Q: What are the characteristics of Indian Economy during British Period? (4 Marks)
A: The characteristics of Indian Economy during the British Period:
1. Before the arrival of the British in India, the Indian economy was characterised by selfsufficient village community republics. But
after their arrival village communities were not self-sufficient.
2. There was continuous exploitation of natural resources, material
wealth and raw materials. Due to this there was no surplus production to export.
3. Industrial revolution enhanced the demand for machine made goods which were sold at cheap rates. Due to this Indian
products could not compete with them.
4. The British willfully made India raw material exporting country and a good potential market for their finished machine made products.
5. There was a continuous exploitation of economic resources, material wealth and natural habitat by the British, which has
resulted in the permanent loss of India's gross national income and national wealth. D.R. Gadgil called this exploitation of Indian
resources as "economic drain'' and Dadabhai Nauroji called it "plunders of economic wealth''.
6. The cropping pattern was made favourable to the British. Preference was given to commercial crops like jute, tobacco, ground nut etc. Growing food crops was discouraged.
7. There was wide spread unemployment, decline in real income percapita, decrease in wage levels, substantial rise in poverty.
8. The selfish design of the British made India's
economy a backward one.
Q: Define poverty line? Explain the concepts of absolute and relative poverty? (4 Marks)
A: Poverty: It is the phenomenon in which certain sections of society are not capable of meeting basic needs for their subsistence.
Poverty line: The amount of consumer expenditure required to purchase the minimum basic essentials is known as poverty line.
Absolute Poverty: It is the most pitiable situation in which certain sections of people are unable to get the required minimum quantities
of iron, cereals, pulses, oil, milk etc. with their low income.
Relative Poverty: It is measured by taking the income levels
of the top five to ten percent of the population and compare
with the bottom five to ten percent of the population. The poverty in India is mainly absolute poverty.
Q: Describe the occupational structure of Indian economy.
A: Definition: The distribution of working people among different occupations or productive work is known as occupational structure.
1. There are three types of occupations in an economy.
a) Primary b) Secondary c) Tertiary sectors
2. Primary sector constitutes agriculture, fishing, plantation, mining etc. 3. Secondary sector constitutes capital goods like machinery, machine tools, consumption goods and building activities etc. 4. Workers employed in secondary sector are 12.7% of the total of the population. 5. Tertiary sector constitutes activities like banking, commerce, communications, computers and other professions.
6. Workers employed in the tertiary sector are 20.5% of the total population.
Q: What is the role of banking and financial institutions in India? Will privatisation help in realising its objective?
A: The banking and financial institutions in India mobilise savings from the public. 1. The banking institutions offer financial assistance to the needy organisations and individuals for productive purposes. 2. They provide industrial finances tosick industries and enable them to survive. 3. They provide finance to farmers in times of need. 4. They offer loans to the needy. 5. They promote village
industries, handicrafts and small scale industries also by offering long term, mid-term and short term loans. 6. They promote capital formation.
In recent times privatisation of these institutions are on the cards because they are incurring huge losses. Sincerity, motto of service
and efficient administration should be the aims of these institutions, if they are privatised. Privatisation will certainly help the Indian economy if there is a constant vigilance on the working of privatised institutions.
Q: What are the achievements and failures of the planning?
A: Achievements: 1. There is a considerable rise in Net Domestic Product, savings and investments. 2. India has achieved self-sufficiency in almost all basic and capital goods industries and consumer goods industries. 3. Self-sufficiency in food grain production is achieved. 4. There is a good deal of diversification
in industrial structure. 5. The plans have created significant infrastructure particularly in the fields of transport and irrigation
and tele communications. 6. There has been tremendous development of educational sector and there has been a significant growth in trained scientific and technical manpower.
Failures: 1. Poverty has not come down. 2. Land reforms were not effectively implemented and so inequalities in income and wealth
2 Marks Questions
Q: What is an organised and unorganised sector?
A: Organised sector of the economy refers to the large scale industrial and agricultural units with a defined pattern of production and employment.
1. The workers both in agriculture and industry whose employment pattern and wage levels do not follow a defined pattern. Similarly
household based manufacturing activity and small scale and tiny sectors of the industry are referred to as the unorganised sector.
Q: What is Economic Planning?
A: Economic planning is a strategy of co-ordinating economic decisions through centralised control of the economy. 1. It is an attempt to estimate the available resources and allocate them to various sectors to achieve the predetermined objectives.