INDIAN ECONOMY-CDG3A

UNIT – 1 Features of under developed economy

(2 marks questions)

What is the definition of under developed economy?

Nurkes says “under developed countries are those which compared

with advanced countries, are under developed with in relation to their

population and natural resources”.

(5 marks questions)

1. What are the Features of under developed economy?

• low per capita real income :

low per capita real income is an important features of an

under developed economy and is a significant measure of a

countries developed.

Per capital real income=real national income

Population

• Gross national income :

Classify the various countries on the basic of gross

national income .per capita into three income groups

• Rapid rate of population growth :

According to World Bank estimate growth rate of

population in under developed countries has been about 2% per

annum where as in developed countries it is about 0.7%.

• Unemployment and under employment:

It means that there are more people engaged in

agriculture then are actually needed, so that the addition of such

person does not add to lands productivity.

• Low levels of productivity:

It has been observed that the productivity of labour in

UDC’s has been found very low as compared with UDC’s

• Low levels of technology and skills:

Poor techniques and lower skills result in inefficient

and insufficient production which cause general poverty

• Economics backwardness:

The economic backwardness main feast itself in

lower efficient, illiteracy, poverty, factor – immobility, lack,

entrepreneurship and ignorance in economic matters

• Education:

The low levels of living in UDC’s are also attribute to

the poor education facilities in UDC’s.

• Dualistic economic:

The existing of two different segments in economy is

called dualism. that is one section is modernised users advance

and efficient techniques of production whereas the other section

is stagnant and uses old primitive methods.

• External indebtedness:

Under developed countries barrow from developed

countries on a large scale .this is because export capacity of this

countries is very less compared to the imports.

• Vicious circle of poverty:

“vicious circle of poverty” implies a circular

constellation of forces tending to act and react in such a

way as to keep a country with a state of poverty.

2) Differentiate between Economic development and economic

growth?

Economic development Economic growth

1. The continuous increase in real

income of a country over a long

period of time more it is also

furnished with technical and

industrial changes in the society.

it represent increase in the

production of goods and service

of a country more over it is

attached with the increase I the

efficiency of the factors of

production

2.It is broader then economic

growth

it is usually means the growth in

production of an economy.

3.it is a qualitative term It is a quantitative term

3)Explain the Indicators of economic development?

• Introduction:

According to the proponents of the basic needs approach

to economic development, following indicators can become

helpful to measure economic development.

• Health standard:

The life expectance of the citizens of the country and

to the infant morality rates in the country.

• Education:

it is considered the literacy rate in the country .more

over what is the enrolment ratio at a primary level is also given

recognition.

• Food availability:

It is considered that what is per capita food

availability in the country.

• Water supply:

What is the percentage of population which is getting

the facilities of clean water supply are considered

here.

• Water drainage:

What is the percentage of population which is getting

the facility of water drainage etc……..

• Shelter residence:

What is the ratio of population who is having

suitable shelter and residence.

(10 marks questions)

1) what are the Determinants of economic development?

There are two types of economic development they

are

• Economic factors

• Non-Economic factors

Economic factor Non- Economic factor

1) Natural resources Desire for development

2) Labour and human

resources

spread of education and skill

formation

3) Structural change Political determinacy

4) Size of market Climate factors

5) Capital formation Freedom from corruption

6) Capital--out ratio law and order suitable

7) Scientific technical

progress

Social factors

8) Financial stability Human factors

9) Development planning

10) Able entrepreneur and

organisation

11)International determinacy

12) Transport and

communication

2)what are the basic features of developing country?

1) Dependence on agricultural

2) Over population above 1.34 billion population is in India

3) Increasing unemployment level

4) Under utilisation of resources

5) low level of technology

6) Foreign trade orientation

7) Dualistic economy

8) Lack of suitable socio economic setup

UNIT-2 NATIONAL INCOME

1) Define national income?

J.M .Keynes “national income is the money value of all

goods and services produced in a country a year.

2) What is Gross national income?

The total money value of all final goods and services produced by the

residents of the country in one year period

3) what is Net national product?

It is found out by subtracting the amount of depreciation of the

existing capital in a year from the market value of all final goods and

services.

NNP at market price =GNP at market price –

depreciation

4) what is Gross domestic product ?

“Gross domestic product” is the total market value at the current price

of all final goods and services produced within a year by the factors of

production located within a country.

GDP = GNP – net foreign income from abroad

5)What is national income at factor cost?

“National income at a factor cost is the aggregate earning of the four

factors of population ( land, labour, capital and organisation ).

6)what is the meaning of Regional development disparities ?

Meaning :

The people living in different regions of the country will be

having different levels of income and standard of living due to in

proper development over concentration of industry in certain areas

and neglect of same region.

(5 marks questions)

1.what are the difficulties in Calculation of national income in

India ?

Introduction:

In India the difficulties are particularly great

because of its backwardness, illiteracy and ignorance of the

people.

Conceptual difficulties:

The income received by the nation living in foreign

should be added with the income produced within the country.

This problem is not solved.

1. Existence of barter system :

In the computation, it is assumed that bulk of the

goods and service produced are exchanged for money at

present there is no reliable method to find out the amount of

consumption at home and the extend of sale through barter

system.

2. Non – availability of reliable statistics :

The serious handicraft is non – availability of vital

statistics and inadequacy of data. even little available statistics

is not completely reliable little.

3. Double counting :

In the production sales method. the error of

double counting may create while calculating raw materials

first and then finished products and services rendered.

4. Transfer problem :

Transfer problem is another difficulty arising in

the calculation of nation income.

2) what are the methods ofCalculating national Income ?

The national income of a country can be computed by various

methods generally there are three methods

Product method :

The total value of all the goods and services

produced in the country during the financial year.

Income method :

In this case the incomes and payments received

by all the people in the country are calculated. Income received

in the form of wages ,interest ,rents ,profit by individuals

business houses and the government.

Expenditure method :

In the economy one mans expenditure is

another man income. the sum total expenditure measure the total

income.

3) Causes for slow growth of national income in India :

• Growth of population :

Massive efforts and huge investment towards

development are dissipated largely to feed the increasing

population of India . the increase In national income is eaten by

the progressive increasing in population.

• Too much dependence on agriculture :

The excessive dependence an agriculture prevents

quick raising in the level of per capita income because

agriculture is no organised on a commercial basis in our

country.

• Occupational structure :

The primary sector is supporting in high

proportion of working force and other sectors are absorbing

proportionately a very low percentage.

• Investment and capital output ratio :

During the first plan period an investment of 8 %

of national income was made, In the second plan period an

investment of 12.7 % was made, it was ranging from 10 % to 14

%.

(10 marks questions)

1.what are the Causes or regional disparities in India ?

• Per capita income differences :

The states which had the higher per capita

income over the national average were Punjab ,Haryana ,

Maharashtra , Gujarat, Karnataka, Tamil Nadu etc……..

• Disparities in the allocation of plan funds for deputes :

The main reason in wittning this disparities was

due to bays in the allocation the resources in the plan economic

development there was a bays in favour developed states ,

neglecting.

• Over investment in some metropolitan centres causing neglect

of other regions :

The government made over investment in some

metropolitan centres like Mumbai , Delhi , Kanpur ,Bangalore

etc……..

• Difference in the resources endowments :

So the resources rich regions has well

developed while other regions are in backward conditions. So

the resources endowments is the main cause of regional

disparities.

• Varying distribution of population :

Some regions are filed with over population

and in some regions there is existence of low population.

Unit -III Poverty and unemployment

(2 marks questions)

1. What is poverty line?

The poverty line, which is also sometimes called the poverty

threshold, is the smallest amount of money a person or a family needs

to live on; to buy what is needed. People who are below this line

are classified as poor. This line is used to decide who can get extra

help with things like food, shelter or medical care. There is a poverty

line based on the income and another based on consumption levels.

2. What Is Unemployment?

Unemployment represents the number of people in the work force

who want to work but do not have a job. It is generally stated as a

percentage and calculated by dividing the number of people who are

unemployed by the total work force.

3. What is disguised unemployment?

Disguised unemployment exists where part of the labour force is

either left without work or is working in a redundant manner where

worker productivity is essentially zero. An economy

demonstrates disguised unemployment when productivity is low and

too many workers are filling too few jobs.

(5 marks questions)

1. What are the Measures to Reduce Poverty in India?

Accelerating Economic Growth: In the fifties and sixties it was

generally thought that poverty in India can be significantly reduced by

accelerating economic growth. According to this view, benefits of

economic growth will trickle down to the poor in the form of more

employment opportunities, greater productivity and higher wages.

2. Agricultural Growth and Poverty Alleviation:

Agricultural growth has been recognized as an important factor that

contributes to marked reduction in poverty. A study made by Montek

Ahuluwalia, former member of Planning Commission, brought clearly

that agricultural growth and poverty are inversely related; the higher

agricultural growth leads to lower poverty ratio.

3. Speedy Development of Infrastructure:

An important measure to generate employment opportunities for the

poor and to raise their productivity is the speedy development of

infrastructure. Since private sector is not attracted to make adequate

investment in infrastructure, public investment needs to be stepped up

for its development.

4. Accelerating Human Resource Development:

Besides physical infrastructure development, poverty can also be

reduced through human resource development. Human resource

development requires greater investment in educational facilities such

as schools to promote literacy, technical training institutes and

vocational colleges to import skills to the people.

5. Growth of Non-Farm Employment:

For reduction of poverty growth of non-farm employment in the rural

areas is of special importance. Non-farm employment is created in

marketing (i.e., petty trade), transportation, handicrafts, dairying, and

forestry, processing of food and other agricultural products, repair

workshops.

6. Access to Assets:

Rapid growth of population after independence has led to greater sub-

division and fragmentation of agricultural holdings and lack of

employment opportunities in industries and other non-farm sectors

has worsened the conditions of agricultural labour and self-employed

small farmers.

7. Access to Credit:

Availability of credit to the poor on easy terms can create the

conditions for small farmers gaining access to productive resources

such as HYV seeds fertilizers, construction of minor irrigation such as

wells and tube wells. This will enable the small farmers to adopt high-

yielding technology to raise their productivity.

8. Public Distribution System (PDS):

Poor households spend nearly 80 per cent of their income on food.

Therefore, an effective way of raising rural incomes and ensuring

food security to the poor households is an assured supply of adequate

quantity of food-grains and other essential commodities at subsidised

prices, that is, at prices which are lower than the market prices.

9. Direct Attack on Poverty: Special Employment Schemes for the

Poor:

It was realised in the early seventies that it would take a very long

time for economic growth to generate enough employment

opportunities to provide productive employment to all the

unemployed and poor in the country. Therefore, a strategy of

providing employment to the poor in the short run, special schemes of

employing poor on rural public works was proposed by Dandekar and

Rath in their now famous work “Poverty in India”.

2. What are the Main Causes of Poverty in India?

(i) Heavy pressure of population:

Population has been rising in India at a rapid speed. This rise is

mainly due to fall in death rate and more birth rate.

(ii) Unemployment and under employment:

Due to continuous rise in population, there is chronic unemployment

and under employment in India. There is educated unemployment and

disguised unemployment. Poverty is just the reflection of

unemployment.

(iii) Capital Deficiency:

Capital is needed for setting up industry, transport and other projects.

Shortage of capital creates hurdles in development.

(iv) Under-developed economy:

The Indian economy is under developed due to low rate of growth. It

is the main cause of poverty.

(v) Increase in Price:

The steep rise in prices has affected the poor badly. They have

become more poor.

(vi) Net National Income:

The net national income is quite low as compared to size of

population. Low per capita income proves its poverty. The per capita

income in 2003-04 was Rs. 20989 which proves India is one of the

poorest nations.

(vii) Rural Economy:

Indian economy is rural economy. Indian agriculture is backward. It

has great pressure of population. Income in agriculture is low and

disguised unemployment is more in agriculture.

(viii) Lack of Skilled Labour:

In India, unskilled labour is in abundant supply but skilled labour is

less due to insufficient industrial education and training.

(ix) Deficiency of efficient Entrepreneurs:

For industrial development, able and efficient entrepreneurs are

needed. In India, there is shortage of efficient entrepreneurs. Less

industrial development is a major cause of poverty.

(x) Lack of proper Industrialisation:

Industrially, India is a backward state. 3% of total working population

is engaged in industry. So industrial backwardness is major cause of

poverty.

(xi) Low rate of growth:

The growth rate of the economy has been 3.7% and growth rate of

population has been 1.8%. So compared to population, per capita

growth rate of economy has been very low. It is the main cause of

poverty.

(xii) Outdated Social institutions:

The social structure of our country is full of outdated traditions and

customs like caste system, laws of inheritance and succession. These

hamper the growth of economy.

(xiii) Improper use of Natural Resources:

India has large natural resources like iron, coal, manganese, mica etc.

It has perennial flowing rivers that can generate hydro electricity.

Man power is abundant. But these sources are not put in proper use.

(xiv) Lack of Infrastructure:

The means of transport and communication have not been properly

developed. The road transport is inadequate and railway is quite less..

(10 marks questions)

1.What are main causes of unemployment?

(i) Caste System:

In India caste system is prevalent. The work is prohibited for specific

castes in some areas.In many cases, the work is not given to the

deserving candidates but given to the person belonging to a particular

community. So this gives rise to unemployment.

(ii) Slow Economic Growth:Indian economy is underdeveloped and

role of economic growth is very slow. This slow growth fails to

provide enough unemployment opportunities to the increasing

population.

(iii) Increase in Population:Constant increase in population has been

a big problem in India. It is one of the main causes of unemployment.

The rate of unemployment is 11.1% in 10th Plan.

(iv) Agriculture is a Seasonal Occupation: Agriculture is

underdeveloped in India. It provides seasonal employment. Large part

of population is dependent on agriculture. But agriculture being

seasonal provides work for a few months. So this gives rise to

unemployment.

(v) Joint Family System: In big families having big business, many

such persons will be available who do not do any work and depend on

the joint income of the family.

(vi) Fall of Cottage and Small industries: The industrial

development had adverse effect on cottage and small industries. The

production of cottage industries began to fall and many artisans

became unemployed.

(vii) Slow Growth of Industrialisation: The rate of industrial growth

is slow. Though emphasis is laid on industrialisation yet the avenues

of employment created by industrialisation are very few.

(viii) Less Savings and Investment:

There is inadequate capital in India. Above all, this capital has been

judiciously invested. Investment depends on savings.

(ix) Causes of Under Employment: Inadequate availability of means

of production is the main cause of under employment. People do not

get employment for the whole year due to shortage of electricity, coal

and raw materials.

(x) Defective Planning: Defective planning is the one of the cause of

unemployment. There is wide gap between supply and demand for

labour. No Plan had formulated any long term scheme for removal of

unemployment.

(xi) Expansion of Universities: The number of universities has

increased manifold. There are 385 universities. As a result of this

educated unemployment or white collar unemployment has increased.

(xii) Inadequate Irrigation Facilities: Even after the completion of

9th five plans, 39% of total cultivable area could get irrigation

facilities.

(xiii) Immobility of labour: Mobility of labour in India is low. Due

to attachment to the family, people do not go to far off areas for jobs.

Factors like language, religion, and climate are also responsible for

low mobility.

2. what are the suggestions to solve unemployment problem?

(i) Change in industrial technique:

Production technique should suit the needs and means of the country.

It is essential that labour intensive technology should be encouraged

in place of capital intensive technology.

(ii) Policy regarding seasonal unemployment:

Seasonal unemployment is found in agriculture sector and agro based

industries.

To remove it:

(a) Agriculture should have multiple cropping,

(b) Plantations, horticulture, dairying and animal husbandry should

be encouraged,

(c) Cottage industries should be encouraged.

(iii) Change in education system:

Educational pattern should be completely changed. Students who

have liking for higher studies should be admitted in colleges and

universities. Emphasis should be given on vocational education.

Qualified engineers should start their own small units.

(iv) Expansion of Employment exchanges:

More employment exchanges should be opened. Information

regarding employment opportunities should be given to people.

(v) More assistance to self employed people:

Most people in India are self employed. They are engaged in

agriculture, trade, cottage and small scale industries etc. These

persons should be helped financially, providing raw materials and

technical training.

(vi) Full and more productive employment:

The main objective of county’s employment policy should be to

increase employment opportunities and productivity of labour. Govt.

should adopt a policy that provides employment to all people.

(vii) Increase in Production:

To increase employment, it is essential to increase production in

agriculture and industrial sectors. Development of small and cottage

industries should be encouraged.

(viii) More importance to employment programmes:

In five year plans more importance should be given to employment.

The programmes like irrigation, roads, flood control, power,

agriculture, rural electrification can provide better employment to

people.

(ix) High rate of capital formation:

Rate of capital formation in the country should be accelerated. Capital

formation should be particularly encouraged in such activities which

generate greater employment opportunities. Capital output ratio

should be kept low.

(x) Industries in co-operative sector:

Industries in co-operative sector should be encouraged. Kerala Govt.’

set up a textile mill covering 600 unemployed persons on co-operative

basis.

(xi) Decentralisation of industrial activity:

Decentralisation of Industrial activity is necessary to reduce

unemployment. If industrial activities are centralised at one place,

there will be less employment opportunities in the under developed

areas.

(xii) Population control:

The growth of population should be checked in order to solve

unemployment, problem. Family planning programme should be

implemented widely and effectively.

3.What are the different types of Unemployment?

Cyclical Unemployment

Cyclical unemployment occurs because of these cycles. When the

economy enters a recession, many of the jobs lost are considered

cyclical unemployment.

Frictional Unemployment

Frictional unemployment occurs because of the normal turnover in the

labor market and the time it takes for workers to find new jobs.

Throughout the course of the year in the labor market, some workers

change jobs. When they do, it takes time to match up potential

employees with new employers. Even if there are enough workers to

satisfy every job opening, it takes time for workers to learn about

these new job opportunities, and for them to be considered,

interviewed and hired.

Structural Unemployment

Let's talk about structural unemployment, which occurs because of an

absence of demand for a certain type of worker. This typically

happens when there are mismatches between the skills employers

want and the skills workers have. Major advances in technology, as

well as finding lower costs of labor overseas, lead to this type of

unemployment.

4)what are the causes of the rapid growth of population ?

Decline in the Death Rate: At the root of overpopulation is the

difference between the overall birth rate and death rate in populations.

If the number of children born each year equals the number of adults

that die, then the population will stabilize.

Better Medical Facilities: Science was able to produce better means

of producing food, which allowed families to feed more mouths.

Medical science made many discoveries thanks to which they were

able to defeat a whole range of diseases.

More Hands to Overcome Poverty: The rest faced poverty and

would give birth to large families to make up for the high infant

mortality rate. Families that have been through poverty, natural

disasters or are simply in need of more hands to work are a major

factor for overpopulation.

Technological Advancement in Fertility Treatment: With latest

technological advancement and more discoveries in medical science,

it has become possible for couple who are unable to conceive to

undergo fertility treatment methods and have their own babies.

Immigration: Many people prefer to move to developed countries

like US, UK, Canada and Australia where best facilities are available

in terms of medical, education, security and employment.

Lack of Family Planning: Most developing nations have large

number of people who are illiterate, live below the poverty line and

have little or no knowledge about family planning.

4. What are the Effects of Overpopulation?

Depletion of Natural Resources: The effects of overpopulation are

quite severe. The first of these is the depletion of resources. The Earth

can only produce a limited amount of water and food, which is falling

short of the current needs.

Degradation of Environment: With the overuse of coal, oil and

natural gas, it has started producing some serious effects on our

environment. Rise in the number of vehicles and industries have badly

affected the quality of air.

Conflicts and Wars: Overpopulation in developing countries puts a

major strain on the resources it should be utilizing for development.

Conflicts over water are becoming a source of tension between

countries, which could result in wars.

Rise in Unemployment: When a country becomes overpopulated, it

gives rise to unemployment as there fewer jobs to support large

number of people. Rise in unemployment gives rise to crime as

people will steal various items to feed their family and provide them

basic amenities of life.

High Cost of Living: As difference between demand and supply

continues to expand due to overpopulation, it raises the prices of

various commodities including food, shelter and healthcare. This

means that people have to pay more to survive and feed their families.

5. Discuss the Solutions to control Overpopulation?

Better Education: One of the first measures is to implement policies

reflecting social change. Educating the masses helps them understand

the need to have one or two children at the most.

Making People Aware of Family Planning: As population of this

world is growing at a rapid pace, raising awareness among people

regarding family planning and letting them know about serious after

effects of overpopulation can help curb population growth.

Tax Benefits or Concessions: Government of various countries

might have to come with various policies related to tax exemptions to

curb overpopulation.

Unit IV

Features, achievements and failure of planned economy

(5 marks questions)

What are the Objectives of India’s Five year Plan ?

1. Economic Growth:

Economic planning in India aims at bringing about a rapid economic

development in all sectors. The key sectors are agriculture, industry,

power and transport.

2. Economic Equity and Social Justice:

Two aspects of social justice involve the reduction of poverty and the

reduction in the inequality in the distribution of income and wealth.

3. Full Employment:

The removal of unemployment is considered to be another important

objective of India’s five year plans. But, unfortunately, it never

received the priority it deserved. In the Sixth plan (1978-83) the than

Janata Government gave employment a place of pride for the first

time.

4. Economic Self-Reliance:

Self-reliance or, for that matter, self-sufficiency, refers to the elimi-

nation of external assistance. In other words, it means zero foreign

aid. India is typically a dependent economy. She is used to importing

a huge quantity of food-grains, fertiliser, raw materials and industrial

machinery and equipment.

5. Modernisation:

This new objective was categorically mentioned for the first time in

the Sixth Plan. Modernisation means such a variety of structural and

institutional changes in the economic activities that can change a

feudal and colonial economy into a progressive and modern economy

that produces various types of goods.

(10 marks questions)

1.what are the Major Achievements of Economic Planning in

India?

1. Increase in National Income and Per Capita Income:

During planning period national income has increased manifold. The

average annual increase in national income was registered to be 1.2

per cent from 1901 to 1947.

This increase was recorded to be 3 per cent from 1950 to 2000-01.

Moreover, average annual growth rate of national income was 4 per

cent in 1970-80 which, further increased to 5 per cent in 1990-2000.

2. Development in Agriculture:

Agricultural productivity has also marked an upward trend during the

plan period. The production of food-grains which was 510 lakh tones

in 1950-51 increased to 176.4 million tones in 1990-91 and further to

211.9 million tones in 2001-02.

3. Development of Industry:

In the first five year plan much of the capital was invested to develop

the industry and defense. About fifty per cent of the total outlay of the

plans was invested for their development. As a result, industrial

production has increased to a great extent. For instance, the

production of cotton cloth which was 4215 million sq. meters in

1950-51.

4. Development of Transport and Communication:

During the planning period, much attention has been paid towards the

development of transport and communication. In the first two plans,

more than one-fourth of the total outlay was invested on the

development of transport and communication.

5. Self Reliance:

During the last five decades, considerable progress seems to have

been made towards the achievement of self reliance. We are no longer

dependent on other countries for the supply of food-grains and a

number of agricultural crops..

6. Employment Generation:

In India, the problem of unemployment is most crucial. During the

first Nine plans much emphasis was laid on the creation of larger

employment opportunities, such as, emphasis on the establishment of

small and cottage industries, spread of technical education,

development of self-employment schemes, creation of larger

industries, improvement of agriculture and service sectors etc.

7. Power:

Total installed capacity (including non-utility), which was only 2,301

MW in 1950, increased to 97,899 MW (including non-utility of

12,079 MW) by the end of March, 2000. The cumulative capacity in

the public utilities as on March, 2000 in the country has reached

97,837 MW (provisional) comprising 23,816 MW as hydro, 70,186

MW as thermal, 2,680 MW as nuclear and 1,155 MW as wind energy.

8. Price Stability:

Attaining economic stability has been considered as one of the major

objective of economic planning throughout the entire plan period. But

unfortunately, the country has been subjected to series of economic

fluctuations and instability in the price level.

9. Capital Formation:

In India due to the development of agriculture, industry and defence,

the rate of capital formation has also increased. In 1950-51, the rate of

capital formation was 11.0 per cent which in 2000-01 remarkably

increased to 21.3 per cent.

10. Development of Science and Technology:

In the era of planning, India has made much progress in the field of

science and technology. In reality, the development is so fast that

India stands third in the world in the sphere of science and

technology. Indian engineers and scientists are in a position that they

can independently establish any industrial venture.

11. Social and Miscellaneous Services:

Development of social and miscellaneous services is also another

important sector of our five year plans. It consists such vital services

as education, health and family planning, housing, labour welfare and

welfare of backward classes etc. and a considerable amount has been

allotted in our five year plans for the provision of these services.

12. Social Justice:

The planning in India has an objective of sustained growth with social

justice. It has also been emphasising the achievement of this

objective. As a result, these plans have been ensuring the

improvement of living standards of the people, removal of poverty,

creation of additional jobs, and reduction in inequalities of income

and wealth.

2. Point out the failures of economic plans in India ?

1. Stagnant Economy:

When India was freed, it has deep marks of stagnation. During the

phase of fifty years of economic planning, its growth rate is zero or

near.

2. Poverty:

These five year plans have miserably failed to make a dent on poverty

as 40 per cent of population is in tight grip of poverty. The poverty is

greatly responsible for poor diets, low health and poor standard of

living. A large proportion of the population has to go even without the

most essential needs of daily life.

3. Unequal Distribution of Income and Assets:

Another failure of the planning is that the distribution of income and

other assets in rural and urban areas continued to be skewed. The bulk

of increased income has been pocketed only by the rich few while

weaker section of the society live hand to mouth and lead very

miserable life.

4. Increasing Unemployment:

Increasing unemployment in our country is the burning problem of

the day. At the beginning of the first five year plan the number of

unemployed was hardly 33 lakh but at the end of eighth plan it

reached 350 lakh. At the end of ninth plan, it is likely to exceed 400

lakh.

5. Abnormal Growth of Population:

In all plans, main objective was to check over-population but it has

miserably failed to bridge the galloping population. The rapid growth

of population has aggravated the situation to the worst. This problem

gives birth to twin problems of poverty and unemployment.

6. Inflationary Pressure:

Inflation had been started with the onset of the heavy doses of

investment programmes during different five year plan periods. Now,

it turned to the gravity of the problem as it has created serious

imbalances in the socio- politico-economic relations. The people with

fixed income group find it extremely difficult to maintain the standard

of living.

7. Adverse Balance of Payment:

Truly, the production of agricultural and industrial sector has

increased manifold but still we are dependent on imports. In our

plans, we have stressed on export promotion and import substitution

to correct the adverse balance of payment but no headway has been

seen in this direction. It has continuously been unfavourable.

8. Unproductive Expenditure:

India is deficient in capital due to rising expenditure on unproductive

channels. Moreover, huge investments are made on the construction

of five star hotels and other wasteful consumption. Its benefits go in

the hand of few affluent people who generally concentrate wealth.

Consequently, rich becomes rich and poor’s lag behind.

9. Huge Amount of Deficit Financing:

To mobilise the resources for different plans, government has

absolutely failed to manage from internal resources. The government

at this time, left with no alternative of deficit financial. From 1950-51

to 1984-85 total amount of deficit financing in the country was Rs.

24440 crores. During Eighth Plan, it was proposed to be Rs. 207000

(8.6% Eighth of total outlay) crores.

10. Biased Growth Profile:

At large, Indian plans have given many evils like growth of

monopolistic practices, large inequalities, poverty but still it has

delivered biased growth profile in favour of more well-to-do section

of the society. It has widened the gap between man and man, region to

region. The result is that a large many are below poverty line.

11. Vicious Circle of Poverty:

Another major objective of planning in India is the eradication of

poverty. However, we have badly failed on this front also as more

than 30% of India’s population is still-living below poverty line. We

are encircled by vicious circle of poverty. A large proportion of

India’s population does not get even bare necessities of life satisfied.

12. Inadequate Social Development:

Despite the 55 years of economic planning in India, we have

miserably failed on the social development front. Economic planning

in India has not been able to make any social change, particularly in

the living standards of the common people and curbing poverty.

13. Defective Process of Planning:

The defective process of planning which came into force since the

beginning of the planning in India, is also responsible for the failure

of our economic planning.

The other important reasons are:

(i) Unrealistic plans;

(ii) Over-ambitious plans;

(iii) Faulty implementation;

(iv) Lack of programmatic approach;

(v) Corrupt administration;

(vi) Non-coordination etc.

14. Slow Economic Growth:

Another major reason of failure of economic planning in India is the

slow growth rate of Indian economy. The achievement of different

sectors during the plan period has been much below the scheduled

targets.

Unit –V Transport, communication and education

(10 marks questions)

1.what are the different modes of Transport System in India ?

Transport System in India

The most important means of transportation in a country are roads,

railways, airways, and waterways. India has completely

revolutionized its transportation system, both external and internal.

Rail Transport

Railways are the most important means of transportation in India.

The improvement in railway communications in recent times has

played a most important part in the internal development of the

country. They have brought the different parts of the country closer.

The advent of the railway has been of special advantage to the

peasantry. Social and political influences from railway construction

have been no less.

Advantages of Railways

• Travelling has become cheaper;

• Defense of the country is less difficult.

• Greater peace and order is maintained in the country, and

• The spirit of nationalism has very greatly developed.

Road Transport

India has a vast network of roads, both metalled and

unmetalled. However, this means of transport and communication are

still inadequate for our needs. The vehicles that are mainly used on

village roads are motorbuses, trucks, and bullock carts.

Before the advent of railways, roads were the only means of

communication for the exportation of surplus produce. With the

extension of the railway system, it has become more and more

necessary to construct roads to feed the railways.

At present, the economic loss caused by the inaccessibility of many

agricultural districts in the rainy season is very great. In sandy, hilly,

and forest-covered tracts and in other parts of the country, where

railways have not penetrated, road transport still holds an important

share of long-distance traffic.

The opening of railways has created a demand for road-construction,

which must be met by the local and provincial bodies. The question of

developing the roads is also of vital importance. We cannot expect

any significant progress in our rural economy unless there are good

road connections between villages and towns.

Waterways

Water transport is the oldest and cheapest form of transport. It is one

of the most important external and internal means of transport in all

the civilized countries of the world. It is useful for the carriage of

bulky and heavy goods.

In India, we have many great river systems. However, they are

unevenly distributed, some of them are fully utilized for irrigation

purposes, and some others are naturally unfit for navigation.

In some parts of India, however, waterways are still extensively used

for navigation purposes.

In India, more navigable rivers and canals should be made. And, a

systematic policy for the development of the inland water transport

should be pursued.

Air Transport System

Proper attention must also be given at the same time to air transport as

another means of national and international communication. India

possesses some natural advantages in this respect and they have to be

fully exploited for development of airways.

The Government is taking a keen interest in the expansion of civil

aviation not only for its importance as a means of transport but also

because of its strategic value in the matter of national defense. There

are also a large number of aerodromes in the country.

2.What are the means of communication?

1. Postal Services:

Postal Services were started in 1837 by British people. The Postal

Department was started in 1854. Railway Mail Service (RMS) was

launched in 1907 and Air Mail Service (AMS) was introduced in 1911.

The Postal Services are the oldest, cheapest and very popular means of

communication. The postal network has been increasing since 1951.

The postal network in India is the largest in the whole world with 1.5

lakh post offices.

2. Telegraph services:

Indian Telegraph is one of the oldest governments owned public utility

organisation in the world. It was launched in 1851 and established link

between Kolkata and Diamond Harbour.

3. Telecommunications:

Telecommunication is the most important mode of communication. It

establishes direct link between two parties located at different places and

at any time. Telephone service was started in 1881 in India but in the last

two decades, there has been tremendous growth in telecommunication

sector. India has now the largest telecommunication network in Asia.

4. Courier Services:

Simply speaking, the courier services means the services rendered by

private companies or firms for sending and delivery of letters, parcels

and packets to the addressee.

5. Electronic Method:

It is the recent development in communication Messages are sent

through Fax and E-mail throughout the world within minutes.

(a) Fax:

It is an electronic method of sending recorded messages in the form of

letters, handbills, statements and files etc. It can be used throughout the

day and night from any comer of the globe.

(b) E-mail:

E-mail is the recent electronic media to send message. It is a way to

communicate people all over the world throughout the day and night

without waiting the receiver to wake up and making himself present. It

can send messages to hundreds of people in a few minutes. It can also

send files, photos or even video clips.

6. Internet Service:

It is the latest mode of communication. We can get required information

directly through computers by opening the site. The required

information can be downloaded any time. We have to install an internet

connection.

7. Radio and Television:

These two are the source of information. They provide us the latest

information in the shape of news and advertisements and also a source

of entertainment for us.

3.Write a note on education in India?

Non-formal education

Since, education is important for the growth of developing nation like

India, various steps have been devised to cut the percentage of

dropouts. Non-formal education – to offer educational facilities for

the drop-outs and to fulfill the desire for additional education in the

grown-up-drop-outs is being given a new orientation to make it

purposeful and to attract a broad spectrum of the drop-out population.

Secondary education system

Secondary education is the fulcrum or central point of a nation’s

education system. With regard to the pattern of secondary education

experiments have been going on since Independence. The 10+2+3

system of education which was recommended by Kothari

Commission of 1965 is now being implemented in almost all the

States and Union Territories of India.

Higher education system

Higher education system in India is imparted through about 180

universities and neatly 4500 colleges. In addition there are several

institutions imparting specialized knowledge and technical skills.

Since education is a State subject. The State Governments in India are

free to open new university. Grants Commission is an authority which

dispenses grants to the universities. However, its formal sanction is

not necessary to open a university. Taking advantage of this provision

many State governments in India have opened a large number of

universities in recent years.

Medium of education

Uncertainty and vacillation have marked the government’s policy

about the medium of education in India. Mahatma Gandhi wanted

basic education to be imparted through the mother tongue.

Our Constitution provides that facilities for primary education in

mother tongue should be provided to all Indian citizens. For this

purpose, the Central Government may issue directives to the State

Governments.

Regarding the medium of instruction in colleges and universities,

some State Governments have already decided, in principle, to switch

over to the regional language. However the implementation in this

respect has remained very slow. If regional languages are fully used

for imparting college education, mobility from one region to another

for the higher education in India will be seriously hampered. But

continuing higher education through the English medium is

disfavored by many politicians and some educationalists. The

alternative of imparting college education through the Hindi medium

throughout the country makes no sense. Thus, the Indian dilemma in

respect of medium of education still continues.

Work-oriented education system

Work-oriented education system was advocated by Mahatma

Gandhi and others. However, vocational education system in India

has proved an up-hill task. The present pattern of 10+2+3 with a

vocational stream has touched only the fringe of the problem. The fact

is that people resent being taught crafts and traditional occupations in

the school. However, the modern commercial education which

imparts skills in typing, shorthand, reception and the like has met with

better popular approval and demand.

Correspondence education and establishment of “Open

Universities”

In recent times new educational opportunities have been invented, one

such being correspondence education system. Today almost every

university in India is offering correspondence courses for different

degrees and diplomas correspondence; and, in this respect, is to be

differentiated from the regular universities which take up

correspondence education in addition to the college education.

Correspondence education provides an important means for drop-outs

to improve their qualification and, for the employed the means to

improve education and service prospects. made very effective. The

Indira Gandhi National Open University has been created at a national

level.