. are not conductive to economic development. These inhibit the progress in underdeveloped countries.

7. Agricultural Constraint :
The environment in which farmers operate the technology available to them, the incentives for production and investment, the availability and prices of input?, the provision of irrigation, the climate and the prices of agricultural products are the areas in which the constraints are to be foun.

8. Foreign Exchange Constraint :
Due to certain disequalising forces in the world economy, the gains from trade have gone to the developed countries and as a result foreign exchange constraint has taken place. There has been phenomenal rise in the exports of urn derdeveloped countries. But this has not contributed much to the development, as the export sector has developed by neglecting other sectors of the economy. Too much dependence on exports has exposed these developing countries to international fluctuations in the demand for and prices of their products. An improvement in their terms of trade is not accompanied by an increase in output and employment due to market imperfections, inadequate overhead capital and structural maladjustments.

Question 5.
Explain the factors promoting economic development.
Answer:
Factors Promoting Economic Development :
There are mainly two types of factors which influence the economic development of a country. They are

I. Economic Factors :
Economists regard factors of production as the main economic factors that determine growth or development. The growth rate of the economy rises or falls as a consequence of changes in them. These economic factors are discussed below.

1. Capital Formation :
When the capital stock increases with the passage of time, this is called capital formation. The strategic role of capital in raising the level of production has been acknowledged. The country which wants to accelerate the pace of growth has no choice but to save a high ratio of its income, with the objective of raising the level of investment unless otherwise it can attract foreign investment on a large scale.

Whatever be the economic system, a country cannot hope to achieve economic progress unless a certain minimum rate of capital accumulation is realized. The incremental capital- output ratio (ICOR), which refers to the additional amount of capital required to produce an additional unit of output, assumes greater importance in economic growth.

2. Natural Resources :
The principal factor affecting the development of an economy is the natural resources or land. In economics land includes the land area and the quality of the soil, forest wealth, minerals and oil resources, good climate and eco system, water and seta resources etc. For economic growth, the existence of natural resources in abundance is essential. A country which is deficient in natural resources may not be in a position to develop rapidly. In fact, natural resources are a necessary condition for economic growth but not a sufficient one. Japan and India are the two contradictory examples.

3. Agrarian Structure :
The agrarian system, where ownership of land becomes important besides the method of cultivation as they play an important role in bringing about economic development. Land reforms and modernization of agriculture through technological changes, improved inputs, marketing and credit are important for a faster agricultural growth of the economy.

4. Markatable Surplus of Agriculture :
The term ‘marketable surplus’ refers to the excess of output in the agricultural sector over and above what is required to allow the rural population to subsist. However, the marketed surplus is an indicator of progress in agriculture sector.

The importance of the marketable surplus in a developing economy emanates from the fact that the urban industrial population subsists on it. With the development of an economy, the ratio Of the urban population increases. As a result demand increases for food grains. This demand must be met adequately; otherwise, the consequent scarcity of food in urban areas will arrest the economic growth.

5. Industrial Structure :
The industrial structure demands the relative importance of large scale, small scale and cottage industries and the level of technology being used in these industries. A change in the structure where modernization takes place due to adoption of recent technological advances will lead to a higher tempo of economic development in the developing economies.

6. Structural Changes :
Structural changes imply the transition from a traditional agricultural society to a modem industrial society involving a radical transformation of existing institutions, social attitudes and motivations. These changes lead to increasing employment opportunities, higher labour productivity, the stock.of capital, exploitation of new resources and improvement in technology.

7. Organisation :
It is an important aspect of the growth process. It relates to the optimum use of factors of production in the economic activities. The entrepreneur is performing the task of an organiser and undertaking risks and uncertainties in the business. But less developed countries lack in entrepreneurial activity and less developed countries should create a climate for encouraging entrepreneurship. For this, the provision of all the required social, economic and technological institutions is necessary.

8. Technological Progress: Technological changes are related to changes in the production methods which are the result of new innovations. Changes in technology lead to increase in the productivity of labour, capital and other production factors. Schumpeter and Kuznets regarded innovation as the most important technological factor in economic growth. The spending of high percentage of national income on Research and Development is required.

9. Division of Labour :
Adam Smith gave much importance to the division of labour in economic development. But division of labour depends upon the size of the market. When the scale of production is large there is greater specialisation and division of labour. The growth prodess in less developed countries can be accelerated by widening of the market through adoption of modem means of transport and communications.

10. Foreign Trade :
Foreign trade has proved to be beneficial to countries, which have been able to set-up industries in a relatively short period. These countries like Japan and South Korea eventually captured international markets for their industrial products. Therefore, a developing country should not only tiy to become self-reliant in capital equipment and other industrial products as early as possible, but it should also push the development of its industries to such economy and yet face no difficulty in making economic progress. In today’s entirely different world situation, a country would find it difficult to grow along this path of development.

II. Non – Economic Factors :
It is obvious that non-economic factors are also equally important in development as economic factors. Let us tiy to understand how they influence the process of economic development:

1. Human Resources :
Human resources are considered as very important factor in economic development. Human being provides labour power for production and if in a country’s labour is efficient and skilled, its capacity to contribute to growth will be high. The productivity of illiterate, irrational, unskilled, disease ridden, superstitious people is generally low and they do not provide much to development in a country. In case either human resources remain unutilized or the labour management remains defective, it will be a burden on the economy.

Efficiency or Productivity of labour force depends upon health, education and social services. The level of technical expertise has a direct bearing on the development. As the scientific and technological knowledge advances, man discovers more sophisticated techniques of production which steadily raise the productivity levels.

2. Political and Administrative Factors :
Dadabhai Naoroji has also explained in his classic work ‘Poverty and Un British Rule in India’ that the drain of wealth and capital from India under the British rule -/as the major cause for absence of development in India during that period.

‘Political and administrative factors also helped in modem economic growth. The eco- npmic growth of Britain, Germany, the United States, Japan and France is due to their.politi- cal stability and strong administration. But, Italy has not been able to grow upto their level due to political instability and corrupt and weak administration. Peace, protection and stability have encouraged the development of entrepreneurship in developed countries, along with the adoption of appropriate monetary and fiscal policies.

3. Social Factors :
Social attitudes, values and institutions also influence economic growth. Attitudes are beliefs and values that cause human behaviour to be “What it is”. Values refer to motivations of human behaviour towards particular ends. Myrdal advocates the adoption of modernization values for the rapid economic development of less developed countries.

Changes in attitudes due to modernization of values lead to development of the agricultural, industrial and tertiary sectors of the economy. , But the development of these sectors is hot possible without, entrepreneurship. According to Myrdal, less developed countries lack entrepreneurship because they are deficient in persons with right attitude for entrepreneurship.

Mass participation in development programmes is a pre-condition for accelerating the growth process. However, people show interest in the development activity only when they feel that the fruits of growth will be fairly distributed. Experiences from a number of countries suggest that whenever the defective social system allows some elite groups to appropriate the benefits of growth, the general mass of people develop apathy towards State’s development programs. Under those circumstances, it is futile to hope that masses will participate in the development projects undertaken by the State. India’s experience during the whole period of development planning is an example.

Question 6.
Discuss the characteristics of Developed Countries.
Answer:
Characteristics of Developed Economies
Based on their GNI per capita, countries are classified as low income, middle income and high income countries. Income classifications are set each year on July 1. These official analytical classifications are fixed during the World Bank’s fiscal year (ending on June 30). According to World Bank Report (2014) entitled “Risk and Opportunity Managing Risk for Development”, the world economies have been divided into four types based on per capita GNI $ (dollar) value i.e.,

Low Income Economy – US$ 1035 or less than it
Low Middle Income Economy – US$1036 – US$4085
Upper Middle Income Economy – US$4086 – US$12615
High Income Economy – US$12616 and more

A developed economy is characterized by an increase in capital resources, improvement in efficiency of labour, better organization of production in all spheres, development of means of transport and communication, growth of banks and other financial institutions, urbanization and a rise in the level of living, improvement in the standards of education and expectation of life, greater leisure and more recreation facilities and the widening of the mental horizon of the people and so on. In short, economic development must break the poverty barrier or the vicious circle and bring into being a self-generating economy so that economic growth becomes self-sustained.

The main characteristics of developed countries are as follows :

1. Significance of Services and Industrial Sector :
Most of the developed countries have given much .importance to the development of industrial sector. They have large capacities to utilize all resources of production, to maximize national income and to provide employment for the jobless people. As per the sectoral contribution to GDP these countries receive the major portion of their GDP from the non-agriculture sectors which include industry and services. For instance, in 2014 the U.K. received 79.6 per cent of her GDP from the services, 19.8 per cent from the industry and 0.6 per cent from agriculture. The same is the case with the U.S.A., Japan and other west European countries.:

Similarly, coming to employment, in 2011 just 1 per cent of employment was in agriculture in the U.K. and this was 47 per cent in Indian agriculture.

2. High Rate of Capital Formation :
Developed countries are generally very rich as they maintain a high level of savings and investment, with the result that they have huge amount of capital stocks. Gross capital formation will be more in these developed countries. Well-developed capital markets, high level of savings, broader business prospects as well as innovative entrepreneurship have led to a high growth of capital formation in these economies. Such a situation can be observed with the help of following table :

Country	1990	2018
USA	18	21
UK	20	17
GERMANY	24	22
JAPAN	33	24
CHINA	35	44

A higher rate of gross capital formation alone can pave the way for economic development.

3. Use of Modern Production Techniques and Skills :
The new and advanced techniques have been used for the exploitation of the physical human resources. These countries have, therefore, been giving priority to the scientific research so as to improve and evolve the new techniques of production. Consequently, these countries find themselves able to produce goods and services of a better quality at a comparatively lesser cost. It is because of the use of modem and mass production techniques and latest skills, that the countries like Japan, Germany and Israel could have developed their economies very rapidly, though they have limited natural resources. This was shown in the following table

Expenditure on R & D

Country	Expenditure on R & D as % of GDP 2017
USA	2.80
UK	1.67
SWITZERLAND	3.37 (2015)
GERMANY	3.04
JAPAN	3.20
INDIA	0.62 (2015)
CHINA	2.1

It is clear that the Switzerland spent 3.37 per cent of its GDP on Research & Development (R & D) during 2015, whereas India spent only 0.62 per cent of its GDP on R & D in 2015.

4. Low Growth of Population :
The developed countries, like the U.S.A., the U.K. and other western European countries have low growth of population because they have low level of birth rate followed by low level of death rate. Good health conditions, high degree of education and higher level of consumption of the people have led to maintain low growth of population. The life expectancy in these countries is also very high. The average annual growth rate of population in developed countries is 0.7 percent as compared with 2 percent in developing countries.

Average life expectancy at birth is 75 years in the developed countries whereas in the developing countries it is 51 years. Besides this, the entire society, its structure and values are found to be more conductive to the goal of rapid industrial and economic development. Further, dignity of labour is maintained. The economic motive and strong desire to lead a better social life always inspire people to contribute greatly to the process of development.

5. Higher Per Capita Gross National Income in $ (Purchasing Power Parity) :
One of the important features of the developed economies is the higher per capita national income, which can be seen from the table given below.

Per Capita Gross National Income at Market Prices (In US Dollars), 2018

Country	Per capita GNI Purchasing Power Parity Basis
USA	63,690
UK	45,350
SWITZERLAND	68,820
GERMANY	54,650
JAPAN	44,380
CHINA	18,170
INDIA	7,680

It is evident from the above table that the per capita GNI of USA in the year 2018 was US $ 63,690, UK was $ 45,350 and Switzerland $68,820, whereas India’s GNI was $7,680. It indi-cates that the developed countries are endowed with higher per capita GNI. It may be noted that in 2018 the average per capita GNI of USA at the purchasing power parity rates was 8.3 times that of India.

Question 7.
Analyse critically the characteristics of developing economics with special reference to India.
Answer:
Characteristics of Developing Economies with Special Reference to India :

The major characteristics of developing economies in general and the Indian economy in particular are as follows :
1. Low Per Capita Income :
According to Caimcross, “the underdeveloped countries are the slums of the world economy”.

The per capita NNP in India in 1995-96 was about Rs. 9,300 and in 2012-13 it was Rs. 22,000. It is one of the lowest in the world. Among the 133 countries of the world, India’s rank is 110. The per.capita GNI of an Indian in 2018 was $ 7680 at the purchasing power parity v rates. In the same year the average per capita GNI of USA is 8.3 times that of India. Whatever progress has been made in terms of the increase in production since independence, the same is not reflected in increase in per capita income because of rapid growth of population along with the growth of production.

This means that a large proportion of population have income level much below the average. For instance, according to the Rangarajan Committee’s estimates, 29.5 percent of total population in 2011-12 were living below the poverty line i.e. they are not able to afford even the minimum nutrition required. Due to the low level of living, the efficiency of labour is also low.

2. Predominance of Agriculture :
In developing countries two-thirds or more of the people live in rural areas and their main occupation is agriculture. Agriculture is mostly unproductive.

In India, 42.7 per cent of the working population was engaged in agriculture in 2017 and its contribution to the gross value added (GVA) is 16.5 percent in 2019-20 (Economic Survey, 2019-20). Rainfall is the main source of irrigation. The technology used in agriculture is traditional in nature and modernization is slowly taking place. Although in some areas modem techniques of cultivation are in application, still the vast agricultural area uses primitive techniques of cultivation. A’ vast area of agricultural land is still not covered by irrigational facilities. Agriculture continues to be a depressed industry as the productivity per person engaged in it is very low.

3. Capital Deficiency :
Developing countries are characterized as “capital-poor or low- saving and low investing” economies.

The low level of income results in low level of savings, which results in low level of capital formation. For want of capital, other resources like labour and natural resources remain unutilized. India has a large potential for renewable as well as non-renewable resources. The country is not able to utilize them fully for want of capital. As per Annual Report of RBI 2019, in 2017-18, gross domestic saving (GDS) rate is 30.1 percent and gross domestic investment (GDI) rate is 32.3 per cent at current prices.

4. Technological Backwardness :
Deficiency of capital hinders the process of scrapping off the old techniques and the installation of modem techniques. Illiteracy and absence of a skilled labour force are the other major hurdles in the spread of techniques in the backward economy. The technological backwardness is not only the cause of economic backwardness, but also the result of it.

In large parts of almost all sectors of the Indian economy, technology used in production is backward.. The expenditure incurred on research and development is low. Advanced technology is in use in a few industries only. With the liberalisation of the economy, new technology is being adopted by a large number of enterprises for their survival.

5. Inadequate Infrastructure Facilities :
Infrastructural facilities include banking, education, public health, drinking water, drainage, irrigation, power, transport and communications. These facilities are essential for the development of agriculture, industrial and services sectors. All these facilities are inadequate.

6. Demographic Features :
The average annual growth rate of population in developing countries is 2 percent as compared with about 0.7 percent in developed countries. The percentage of population under 15 years of age is about 40 in developing countries, compared with only 20 to 25 percent iii developed countries. Average life expectancy at birth is roughly 51 years in developing countries whereas in the developed countries it is 75 years. It is 68.5 years in India as per 2011 census. As per HD report 2019, it is 69.4 years in 2018.

The density of population in India in 2006 was 373 per sq.km as compared with 33 in USA and 141 in China. The number of deaths of infants of less than one year of age per thousand live births in India was 44 in 2010. This shows the inadequate medical facilities, low level of nutrition and poor sanitary conditions.

India’s population is very large, it is 129.5 crores in 2014, and it is rising at a rate of 1.64 per cent (2011) per annum.

7. High Rate of Illiteracy :
Most of the underdeveloped countries suffer from mass illiteracy. Illiteracy retards development. A minimum level of education is necessary to acT quire skills. India ranked at the 129th positon in 2018 on the basis of the Human Development Index which is based on life expectancy, adult literacy, combined enrolment ratio, an?l real GDP per capita in US Dollars.

Illiteracy rate in females is much higher than in males. In India as per 2011 census literacy rate, male literacy rate and female literacy rate (percent) are 74.0, 82.14 and 65.5 respectively.

8. A Dualistic Economy :
Almost all developing containing have a dualist economy.

Dualism is also characterised by the existence of an advanced industrial system and an indigenous backward agricultural system. The industrial sector uses capital intensive techniques and produces a variety of capital goods and durable consumer goods. The rural sector with traditional techniques is producing agricultural commodities. There is also financial dualism consisting of the unorganised money market with very high interest rates on loans and the organised money market with low interest rates and abundant credit facilities.

9. Underdeveloped Natural Resources :
Underdeveloped countries have not been suc-cessful in over coming the scarcity of natural resources by appropriate changes in technology and social and economic organization. The natural resources are underdeveloped due to various inhibitions such as their inaccessibility, lack of technical knowledge, non availability of capital and the small extent of the market.

10. Lack of Entrepreneurship :
Another feature of underdeveloped countries is the lack of entrepreneurial ability. Entrepreneurship is inhibited by the social system which denies opportunities of creative faculties. The small size of the market, lack of capital* lack of infrastructural facilities, technological backwardness, absence of private property, absence of freedom of contract and law and order hamper enterprise and initiative.

11. Unemployment and Disguised Unemployment :
In underdeveloped countries there is vast open unemployment and disguised unemployment. The unemployment is spreading with urbanisation and the spread of education. But the industrial sector has failed to expand along with the growth of labour force. In India unemployment is structural and is the result of a deficiency of capital. In under developed countries under employment or disguised or concealed unemployment is a notable feature. In Indian agricultural sector, a much larger number of labourers are engaged than are really needed. The marginal product of labour in agriculture is negligible or it may be zero or may be negative.

The Eleventh Plan (2007-12) has a backlog of 37 million unemployed and estimated that 45 million are likely to be the new entrants to the labour force during this plan. Unemployment reached to 6.1 percent in 2017-18. Thus, the provision of employment becomes a major task of the planning process in India.

12. Social Institutions s In developing countries social institutions are not conducive to economic development. The Indian society is divided into many castes and sub-castes resulting in frictions in the society. The religious and social beliefs and customs to certain extent inhibit the development of scientific attitudes. People are conservative and superstitious and governed by customs and traditions. Joint family system and the caste system obstruct mobility Of labour.

13. Foreign Trade Orientation :
Underdeveloped economies are generally foreign trade oriented. These countries export primary products and import consumer goods and machinery. This too much dependence on exports of primary products leads to serious repercussions in their economies in the forms of neglecting other sectors, susceptible to international fluctuations. Developing countries are facing with the balance of payments difficulties. In India the recent rapid increase in the import bill together with stagnating exports has led to a significant worsening of the trade balance (US $ – 180.3 billions in 2018-19).

Short Answer Questions

Question 1.
Define economic growth and write its essential aspects.
Answer:
Economic growth is a narrower concept than economic development. It is an increase in a country’s real national output which can be caused by an increase in the quality of resources. Economic growth can be measured by an increase in a country’s gross domestic product (GDP).

According to Michael P. Todaro, “Economic growth is a steady process by which the productive capacity of the economy is increased over a time to bring about rising levels of national output and income”.

According to Simon Kuznets, “Economic growth may be defined as a long term process where in the substantial and sustained rise in real national income, total population and real per capita income takes place”.

According to Maddison, “The raising of income levels is generally called economic growth in rich countries and in poor ones it is called economic development”.

John Friedmann defines growth as an expansion of the system in one or more dimensions without a change in its structure.

Essentials of Economic Growth
From the above stated definitions, the essential features of economic growth can be explained as given here under:

Economic growth shows a higher rate of increase in real per capita income than the rate of growth of population.
Economic growth is always linked with a large increase in productive ability of the economy.

In short-run, economic growth is measured with the help of rate of saving and capital- output ratio, while in the long run it is measured with the help of increase in labour force and technological growth. Thus the four determinants of economic growth can be understood as (a) rate of saving of the economy; (b) capital-output ratio, where the stock of capital is divided by output; (c) rate of growth of labour force and (d) rate of growth of technological progress.

Question 2.
Explain the structural changes in economic development.
Answer:
Economic development represents structural changes in various sectors of the country: There will be a change in the occupational structure. In economic development there will be a decrease in the share of labour force in primary sector and an increase in the shares of labour force in secondary sector and tertiary sector. The structural changes can be seen as follows :

1. There will be a change in the structure of national output. The contribution of primary sector in the national output falls and the shares of secondary and tertiary sectors slowly go up.

2. There will be a change in the structure of industrial production. There will be an increase in the production of capital goods vis-a-vis the production of consumer goods.

3. There will be a change in the structure of foreign trade. The share of primary goods in exports decreases and the share of capital goods in imports increases. Accordingly, in economic development there will be an increase in exports of manufactured and final goods as well as services. Similarly, there will be a decrease in the imports of consumer items. In present context of globalization, the developing countries are also actively participating in world agricultural trade, where agricultural exports are being given importance, besides limiting the importation of consumer items. But this cannot be considered as a reversal of the earlier trend in all the developing countries.

4. There will be a change in the structure of technology. In economic development, modem and advanced techniques of production’are used in all the sectors of economy.

5. There will be a change in the social and institutional sectors. Due to economic devel-opment there will be an increase in the self-esteem and living standards of the population.

In brief economic development is economic growth coupled with ‘change’. The term change’ here refers to the qualitative changes in the economy. These are in the form of im-provement in the level of living, reduction in inequalities in income and wealth, rise in efficiency, improvement in technique, faster growth of industrial sector, positive changes in attitudes and other concomitant changes in all the economic spheres.

Question 3.
Distinguish between economic development and economic growth.
Answer:
The distinction between economic growth and development is presented below :

Economic Growth	Economic Development
1. Economic growth refers to an irlcrease in a country’s real output of goods and services.	1. Economic development refers not only to economic growth but also about progressive changes in the socio-economic structure of a country.
2. Economic growth is a single dimensional phenomenon.	2. Economic development is a multidimensional phenomenon.
3. Economic growth explains primarily about quantitative changes in the economy.	3. Economic development explains quantitative as well as qualitative changes in the economy.
4. Economic growth occurs either through actie role of government or not.	4. In the initial stages of development, governmental intervention is desirable in view of low level of output in the country and hence an active role is important for development.
5. Faster economic growth occurs when ‘ more technological progress occurs.	5. A higher level of economic development entails improement in the quality of life of the people.
6. Economic growth is the key issue under traditional economics. According to this approach “take care of growth, and poverty would be eliminated automatically.” This is called as the trickle down approach.	6. Economic development is the main issue under modern economics. Accordingiy, “take care of poverty, and growth would take care of itself.”
7. The scope of economic growth is narrow because it is concerned with changes in per capita income level only.	7. Scope of economic development is wide and comprehensive than economic growth. Its link is not only with an increase in income but also with the well being of the economy.
8. Economic growth is considered as short-term process where we can measure income changes on an yearly basis. So, its time span may be of one year.	8. Economic development is a longterm process that spans about 20 to 25 year’s. It takes more years to change social, economic and institutional set-up.
9. Economic growth is more relevant concept in the case of developed countries.	9. Economic development is the main issue of developing countries.
10. There may or may not be any social change in case of economic growth. It is only concerned with change in income level without giving due consideration to social change.	10. Social changes, in case of economic development, are compulsory. It refers to the better jobs, availability of food, better health and education and a sustained increase in living standards where enrivonmental issues are also given a due consideration.
11. Economic growth does not indicate the distribution of income and wealth in the economy.	11. Economic development indicates the distribution of income and wealth in the economy.
12. Economic growth is measured only by comparing income levels of different years. It is usually measured by comparing the rate of economic growth for every year.	12. Measurement of economic, development is based on the computation of composite indices where reduction in poverty, development of human beings and living standards play an important role.

Question 4.
Explain the economic factors promoting development.
Answer:
Factors Promoting Economic Development :

There rre mainly two types of factors which influence the economic development of a country. They are

1. Capital Formation :
When the capital stock increases with the passage of time, this is called capital formation. The strategic role of capital in raising the level of production has been acknowledged. The country which wants to accelerate the pace of growth has no choice but to save a high ratio of its ificome, with the objective of raising the level of investment unless otherwise it can attract foreign investment on a large scale.

2. Natural Resources :
The principal factor affecting the development of an economy is the natural resources or land. In economics land includes the land area and the quality of the soil, forest wealth, minerals and oil resources, good climate and eco system, water and sea resources etc. For economic growth, the existence of natural resources in abundance is essential. A country which is deficient in natural resources may not be in a position to develop rapidly. In fact, natural resources are a necessary condition fpr economic growth but not a sufficient one. Japan and India are the two contradictory examples.

3. Agrarian Structure :
The agrarian system, where ownership of land becomes important besides the method of cultivation as they play an important role in bringing about economic development. Land reforms and modernization of agriculture through technological, changes, improved inputs, marketing and credit are important for a faster agricultural growth of the economy.

The importance of the marketable surplus in a developing economy emanates from the fact that the urban industrial population subsists on it. With the development of an economy, the ratio of the urban population increases. As a result demand increases for food grains. This demand must be met adequately; otherwise, the consequent scarcity of food in urban areas will arrest the economic growth. .

5. Industrial Structure :
The industrial structure demands the relative importance of large scale, Small scale and cottage industries and the level of technology being used in these industries. A change in the structure where modernization takes place due to adoption of recent technological advances will lead to a higher tempo of economic development in the developing economies.

6. Structural Changes :
Structural changes imply the transition from a traditional agricultural society to a modem industrial society involving a radical transformation of existing institutions, social attitudes and motivations. These changes lead to increasing employment opportunities, higher labour productivity, the stock of capital, exploitation of new resources and improvement in technology.

7. Organisation :
It is an important aspect of the growth process. It relates to the optimum use of factors of production in the economic activities. The entrepreneur is performing the task of an organiser and undertaking risks and uncertainties in the business. But less developed countries lack in entrepreneurial activity and less developed countries should create a climate for encouraging entrepreneurship: For this, the provision of all the required social, economic and technological institutions is necessary.

8. Technological Progress :
Technological changes are related to changes in the production methods which are the result of new innovations. Changes in technology lead’to increase in the productivity of labour, capital and other production factors. Schumpeter and Kuznets regarded innovation as the most important technological factor in economic growth. The spending of high percentage of national income on Research and Development is required.

9. Division of Labour :
Adam Smith gave much importance to the division of labour in economic development. But division of labour depends upon the size of the market. Whe,n the scale of production is large there is greater specialisation and division of labour. The growth process in less developed countries can be accelerated by widening of the market through adoption of modem means of transport and communications.

10. Foreign Trade :
Foreign trade has proved to be beneficial to countries, which have been able to set-up industries in a relatively short period. These countries like Japan and South Korea eventually captured international markets for their industrial products. Therefore, a developing country should not only try to become self-reliant in capital equipment and other industrial products as early as possible, but it should also push the development of its industries to such economy and yet face no difficulty in making economic progress: In todays entirely different world situation, a country would find it difficult to grow along this path of development.

Question 5.
Explain the Non-Economic Factors promoting development.
Answer:
Non- Economic Factors
It is obvious that non-economic factors are also equally important in development as economic factors. Let us try to understand how they influence the process of economic development:

1. Human Resources :
Human resources are considered as very important factor in economic development. Human being provides labour power for production and if in a country’s labour is efficient and skilled, its capacity to contribute to growth will be high. The productivity of illiterate, irrational, unskilled, disease’ ridden, superstitious people is generally low and they do not provide much to development in a country. In case either human resources remain unutilized or the labour management remains defective, it will be a burden on the economy.

2. Political and Administrative Factors :
Dadabhai Naoroji has also explained in his classic work ‘Poverty and Un British Rule in India’ that the drain of wealth and capital from India under the British rule was the major cause for absence of development in India during that period.

‘Political and administrative factors also helped in modem economic growth. The economic growth of Britain, Germany, the United States, Japan and France is due to their political stability and strong administration. But, Italy has not been able to grow upto their level due to political instability and corrupt and weak administration. Peace, protection and stability have encouraged the development of entrepreneurship in developed countries, along with the adoption of appropriate monetary and fiscal policies.

Changes in attitudes due to modernization of values lead to development of the agricultural, industrial and tertiary sectors of the economy. But the development of these sectors is not possible without entrepreneurship. According to Myrdal, less developed countries lack entrepreneurship because they are deficient in persons with right attitude for entrepreneurship.

Mass participation in development programmes is a pre-condition for accelerating the growth process. However, people show interest in the development activity only when they feel that the fruits of growth will be fairly distributed. Experiences from a number of cpuntries suggest that whenever the defective social system allows some elite groups to appropriate the benefits of growth, the general mass of people develop apathy towards State’s development programs. Under those circumstances, it is futile to hope that masses will participate in the development projects undertaken by the State. India’s experience during the whole period of development planning is an example.

Question 6.
Explain the physical quality life Index (PQLI)
Answer:
Physical Quality of Life Index (PQLI)

It was invented by M.D. Morris in 1979. He constructed a composite Physical Quality of Life Index relating to 23 countries for a comparative study. This is a non-income indicator of economic development because this uses physical quality of life as an indicator. This method of measuring economic development is based on the following three things. They are : (i) life expectancy, (ii) infant mortality rate, and (iii) basic literacy. This index measures performance in meeting the most basic needs of people. This index represents basic needs such as health, education, drinking water, nutrition and sanitation.

If in any country PQU is increasing then it indicates the increase in the physical quality of life of the people with increase in life expectancy, fall in infant mortality rate and rise in basic literacy rate. Increase in per capita income does not necessarily indicate the increase in the facilities like health, food, sanitation and education. Therefore, PQU method is taken to be a better indicator than per capita income method. The PQU measures quality of life directly and points towards that indicator which requires immediate action.

The PQU has certain limitations. These are :
a) Morris admits that PQU is a limited measure of basic needs.
b) It does not explain the changing structure of economic and social organisation.
c) it does not measure total welfare.
d) Equal weights are given to the three variables of PQU.

Question 7.
Discuss the human development Index (HDI) How it is measured.
Answer:
Human Development Index (HDI) :
Mahbub – UI – Haq developed the Human Development Index and UNDP incorporated it in its first Human Development Report in 1990. Since then, the UNDP is presenting the measurement of human development in its annual report.

Human Development Index (HDI) is a modern indicator of economic development. It is a statistical tool used to measure a country’s overall achievement in its social and economic dimensions. The following indicators are required to construct HDI:

Life expectancy at birth.
Education – adult literacy, combined gross enrolment ratio.
Real GDP per capita based on purchasing power parity in terms of dollar.

For the construction of HDI, an index is created for each of these indicators with fixed minimum and maximum values for each of these indicators as shown below :

Life expectancy at birth, 25 years and 85 years.
Adult literacy rate 0% and 100%
Combined gross enrolment ratio, 0% and 100%
Real GDP per capita (PPP) $ 100 and $40,000-

For the components of the HDI, individual indices are calculated according to the following formula.

TS Inter 2nd Year Economics Study Material Chapter 1 Economic Growth and Economic Development 2

Then, the HDI is calculated as a simple average of the three dimension indices. HDI value ranges from zsero to one. Countries with HDI below 0.5 are considered to have a low level of human development, those between 0.5 to 0.8 a medium level and those above 0.8 a high level. But as per Human Development Report 2014 (HDI, 2013) Countries have been grouped under four categories, (i) Countries in the HDI 0.8 and above are in the very high Human development group, (ii) Countries in HDI range 0.7 to 0.8 are in the High Human Development group, (iii) Countries in the HDI range 0.5 to 0.7 are in the range of Medium Human development group and (iv) Countries in the HDI range less than 0.5 are in the low. Human Development group. India’s HDI value is shown in the following table :

Year	HDI Value
1990	0.427
1995	0.546
2001	0.472
2002	0.592
2007	0.612
2010	0,519
2013	0.586
2017	0.640
2018	0.647

Very Short Answer Questions

Question 1.
Economic growth.
Answer:
Increase in the real output of goods and services over a long period of time is known as economic growth. It is a narrow concept. It explains quantitative changes. It relates to developed countries.

Question 2.
Economic Development.
Answer:
The Institutional changes and Tecyhnological changes which are used to achieve some amount of goods and services is known as economic development. It is a wider concept. It relates to developing countries.

Question 3.
Self Reliance.
Answer:
Self reliance implies that a country generates sufficient surplus to buy what it needs. It does not depend upon other countries for the resources of funds needed to acquire them. Self reliance allows imports.

Question 4.
Sustainable development.
Answer:
This concept was given by Brutland commission in the year 1987. It means to meet the needs of present generations, without comprising the ability of future generations.

Question 5.
Inclusive growth.
Answer:
Inclusive growth refers to both the pace and the pattern of the economic growth. This concept stresses the inclusiveness of the higher to scheduled population in the growth process, which is respected to bring in several other benefits as well to the economy. If the bottom 20% share can increase to 5 to 10% at lease, then it can be termed as inclusive growth.

Question 6.
Physical quality of Life Index (PQLI).
Answer:
If refers to physuical quality of life index. This concept can be studied with 3 ideas.

Life expectancy – 65%
Literacy Rate -.74%
Infant molality rate 61/1000 live birth

This is a non income indicator of Economic development.

Question 7.
Human development Index (HDI).
Answer:
It refers to Human Development index. This concept measures the average achievement in three basic dimensions of human development. They are life expectancy at birth, adult literacy contained enrolment ratio and real GDP percapita based on purchasing power purity (PPP),

Question 8.
Gender related Development Index.
Answer:
This concept was introduced by Human development report (HDR) 1995. This concept is a composite index which measures the average achievement of population in the same dimensions as the HDI while adjusting for gender inequalities in the level of achievement in the three basic aspects of human development. It uses same variables as the HDI while adjusting for gender inequalities in the level of achievement in the three basic aspects of human development. It uses same variables as the HDI, dis eggregated by gender.

Question 9.
Social Progress Index (SPI).
Answer:
SPI is published by the non-profit social progress imperalised and it is based on the workings of Amartya Sen. This concept measures the well being of a society by observing social and environmental outcomes directly rather than the economic factors. The social and environmental factors include wellness, equality, inclusion, sustainability and personal freedom and safety.

Question 10.
Multi dimensional poverty Index (MPI).
Answer:
This concept was first introduced in the year 2010. It is an attempt designed to illustrate the many deprivations faced by the most several disadvantages. This concept requires a household to be deprived in multiple indicators at the same time. A person is multi dimensionally poor if the weighed indicators in which he or she is seprives add up to at least 33 percent.

Question 11.
Natural resources.
Answer:
Natural resources refers to land are and quality of soil forest wealth, good river system, minerals and Oil resources and ecosystem are included. For economic growth the existence of natural resources in abudance is essential.

Question 12.
Human Capital.
Answer:
Investment on human is called human capital most of the developing countries the people are illiterate. Their standard of living and mobility of labour is very low. The attitude and values of people do not encourage economic change and growth.

Question 13.
Vicious circles of poverty.
Answer:
A country is poor language it is poor. This concept was given by Ragnar Nurksc. The basic vicious circle stems from the fact that in developing countries total productivity is low and to deficiency of capital, market imperfections, economic backwardness and under development.

The vicious circle operates both on demand side and supply side. The demand side is that the low level of real income leads to a low level of demand the supply side, is that the low productivity reflected in low real income.

Question 14.
Capital formation.
Answer:
It refers to the net addition of capital stock such as equipment, buildings and other intermediate goods. A nation uses capital stock in combination of labour to provide services and to produce goods. An increase in this capital stock is known as capital formation.

Question 15.
Markatable surplus of agriculture.
Answer:
In refers to the success of agricultural output over and above what is required for subsistence living of the rural population. In case a country fails to produce a sufficient markable surplus it will be left with no choice select to import food grains which may cause a balance at payments problem.

Question 16.
Social factors.
Answer:
Social attitudes, values, and institutions also influence economic growth. These are rationality in throughout and action through on deliberate cultivation of scientific attitude and application of modem technology in order to increase productivity, raise levels of living and brings about social and economic equalisation, changes in attitudes due to modernisation of values lead to development of agriculture, industry and tertiary sectors of the economy.

TS Inter 2nd Year Commerce Study Material Chapter 10 Functions of Management

November 16, 2022October 22, 2022 by Srinivas

Telangana TSBIE TS Inter 2nd Year Commerce Study Material 10th Lesson Functions of Management Textbook Questions and Answers.

TS Inter 2nd Year Commerce Study Material 10th Lesson Functions of Management

Long Answer Type Questions

Question 1.
What are the main points in the definition of planning?
Answer:
Planning is deciding in advance what to do and how to do. It is one of the basic managerial functions. Before doing something, the manager must formulate an idea of how to work on a particular task. Thus planning is closely connected with creativity and innovation. But the manager would first have to set objectives, only then will a manager know where he has to go. Planning seeks to bridge the gap between where we are and where we want to go. It requires taking decision since it involves making a choice from alternative course of action.

Planning involves setting objectives and developing appropriate courses of action to achieve these objectives. Objectives provide direction for all managerial decisions and actions. All members need to work towards achieving organizational goal. These goals set the targets which need to be achieved. This plan should be forecasting the future course of events. There are many steps in planning.
a) Determination of objectives for whole organization.
b) Laying down policies to be followed.
c) Laying down the standards of performance.
d) Preparation of budgets for whole organization.

Question 2.
Do you think planning can work in a changing environment?
Answer:
Planning can work in changing environment explained below.
1) Focus on objectives :
Planning determines the objectives of the enterprise and also various departments, for devises the ways for achieving the objectives, good plan is required. Planning compels the managers to consider the future and make them to recognize the need for revising and extending plans in the light of dynamic business environment,

2) Economical operation :
The working of the enterprise will be systematic a*.., purposeful. Under planning, there will be jointly directed effort instead of uncoordinated decisions are made on the .basis of facts. The resources are utilized in the best possible way.

3) Reduces uncertainty and change :
An enterprise works in a dynamic world. The future is uncertain. Changes take place in business environment, economic policies and supply of resources. There may be changes in technology. Planning can work in changing environment.

4) Facilitates control :
Planning helps the managers to exercise proper and effective control over the subordinates. In planned organization, the work to be done is determined in advance. This enables the management to check on the performance of subordinates.

Question 3.
If planning involves looking ahead, why does it not ensure success?
Answer:
Planning involves looking ahead why does it not ensure success are.
1) Uncertain future :
Planning is made on the basis of estimate of the conditions in future. Forecasting is done on the basis of information and facts collected. Even if the collected information is reliable. The future is uncertain and cannot be predicted accurately.

2) Rigid :
In planning, policies, procedures and programmes are determined in advance. They have to be followed by the employees. This restricts personal freedom. Individual initiative is suppressed. Thus, planning leads to inflexibilities and rigidities.

3) Expensive :
Planning requires more time and money for preparation. It involves heavy expenditure. Large organizations must consider the benefits of planning in relation to the expenditure. Small organizations cannot afford planning as it is time consuming and costly process.

4) Investment :
Changes in the environment requires over locking aspect of capital already invested in the business in the form of equipment. Managers develop a strong feeling so that committed managers to recovery of captial sunk as a result of some earlier decision that future planning is constrained and limited to its recovery, and very often capital so invested itself becomes a planning premise.

5) External factors :
These are external factors of planning which has no control at all by the internal agencies. Personnel policies and decisions may be limited aspects of labour union pressure specifically when union is conducting its activities at national level. The rules framed by governments, its rules, directives, and legal provisions also results in setting for planning.

Question 4.
What are the types of planning?
Answer:
1) Strategic planning :
Strategic planning means the process of formulating an integrated plan related to strategic benefits of the enterprises to meet the challenges of the business environment. It consists of identifying the strategy, the objectives to be achieved in future.

Strategic planning is a periodic in nature. It facilitates to coordination between departments in the organization.

2) Operational planning :
It is a short term practice designed to implement the strategy made under strategic planning. To carry on this plan the firm should prepare short term plan regarding the policy to make in the organization.

Question 5.
Dose organizing and explain the steps in organising?
Answer:

Organising in the process of defining and grouping activities and establihing authority and relationships among them.
Organising essentially implies a process which co-ordinates human efforts, assembles resources and integrates both into a unified whole to be utilized for achieving specified objectives.

Prof. Urwick defines “organization as determining what activities are necessary to any purpose and arranging them in groups which may be assigned to individuals”.

The process of organization consists of the following steps :
a) Identification and division of work.
b) Departmentalization.
c) Assigning the responsibilities. .
d) Establishing reporting relationships.

A process of organising are following steps.

1) Identification and division of work :
The first step in the process of organising involves identifying and dividing the work that has to be done in accordance with previously determined plans. The burden work can be shared among the employees.

2) Departmentalization :
Once work has been divided into small and manageable activities then those activities which are similar in nature are grouped together. Such sets facilitate specialization. This grouping process is called departmentalization.

3) Assignment of duties :
It is necessary to define the work of different job positions and accordingly allocate work to various employees. Jobs are then allocated to the members of each department in accordance to their skill and competencies.

4) Establishing reporting relationships :
Merely allocating work is not enough. Each individual should also know who has to take orders from and to whom he is accountable. The establishment of such clear relationships helps to create a hierarchical structure and helps in coordination among various departments.

Question 6.
Explain the meaning of controlling and explain its importance?
Answer:
Meaning of Controlling :

Control means seeing that everythig is taking place with the established rules and expressed commands.
Controlling is the process of ensuring that actual activities conform to planned activities.
Controlling also helps in judging accuracy of standards, ensuring efficient utilization of resources, boosting employeee morale, creating an atmosphere of order and discipline in the organization and coordinating different activites so that they all work together in one direction to meet targets.

Importance of controlling :
Control is an indispensable function of management Without control the best of plans can be misleading. A control system helps an organization in the following ways.

1. Accomplishing organizatinal goals :
The controlling function measures progress towards the organizational goal and bring to light the deviations indicating corrective action. It guides the organization on the right track so that organizational goals may be achieved.

2. Judging accuracy of standards :
A good control system enables management to verify whether the standards set are accurate and objective. An efficient control system keeps a careful check on the changes taking place in the organization to review the standards.

3. Making efficient use of resources :
By use of control a manager reduces wastages and spoilage of resouces. Each activity is performed in accordance with predetermined standdards and norms. These ensure that resources are used in the most effective and efficient manner.

4. Improving employee motivation :
A good control system ensures that employees know well in advance what they are expected to do and what are their standards of performances based on which they are appraised.

5. Ensuring order and discipline :
Controlling creates an atmosphere of order and discipline in the organization. It helps to minimize dishonest behavior on the part of the employees by keeping a close check on heir activities.

Question 7.
What is POSDCORB? What are its uses and limitations?
Answer:

As per “Luther Gullick” the functions of management are “POSDCORB”.
“POSDCORB” means planning, organising, staffing, Directing, co-ordinating, reporting and budgeting.
‘POSDCORB’ represents the initial words of management functions.

Uses and Application of POSDCORB :

POSDCORB is used as a good starting point to analyze management functions and activities in a structural way to achieve organizational goal.
If benefits the organizations in structuring and analysing the management activities.

Limitations :

Mark Mopre believed that POSDCORB is too inward looking. In his view, the single most important job of a manager is understanding and shapint the environment of the organization, by means of the services it delivers to its customers and clients.
According to Dr. Lewis Meriam, the most important thing has been omitted in the fascinating world POSDCORB is knowledge of a subject matter. Because managers have to plan something, managers have to organize something, and managers have to direct something, Compare the training facility within the industry but do not pay any attention to what managers should achieve.

Question 8.
Explain the importance of organising in an enterprise?
Answer:
Importance of Organising :
In order for any business enterprise to perform tasks and successfully meet goals, the organising function must be properly performed. The following points highlight the crucial role that roganising plays in any business enterprise.

1) Benefits of specialization :
Organising leads to a systematic allocation of jobs amongst the work force, this reduces the workload as well as enhances productivity because of the specific workers performing a specific job on a reguiar basis. Repetitive performance of a particular task allows a worker to gain experience in that area and leads to specialization.

2) Clarity in Working Relationships :
The establishment of working relationships clarifies lines of communication and specifies who is to report to whom. It helps in fixation of responsibility and specification of the extent of authority to be exercised.

3) Optimum Utilization of Resources :
Organising leads to the proper usage of all maerial, financial and human resources. The proper assignment of jobs avoids overlapping of work and also makes possible the best use of resources. Avoidance of duplication of work helps in preventing confusion and minimizing the wastage of resources and efforts.

4) Adaptation to Change :
The process of organising allows a business enterprise to account moderate changes in the business environment. It provides much needed stability to the enterprise as it can then continue to survive and grow inspite of changes.

5) Effective Administration :
Organising provides a clear description of jobs and related duties. This helps to avoid confusion and duplication. Clarity in working relationships enables proper execution of work. Management of an enterprise thereby becomes easy and this brings effectiveness in administration.

6) Development of Personnel :
Organising stimulates creativity amongst the managers. Effective delegation allows the managers to reduce their workload by assigning routine jobs to their subordinates. It gives them the time to explore areas for growth and the opportunity to innovate thereby stengthening the company’s competitive position.

Short Answer Type Questions

Question 1.
What are the main features to be considered by the management while planning?
Answer:
1) Planning is an intellectual process :
In thinking of the objectives the manager goes through the intellectual process. The quality of planning will vary according to the quality of the mind of the manager.

2) Planning is goal oriented :
All planning is linked up with certain goals and objectives.

3) Planning is a primary function of management :
Planning has been described as the most basic of all managerial functions. Manager decides upon the policies, procedures, programms and projects.

4) Planning is directed towards efficiency :
The concept efficiency is implicit in planning. In planning, the manager evaluates the alternatives on the basis of efficiency.

Question 2.
What are the steps taken by management in the planning process?
Answer:
1) Awareness of business opportunity :
There will be many business opportunities. The management must be made aware of an opportunity.

2) Determination of objectives :
Objectives clearly state the results to be achieved by the management. They indicate what is to be done and on which greater emphasis should be placed.

3) Determining planning premises :
The management must makes assumptions about the future behaviour of various factors and forces which influence business.

4) Determining alternative course of action :
After evaluating the various alternatives the most suitable course of action is selected as the plan.

5) Formulating the derivative plans :
Once proper course of action is selected it is necessary to prepare derivative plans to support the basic plan.

Question 3.
Define staffing process and the various steps involved in it.
Answer:
Staffing is putting people to jobs. It begins with work force planning and includes different other functions like recruitment, selection, training, development, promotion, compensation and performance appraisal of work force.

Various steps involved in staffing following are :
1) Estimating the man power requirement :
Each job position requires the appointment of a person with a specific set of educational qualifications, skills, experience and so on. Thus understanding manpower requirement is not only a matter of knowing how many persons we need but also of what type.

2) Recruitment :
Recruitment is the process of searching for prospective employee and stimulating to apply for jobs in the organization.

3) Selection :
Selection is the process choosing from among the prospective job candidates developed at the stage of recruitment.

4) Placement and Orientation :
After submitting the joining report by the employee at work place, the employee is given brief presentation about the company.

5) Training and Development :
Organizations either have in – house training centers or have alliances with training institutes to ensure continuing learning. If the employee motivation is high, their competencies are strengthened.

Question 4.
Explain the procedure for selection of employees.
Answer:
Selection is the process of choosing from among the prospective job candidates developed at the stage of recruitment. Selection serves two important purposes. Firstly, it ensures that the organization gets the best among the available and secondly, it enhances the self esteem and prestage of those selected and conveys them seriousness with which the things are done in the organization.

Those who are able to successfully negotiate the test and interviews are offered an employment, a written document containing the offer of employment, the terms and conditions and date of joining.

Question 5.
Explain the principles of directing.
Answer:
The principles are explained below.
i) Maximum individual contribution :
This principle emphasizes that directing techniques must help every individual in the organization to contribute to his maximum potential for achievement of organizational objectives.

ii) Harmony of objectives :
Good directing provides harmony by convincing that employee rewards and work efficiency are complimentary to each other.

iii) Appropriateness of direction technique :
According to this people, appropriate motivational and leadership technique should be used while directing the people based on the needs of subordinates capabilities, attitudes and other situational variables.

iv) Unity of command :
This principle insists that a person in the organization should receive instructions from one superior only.

v) Managerial communication :
Effective managerial communication across all the levels in the organization makes direction effective. Directing should convey clear instructions to create total understanding subordinates.

vi) Use of informal organization :
A manager should realize that informal groups or organization exist within every formal organization.

vii) Leadership :
Managers should exercise good leadership as it influence the subordinates positively while directing the subordinates without causing dissatisfaction among them.

Question 6.
“Plainning is looking ahead and controlling is looking back” comment.
Answer:
Planning is deciding in advance what to do and how to do planning involves setting objectives and developing appropriate course of action to achieve these objectives.

Control means seeing that everything is taking place with the established rules and expressed commands. Controlling is the process of ensuring that actual activities conform to planned activities.

Planning provides rules and standards where controlling compared the actual work with the standards laid in the planning.

Thus, we can says that, “planning is looking ahead and controlling is looking back”.

Very Short Answer Type Questions

Question 1.
Features of Planning.
Answer:
The following are the features of planning :

Planning is an intellectual process.
Planning is goal oriented.
Planning is a primary function of management.
Planning is directed towards efficiency.

Question 2.
Process of organising.
Answer:
The following are the process of organising :

Identification and division of work.
Departmentalization.
Assignment duties.
Establishing reporting relationships.

Question 3.
Organization Structure.
Answer:
It is the process which co-ordinates human efforts, assembles resourses and integrates both into a unified whole to be utilized for achieving specified objectives.

Question 4.
Staffing.
Answer:
It is the process of management which is concerned with obtaining, utilizing and maintaining a satisfactory and satisfied work.

Question 5.
Need for staffing.
Answer:

Helps in discovering and obtaining for various jobs.
Puttings right person on the right job.
Optimum utilization of human resources.
Improve job satisfaction.

Question 6.
Importance of Directing.
Answer:

The importance of directing can be understood by the fact that every action in the organization is initiated through directing only.
Directing guides employees to fully realize their potential,
Directing guides towards achieving of common objectives.

Question 7.
Meaning of control.
Answer:

Controlling in the process of entering that actual activities conform to planned activities.
To control means seeing that everything is taking place in conformity with the established rules and expressed commands.

Question 8.
Relationship between planning and control.
Answer:

Planning is deciding in advance what to do and how to do planning involves setting objectives and developing an appropriate cause of action.
Controlling is the process of ensuring that actual activities conform the planned activities.
planning provides rules and standards where controlling compared the actual work the standards laid in planning, thus, “planning is looking a head and controlling is looking back”.

Question 9.
POSTCORB.
Answer:

As per “Luther gullick” the functions of management are “POSDCORB”.
“POSDCORB” means planning, organising, staffing, Directing, co-ordinating, reporting.and budgeting.
‘POSDCORB’represents the initial words of management functions.