6 SEM TDC GE COM (CBCS) 601
2 0 2 4
(May)
COMMERCE
(Generic Elective)
Paper: GE-601
(Indian Economy)
Full Marks: 80
Pass Marks: 32
Time: 3 hours
The figures in the margin indicate full marks for the questions
1. Answer the following as directed: (1×8=8)
(a) Write the full form of PQLI.
Answer: Physical Quality of Life Index
(b) Mention any one characteristic of Indian economy at the time of Independence.
Answer: The Indian economy was predominantly agrarian with low levels of industrialization.
(c) The Prime Minister Narendra Modi is the present Chairman of NITI Aayog. (True or False)
Answer: True
(d) The monetary policy of our country is formulated by the Reserve Bank of India/State Bank of India. (Choose the correct answer)
Answer: Reserve Bank of India
(e) Which one is the fastest growing sector in present India?
Answer: Service sector
(f) What is population explosion?
Answer: Population explosion refers to a rapid and excessive increase in the population of a country.
(g) Suggest any one measure to raise agricultural productivity of India.
Answer: Use of modern technology and high-yielding variety (HYV) seeds.
(h) The Government of India nationalized ___ number of commercial banks for the first time in India in the year 1969. (Fill in the blank)
Answer: 14
2. Write notes on any four of the following in detail: (4×4=16)
(a) Composition of National Income in India: National Income in India is composed of three major sectors:
Primary Sector: Includes agriculture, forestry, fishing, and mining. This sector contributed a significant share during the time of independence but now accounts for a lesser share due to modernization.
Secondary Sector: Comprises industries and manufacturing. Its contribution has gradually increased over time, especially after industrial reforms.
Tertiary Sector: Includes services like banking, trade, education, healthcare, etc. This is currently the largest contributor to India’s national income and the fastest-growing sector.
The shift from primary to tertiary indicates economic development and structural transformation.
(b) Features of New Economic Policy (1991): The New Economic Policy introduced in 1991 aimed at liberalizing the Indian economy. Key features include:
Liberalization: Reduction of government control over industries, encouraging private participation.
Privatization: Disinvestment in public sector enterprises and promotion of private sector.
Globalization: Opening up of the economy to foreign investments and international trade.
Financial Reforms: Reforms in the banking, taxation, and foreign exchange sectors for better efficiency.
These reforms aimed at making the Indian economy more market-oriented and globally competitive.
(c) Causes of Unemployment Problem in India: Several factors contribute to the high unemployment rate in India:
Population Growth: Rapid increase in population leads to more job seekers than available jobs.
Underdeveloped Industrial Sector: Lack of adequate industries limits employment opportunities.
Seasonal Employment in Agriculture: Employment in agriculture is not available throughout the year.
Skill Mismatch: Many youths lack the required skills for existing job opportunities due to poor education and training systems.
Technological Advancement: Automation and mechanization reduce the demand for labor in certain sectors.
(d) Policy Measures to Protect Environment in India: India has taken several steps to protect the environment:
Environmental Laws: Implementation of the Environment Protection Act (1986), Air and Water Acts, etc.
Pollution Control Boards: Establishment of Central and State Pollution Control Boards to monitor and control pollution.
Afforestation Programs: Projects like Van Mahotsav and National Afforestation Programme to increase green cover.
Promotion of Renewable Energy: Use of solar, wind, and other renewable sources to reduce dependence on fossil fuels.
Public Awareness: Campaigns and education to promote eco-friendly practices among citizens.
(e) Public Distribution System (PDS) of India: The Public Distribution System is a food security system operated by the Government of India:
Objective: To provide essential commodities like rice, wheat, sugar, and kerosene to the poor at subsidized rates.
Structure: It operates through a network of Fair Price Shops (ration shops) across the country.
Targeted PDS (TPDS): Introduced in 1997 to focus benefits more on Below Poverty Line (BPL) families.
Challenges: Issues like leakage, corruption, and inefficiency have affected its performance.
Reforms: Digitization and linking with Aadhaar are being introduced to improve transparency.
(f) Phillips Curve: The Phillips Curve illustrates the inverse relationship between inflation and unemployment:
Basic Concept: As unemployment decreases, inflation tends to increase, and vice versa.
Short-Run Trade-Off: Governments face a trade-off between reducing inflation and reducing unemployment in the short term.
Long-Run View: In the long run, the curve may become vertical, indicating no trade-off due to inflation expectations.
Policy Relevance: Useful in framing monetary and fiscal policies to balance inflation and employment levels.
3. (a) What do you mean by economic development and economic growth? Explain different measures of development and underdevelopment. (4+10 = 14)
Answer: Economic Growth: Economic growth refers to the increase in a country's output of goods and services over a period of time. It is usually measured by the rise in Gross Domestic Product (GDP) or Gross National Product (GNP). Economic growth is quantitative in nature and does not necessarily indicate improvements in the quality of life or standard of living.
Economic Development: Economic development is a broader concept that includes economic growth along with improvements in living standards, reduction of poverty, better education, healthcare, and equality. It focuses on the overall improvement in the quality of life of people and structural transformation of the economy.
Difference between Growth and Development:
Growth is about numbers, while development is about people’s well-being.
Growth can occur without development, but development includes growth as one of its components.
Measures of Development:
Per Capita Income:
It is the average income earned by a person in a country. While useful, it doesn’t reflect income distribution or quality of life.Human Development Index (HDI):
Developed by the UNDP, HDI measures development by combining indicators of life expectancy, education (mean and expected years of schooling), and per capita income. It gives a more comprehensive view than income alone.Physical Quality of Life Index (PQLI):
PQLI includes life expectancy, infant mortality rate, and literacy rate. It focuses more on basic human needs.Gender Inequality Index (GII):
Measures gender disparities in terms of reproductive health, empowerment, and labor market participation.Multidimensional Poverty Index (MPI):
It identifies multiple deprivations in the areas of health, education, and standard of living.
Measures of Underdevelopment:
Low Per Capita Income: Poor countries have a very low average income, indicating underdevelopment.
High Poverty and Unemployment Rates: These are major characteristics of underdeveloped economies.
Backward Infrastructure: Lack of proper roads, electricity, water supply, and communication services.
Low Literacy and Health Standards: Poor health and education facilities reflect the low level of development.
High Dependence on Agriculture: A majority of the population is engaged in agriculture with low productivity, indicating underdevelopment.
OR
3. (b) What is occupational distribution? Is it related to economic development? Explain the features of Indian agriculture at the time of Independence. (2+2+10 = 14)
Answer: Occupational Distribution: Occupational distribution refers to the proportion of the working population engaged in different sectors of the economy — primary (agriculture), secondary (industry), and tertiary (services).
Relation to Economic Development: Yes, occupational distribution is closely related to economic development. In developed economies, a larger share of the population is employed in the industrial and service sectors. In contrast, developing countries like India at the time of independence had most people engaged in agriculture, which is often a sign of economic backwardness.
Features of Indian Agriculture at the Time of Independence:
Low Productivity: Agricultural productivity was extremely low due to the use of traditional tools, lack of irrigation, and scientific methods.
Subsistence Farming: Most farmers produced only enough to feed their families, with little or no surplus for trade or savings.
Backward Technology: Farming methods were primitive. There was very limited use of fertilizers, improved seeds, or modern machinery.
Land Tenure System: The zamindari system and other exploitative tenancy systems left farmers at the mercy of landlords. Farmers had no incentives to improve productivity.
Fragmentation of Land Holdings: Land was divided into very small and scattered plots, making efficient farming difficult.
Lack of Irrigation Facilities: Agriculture was heavily dependent on monsoons, making it highly risky and uncertain.
High Dependence on Agriculture: Around 70-75% of the working population was engaged in agriculture, showing the lack of industrial development.
Rural Indebtedness: Farmers were often trapped in cycles of debt due to dependence on moneylenders and crop failures.
Absence of Institutional Support: There were no proper systems for crop insurance, agricultural credit, or marketing support.
Poor Infrastructure: There was a lack of transport, storage, and communication facilities in rural areas, which further limited agricultural development.
4. (a) Prepare a note covering achievements and failures of planning in India. (7+7=14)
Answer:
Achievements of Planning in India:
Increase in National Income:
The overall national income and per capita income have increased considerably due to planned economic growth.Industrial Development:
Planning led to the establishment of a strong industrial base, particularly in heavy industries like steel, cement, and machinery.Expansion of Infrastructure:
Planning focused on the development of infrastructure such as roads, railways, electricity, irrigation, and communication networks.Agricultural Progress:
The Green Revolution under planned efforts significantly increased food grain production and made India self-sufficient in food.Growth of Education and Health Services:
There has been a notable increase in literacy rates, schools, colleges, and improvement in healthcare facilities.Poverty Alleviation Programs:
Several plans included poverty reduction schemes like IRDP, MGNREGA, and others to provide employment and support to the poor.Development of Science and Technology:
India made great strides in areas such as space research, nuclear energy, and IT due to planned investments.
Failures of Planning in India:
Unequal Growth:
Economic growth has been uneven across regions and sections of society. The gap between the rich and poor remains high.Unemployment and Underemployment:
Despite several plans, the problem of unemployment has not been effectively solved, especially among educated youth.Population Pressure:
Planning failed to control the rapidly growing population, which put pressure on all resources and slowed down development.Low Agricultural Productivity:
In many regions, agricultural productivity remains low due to lack of reforms and inefficient land management.Public Sector Inefficiency:
Many public sector enterprises became loss-making units due to poor management and corruption.Environmental Degradation:
Industrialization and urbanization under planning led to deforestation, pollution, and environmental issues.Planning without Proper Implementation:
Several plans suffered from poor implementation, lack of coordination, and bureaucratic delays, affecting overall outcomes.
OR
4. (b) Define monetary policy and fiscal policy. Briefly explain various techniques of monetary and fiscal policies of the Government of India. (14)
Answer:
Monetary Policy: Monetary policy refers to the policy measures taken by the Reserve Bank of India (RBI) to control the supply of money, credit availability, and interest rates in the economy with the aim of maintaining price stability, controlling inflation, and promoting economic growth.
Fiscal Policy: Fiscal policy refers to the use of government revenue (taxation) and expenditure to influence the economy. It is formulated and implemented by the Ministry of Finance, Government of India, to achieve objectives like economic stability, growth, and equity.
Techniques of Monetary Policy:
Bank Rate Policy:
RBI changes the bank rate to control money supply. A higher rate discourages borrowing, while a lower rate encourages it.Open Market Operations (OMO):
Buying and selling of government securities by the RBI to regulate liquidity in the market.Cash Reserve Ratio (CRR):
The percentage of a bank’s total deposits that must be kept with the RBI. Increasing CRR reduces liquidity and vice versa.Statutory Liquidity Ratio (SLR):
The portion of deposits banks are required to maintain in the form of gold or government securities.Repo and Reverse Repo Rates:
Repo rate is the rate at which RBI lends to banks; reverse repo is the rate at which RBI borrows from banks. These affect the cost of credit.Moral Suasion and Direct Action:
RBI persuades banks to follow its directives or may take action against non-compliance.
Techniques of Fiscal Policy:
Taxation:
The government adjusts tax rates to influence consumption and investment. Progressive taxation helps reduce income inequality.Public Expenditure:
Increasing spending on infrastructure, health, education boosts economic activity.Subsidies and Transfers:
Providing financial support to the poor and backward sections to promote inclusive development.Public Borrowing:
The government borrows from the public to finance deficit spending, especially during economic slowdown.Deficit Financing:
When expenditure exceeds revenue, the government may borrow or print money, but excessive use may lead to inflation.Investment in Public Sector Enterprises (PSEs):
Government invests in PSEs to create jobs and provide essential goods and services.
5. (a) What are the objectives of land reforms? Discuss various land reform measures introduced in India. (4+10 = 14)
Answer: Objectives of Land Reforms in India:
Land reforms in India were introduced to bring about social justice and economic development in the agricultural sector. The main objectives are:
Elimination of Exploitation:
To remove the exploitation of tenants by landlords and ensure fair practices.Equitable Distribution of Land:
To reduce the concentration of land in the hands of a few and distribute surplus land among the landless.Increase in Agricultural Productivity:
To improve productivity by encouraging the use of modern farming techniques and ensuring secure ownership.Improvement in the Socio-Economic Condition of Farmers:
To uplift small and marginal farmers by giving them land ownership and access to resources.
Various Land Reform Measures Introduced in India:
Abolition of Intermediaries (Zamindari System): The first step in land reforms was to abolish intermediaries like zamindars. This helped in transferring land ownership directly to the tillers of the soil. States like Uttar Pradesh, Bihar, and Madhya Pradesh implemented this after independence.
Tenancy Reforms: These included laws to regulate rent, provide security to tenants, and give them ownership rights. “Land to the tiller” was the guiding principle. In some states, tenants were given the right to purchase the land they cultivated.
Ceiling on Land Holdings: A limit was imposed on how much agricultural land a person or family could own Surplus land above the ceiling limit was taken by the government and redistributed to landless farmers. This aimed to reduce inequality in land ownership.
Consolidation of Land Holdings:
To avoid fragmentation of land, small and scattered land pieces were consolidated into one holding. This made farming more efficient and mechanization easier.Bhoodan and Gramdan Movements: Started by Acharya Vinoba Bhave, these were voluntary movements where landlords donated land to the landless. Though initially successful, the movement lost momentum due to lack of proper implementation.
Computerization of Land Records: To improve transparency and reduce land disputes, land records are being digitized under various schemes. This also helps prevent illegal land transfers.
Challenges: Improper implementation, political resistance, and lack of updated land records affected the success of land reforms.
OR
5. (b) Discuss about various causes and remedies of population explosion in India. (7+7 = 14)
Answer:
Causes of Population Explosion in India:
High Birth Rate: Despite some decline, India still has a high birth rate due to early marriages and lack of family planning.
Decline in Death Rate: Better medical facilities, vaccinations, and hygiene have reduced the death rate significantly.
Illiteracy and Lack of Awareness: Many people, especially in rural areas, are unaware of the consequences of having large families.
Religious and Social Beliefs: In some communities, having more children is considered a blessing or a source of social security.
Poverty: Poor families often view children as assets for earning and household work.
Lack of Effective Family Planning: Family planning programs are often poorly implemented or not accessible to remote areas.
Migration from Rural to Urban Areas: Migration adds pressure to the population of urban centers, worsening the problem.
Remedies for Population Explosion in India:
Promoting Education: Educating both men and women, especially girls, can help delay marriage and reduce fertility rates.
Awareness Campaigns: Government and NGOs can spread awareness about the benefits of small families and use of contraceptives.
Incentives for Family Planning: Providing financial and health incentives for couples adopting family planning methods.
Compulsory Registration of Marriages and Births: This can help track demographic trends and ensure legal minimum age for marriage.
Employment Opportunities: Creating jobs can reduce poverty and change the mindset of having more children for income support.
Access to Healthcare and Contraceptives: Ensuring easy availability of reproductive health services in both urban and rural areas.
Strict Implementation of Laws: Laws related to minimum age of marriage and prohibition of child marriage should be enforced.
6. (a) What are the causes of low agricultural productivity in India? Explain the role of technology in increasing agricultural productivity. (7+7 = 14)
Answer: Causes of Low Agricultural Productivity in India:
Fragmentation of Land Holdings:
Due to population pressure and inheritance laws, land gets divided into very small and scattered plots, which are uneconomical to cultivate efficiently.Traditional Farming Methods:
Many farmers still use outdated tools like wooden ploughs and depend on bullocks instead of modern machinery.Lack of Irrigation Facilities:
A large portion of Indian agriculture depends on monsoon rains. Only about one-third of the cultivated area is under assured irrigation.Poor Quality of Seeds and Fertilizers:
Many farmers do not have access to high-yielding variety (HYV) seeds and modern fertilizers, which affects crop output.Inadequate Credit Facilities:
Farmers often borrow money from local moneylenders at high interest rates and cannot afford to invest in good inputs.Low Investment in Agriculture:
Both public and private investment in agricultural infrastructure like storage, transport, and marketing has been insufficient.Lack of Education and Awareness:
Many farmers are illiterate and unaware of modern farming techniques and government schemes that could help improve productivity.
Role of Technology in Increasing Agricultural Productivity:
High-Yielding Variety (HYV) Seeds:
The use of HYV seeds during the Green Revolution significantly increased the production of wheat and rice in India.Mechanization of Agriculture:
Tractors, harvesters, threshers, and other machines reduce manual labor and increase efficiency in sowing, harvesting, and processing.Improved Irrigation Techniques:
Techniques like drip and sprinkler irrigation save water and ensure better crop yield even in dry areas.Use of Fertilizers and Pesticides:
Balanced use of chemical and organic fertilizers, along with pesticides, helps protect crops and improve soil fertility.Soil Testing and Precision Farming:
Technology now allows farmers to test their soil and apply the exact nutrients needed. Precision farming also uses GPS and sensors to optimize farming practices.Agri-Tech Mobile Apps and Portals:
Apps like Kisan Suvidha, PM-Kisan, and eNAM provide farmers with market prices, weather updates, and expert advice.Cold Storage and Supply Chain Improvements:
Use of cold chains and better logistics helps reduce post-harvest losses and increase farmers’ income.
OR
Explain various measures introduced recently for increasing industrial growth in India. (14)
Answer:
India has taken several policy initiatives and reforms in recent years to boost industrial growth, attract investments, and create employment. Some of the key measures are:
Make in India Initiative:
Launched in 2014, this flagship programme aims to promote India as a global manufacturing hub by easing regulations, improving infrastructure, and encouraging domestic and foreign investments.Production Linked Incentive (PLI) Schemes:
Introduced for sectors like electronics, pharmaceuticals, textiles, and automobiles to provide incentives based on production and sales, thereby encouraging manufacturing.Ease of Doing Business Reforms:
India has simplified business registration, reduced tax complications, digitized licensing processes, and introduced single-window clearances to attract investors.Atmanirbhar Bharat Abhiyan (Self-Reliant India):
This campaign focuses on strengthening local industries, boosting domestic manufacturing, and reducing dependency on imports.Startup India and MSME Support:
The government supports startups and Micro, Small and Medium Enterprises (MSMEs) through funding, tax benefits, credit facilities, and simplified regulations.Industrial Corridors and Infrastructure Development:
Several industrial corridors (like Delhi-Mumbai Industrial Corridor) are being developed with high-quality infrastructure to support industries.Foreign Direct Investment (FDI) Reforms:
The FDI policy has been liberalized in various sectors like defense, retail, and insurance to attract more foreign capital.Skill Development Initiatives:
Programmes like Skill India and PM Kaushal Vikas Yojana aim to train youth and match industry needs, enhancing industrial productivity.Digital India and Technology Integration:
Promoting digitization in industries through automation, AI, and Industry 4.0 technologies to make manufacturing more efficient.Green and Sustainable Industrial Policy:
The government is promoting eco-friendly industries and renewable energy use in the industrial sector to ensure sustainable growth.National Logistics Policy (2022):
Introduced to improve supply chain efficiency, reduce logistics costs, and boost trade competitiveness.Revised Labour Laws:
New labour codes aim to simplify and rationalize India’s labour laws, balancing the interests of workers and industries.
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