UNIT – I

INDIAN ECONOMY

 

I. Answer the following:-

1. What are the characteristics of Indian economy during the British Period?

The Indian economy experienced heavy exploitation during the British period.

1. There was a continuous exploitation of economic resources, material wealth and natural habitat by the British rulers, which has resulted in the permanent loss of India’s Gross National Income and National Wealth.

2. Some prominent nationalist economists described this process as responsible for India’s economic ills during this time.

3. D.R.Gadgil termed this exploitation as “Economic drain” where as Dhadabai Naoroji Called it ‘Plunder of economic wealth’.

4. The British plunder of Indian wealth assumed various forms chief among them were, modified land tenure system, improved irrigation systems and transport including creation of railways and initiation of the process of industrial transformation.

5. Commercialisation of agriculture and development of plantation, jute and other agro based industries took place.

6. Stiff competition to indigenous products through British exports of machine made goods.

7. Discriminatory tariff policy to suppress local textiles and other artisan based industries in order to promote British exports of machine made goods.

8. All this led to slow pace of growth of agro-based industries and deindustrialization of indigenous manufactures.

9. And also
(a)There was an enormous decline in real percapita income
(b) decrease in wage levels,
(c) rise in the number of the unemployed,
(d) substantial rise in poverty due to among other things and man
made famines.

2. What is an organised Sector?

Organised Sector:

1. The Organised Sector of the economy refers to large scale industrial units and agricultural units with a defined pattern of production and employment.

2. In India a substantial proportion of labour force and output is located in the organised sectors of the economy.

3. Industries such as automobiles, chemicals, machine tools, engineering goods, textiles, electronics like T.V manufacturing and computers can be located in the organised sector of the Indian Economy.

3. Explain the meaning of the unorganised Sector?

Unorganised sector:

1. The unorganised sector of the economy refers to the house-hold based manufacturing activity and small scale and tiny sector of industry.
2. An unorganized sector is one in which there is no stability in profits or gains.
3. Its production is limited and it is confined to limited area.
4. It requires less man power and investment.
5. The handicrafts, artisan professions, khadi and village industries, such as handloom sector, beedi making, agarbatti making, hand paper manufacture and match box industries etc., can be located in the unorganised sector of the Indian economy.

4. What is the role of monsoons in agriculture?

The role of monsoons in agriculture:-

1. Indian agriculture depends mostly on rainwater for cultivation.

2. South-west monsoons which occur during the months of June to September bring most of the rainfall to supply water necessary for cultivation.

3. In a given year if there is a normal monsoon So that the total rainfall is adequate that year is said to be a good year.

4. If in a given year there is inadequate rainfall then it is called a bad year.

5. Rain fall is not uniform all over the country due to different geo-tropical conditions, Climatic variation and terrestrial differences. This gives rise to uneven distribution of rainfall.

5. What are the forms of land tenure which gave rise to unequal socio-economic structure in India give reasons?

There were three forms of land tenure in British India. They were :

1. Zamindari system
2. The Mahalwari system
3. Rayatwari system(Ryotwari System)

1. The Zamindari system :

1. The East India Company, at the initiative of Lard Cornwallis, transformed the existing tax collectors into landed proprietors.

2. The original owners of the land into tenants who could be exploited at the owner’s will.

3. This was the main form of what was called the Zamindari system.

2. Mahalwari System:-

1. Under the Mahalwari system, the land belonged to a small group of families who were usually the most powerful in their region.

2. They were responsible for paying rent to the state.

3. Rayatwari System(Ryotwari):-

1. Under the Rayatwari tenure land may be held in single independent holdings.

2. The individual holders were responsible for payment of revenue to the state.

These forms of land tenure gave rise to a heterogeneous and un equal socio-economic structure in India. Secondly the colonial system had created privileged social classes through legislation who could champion colonial order.

6. Distinguish various economic systems?

Generally there are three types of economic systems. They are:-

1. The Capitalist Economic System
2. The Socialist Economic System
3. Mixed economic System

1. The Capitalist Economic System

1. A capitalist economic system is characterized by the presence of large number of private enterprises in major branches of production.

2. Individual owners of capital organise production and supply of goods and services based on the objective of profit Maximisation.

3. Supply and demand combined with the operation of the price mechanism under free market conditions.

4. However, in all modern economies the profit motives of individual capitalists are controlled by the state and the prices of essential goods and services kept within limit in order to protect the interests of consumers.

Examples:- Western Europe countries like France, Germany, Italy, Spain,
Portuguese and North America are examples of this system.

2. The Socialist Economic System

1. In a Socialist Economic System production and supply of goods and services is organised by the public enterprises.

2. Ownership of capital by individual capitalists is replaced by the state ownership.

3. Free market conditions and price mechanism is replaced by centralised planning mechanism, which is responsible for the supply of the commodities.

Examples:- China and Eastern European Economies, like Russia, Poland, Rumania fall into this category.

3. Mixed Economic System:-

1. In a Mixed economic system production and supply of goods and services is organised by both private firms owned by individual capitalists and public enterprise owned by the government.

2. The public enterprises operating under the ownership of the state is known as the Public sector.

3. The firms owned by individual proprietors or shareholders forms the Private sector.

4. In India some of the important industries and banking, insurance, and other financial institutions are in the Public sector.

5. There are also firms which are jointly owned by private individuals and the government. This is known as the Joint sector.

Examples:- Indonesia and India

7. Explain the factors causing the inequalities in income and wealth?

Some of the major causes for income inequalities are:

1. Since earning capabilities of individuals differ in a variety of ways, there are wide disparities in wage levels and salary incomes of working people.

2. Wealth and property is bequeathed to children from their parents through law of inheritance and right to ownership of property. This is likely to result in the wealthy people transfering their riches to their offspring generation after generation.

3. Striking differences in educational levels, training and skills among people, unequal opportunities and lack of mobility due to social and cultural factors.

Among the above in equality in the ownership of property is the most important reason for the inequality of incomes.

8. What were the immediate economic consequences of integration of British India into world capitalist system?

The immediate economic consequences of integration of British India in to the world capitalist system were threefold.

1. Commercialisation of agriculture and development of Plantation ,jute and other agro based industries.

2. Stiff competition to indigenous products through British exports of machine made goods. Discriminatory tariff policy to suppress local textiles and other artisan based industries in order to promote British exports.

3. The above resulted in slow pace of growth of agro based industries deindustrialization of indigenous manufactures.

4. An enormous decline in real income per capita decrease in wage levels, rise in the level of un employed , substantial rise in poverty due to , among other things and man made famines.

9. Mention the crops that are grown during the kharif and rabi seasons?

1. Rice, Jowar, Bajra, Maize etc., are grown during kharif season.
2. Wheat, Jowar, maize, gram etc., are grown during Rabi season.

II. Fill in the blanks :

1. Before the colonial rule the Indian Village community republics consisted of
agriculturists, artisans and menials and Village officials.

2. Hand crafts, handlooms, house hold manufacturing , activities are included in the
Unorganised sector of the economic.

3. Most of the rain water needed for cultivation comes during the month of June_
September ,which is known as South West monsoon.

4. Under the Mahalwari system, land is owned by a small group of families who pay
rent to the state.

5. Income earned through wealth and property is known as Unearned income.

6. Firms operating under the ownership of the state is known as public sector.

7. Supply and demand forces determine the price level in capitalist economic system.

8. Indian economy is a mixed economy.

9. The Income earned from labour or work is called as earned income.

10. The Public enterprises operation under the ownership of the state is known as
Public sector.

11. D.R.Gadgil termed exploitation of economic resources of India as ‘ economic drain’.

12. Dadabhai Naoroji termed exploitation of economic resources of Inda as ‘ plunder of economic wealth .

13. The main crop in Rabi season in India is wheat.

14. Handicrafts is example for the unorganized sector.

15. Rice is main crop in kharif season In India.

16. Industries related to unorganized sector are called small , tiny scale industry.

17. According to 1991 census of India the literacy rate is 52.2% .

18. According to 2001 census the literacy rate is 65.38%.

19. Centralised planning mechanism is in Socialist economic system.

20. The East India company captured political power in 1757 or plassey war.

21. Manufacture of Agarbattis in Un organized sector.

22. China and East Europeans economic falls Socialist economic system.

23. In 1991 the rural population in India in millions was 629.

24. The Zamindari system was the initiative of Lord Corn wallis.

25. The Industries which owned by government is known as public sector.

26. Rapid growth of towns is called Urbanisation .

27. 70 percentage of the total India s population depend upon the agriculture.

28. One of the largest rice producing state is Andhra Pradesh.

29. The Indian agriculture is mainly depend on Rain water or Monsoons.

30. Lorentz curve measures the inequalities in income

III. Match the following:

1. Dadabhai Naoroji ( c ) a. Growth of towns.

2. D.R.Gadgil ( e ) b. Socialist System.

3. Urbanisation ( a ) c. Plunder of wealth.

4. Public sector ( d ) d. Mixed economic system.

5. Centralised planning ( b ) e. Economic drain.

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