CBSE Class 11 Economics Agriculture Assignment

INDIAN ECONOMIC DEVELOPMENT 1950-1990

IMPORTANT POINTS: -
➢ Economic Planning: -It is a process under which a central authority defines a set of targets to be achieved within a specified period of time.
➢ Plan: a plan lays down how the limited resources of an economy should be put to use to achieve precise objectives within a specified period of time.
➢ In 1950, the Planning Commission was set up with the Prime Minister as its Chairperson.
➢ Economy: - a system which provides means to work and livelihood is called economy.

Types of economy
• Capitalist Economy: It is an economic system in which major economic decisions are taken through market forces.
• Socialist economy is an economy in which all the decision is taken by the government.
• Mixed economy is an economic system in which all the decision is taken by government and as well as private sector.

Goals of Five-Year Plans
A plan should have some clearly specified goals.

The goals of five-year plans are
1. Economic growth: Economic growth implies a consistent increase in GDP or a consistent increase in the level of output or a consistent increase in the flow of goods and services in the economy over a long period of time.
2. Modernisation: Modernisation refers to increase the production of goods and services to producers with the adoption of new technology.
3. Self-reliance: it means avoiding imports of those goods which could be produced in India itself. This policy was considered a necessity to reduce our dependence on foreign countries, especially for food.
4. Equity: It implies equitable distribution of income so that the benefits of growth are shared by all sections of the society.
➢ Importance of Agriculture in the Indian Economy
• Contribution to GDP
• Supply of wage goods
• Employment
• Industrial raw material
• Contribution to international trade
• Contribution to domestic trade
• Wealth of the nation
➢ Problems of Indian Agriculture
• Lack of permanent means of irrigation
• Deficiency of finance
• Conventional outlook
• Small and scattered holding
• Lack of organized marketing system
➢ Reforms in Indian Agriculture

Technical Reforms: It refers to a spurt in farm output during mid 60’s. Measures introduced as part of green revolution are: -
• Use of HYV seeds
• Use of chemical fertilizers
• Scientific farm management practices
• Mechanized means of cultivation

Land Reforms
• Abolition of intermediaries
• Regulation of rent
• Consolidation of land holding
• Ceiling on land holding
• Co-operative farming

Green Revolution
This refers to the large increase in production of food grains resulting from the use of high yielding variety (HYV)seeds especially for wheat and rice along with the use of fertilizer and pesticide in the correct quantities as well as regular supply of water.
Gains of Green Revolution
➢ Spurt in crop productivity
➢ Substantial rise in acreage (area under cultivation)
➢ Shift from subsistence farming to commercial farming
➢ Change in farmer’s outlook
➢ Self-Sufficiency in food grain production and buffer stocks.

limitations of Green Revolution
➢ increase in income disparities
➢ increase in regional disparities
➢ effective only on wheat and rice
➢ over utilization of chemical in agriculture

Marketable Surplus: -It refers to surplus of farmer’s output over and above his own farm consumption.

Importance of Industrial Sector
➢ Structural transformation
➢ Source of employment
➢ Source of mechanized means of farming
➢ Imparts dynamism to growth process
➢ Growth of civilization
➢ Infrastructural growth
Features of Industrial policy Resolution of 1956

It was an official declaration on the leading role of the government in the process of industrialization. Private sector was assigned only a secondary role in the process of industrialization. Industries in the private sector could be established only through a license from the government.
New classification of Industries: Industries were classified into three schedule depending upon role of state.
(a) Schedule-A- 17 industries listed in schedule-A whose future development would be the responsibility of state.
(b) Schedule-B- 12 industries were included in Schedule-B, Private sector could supplement the efforts of the Public Sector, with the state taking sole responsibility for starting new units.
(c) Schedule-C - other residual industries were left open to private sector.

SMALL SCALE INDUSTRY (SSI): -A small-scale industry is presently defined as the one whose investment does not exceed Rs. 5 crores.

➢ CHARACTERISTICS OF SSI OR ROLE OF SMALL-SCALE INDUSTRIES
•Labour intensive-employment oriented
• Self-employment.
• Less capital intensive
• Export promotion
• Seed beds for large scale industries
• Shows locational flexibility.

➢ PROBLEMS OF SMALL-SCALE INDUSTRIES
• Difficulty of finance
• Shortage of raw material
• Difficulty of marketing
• Outdated machines & equipment
• Competition from large scale industries.

Inward looking Trade Policy: - It refers to the policy of “import substitution “and protection to the domestic’s industry through import restrictions and important duties. Contrary to it, outward looking trade strategy refers to the policy of “Export promotion” through competitive production environment in the domestic economy.
➢ Criticism of import substituting strategy
• It did not lead to growth.
• Lack of competition implied lack of Modernisation.
• Growth of inefficient public monopolies.
• It did not lead to efficiency.

Salient Features of the Reforms during 1950-1990
➢ Public sector was to play a central role in the process of industrialization.
➢ Private sector was to play a secondary role.
➢ Policy of import substitution
➢ Domestic industry was to be protected from foreign competition.
➢ SSI was to developed to promote the objectives of employment and equity

CASE – BASED QUESTIONS

1. Read the following Case Study carefully and Answer the questions

Subsidies are a created, administered device intended for use only until such a time the basic set-up of the programme of activity can take up its own protection through its required competitiveness. If it fails to happen there is no reason to protect it. The trend that the beneficiaries of subsidies expect them for every new programme and hope continuance of subsidies is noteworthy. Economists advocate that subsidies should be

selective, limited and specially targeted for weaker sections only. Subsidies alter relative prices and budget constraints and thereby affect decisions concerning production, consumption and allocation of resources. Like many other countries, subsidies in Indian economy are pervasive. These are explicit or hidden and include the areas such as education, health, environment and variety of economic activities including agriculture and transport.
-Study Agro-economic Research Centre, MP, JUNE 2004

Question. Agricultural subsidy is important because new technology is seen as…………………. (risky/favorable) by the farmers.
Answer. Risky 

Question. Which of the following is the limitation of subsidy?
a) It provides financial cushion to the farmers.
b) It leads to burden on government finances.
c) It increases the gulf between rich and poor farmers.
d) Both (a) and (c)
Answer.  B

Question. Green revolution was a success due to agricultural subsidies provided to farmers True or False
Answer. True

Question.The benefits of subsidy is mostly reaped by………………………………farmers (prosperous/marginal)
Answer. prosperous

2. Read the following Case Study carefully and Answer. the questions

The green revolution for the third agricultural revolution is the set of research technology e-transfer initiatives earring between GNE E and the late 1960 that increased agricultural production worldwide beginning most markedly in the late 1960 the initiative resulted in the adoption of new technologies including high yield varieties of CSR rules of cells especially does wheat and rice it was associated with chemical fertilizers agrochemicals and controlled water supply and newer methods of cultivation including machine isolation
National bank for agriculture and rural development is and apex development finance institution fully owned by government of India the bank has been entrusted with Martyrs concerning policy planning and operations in the field of credit for agriculture and other economic activities in rural areas in India.

Question. Who among the following is known as the father of green revolution
(a) Dr. M S Swaminathan
(b) Dadabhai Naoroji
(c) Vikram Sarabhai
(d) all of these
Answer. A

Question. Green revolution is also known as ………………
(a) Golden revolution
(b) milk revolution
(c) Wheat revolution
(d) None of this
Answer. C

Question. Which of the following institutions were setup as the apex body in rural areas to support the small farmers in the adoption of modern farming methods?
(a) RRB
(b) SIDBI
(c) RBI
(d) NABARD
Answer. D

Question. Green revolution was the …………… set of agricultural reforms brought in India
(a) First
(b) Second
(c) Third
(d) fourth
Answer. C

ASSERTION and REASONING

Question. ASSERTION (A): This new Green Revolution is leading to foreign ownership over most of India's farmland, undermining farmers' interests.
REASONING (R): New Green Revolution is driven by private (and foreign) interest—notably MNCs like Monsanto.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Answer: A

Question. ASSERTION and REASONING ASSERTION (A): Growth and social justice is the central objective of Indian planning.
REASONING (R): India opted for planning to utilize available resources efficiently and to establish social justice.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Answer: B

Question. ASSERTION and REASONING ASSERTION (A): Subsidies were, needed to encourage farmers.
REASONING (R): Any new technology is looked upon as being risky by farmers
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Answer: A

Question. ASSERTION and REASONING ASSERTION (A): The industries became diversified compared to the situation at independence.
REASONING (R): Excessive government regulation prevented their growth.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Answer. (b) 

Question. ASSERTION and REASONING ASSERTION (A): The excessive regulation of what came to be called the permit license raj prevented certain firms from becoming more efficient. REASONING (R): More time was spent by industrialists in trying to obtain a license or lobby with the concerned ministries rather than on thinking about how to improve their products. Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Answer: A

Choose the correct alternative.

Question. In which year was India’s First Five Year Plan launched?
(a) 1951
(b) 1947
(c) 1940
(d) 1955
Answer. A

Question. Which of the following bodies/institutions was engaged in the formulation of Five Year Plan in India?
(a) Planning commission
(b) National Development Council
(c) Finance Ministry
(d) Home Ministry
Answer. A

Question. Which of the following is the main objective of carrying out various economic activities?
(a) Profit
(b) Public welfare
(c) Competition
(d) Equality
Answer. B

Question. What is needed to provide protection against natural calamities like floods, drought, locusts, thunderstorms, etc.?
(a) Multiple cropping
(b) Green revolution
(c) Crop insurance
(d) HYV
Answer. C

Question. Which of the following steps promoted the growth of the economy as a whole by stimulating the development of industrial and tertiary sectors?
(a) Independence
(b) Planning
(c) Colonial rule
(d) Green revolution
Answer. B

Question. How many industries have been reserved for the public sector under Industrial Policy Resolution, 1956?
(a) 17
(b) 21
(c) 15
(d) 2
Answer. A

Question. In which of the following type of economy are resources owned privately and the main objective behind economic activities is profit-making?
(a) Capitalist
(b) Socialist
(c) Mixed
(d) Global
Answer. A

Question. When was NITI Ayog established?
(a) 1991
(b) 2001
(c) 2011
(d) 2015
Answer. D

Question. Who was the Chairperson of the Planning Commission of India?
(a) President of India
(b) Finance Minister of India
(c) Prime minister of India
(d) Governor of RBI
Answer. A

Question. In which year, Industrial Policy Resolution was adopted?
(a) 1956
(b) 19
(c) 1965
(d) 1953
Answer. A

Question. Self –reliance means avoiding:
(a) Exports
(b) imports
(c) Both (a) and (b)
(d) None of the above.
Answer. B

Question. Which factor led to the breaking up of the stagnation of agriculture?
(a) Land reform
(b) Green Revolution
(c) Buffer stocks
(d) Land ceiling.
Answer. B

SHORT Answer. QUESTIONS 

Question. Define the land ceiling.
Answer. Land ceiling refers to the size (dimension) of the land that an individual or family can possess. In India, this act was passed during the year 1961-62 and it was controlled by all the state governments. However, the ceiling limits vary from state to state.

Question. Define small scale industries.
Answer. Small scale industries are those which have fixed investment in plant and machinery, whether hold on ownership basis or lease basis or hire purchase basis not more than ₹ 1 crore.

Question. What were the achievements of five-year plan?
Answer. Post Indian independence in the year 1947, India had to reconstruct its economy from scratch. The leaders in those days had to select the type of the economy that India would be and also outline the economic planning.
The primary achievements witnessed through five-year plans are as follows:
A great increase in the National Income and Per Capita Income
Significant development in agriculture
Industrial development
Price and power parity
Increased capital formation

Question. Define a socialist economy
Answer. Socialism primarily focuses on the manufacturing sector to satisfy human needs. This is unlike capitalism means: direct regulation and management of the social workers and industries by the workers through a government.

Question. Define a plan.
Answer. A plan is a proposed list of goals that an economy wants to achieve within a specific period of time. It suggests the optimum ways to utilize the scarce available resources to achieve the enlisted goals. In India, planning is done for a period of five years, which is called five-year plan.

Question. What is marketable surplus?
Answer. Marketable surplus refers to the difference between the total output produced by a farmer and his on-farm consumption. In other words, it is that portion of the total output that the farmer sells in the market.
Marketable surplus = Total farm output produced by farmer - Own consumption of farm output

SHORT Answer. QUESTIONS 

Question. Explain the need and type of land reforms implemented in the agriculture sector.
Answer. The need for land reforms in India was very necessary due to the following reasons:
1. Land Tenure System: There were three types of land tenure systems namely, the Zamindari System, the Mahalwari System and the Ryotwari System prevalent in the Indian agricultural sector at the time of independence. The common feature of these three systems was that the land was mostly cultivated by the tenants and the land revenues were paid by them to their landlords. This led to the exploitation of tenants in the form of exorbitant rents.
2. Size of Land Holdings: The size of land holdings owned by the farmers was very small. In addition, the land holdings were fragmented. This obstructed the use of modern techniques.
3. Lack of Initiative: As most of the land was owned by the landlords, so the farmers lacked initiative and neither had enough means to undertake mechanized methods of cultivation.
4. Traditional Approach and Low Productivity: Indian farmers used to rely on the conventional and the traditional inputs and methods and climatic conditions that hampered the productivity of agricultural sector.
5. Absence of Marketing System: Due to the absence of well-developed marketing system, the farmers used to rely on the intermediaries to sell their product in the market. These intermediaries used to purchase the farm products at a very low price and sell them at higher price at market.
6. Nature of Farming: The basic motive for farming was for subsistence. That is, farming was done basically to earn survival and not for sale and to earn profit.
Due to the above problems in the Indian agriculture, it was very necessary to undertake land reforms.

Land reforms comprise of the following steps: -
1. Abolishing Intermediaries: The prime focus of land reforms was to abolish intermediaries like Zamindars, Jagirdars, etc. There were many steps undertaken to make the tillers, the owners of the land.
2. Regulation of Rent: The cultivators were exploited in the form of exorbitant rents. In the first five-year plan, the maximum rent fixed was one-fourth or one-fifth of the total farm produce (except in Punjab and Haryana,). The regulations of rent not only reduced the burden from the tenants but also enabled them with greater portion of finance to invest on farm.
3. Consolidation of Holdings: As the land holdings were small and also fragmented, so it was very necessary to consolidate the land holdings for the use of modern and advanced technology. The farmers were given consolidated holdings equal to the total of the land in their various fragmented plots. This enabled them the benefits associated with the large scale production.
4. Land Ceilings: It means to limit the fixed amount of land that an individual may hold. The basic motive behind this step was to promote equality of ownership of land holdings. This eradicated the concentration of land holdings in few hands. Government used to confiscate the excess land over the fixed amount of land and distribute it among the landless farmers.
5. Co-operative Farming: This step was taken to counter the problems due to sub-division of holdings. Small scale farming by an individual land holder is neither profitable nor productive, so, these steps encouraged different farmers to pool their farms and perform farming jointly. This enhanced the productivity and greater profits were shared by the individual farmers.

Question. What is Green Revolution? Why was it implemented and how did it benefit the farmers? Explain in brief.
Answer.
Due to low productivity, frequent occurrence of famines and low levels of agricultural products in the latter half of second five-year plan, a team was formed to suggest various ways to counter these problems. As per the recommendations of the team, government introduced the use of HYV seeds, modern techniques and inputs like fertilizers, irrigation facilities and subsidized credit. These steps collectively are known as Intensive Area Development Programme (IADP). Consequently, in the year 1967-68, food grains production increased nearly by 25%. Due to this substantial increase of food grains production, this outcome is known as 'Green Revolution'.
The needs of Green Revolution are as follows.
1. Low Irrigation Facility: The well irrigated and permanent irrigated area was only 17% in 1951. The major part of area was dependent on rainfall and, consequently, agriculture suffered from low level of production.
2. Conventional and Traditional Approach: The use of conventional inputs and absence of modern techniques further hampered the agricultural productivity.
3. Frequent Occurrence of Famines: Famines in India were very frequent during the period 1940s to 1970s. Further, due to higher growth rate of populations, agriculture failed to grow at the same speed.
4. Lack of Finance (credit): Small and marginal farmers found it very difficult to get finance and credit at cheap rate from the government and banks, hence, fell an easy prey to the money lenders.
5. Self-sufficiency: Due to the traditional agricultural practices, low productivity, and to feed growing population, often food grains were imported that drained away scarce foreign reserves.
It was thought that with the increased production due to Green Revolution, government can maintain buffer stock and India can achieve self-sufficiency and self-reliable.
6. Marketing Agriculture: Agriculture was basically for subsistence and, therefore, less amount of agricultural product was offered for sale in the market. Hence, the need was felt to encourage the farmers to increase their production and offer a greater portion of their products for sale in the market.

Question. Why was public sector given a leading role in industrial development during the planning period?
Answer.
At the time of independence, Indian economic conditions were very poor and weak. There was neither sufficient foreign reserve nor did India have international investment credibility. In the face of such poor economic condition it was only the public sectors that need to take the initiative. The following are the reason that explains the driving role of the public sector in the industrial development:
1. Need of Heavy Investment: There was a need of heavy investment for industrial development. It was very difficult for the private sector to invest such a big amount. Further, the risks involved in these projects were also very high and also these projects had long gestation period. Thus, the government played the leading role to provide the basic framework of heavy industries.
2. Low Level of Demand: At the time of independence, the majority of population was poor and had low level of income. Consequently, there was low level of demand and so there was no impetus for any private sector to undertake investment in order to fulfill these demands. Thus, India was trapped into a vicious circle of low demand. The only way to encourage demand was by public sector investments.

Question. Explain the statement that green revolution enabled the government to procure sufficient food grains to build its stocks that could be used during times of shortage.
Answer.
Green Revolution led to an increase in the production of food grains. With the use of modern technology, extensive use of fertilizers, pesticides and HYV seeds there was a significant increase in the agricultural productivity and product per farm land. In addition, the spread of marketing system, abolition of intermediaries and easy availability of credit has enabled farmers with greater portion of marketable surplus. All these factors enabled the government to procure sufficient food grains to build the buffer stock and to provide cushion against the shocks of famines and shortages.

LONG Answer. QUESTIONS 

Question. While subsidies encourage farmers to use new technology, they are a huge burden on government finances. Discuss the usefulness of subsidies in the light of this fact.
Answer.
Subsidy means availing some important inputs to farmers at a concessional rate that is much lower than its market rate. During 1960s, in order to adopt new technology HYV seeds and use of modern fertilizers and insecticides, farmers were provided inputs at a subsidized rate. Thus, the public sector role was needed to invest heavily, so as to raise the income of people that will in turn raise the demand and so on.
The following arguments are given in favor of subsidy:
1) Subsidy is very important for marginal land holders and poor farmers who cannot avail the essential farm inputs at the ongoing market rate.
2) Subsidy in 1960s was basically an incentive for the farmers to adopt modern techniques and vital inputs like fertilizers, HYV seeds, etc. The subsidy was mainly of convincing and lucrative nature so that the farmers do not hesitate to use these modern techniques.
3) Subsidy is generally provided to the poor farmers with the motive of reducing inequality of income between rich and poor farmers and to promote an egalitarian distribution of income.
4) It is argued that the adoption of new technology and techniques are not risk free and only daring farmers are only willing to adopt them.
The following arguments are given against subsidy.
1) It is generally argued that subsidy favours and benefits fertilizer industries than the farmers. Subsidies provide a protective shield against the market conditions and, consequently, these industries need not to bother about their market share and competition.
2) Subsidies are also enjoyed by the potential farmers who do not need them. This often leads to the misallocation and wastage of the scarce resources.
3) Subsidies, if provided at a much lower rate than the market rate may lead to the wastage of resources. For example, subsidized electricity leads to the wastage of energy.
4) There is a general consensus that in order to assess the benefit and feasibility of a particular technique, subsidy should be provided but once the performance has been

Question. Why, despite the implementation of green revolution, 65 per cent of our population continued to be engaged in the agriculture sector till 1990?
Answer.
Although Indian agricultural production increased substantially that enabled India to attain the status of self-sufficiency in food grains but this increase is substantial only in comparison to food grain production in the past. Further, India failed to achieve structural transformation associated with the agricultural revolution and development. That is, in other words, industrial and service sector failed to generate significant employment opportunities in order to attract and absorb excess agricultural labour. The agricultural contribution to GDP has fallen from 51% in 1960-61 to 44% in 1970-71, on the other hand, the share of industry and service sector in India's GDP increased merely from 19% to 23% and from 30% to 33% during the same period. Meantime, the percentage of population dependent on agriculture decreased merely from 67.50% (in 1950) to 64.9% (in 1990). Hence, the industrial and service sector growth was not very significant and, hence, failed to employ and attract surplus labour from agricultural sector. This may be because of the flaws in the economic policies that became the bottleneck for the growth of secondary and tertiary sector.

Question. Though public sector is very essential for industries, many public sector undertakings incur huge losses and are a drain on the economy's resources. Discuss the usefulness of public sector undertakings in the light of this fact.
Answer.
Although, the mismanagement and wrong planning in PSUs may lead to misallocation and, consequently, to wastage of the scarce resources and finance but PSUs do have some positive and useful advantages.
1. Enhancing Nation's Welfare: The main motive of the PSU was to provide goods and services that add to the welfare of the country as a whole. For example, schools, hospitals, electricity, etc. These services not only enhance welfare of country's population but also enhance the future prospects of economic growth and development.
2. Long Gestation Projects: It was not feasible and economically viable for the private sectors to invest in the big and wide projects like basic industries and electricity, railways, roads, etc. This is because these projects need a very huge initial investment and have long gestation period. Hence, PSU is the most appropriate to invest in these projects.
3. Basic Framework: An important ideology that was inherited in the initial five-year plan was that the public sector should lay down the basic framework for industrialization that would encourage the private sector at the latter stage of industrialization.
4. Socialist Track: In the initial years after independence, Indian planners and thinkers were more inclined towards socialist pattern. It was justified on the rational ground that if the government controls the productive resources and production, then it won't mislead the country's economic growth. This was the basic rationale to set up PSUs. These PSUs produce goods not according to the price signals but according to the social needs and economic welfare growth of the country.
5. Reduce Inequality of Income and Generate Employment Opportunities: It was assumed that in order to reduce inequalities of income, eradicate poverty and to raise the standard of living, government sector should invest in the economy via PSUs.

Main Features of Indian Agriculture
1. Low productivity
2. Disguised unemployment.
3. Dependence on rainfall
4. Subsistance farming - objective of farmer is to secure subsistance
for his family not to earn profit.
5. Traditional inputs
6. Small holdings
7. Backward technology.
8. Landlord tenant conflict.

Problems of Indian Agriculture

General Problems :
1. Pressure of population on land
2. Land degradation
3. Subsistance farming
4. Social environment.
5. Crop losses- by pest,
insect, flood, draught etc.

Institutional Problems.
1. Small and scattered holdings.
2. Poor implementation of land reforms.
3. Lack of credit and marketing facilities.

Technical Problems.
1. Lack of irregation facilities.
2. Wrong cropping pattern.
3. Outdated techneque of production.

Reforms in Indian Agriculture
A. Institutional Reforms also called Land reforms.
(i) Abolition of intermediaries.
(ii) Regulation of rent.
(iii) Consolidation of holdings.
(iv) Ceiling on land holdings.

B. General reforms.
(i) Expansion of irrigation facilities
(ii) Provision of credit
(iii) Regulated markets and co-operative marketing societies.
(iv) Price support policy.

C. Technical Reforms or Green Revolution
(i) Use of HYV seeds
(ii) Use of dumical fortilizers.
(iii) Use of insecticides and pesticides for crop protection
(iv) Scientific rotation of crops
(v) Modernised means of cultivation.

ACHIVEMENTS OF GREEN REVOLUTION
1. Rise in production and productivity.
2. Increas in income.
3. Rise in commercial farming.
4. Impact on social revolution - use of new technology HYV seeds, fertilizers etc.
5. Increase in employment.

FAILURES OF GREEN REVOLUTION
1. Restricted to limited crops and areas such as two crops wheat & rice growing states like Punjab, Haryana, U.P and Andhra Pradish.
2. Partial removel of poverty.
3. Neglected land reforms.
4. Rise in un employment.
5. Ecological degradation.

INDUSTRY
ROLE OF INDUSTRIAL SECTOR IN INDIA
Industrialisation is important for an overall growth of a country.
following points highlight the importance of Industry is an economy.
1. Provides employment.
2. Raising people income
3. Promotes regional balance.
4. Leads to modernisation.
5. Helps to modernise agriculture.
6. Leads to self-sustainable developement
7. High potential for growth.
8. Key to high volume of exports.
9. Growth of civilisation.
• Industrialisation is a pre-condition for the final take-off of an economy.

INDUSTRIAL DEVELOPMENT SINCE INDEPENDENCE
Share of industrial sector in the GDP has increased upto 8.3% in the 10th plan. It is expected to be 10.5% in the 11th plan.
The following important changes have taken place :
(i) Development of infrastructure like power transport, communication, banking & finance, qualified and skilled human resource.
(ii) Much progress in the field of research and development.
(iii) Expansion of public sector
(iv) Building up of capital goods industry
(v) Growth of non-essential consumer goods industries.

PROBLEMS OF INDUSTRIAL DEVELOPMENT IN INDIA
1. Sectoral imbalances - agriculture and infrastructure have failed to provide the support to the industrial sector.
2. Regional imbalance - restricted to few states.
3. Industrial sickness- which raised the problem of unemployment.
4. Highter cost of industrial product due to lack of healthy competition.
5. Dependence on the Government - for reduction in tax or duty to make import easier.
6. Poor performance of the public sector
7. Underutilisation of capacity.
8. Increasing capital - output ratio

ROLE OF PUBLIC SECTOR / GOVT. IN INDUSTRIAL DEVELOPMENT
Direct intervention of the state was considered essential in view of the following factors.
1. Lack of capital with the private enterpreneurs.
2. Lack of incentive among the Pvt. enterpreneures - low demand due to limited size of the market.
3. Socialistic pattern of society - main aim of Govt. is to generate employment rather than profits.
4. Development of infrastructure.
5. Development of backward areas.
6. To prevent concentration of economic power.
7. To promot import substitution.

INDUSTRIAL POLICY RESOLUTION (IPR) 1956
Industrial policy is an important instrument through which the govt.
regulates the industrial activities in an economy.
The 1956 resolution laid down the following objectives of industrial policy.
(a) To accelerate the growth of industrialisation.
(b) To develop heavy industries.
(c) To expand public sector.
(d) To reduce disparities in income and wealth.
(e) To prevent monopolies and concentration of wealth and income in the hand of a small member of individuals.

FEATURES OF INDUSTRIAL POLICY RESOLUTION (IPR) OF 1956
Features of Industrial policy resolution of 1956 were.
1. New classification of Industries : Industries were classified into three schedule depending upon role of state.
(a) Schedule-A - 17 industries listed in schedule-A whose future development would be the responsibility of state.
(b) Schedule-B - 12 industries were included in schedule-B, which could be established both as the private and public sector enterprises.
(c) Schedule-C - other residual industries were left open to private sector.
2. Stress on the role of cottage and small scale industries.
3. Industrial licensing : Industries in the pvt. sector could be established only through a licence from the government.
4. Industrial concessions - were offered of pvt.
entrepreneurs for establishing industry in the backward regions of the country. Such as tax rebate and concessional rates for power supply.

SMALL SCALE INDUSTRY (SSI)
A small scale industry is presently defind as the one whose investment does not exceed Rs. 5 crore.

CHARACTERISTICS OF SSI OR ROLE OF SMALL SCALE INDUSTRIES
1. Labour intensive - employment oriented
2. Self - employment.
3. Less capital intensive.
4. Export promotion.
5. Seed beds for large scale industries.
6. Shows locational flexibility.

PROBLEMS OF SMALL SCALE INDUSTRIES
1. Difficulty of finance.
2. Shortage of raw material.
3. Difficulty of marketing.
4. Outdated machines & equipments
5. Competition from large scale industries.

FOREIGN TRADE
At the time of independence raw material was exported from India to Britain in abundance on the other hand finished goods from Britain were imported into India.
Notably our balance of trade was favourable (exports > imports)
After independence India’s foreign trade recorded a noticeable change such as.
(i) Decline in percentage share of agricultural exports.
(ii) Increase in percentage share of manufactured goods in total exports.
(iii) Change in direction of export trade and import trade.

TRADE POLICY
In the first seven five year plans of India, the trade was commenly called an ‘inward looking’ trade strategy. This strategy is technically known as ‘import substitution’.
Import substitution means substituting imports with domestic
production. Imports were protected by the imposition of tariff and
quotas which protect the domestic firms from foreign competition.
Impact of Inward looking Trade strategy on the domestic industry.
1. It helped to save foreign exchange by reducing import of goods.
2. Created a protected market and large demand for domestically produced goods.
3. Helped to build a strong industrial base in our country which directly lead to economic growth.

Criticism of import substituting strategy
1. It did not led to growth.
2. Lack of competition implied lack of modernisation.
3. Growth of inefficient public monopolies
4. It did not lead to efficiency.

INDUSTRIAL LICENSING
Licensing is a tool for channelising scare resources in predetermined priority sector of an economy.
The Industries developement and resolution act (IDRA) was enacted in 1951.

MAIN OBJECTIVES OF IDRA act of 1951
1. Regulation of industrial development in accordance with planned priorities.
2. Avoidance of monopoly
3. Balanced regional development.
4. Prevention of undue competition between large-scale industries and small scale industries 5. Optimum utilisation of scare foreign exchange resoures.
Under this oct the following were applicable.
A. All the scheduled industries should be registered with the govt.
B. A licence must be obtained by all the new industries.
C. Govt. is authorised to examine the working of any industrial undertaking.
D. If the undertaking continued to be mismanaged, govt can take over its management.

CRITICISM AGAINST INDUSTRIAL LICENSING
1. There was an adhoc system for accepting or rejecting an application for licence.
2. The quality of techno economic examination conducted by Director general of technical developement was generally poor.
3. Licensing policy resulted in under utilisation of capacity ln many industries.
4. In reality the policy helped large business houses in accumulating economic power.

PERMIT LICENCE RAJ
The licensing authorities many a times granted licence to big business houses without proper scrutiry of their applications.

ONE MARK QUESTION

Question. Define economy.
Answer: It is organisation of economic activities which provides people with the means to work and earn a livlihood.

Question. Who is the chairman of the planning commission in India?
Answer: Prime minister is the chairman of planning commision in India.

Question. What was the idea behind abolition of intermediaries?
Answer: The aim of abolition of Zamindar was to make direct link between government and real cultivators so that cultivators can get maximum profit.

Question. Write the classification of industries according to IPR-1956.
Answer: Classification of industries according to IPR 1956 was.
(a) Schedule ‘A’ includes 17 in dustries governed by public sector.
(b) Schedule ‘B’ includes 12 industries governed by public & pvt. sector both.
(c) Schedule ‘C’ includes other residual industries under pvt. sector.

Question. What do you mean by green revolution?
Answer: Green revolution refers to the tremendous increase in agricultural production and productivity with the introduction of new technology.

Question. What is meant by small scale industries?
Answer: Small scale industires are those in which the investment limit is Rs 5 crores.

Question. What is marketable surplus.
Answer: Marketable surplus means production soldin the market after self consumption by the farmers.

Question. Who formulates five year plans in India.
Answer: Planning commision

Question. Write the duration of current five year plan.
Answer: First april 2007 to 31 March 2012.

Question. Name any two Common goals of five year plan.
Answer: Growth and equity.

Question. Name the type of economy adopted in India.
Answer: Mixed economy

Question. Name three general problems of an economy.
Answer: What to produce, how to produce and to whom to produce.

Question. What is import - substitution?
Answer: Import substitution means encouraging domestic production of such goods which the country is importing.