Plus One Economics Chapter Wise Questions and Answers Chapter 2 Indian Economy 1950-1990

Kerala Plus One Economics Chapter Wise Questions and Answers Chapter 2 Indian Economy 1950-1990

Plus One Economics Indian Economy 1950-1990 One Mark Questions and Answers

Question 1.
The Planning Commission was set up on
(i) 1^st January 1950
(ii) 1^st March 1950
(iii) 15^th March 1950
(iv) 1^st April 1950
Answer:
(iii) 15^th March 1950

Question 2.
Who is the architect of Indian planning?
(i) K.N. Raj
(ii) PC. Mahalanobis
(iii) R.C. Desai
(iv) Dadabhai Navoroji
Answer:
(ii) PC. Mahalanobis

Question 3.
India is ____ type of economic system.
(i) Capitalist
(ii) Socialist
(iii) Mixed economy
(iv) None of these
Answer:
(iii) Mixed economy

Question 4.
Green revolution is related to:
(i) Food grain production
(ii) Cash crop production
(iii) Milk production
(iv) All the above
Answer:
(i) Food grain production

Question 5.
Who is considered as the architect of Indian Planning?
Answer:
P C Mahalanobis is considered as the architect of Indian Planning.

Question 6.
White revolution deals with ____.
Answer:
Milk

Question 7.
How many annual plans were implemented in India?
Answer:
6 Annual Plans.

Plus One Economics Indian Economy 1950-1990 Two Mark Questions and Answers

Question 1.
Point out the main objective of industrial licencing.
Answer:
The aim of industrial licencing was establishment, expansion, and ownership of private industries according to priorities of five year plans. It also aims to check the monopoly tendency in industries. Another objective is to remove the regional disparities of growth.

Question 2.
Define economic planning.
Answer:
Economic planning means utilisation of country’s resources into different development activities in accordance with national priorities.

Question 3.
Name the chairman and deputy chairman of NITI AYOG.
Answer:

• Chairman – Narendra Modi (Prime Minister).
• Deputy Chairman – Arvind Panagaria.

Question 4.
Analyze the following table and draw inference.

Answer:
The above table shows the contribution of agriculture, industry and service sectors to India’s GDP. It makes a comparative analysis of 1950-51 and 1990-91. From the data, it is clear that at the time of independence, agriculture was the major contributor to our GDP followed by service sector and industrial sector.

This picture has undergone change by 1990-91. The service sector is the major contributor GDP during 1990-91. The negative significance of agriculture slightly declined which is a good sign of development.

Plus One Economics Indian Economy 1950-1990 Three Mark Questions and Answers

Question 1.
Why was it necessary for a developing country like India to follow self-reliance as a planning objective?
Answer:
Our first seven five year plans gave importance to ‘self-reliance’. This means averting imports of those goods which could be produced in India itself. When India becomes self-reliant, we can save foreign exchange and can promote exports.

Question 2.
Do you think that Land Reforms were successfully implemented in all the States of India? Substantiate your view.
Answer:
No. Land Reforms were not successfully implemented in all the States of India. Land reforms were successful in Kerala and West Bengal because these states had governments committed to the policy of land to the tiller. Unfortunately, other states did not have the same level of commitment and vast inequality in landholding continues to this day.

Question 3.
Find the odd one out

1. Modernization, growth, equity, imports
2. Chemical fertilizers, HYV seeds, licensing, irrigation
3. Licensing, protection, abolition of intermediaries, reservation for small scale industry.

Answer:

1. Imports. Others are objectives of five year plans
2. Licensing. Others relate to green revolution
3. Abolition of intermediaries. Others relate to industrial policy

Question 4.
Given below are some names of the countries. Classify them into a fable based on the economic system they follow.
(USA, Germany, Cuba, India, China, Srilanka, UK, Venezuela, Pakistan)
Answer:

Question 5.
Match the following columns.

Answer:

Question 6.
‘Growth with equity’ is an objective of Indian planning. Justify.
Answer:
Growth means increase in the country’s capacity to produce the output of goods and services and equity means equality. Growth with equity is an important objective of our planning. By this, we mean that the government should ensure that the benefit of economic growth reaches the poor sections of the society. It also aims that every citizen should be able to meet the basic requirements such as food, shelter, education, health care, etc.

Question 7.
What is the importance of agriculture in Indian economy?
Answer:
Agriculture is considered as the backbone of the Indian economy. It contributes about 25% of national income. Moreover, about 2/3 of our total population depends on agriculture for their living. Therefore, agriculture plays an important role in the economic development of our country.

Question 8.
Give the main objectives of industrial policy 1956?
Answer:
The main objectives of Industrial Policy 1956 are:

• rapid industrial development.
• rapid growth of public sector.
• reduction in inequalities of income and wealth.

Plus One Economics Indian Economy 1950-1990 Four Mark Questions and Answers

Question 1.
“Gross Domestic Product (GDP) is a good indicator of economic growth of a country”. Comment.
Answer:
A steady increase in the Gross Domestic Product is considered a good indicator of economic growth. The gross domestic product is the market value of all goods and services produced in the country during a year. If the value of GDP is more, it will be divided among the number of people. It is necessary to produce more goods and services if people of India are to enjoy a more rich and varied life.

The GDP of a country is derived from the different sectors of the economy, namely the agricultural sector, the industrial sector, and the service sector. The contribution m|de by each of these sectors makes up the sectoral composition of the economy.

Question 2.
Explain the need and type of land reforms implemented in the agricultural sector.
Answer:
independence, the land tenure system was dominated by the intermediaries who merely collected rent from the tillers without contributing towards improvements on the farm. This resulted in low production from agriculture and forced India to import food. This called for an urgent need of a land reform system.
The types of land reform implemented are:

• Abolition of intermediaries
• Making the tillers the owners of land
• Land ceiling i.e., fixing the size of landholding.

Question 3.
Prepare a table showing the plans of India and the years of their implementation?
Answer:

Question 4.
Match the following

Answer:

Plus One Economics Indian Economy 1950-1990 Five Mark Questions and Answers

Question 1.
What is green revolution? How did it benefit the farmers?
Answer:
Significant and continuous rise in agricultural production with the use of fertilizers, HYV seeds and irrigation facilities is known as Green Revolution.

In India, green revolution was executed in two phases. The first phase was from 1965-75. This phase concentrated the crop wheat and was confined to affluent states. The second phase was from 1975-85. The phase concentrated on a variety of crops and was implemented in all Indian states.
The benefits of green revolution:

1. Self-sufficiency in food grain.
2. Living standards of farmers increased
3. Large marketable surplus
4. The price of food grain fell down and consumers were benefited.

Question 2
Prepare a debate report on the topic “Is agriculture subsidy necessary”?
Answer:
Arguments in favour of giving subsidies

• Subsidies provide an incentive for adoption of the new technology by farmers in general and small scale farmers in particular
• Subsidies are needed to encourage farmers to test new technology
• Subsidies help small farmers to continue production so that food security of the nation can be ensured

Arguments against giving subsidies

• Subsidies very often do not benefit the target group
• It is a huge burden on the government’s finances
• Subsidies provide an incentive for wasteful use of resources.

Question 3.
Discuss the rationale for import substitution as a foreign trade policy measure?
Answer:
The industrial policy that we adopted was closely related to the trade policy. In the first seven plans, trade was characterized by what is commonly called an inward-looking trade strategy. Technically, this strategy is called import substitution. This policy aimed at replacing or substituting imports with domestic production.

For example, instead of importing vehicles made in a foreign country, industries would be encouraged to produce them in India itself. In this policy, the government protected the domestic industries from foreign competition. Protection from imports took two forms: tariffs and quotas.

Tariffs are a tax on imported goods; they make imported goods more expensive and discourage their use. Quotas specify the quantity of goods which can be imported. The effect of tariffs and quotas is that they restrict imports and, therefore, protect domestic firms from foreign competition.

Question 4.
Small scale industries play a vital role in Indian economy. Give reasons.
Answer:
Small-scale industry’ is defined with reference to the maximum investment allowed on the assets of a unit. This limit has changed over a period of time. In 1950 a small-scale industrial unit was one which invested a maximum of rupees five lakh; at present, the maximum investment allowed is rupees one crore.

It was believed that small-scale industries are more ‘labour intensive’ i.e., they use more labour than the large-scale industries and, therefore, generate more employment. But these industries cannot compete with the big industrial firms; it is obvious that development of small-scale industry requires them to be shielded from the large firms.

For this purpose, the production of a number of products was reserved for the small-scale industry the criterion of reservation being the ability of these units to manufacture the goods. They were also given concessions such as lower excise duty and bank loans at lower interest rates. Therefore it can be concluded that small scale industries play a vital role in an economy like India.

Plus One Economics Indian Economy 1950-1990 Eight Mark Questions and Answers

Question 1.
Prepare a seminar report on the “Goals of five year plans pursued till 1991”. [Hint: A Seminar report should contain the title, introduction, content, and conclusion].
Answer:
“Goals of five year plans pursued till 1991”.
Introduction:
The plus one commerce batch of (Name of school) conducted a seminar on the topic Goals of five year plans pursued till 1991 on 16/08/2018 at 11.0 a.m with the ample guidance of our economics teacher. Our class was divided into four groups to cover the entire area of the topic. Each group presented one objective each. They focused on the area given to them and the group leader presented the seminar paper after required preparation.

Content:
A plan should have some clearly specified goals. The goals of the five-year plans are growth, modernization, self-reliance, and equity.

1. Growth:
It refers to increase in the country’s capacity to produce the output of goods and services within the country. It implies either a larger stock of productive capital, or a larger size of supporting services like transport and banking, or an increase in the efficiency of productive capital and services.

A good indicator of economic growth, in the language of economics, is steady increase in the Gross Domestic Product (GDP). The GDP is the market value of all the goods and services produced in the country during a year. The GDP of a country is derived from the different sectors of the economy, namely the agricultural sector, the industrial sector, and the service sector. The contribution made by each of these sectors makes up the structural composition of the economy.

2. Modernization:
To increase the production of goods and services the producers have to adopt new technology. For example, a farmer can increase the output on the farm by using new seed varieties instead of using the old ones. Similarly, a factory can increase output by using a new type of machine. Adoption of new technology is called modernization.

However, modernization does not refer only to the use of new technology but also to changes in social outlook such as the recognition that women should have the same rights as men. In a traditional society, women are supposed to remain at home while men work. Modern society makes use of the talents of women in the workplace in banks, factories, schools, etc. and such a society will be more civilized and prosperous.

3. Self-reliance:
A nation can promote economic growth and modernization using its own resources or by using resources imported from other nations. The first seven five year plans gave importance to self-reliance which means avoiding imports of those goods which could be produced in India itself.

This policy was considered a necessity in order to reduce our dependence on foreign countries, especially for food. It is understandable that people who were recently freed from foreign domination should give importance to self-reliance.

4. Equity:
Now growth, modernization, and self-reliance, by themselves, may not improve the kind of life which people are living in A country can have high growth; the most modem technology developed in the country itself, and also has most of its people living in poverty.

It is important to ensure that the benefits of economic prosperity reach the poor sections as well instead of being enjoyed only by the rich. So, in addition to growth, modernization, and self-reliance, equity is also important every Indian should be able to meet his or her basic needs such as food, a decent house, education, and health care and inequality in the distribution of wealth should be reduced.

Conclusion:
All the four groups presented their topics with necessary facts and figures. After the presentation, there was the question-answer session. The active participation of everyone made this session live and interesting. On the whole, the seminar was a big success.

Question 2.
Prepare a note on the achievements and failures of economic planning in India?
Answer:
A. Achievements of Planning:
1. Rise in national income:
These has been significant increase in national income during the plan period. The national income increased by an average of above 4% during economic planning.

2. Increase in per capita income:
Prior to independence, rate of increase in per capita income had been almost zero. But during the period of planning, per capita income increased at the rate of 2% p.a.

3. Increase in rate of capital formation:
Capital formation plays a significant rule in the economic growth of a country. During five year plans rate of capital formation has significantly increased. As the rate of capital formation depends on the rate of saving and investment, there has been considerable increase in the rate of saving and investment.

4. Institutional reforms in agriculture and Green Revolution:
Plans have contributed to the development of agriculture in two ways:

• Land reforms have been introduced in agriculture.
• Since 1966, stress has been given another technological advancement of agriculture. It resulted into Green revolution. During the period of planning, production of food grains has trebled.

5. Development of industries:
Industrial sector has received a lot of encouragement as a result of planning. Basic and capital goods industries like iron and steel, machinery, chemical fertilizers, etc. have developed adequately. During the period of planning, growth rate of industrial production has been around 6.9% per annum industrial production during the First Five Year Plan increased by 8%.

6. Development of Economic Infrastructure :
Economic infrastructure mainly includes transport, means of communication, irrigation facilities and the generation capacity of power, etc. During the period of planning, economic infrastructure has developed considerably.

7. Development of Social Infrastructure:
During the period of planning, country’s social services like education, health, and medical facilities, family planning, etc. also developed appreciably.

8. Employment:
Serious efforts have been made during plans to increase employment opportunities.

B. Failures of Economic Planning:
The following are the main features of economic planning in India.
1. No substantial increase in the Standard of Living:
All the five-year plans of India aimed at raising the standard of living of the people.

2. Rise in Prices:
Price stability has been one of the objectives of each Five Year Plans in India. But almost all the plans witnessed considerable rise in price level. First Plan is the only exception when price level comes down, in all other plans the prices recorded a steep rise.

3. Increase in Unemployment:
Unabated rise in unemployment was witnessed during the period of planning.

4. Less Growth in Production:
In the Five Year Plans, growth rate of production was slow in many states. Priority should have been given to the development of agriculture in all the plans, but it was not done.

5. Inadequate Development of Infrastructure:
Development of infrastructure like electricity, roads, transport, education, etc. ramained inadequate during the period of planning.

6. Inequality in Distribution of Income and Wealth:
The main objective of the Five Year Plan is to minimise inequality in distribution of income and wealth but during the period of planning the problem of inequality further.

7. Inefficient Administration:
An expert team of U.N.O. observed that one of the main shortcomings of Indian planning has been with reference to its implementation.

8. Lack of Strong Foundation:
Despite completion of Nine Five Year Plans, economic base could not acquire strength. Even now use depend heavily on rainfall for agricultural production. Due to the failure of monsoon in 1965-66, 1966 – 67, 1979 – 80 and 1982 – 83, the entire economy was thrown out of gear.

Plus One Economics Chapter Wise Questions and Answers