Economics (Code No. 58/4/2)
Time allowed : 3 hours
Maximum Marks: 80
General Instructions:
Read the following instructions very carefully and strictly follow them :
(i) This question paper comprises two sections - A and B. All questions are compulsory.
(ii) Question numbers 1 – 10 and 18 – 27 are very short-answer questions carrying 1 mark each. They are required to be answered in one word or one sentence each.
(iii) Question numbers 11 – 12 and 28 – 29 are short-answer questions carrying 3 marks each. Answers to them should not normally exceed 60 – 80 words each.
(iv) Question numbers 13 – 15 and 30 – 32 are also short-answer questions carrying 4 marks each. Answers to them should not normally exceed 80 – 100 words each.
(v) Question numbers 16 – 17 and 33 – 34 are long answer questions carrying 6 marks each. Answers to them should not normally exceed 100 – 150 words each.
(vi) Answers should be brief and to the point. Also, the above word limit is adhered to as far as possible.
(vii) There is no overall choice. However, an internal choice has been provided in 2 questions of one mark, 2 questions of three marks, 2 questions of four marks and 2 questions of six marks. Only one of the choices in such questions have to be attempted.
(viii) In addition to this, separate instructions are given with each section and question, wherever necessary.
Section - A
(Macroeconomics)
1. State, whether the given statement is true or false :
‘Unexpected obsolescence is a component of depreciation.’
Answer: False
Unexpected Obsolescence is the loss of value of fixed assets of an organisation, which is not expected by the purchaser and occur because of natural calamities like floods, earthquakes, tornado, etc., It is not included in depreciation because the loss of value of fixed assets due to unexpected factors is a capital loss.
2. Two components of money supply are _____ and _____. (Fill up the blank with the correct answer).
Answer:
- Demand deposits with the banks such as savings and current account.
- Time deposit with the bank such as Fixed deposit and recurring deposit.
OR
The main aim of monetary policy is _____. (Choose the correct alternative)
(a) to bring price stability in the economy.
(b) employment generation in the country.
(c) to increase trade surplus.
(d) to generate greater tax revenue.
Answer: (a) to bring price stability in the economy.
3. If income rises from ₹50,000 to ₹60,000, consumption increases from ₹40,000 to ₹48,000. In this situation, what will be the value of Marginal Propensity to Consume (MPC)? (Choose the correct alternative.)
(a) 0.80
(b) 0.20
(c) 0.10
(d) 0.90
Answer: a) 0.80
4. Loans offered by commercial banks ______ (increase/decrease) the money supply in the economy. (Fill up the blank with the correct alternative.)
Answer: increase
5. ₹2,000 note lying in wallet of Rohini, a student is an example of ______ (stock/flow) variable. (Fill up the blank with correct alternative.)
Answer: Stock
When a variable is measured at a specific point of time, it is known as stock. The goods that are consumed over a period of time, that do not wear out immediately, or intermediate goods which do not change over time or can be measured at a given point of time are called stocks.
6. State, whether the given statement is true or false :
‘Expenditure on Ujjwala Yojana launched by the Government is an example of capital expenditure.’
Answer: False.
Expenditure on Ujjwala Yojana launched by the Government is an example of revenue expenditure as it neither creates any asset nor causes any reduction in the government's liability.
7. The sum of factor payments is equal to _______. (Choose the correct alternative.)
(a) Domestic Income
(b) National Income
(c) Per Capita Real Income
(d) Per Capita Nominal Income
Answer: (b) National Income
8. Define inventory (stock).
Answer: Inventory or stock is unused raw material, semi-finished good, or unsold finished goods which a firm carries from one year to the next.
9. Give any one example of ‘debt creating capital receipts’ in the Government Budget.
Answer: Borrowings from RBI
10. Define intermediate consumption.
Answer: The use of intermediate goods during the production process to create the final product is termed Intermediate Consumption.
11. “Management of a water polluting oil refinery says that it (oil refinery) ensures welfare through its contribution to Gross Domestic Product.”
Defend or refute the argument of management with respect to GDP as a welfare measure of the economy.
Answer: The given statement, "Management of a water polluting oil refinery says that it (oil refinery) ensures welfare through its contribution to Gross Domestic Product.” is refuted because GDP is not a good measure of welfare as it does not consider the impact of externalities. Externalities mean any benefit or harm of an activity that is caused by an individual or an organization for which they are not paid or penalised.
As the oil refineries may pollute the nearby source of water, they are not penalised for the harmful effect caused by them on people and marine life. Hence, these negative externalities do not ensure the welfare of the economy through Gross Domestic Product.
12. Calculate Net Value Added at Factor Cost (NVAFC) from the following data :
Answer: Value-added refers to the addition in the value of a raw material or intermediate good by an organization, during the production process.
To determine NVAFC, first of all, we have to determine Value Added or GVAMP.
Value Added = Value of Output - Intermediate Consumption
Value Added = 800 - 200
Value Added (GVAMP) = 600
Now,
NVAFC = Value Added - Depreciation - Net Indirect Tax (Indirect Tax - Subsidies)
= 600 - 20 - [30 - 50]
= 600 - 20 + 20
NVAFC = ₹600 Crores
OR
State the three components of Income from Property and Entrepreneurship.
Answer: Income from Property and Entrepreneurship or Operating Surplus is another term used in factor payments. It is the sum total of income from property and income from entrepreneurship. Operating Surplus arises in both government and private enterprises, but does not arise in the general government sector as in this sector it works with the motive of social welfare. These components are used in determining national income through Income Method.
The three components of 'Income from Property and Entrepreneurship' are as follows:
- Rent/Royalties
- Interest
- Profit
13. Explain the function of Central Bank as ‘Banker, Agent and Advisor’ of the Government.
Answer: A central bank is a financial institution that is responsible for managing a country's monetary policy and overseeing the banking system. It acts as the main regulator of the money supply and interest rates and plays a key role in promoting economic stability and growth. Central banks are typically independent of the government and have specific powers and responsibilities granted by law. One of the major functions of the Central Bank is that it acts as a Banker, Agent, and Advisor to the Government.
The Reserve Bank of India (Central Bank) acts as an agent, banker, and financial advisor to the Central Government and all the State Governments. As a banker, the Central bank carries out every banking business of the government, such as:
- To keep the cash balances of the Central and State Governments, the Central Bank maintains a current account.
- It accepts receipts and makes payments for the government and also carries out exchange, remittance, and other banking operations of the Central and State Governments.
- Ultimately, it gives loans and advances to the government for temporary periods. The government sells its treasury bills to the Central Bank in order to borrow money.
As an agent, the Reserve Bank of India (Central Bank) is responsible for the management of public debt.
As a financial advisor, it gives advice to the government from time to time on financial, monetary, and economic matters.
OR
Elaborate, how does a Central Bank stabilize money supply through ‘Bank Rate’.
Answer: A central bank is a financial institution that is responsible for managing a country's monetary policy and overseeing the banking system. It acts as the main regulator of the money supply and interest rates and plays a key role in promoting economic stability and growth. Central banks are typically independent of the government and have specific powers and responsibilities granted by law.
Bank Rate is the rate at which a country's central bank (in the case of India, RBI) lends money to commercial banks to meet their long-term financial needs. Bank Rate has the same effect on credit as that of Repo Rate. To stabilize the money supply in the economy, the Central Bank increases the bank rate, which forces commercial banks to increase their lending rates. Once the lending rates are increased, it makes borrowings costlier for the general public.
Hence, the Central Bank increases bank rate to discourage the general public from taking loans from commercial banks, which as a result restrict the money supply in the economy.
14. Define effective demand. Discuss how effective demand can be restored if ex-ante Aggregate Demand (AD) is less than ex-ante Aggregate Supply (AS).
Answer: Effective Demand is that level of output where the Aggregate Demand of the commodities is equal to the Aggregate Supply.
When the planned spending of an economy; i.e., ex-ante Aggregate Demand is less than the planned output; i.e., ex-ante Aggregate Supply, then the AD (C + I) curve lies below the 45° line. It would mean that the consumers and firms collectively would be buying less goods than the willingness of the firms to produce. Because of this, the planned inventory of the firms would rise.
For bringing back the inventory to the desired level and clear the unwanted increase in inventory, the firms would resort to reduction in employment and output until the economy gets back at output level OY, where AD ultimately becomes equal to AS and there is no more tendency to change.
15. Elaborate the objective of ‘allocation of resources’ in the Government Budget.
Answer: Government Budget is a statement of expected receipts and expected expenditures of the Government (for the coming fiscal year) that reveals the budgetary policy of the Government to achieve the twin objective of growth and stability. The financial/fiscal year is taken from 1st April to 31st March. One of the major objectives of the Government Budget is the Allocation of Resources.
Allocation of Resources refers to the direction of resources from one use to the other. In India, the public and private sectors play an essential role in the economy. However, Private enterprises always aim at maximising profits by allocating resources to those areas of production where they can earn higher returns. There are chances that an industry like alcohol may not promote the welfare of people. The Government of a country directs the distribution of resources through its resources in order to strike a balance between the goals of profit maximization and social welfare. For example, there is the production of both necessary and luxury goods. Besides, the Government can influence the allocation of resources through:
- Tax Concessions or Subsidies: Government encourages and discourages investment in useful and harmful goods respectively by providing concessions, subsidies, imposing heavy taxes, etc., on their production. For example, Government imposes heavy taxes on producing goods that are harmful to health, like 'cigarettes'. Similarly, Government provides subsidies for the production of goods like 'khadi', which are helpful to society.
- Directly Producing Goods and Services: If the private sector does not take the initiative in certain non-profitable economic activities, the Government directly controls them, like water supply, sanitation, etc. It is also known as the allocation function as the Government attempts to provide certain goods and services which can not be provided through the market mechanism.
16. State, giving valid reasons whether the following statements are true or false :
(i) Trade deficit is always a great cause of worry for an economy.
(ii) Depreciation of currency has the same effect on exports as devaluation of currency.
(iii) ‘Indians investing in assets abroad’ will be recorded under debit side of capital account in Balance of Payments.
Answer:
i) False.
Trade deficit is a situation when the imports of goods are more than the exports of goods. Even though Balance of Trade is unfavourable for the country, it is not always a great cause of worry for an economy. It is because trade deficit reflects an increase in investment which builds the capital stock which will ultimately increase the future output in an economy.
ii) True.
Currency Depreciation means a decrease in the value of domestic currency in terms of foreign currency. Devaluation of currency means a reduction in the price of domestic currency in terms of all foreign currencies under the fixed exchange rate regime. Depreciation and devaluation both have the same effect on exports as both of them normally encourages exports from a country as they becCurrency Depreciation means a decrease in the value of domestic currency in terms of foreign currency. Devaluation of currency means a reduction in the price of domestic currency in terms of all foreign currencies under the fixed exchange rate regime. Depreciation and devaluation both have the same effect on exports as both of them normally encourages exports from a country as they become cheaper for foreign nationals and they can now buy more of domestic goods with the foreign currency more cheaper for foreign nationals and they can now buy more of domestic goods with the foreign currency.
iii) True.
Capital Account comprises of all the transactions, which have a direct or indirect impact on the assets and liabilities of the country or government with regard to the outside world. When Indians invest in assets abroad it will result in an outflow of foreign currency; hence, it will be recorded under the debit side of capital account in the Balance of Payment.
OR
(a) Explain, what can be the likely impact of depreciation of the home currency on imports to the country.
(b) Distinguish between Current Account Deficit (CAD) and Current Account Surplus (CAS).
Answer:
a) Currency Depreciation means a decrease in the value of domestic currency in terms of foreign currency. For example, if the price of $1 rises from ₹60 to ₹64, then it can be said that there is a depreciation of the Indian currency. The main factors contributing to currency depreciation are easy monetary policy and excessive inflation. It can also be caused by political instability. Due to uncertainty in the domestic country, investors fear investing in the domestic country. For example, due to the war between Russia and Ukraine, investors fear investing in the country because of instability in the economy. Besides, if the country imports large amounts of products, then there will be a trade imbalance, which will lead to currency depreciation.
Impact of depreciation of home currency on imports to the country:
Currency depreciation means a fall in the price of domestic currency (₹) in comparison to foreign currencies ($). For example, earlier people can get goods worth ₹60 from a unit of the dollar, but now they can get goods worth ₹64 from 1$. It means that they have to give more money in terms of rupees to get goods from a foreign country, resulting in losses for importers. Therefore, imports of the economy may fall at tend to fall.
b) Current Account Deficit (CAD): A situation when the current account's receipts are less than its payments is known as Current Account Deficit. Simply put, this situation arises when the value of exports of goods and services is less than the value of imports of goods and services.
Current Account Surplus (CAS): A situation when the current account's receipts are more than its payments is known as Current Account Surplus. Simply put, this situation arises when the value of exports of goods and services is more than the value of imports of goods and services.
(The goods and services here consist of visible items, invisible items, and unilateral transfers.)
Difference between Current Account Deficit and Current Account Surplus:
Basis | Current Account Deficit | Current Account Surplus |
|---|
Meaning | A situation when the current account's receipts are less than its payments. | A situation when the current account's receipts are more than its payments. |
Significance | Current Account Deficit signifies that the nation is a borrower from the rest of the world. | Current Account Surplus signifies that the nation is a lender to the rest of the world. |
17. (a) Given the following information, identify whether the economy is in equilibrium or not.
Answer: An economy is in equilibrium when the Aggregate Demand is equal to the Aggregate Supply; i.e., AD = AS(Y).
In the given question, MPC = 0.7, Y = ₹1,000 Crores, and Autonomous Consumption = ₹200 Crores
AD=\bar{A}+MPC(Y)
AD = 200 + 0.7 (1,000)
AD = 200 + 700
AD = ₹900 Crores
AD = ₹900 and AS = ₹1,000.
The economy in the given question is not in equilibrium because here AD < AS.
(b) Answer the following questions based on the figure given below :
(i) At which level of income, Average Propensity to Consume will be equal to one and why?
(ii) What is the significance of saving curve above the point B.
Answer:
i) Average Propensity of Consume (APC) is the ratio of consumption expenditure to the corresponding income level at a point of time.
APC will be equal to one when the Consumption is equal to Income; i.e., Savings is equal to zero.
ii) Point B is the break-even point and the saving curve above this point signifies positive savings.
For Visually Impaired Candidates only :
(b) (i) Define Autonomous consumption.
(ii) What is the significance of dis-savings?
Answer:
b) i) Autonomous Consumption is the minimum consumption level required for survival. Simply put, it is consumption at zero level of national income. An individual meets this consumption level either from past savings or by selling assets or through borrowings. Autonomous Consumption is denoted by \bar{C} .
ii) Dis-savings is a situation when Consumption (C) is more than Income (Y). This situation signifies that the spending done for basic needs (necessary for one's survival) is financed by borrowings and past savings.
Section - B
(Indian Economic Development)
18. Which of the following countries adopted ‘One Child Policy’ as a measure to control population?(Choose the correct alternative.)
(a) India
(b) China
(c) Pakistan
(d) Russia
Answer:(b) China
19. World Trade Organisation (WTO) was established in 1995, as a successor organisation to _______. (Fill up the blank with correct answer)
Answer: GATT (General Agreement on Trade and Tariff)
20. Define mixed economy.
Answer: A Mixed Economy system is a combination of both capitalist and socialist economic systems. It incorporates the benefits of both systems and avoids their drawbacks. In a mixed economy, both the public and private sector coexists, and the private & public sector collaborates to achieve social objectives within an economic framework. India is the biggest example of a mixed economy.
21. _______ policy followed in first seven five year plans of India, aimed at substituting imports with domestic production. (Fill up the blank with the correct answer)
Answer: Import Substitution
22. In the past few decades _________ (primary/secondary/tertiary) sector has created maximum jobs opportunities in India. (Fill up the blank with the correct answer)
Answer: tertiary
23. The main aim of ‘Great Leap Forward’ (GLF) in China was to ensure rapid increase of _______. (Choose the correct alternative)
(a) agriculture
(b) industries
(c) services
(d) exports
Answer: (b) industries
24. Which of the following is NOT a benefit of organic farming? (Choose the correct alternative.)
(a) Cheaper inputs
(b) Attractive returns on investment
(c) Greater import possibilities
(d) Higher nutritional value
Answer: (c) Greater import possibilities
25. Define disguised unemployment.
Answer: A situation in which the number of employees/workers engaged in a work is more than the actual requirement is known as disguised unemployment. Another name for disguised unemployment is Hidden Unemployment. For example, if only four workers are required on a piece of land but 7 workers are engaged on that land, then 3 workers are disguised unemployed.
26. Introduction of Economic Reforms in China took place in the year _________. (Choose the correct alternative.)
(a) 1978
(b) 1980
(c) 1988
(d) 1991
Answer: (a) 1978
27. State whether the following statement is true or false :
“World Bank is also known as International Bank for Registration and Delimitation (IBRD).”
Answer: False.
World Bank is also known as International Bank for Reconstruction and Development (IBRD).
OR
Define Marketed Surplus.
Answer: Marketed Surplus is that portion of the agricultural produce which is sold by the farmers in the market. Simply put, it is the difference between the total output produced by the farmers and their self-consumption from that output.
Marketed Surplus = Total farm output produced by a farmer - Own Consumption of farm output
28. Compare and analyse the given data of India and China, with valid reasons :
Answer: The given table related to the data of India and China shows the following aspects of its population growth and sex ratio:
- The annual growth rate of the population in China is less (0.5%) than the growth rate in India (1.2%) because of the "One Child Policy" in China. India too wanted to spread awareness among people related to family planning measures, but the decreasing rate of population is China is more than the decreasing rate in India.
- The number of females per 1000 males in India is less (929) than the number of females per 1000 males in China (941). It is because in India people prefer a son (male) as their child instead of a daughter (female).
29. “Rapid increase in economic growth surely trickles down to the people under the absolutely poor category.”
Defend or refute the given statement with valid argument.
Answer: A poor person is an individual who lives a difficult life as he is not able to afford the necessities of life, which morally degrade him. He is incapable of acting like a human being. He feels demoralized by how society treats him.
The given statement, ‘‘Rapid increase in economic growth surely trickles down to the people under the absolutely poor category.’’ is refuted because of the following reasons:
- The growth in population has resulted in very low growth in the per capita income of the country.
- Also, the green revolution has increased the regional disparity and the gap between poor and rich farmers.
- Ultimately, the rich have grabbed the benefits of economic growth.
OR
“Human Capital Formation gives birth to innovation, invention and technological improvements.” Do you agree with the given statement? Support your answer with valid arguments.
Answer: Human Capital Formation is the process of addition made to the stock of skilled and capable people in the country over a time period. Yes, the given statement "Human Capital Formation gives birth to innovation, invention and technological improvements" is correct as this process not only increases the productivity of the available human resource but also helps in stimulating innovation among them, which ultimately helps in creating the ability to adopt new technologies.
Simply put, by making investments in education, one can create the ability to adopt new technologies, and facilitate invention and innovation. It is because educated human resource usually moves towards modern technologies and innovation.
30. Distinguish between:
(i) Tariff and non-tariff Barriers,
(ii) Bilateral and multilateral trade.
Answer:
i) Tariff Barriers: The taxes or duties imposed on the imports of the country by the government, to protect domestic companies and increase government revenue are known as tariff barriers.
Non-tariff Barriers: All restrictions other than the taxes imposed on the imports of the country by the government, to protect domestic companies and discriminate against new entrants are known as non-tariff barriers.
Difference between Tariff and Non-tariff Barriers
Basis | Tariff Barriers | Non-tariff Barriers |
|---|
Meaning | The taxes or duties imposed on the imports of the country by the government, to protect domestic companies and increase government revenue. | All restrictions other than the taxes imposed on the imports of the country by the government, to protect domestic companies and discriminate new entrants. |
Nature | These are explicit in nature. | These are implicit in nature. |
Revenue | Government receives revenue from tariff barriers. | The Government do not receive any revenue from non-tariff barriers. |
ii) Bilateral Trade: Trading of goods and services between two countries is known as Bilateral Trade.
Multilateral Trade: Trading of goods and services among two or more than two countries is known as Multilateral Trade.
Difference between Bilateral and Multilateral Trade
Basis | Bilateral Trade | Multilateral Trade |
|---|
Meaning | Trading of goods and services between two countries. | Trading of goods and services among two or more than two countries. |
Encourages | Bilateral Trade encourages economic cooperation between two countries. | Multilateral Trade encourages globalisation which ultimately integrates many countries of the world. |
Negotiations | It requires separate negotiations with different countries on one to one basis. | It requires negotiations with many countries together. |
31. (a) State the names of six Indian Systems of Medicine (ISM) under the AYUSH scheme of the Government of India.
(b) Name any two non-conventional sources of energy.
Answer:
a) AYUSH scheme is India's well-developed alternative healthcare system. At present, there are 27,951 AYUSH dispensaries, 4,095 hospitals and around 8 lakh registered practitioners in India. The six Indian Systems of Medicine (ISM) under the AYUSH scheme of the Government of India include Ayurveda, Yoga, Unani, Siddha, Naturopathy, and Homeopathy.
b) The sources of energy which have come into use only recently are known as non-conventional sources of energy. These sources of energy are renewable and eco-friendly. Two non-conventional sources of energy are wind energy and geothermal energy.
32. Discuss briefly any two salient features of India’s pre-independence occupational structure.
Answer: Distributing working people across primary, secondary, and tertiary sectors of the economy is known as Occupational Structure. The primary sector consists of production units that exploit natural resources like water, land, etc. For example, mining, fishing, forestry, etc. The secondary sector consists of production units that transform one good into another good. For example, construction companies, power generation companies, etc. The tertiary or service sector consists of production units that are engaged in producing services. For example, finance, education, transport, etc.
The salient features of the occupational structure of India on the eve of Independence are as follows:
- Predominance of Primary Occupation: Largest share of the workforce; i.e., 70-75% were found in the agricultural sector. However, the manufacturing and service sector accounted for 10% and 15-20% respectively.
- Regional Variation: On the eve of independence, regional variation was growing. There was a decline in the dependence of the workforce on the agricultural sector in the states of Andhra Pradesh, Tamil Nadu, Karnataka, Kerala, West Bengal, and Maharashtra. However, the increase in the manufacturing and service sectors in these states was good. Also, during the same time, the share of the workforce in the agricultural sector in the states of Orissa, Punjab, and Rajasthan increased.
OR
Discuss briefly the rationale behind choosing ‘Self-reliance’ as a planning objective for the Indian economy.
Answer: The planning commission proposed that India should formulate a plan for a period of 5 years for its development and economic growth, known as the Five Year Plan. Till now, twelve five-year plans have been completed in India. Under the influence of then Prime Minister Pt. Jawahar Lal Nehru, India established its first five-year plan inspired by the Soviet Union. The basic goals behind the Five Year Plan are growth, modernisation, self-reliance, and equity.
Self-reliance means anything that India is capable of manufacturing domestically will not be imported, especially food and agricultural products. In nutshell, Self-reliance means development through domestic resources. The major objectives of choosing Self-reliance as a planning objective for the Indian economy are as follows:
- To reduce Foreign Dependence: As India recently got freedom from foreign control, it was necessary for India to become independent or self-reliant and reduce its dependency on foreign countries, especially for food or agricultural items.
- To avoid Foreign Interference: The government of India was afraid that dependency on foreign countries for food supplies, capital, & technology may increase foreign interference in the economic policies of the country.
33 (a) Define worker-population ratio. What does it signifies?
(b) Analyse the trends in sectoral distribution of work force in India on the basis of data:
Answer:
a) Worker-population Ratio is the ratio of total number of workers to the total population and is generally expressed in terms of percentage. The formula for calculating the worker-population ratio is:
Worker~Population=\frac{Total~number~of~workers}{Total~Population}\times{100}
Significance: The worker-population ratio signifies that part of a population which has an active contribution to the production of goods and services of a country.
b) With the given information about the trends in employment patterns, it can be concluded that the proportion of the workforce in India in the primary sector is rapidly decreasing from 74.3% (in 1972-73) to 48.9% (in 2011-12). However, the employment share of both secondary and service sectors has increased by approximately 13.4% (in the last 40 years) and 12% (in the last 40 years), respectively.
OR
(a) “The Prime Minister urged to increase the rural income by increasing non-farm activities.”
Explain how non-farm activities can lead to rise in income of people in rural sector.
(b) “Indian health system needs the increased dose of public expenditure to cure itself.”
Defend or refute the given statement with valid arguments.
Answer:
a) Non-farm activities like poultry, craft, animal husbandry, handloom, dairying, etc., are alternative ways of attaining sustainable livelihood and raising the income level. The income level is raised because of the fewer chances of risk faced by farmers in farm activities because of fluctuations in production and market prices.
Besides, in India, agriculture is mainly a seasonal occupation and during the off-season, the farmers find it difficult to find other employment opportunities and stabilise their income. Therefore, the Prime Minister has urged to increase rural income by increasing non-farm activities.
b) The State of the Indian Health System in continuously improved since independence but the improvement is unreasonably slow. It has been a victim of a relatively low public expenditure. As compared to other developing countries, the health expenditure of India as a percentage of GDP is very low (around 4.7% of the total GDP in the year 2014-15). Therefore, it is essential for the Indian Health System to get a stronger dose of public expenditure to cure itself.
34. (a) State and discuss any two environmental concerns faced by India in the present times.
(b) Discuss the importance of credit in rural development.
Answer:
a) Environment is the total planetary inheritance and total resources. Simply put, it is the sum total of all external forces surrounding us and consists of all biotic and abiotic factors influencing each other. Environment performs four major functions; viz., Provides resources for production, assimilates waste, sustains life, and provides aesthetic services.
Two environmental concerns faced by India in the present times are:
- Land Degradation: It means a decline in the overall quality of water, soil or vegetation conditions and is commonly caused by human activities. Land Degradation occurs because of the natural and man-made processes of water erosion, wind erosion, and waterlogging. In India, poor land use practices are responsible for fast land degradation. The factors responsible for land degradation are shifting cultivation, overgrazing, improper crop rotation, poverty of the agriculture-dependent people, etc.
- Water Pollution: When toxic substances enter rivers, streams, and other water bodies and get dissolved or lie suspended in water, it results in water pollution. It degrades the quality of water and harms the life of marine life and various non-marine animals too, and is also a serious threat to human life. The problem of water pollution is so severe that in near future getting freshwater seems to be a distant dream.
b) Continuous and comprehensive socio-economic process that attempts at improving all aspects of rural life is known as Rural Development. A timely infusion of capital to get high productivity in agriculture and non-agriculture sectors is essential for the growth of the rural economy. As the time gap (gestation gap) between the sowing of crops and the realisation of income is long, the farmers are in strong need of credit for agricultural activities. There are two sources from which the farmers raise loans for agriculture; viz., Non-Institutional Sources and Institutional Sources. Through these sources, the farmers meet their initial investment in seeds, fertilisers, and other family expenses like marriage, death, etc. Therefore, credit is crucial for rural development as it contributes to agricultural production.
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Occupational Structure and Infrastructure on the Eve of IndependenceAt the time of independence, the Government of India announced agriculture to be the economy's prime moving force. Even before and during the colonial rule, India has always seen a predominance of the agricultural sector in the economy, since 85% of its population resides in the village and is depen
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Impact of Partition on the Indian EconomyAfter being declared an independent nation on 15 August 1947, the Indian government, along with the British officials, announced the partition of the country. The main reason behind the division of the country was the rivalry issues between the Hindus and the Muslims of Hindustan. The partition led
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Chapter 2: Indian Economy (1950-1990)
Indian Economy (1950-1990): Economic System adopted by Independent IndiaAn economic system is a medium through which the government allocates and distributes the available resources, goods & services across the country and geographical boundaries. Economic systems act as a regulatory system to manage the elements of production, labour, physical resources, and busine
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Economic Planning during 1950-1990On 15 August 1947, India gained Independence from the two hundred years of British rule. Finally, India became the master of its destiny, and the job of building the nation is now in the hands of the people of India. After Independence, it was necessary to rebuild the stagnant economy into a journey
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India’s Five Year PlanRight after the approval of the new constitution on 26 January 1950, a planning commission was set up and constituted in March 1950 by the Indian government. The late Prime Minister Pandit Jawahar Lal Nehru was its first chairman. Broad functions of the planning commission include: 1. Assessment of
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Agriculture during 1950-1990Agriculture can be defined as “The art and science of growing plants and other crops and raising animals for food, other human needs, or economic gainâ€. It came from two Latin words, ‘Ager’, meaning field, farm, land, and ‘Culture’, meaning cultivation. Thus, agriculture is the art or the practice o
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Policies or Measures to Solve Agricultural Problems during 1950-1990Agriculture can be defined as “The art and science of growing plants and other crops and raising animals for food, other human needs, or economic gainâ€. It came from two Latin words, ‘Ager’, meaning field, farm, land, and ‘Culture’, meaning cultivation. Thus, agriculture is the art or the practice o
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Green Revolution: Impacts, Achievements and ShortcomingsThe Green revolution happened due to the modernisation of Indian agriculture during the mid-sixties. Due to the increase in population during the late 1950s and 1960s, there appeared to be an extreme food crisis due to several food calamities and increased demand for food grains. The incapacity of I
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Debate Over Subsidies to AgricultureSubsidy is a discount provided by the government to the general public in order to supply critical items at accessible costs across the country. The amount that the government grants to a unit/industry that sells subsidised items to the public is known as a Subsidy. Subsidies are a type of governmen
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Industries during 1950-1990The economic activities concerned with the production of goods (steel energy), extraction of minerals (coal mining), and provision for services (tourism) are referred to as Industries. To be more specific, an industry is a group of organisations that are involved in the production/manufacturing or h
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Industrial Policy Revolution, 1956A comprehensive package of different policy measures covering various issues that are connected with different industrial enterprises of the country is known as Industrial Policy. The country needs to devise various principles, procedures, rules, and regulations to control its industrial enterprise.
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Foreign Trade during 1950-1990|Trade Policy: Import SubstitutionWhat is Foreign Trade? Foreign Trade refers to the exchange of goods & services between two or more nations or within boundaries. India has been one of the major trading countries since the time of independence, and primarily exports goods like cotton, silk, jute, indigo, wool, etc. India is als
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Chapter 3: Liberalisation, Privatisation, and Globalisation: An Appraisal
Economic Reforms: Need and Criticism of Economic ReformsPre-Reform ScenarioSince independence, India has followed a mixed economic system in which the advantages of both capitalist (market) and socialist (planned) economies are combined. Under this system, the government and private sector play an equivalent role in the economy. Although there is some ec
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Liberalisation: Meaning, Economic Reforms Adopted by Indian Government and ObjectivesLiberalisation is a way to eliminate state control over economic activities. It provides business enterprises with greater autonomy in decision-making and eliminates government interference. Liberalisation was initiated to end these limitations and explore multiple areas of the economy. Though some
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Privatisation: Meaning, Disinvestment, Rationale and Obstacles to Privatisation in IndiaPrivatisation refers to transferring ownership of services and assets from the public sector to the private sector. The assets owned by the public sector can be sold to the private sector or the restrictions on competition between public & privately held companies may be eliminated. The main rea
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Globalisation: Meaning, Advantages, Disadvantages and TypesWhat is Globalisation?Globalisation is the process of integrating a country's economy with the global economy by removing restrictions on trade and capital flows. Simply put, globalisation is the process of interaction and union of individuals, organisations, and governments on a worldwide scale. It
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World Trade Organisation (WTO): Features, Functions and ObjectivesMeaning of World Trade OrganisationBefore World Trade Organization (WTO), General Agreement on Trade and Tariffs (GATT) was established as a global trade organization in 1948 with 23 countries. GATT was set up to regulate all multilateral trade agreements by granting all nations equal access to the
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Impact of Liberalisation, Privatisation, and GlobalisationIn the early 1990s, India faced a major crisis followed by a foreign exchange deficit, resulting in its economic downfall. To overcome the crisis, the government came up with adjustments to the economy by bringing new reforms. The reforms introduced were called ‘structural reforms’ and launched unde
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Concept and Features of DemonetizationWhat is Demonetization?When a currency is stripped of its legal status and replaced with a new currency, it is known as demonetization. It is also interpreted as a shift on the part of the government indicating that tax evasion will no longer be tolerated or accepted. The government of India, announ
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What is GST? Types, Features, Benefits, Input Tax Credit, GST CouncilThe Goods and Services Tax or GST is a single, indirect tax that integrates all indirect taxes within the Indian economy. The GST Act was passed on 29th March 2017 in the Parliament of India and came into effect on 1st July 2017. The idea behind it was to replace multiple layers of taxation with one
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Chapter 4: Human Capital Formation in India
Human Capital Formation: Meaning, Sources, Role and ImportanceIf seen from the economic development point of view, human resources are important. In today's world, it is believed that to build a strong nation, it is essential to focus on the development of people and the organisation of human activity. Here, the development of human resources refers to the inc
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Difference between Physical Capital and Human CapitalIf seen from the economic development point of view, human resources are important. In today's world, it is believed that to build a strong nation, it is essential to focus on the development of people and the organisation of human activity. A country's economic development is possible only when it
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Sources of Human Capital FormationTo produce more human capital from resources, we need to invest in human capital. The process of adding to the stock of human capital over time is known as Human Capital Formation. In other words, Human capital formation is the process of acquiring and expanding the number of competent, educated, an
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Problems of Human Capital FormationTo produce more human capital from resources, we need to invest in human capital. The process of adding to the stock of human capital over time is known as Human Capital Formation. In other words, Human capital formation is the process of acquiring and expanding the number of competent, educated, an
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Role of Human Capital on Economic GrowthHuman Capital and Economic Growth are two related concepts of Human Capital Formation. A measure of labour's capabilities, including skills, working capacity, education, health, and intelligence, is referred to as Human Capital. The concept of human capital emphasises the idea that not every resourc
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Difference between Human Capital and Human DevelopmentHuman Capital and Human Development are two different concepts. The former is a measure of labour's capabilities, including skills, working capacity, education, health, and intelligence. However, Human Development is the process of enhancing human potential in terms of skills and rights. What is Hum
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Human Capital Formation in India: Growth of the Education Sector in IndiaIndia is a large and populated country, yet it is still in the process of development. Hence, one of the most essential factors that will contribute to transforming India from a developing country to a developed nation is education. If we carefully examine India's demographics, we can see that the s
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Chapter 5: Rural Development
Rural Development: Meaning, Significance, Process and EvaluationRural development is the continuous and comprehensive socio-economic process of improving all aspects of rural life. Traditionally, rural development has been focused on the exploitation of land-intensive natural resources such as forests and agriculture. However, growing urbanisation and changes in
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Rural Credit: Meaning, Purpose, Need, Sources and Critical AppraisalWhat is Rural Credit? Agriculture is the primary source of income for people living in India's rural areas. Farmers and peasants have to invest a significant amount of funds each year to guarantee a healthy crop. As a result, they frequently borrow money from moneylenders and financial institutions
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Sources of Rural CreditAgriculture is the primary source of income for people living in India's rural areas. Farmers and peasants have to invest a significant amount of funds each year to guarantee a healthy crop. As a result, they frequently borrow money from moneylenders and financial institutions to meet their basic re
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Agricultural Marketing: Meaning, Measures, Defects and Alternate Marketing ChannelsWhat is Agricultural Marketing?The agricultural sector is the backbone of the Indian economy and contributes significantly to the country's Gross Domestic Product (GDP). The agricultural sector is also the primary source of livelihood for a significant portion of the population. In recent years, the
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Agricultural Diversification: Needs, Benefits and TypesAgricultural Diversification means changing cropping pattern or shifting the agricultural workforce into other non-agricultural activities. The process of diversification involves diversifying an economy's revenue sources away from a single source and towards an ever-increasing range of industries a
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Organic Farming: Meaning, Benefits, Challenges and Future Prospects of Organic FarmingFrom the experiences of the past years, it is indicated that modern farming methods have overused the natural resources base. Excessive chemical fertilizers and pesticides were used, which created the problems of loss of soil fertility, and soil and water pollution. Ordinary farming depends intensel
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Chapter 6: Employment: Growth, Informalisation and Other Issues
Employment: Meaning, Importance, Basic Terms of Employment and Participation of people in EmploymentWhat is Employment?People do a wide range of jobs to earn a living. Work significantly impacts our lives as individuals and as members of society. Some people work on farms, in factories, banks, shops, and a variety of other workplaces, while some work from home. Work at home includes not only tradi
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Forms of Employment: Self and Wage EmploymentPeople do a wide range of jobs to earn a living. Work significantly impacts our lives as individuals and as members of society. Some people work on farms, in factories, banks, shops, and a variety of other workplaces, while some work from home. Work at home includes not only traditional work like we
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Distribution of EmploymentIn economics, employment refers to the state of having a job or being employed. If one has to employ someone, one must pay them. The person who hires people is known as employer, and the person who is getting paid for providing the services is known as employee. Employers may include individuals, bu
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Growth and Changing Structure of EmploymentThe economy of a country can describe the structure of employment in that country. The countries with a good rate of the economy have more people employed in their tertiary/quaternary sector than the primary and secondary sectors and when it comes to countries which have a poor economy, it can be sa
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Informalisation of Indian WorkforceSince Independence, Indian Planning focused on providing better jobs to the people in order to increase their living standards. Even after giving surplus job opportunities, more than 50 percent of the Indian workforce is still dependent on agriculture to earn their livelihood. People tend to incline
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Difference between Formal Sector and Informal SectorInformalisation of the Workforce is a situation where the workforce in the informal sector increases to the total workforce of the country. According to the composition of the workforce in India, it has been divided into two categories; Formal or Organised Sector and Informal or Unorganised Sector.
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Unemployment: Meaning, Causes, Effects and Remedial MeasuresUnemployment is one of the most important problems that can be found in any country in the world, regardless of its economic condition. Unemployment is defined as a condition wherein people are able and willing to work at the current wage rate but cannot find work. Some skilled workers struggle to f
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Unemployment and its TypesUnemployment is one of the most important problems that can be found in any country in the world, regardless of its economic condition. Unemployment is defined as a condition wherein people are able and willing to work at the current wage rate but cannot find work. The three major types of unemploym
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Chapter 7: Environment and Sustainable Development
Environment: Meaning, Functions, and Reasons for Environmental CrisisMeaning of Environment Environment is defined as the total of planetary inheritance and all resources. It includes all biotic and abiotic elements that interact with one another. While all living elements—birds, animals, plants, forests, fisheries, and so on—are biotic; abiotic elements include air,
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Environmental Degradation in IndiaWhat is Environmental Degradation? Environmental degradation is the decay of the ecosystem caused by human consumption of resources such as air, water, and land. Simply put, the increasing deterioration of the climate as a result of different factors is referred to as Environmental degradation. Some
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Causes and Impact of Environmental DegradationThe physical surroundings of a person of which they are a part and upon whom they depend for activities like physiological working, production, and consumption, are referred to as Environment. Here, the physical environment comprises all natural resources, including soil, plants, energy-carrying mat
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What are the measures to control Environmental Degradation ?Environmental degradation is the decay of the ecosystem caused by human consumption of resources such as air, water, and land. Simply put, the increasing deterioration of the climate as a result of different factors is referred to as Environmental degradation. Some of these factors include unusual w
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Sustainable Development: Meaning, Objectives and StrategiesSustainable development is the economic development process that seeks to satisfy the requirements of the present generation without affecting the needs of future generations. Sustainable development maximises the well-being of current and future populations The environment and the economy are inter
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Chapter 8: Comparative Development Experiences of India and its Neighbours
CBSE Previous Year Papers (2020)