CBSE Class 11 Economics Economic Indian Economy Set C

CASE STUDY-1

The industrial sector became well diversified by 1990, largely due to public sector. It was no longer restricted to cotton textiles and jute. It also included engineering goods and a wide range of consumer goods . The industrial sector increased in the period from 11.8 % in 1950- 51 to 24.6 in 1990 – 91. This rise in industry’s share of GDP is an important indicator of development. It gave opportunities to people with small capital to get into business. New investment opportunities helped in generating more employment. It promoted growth with equity.

Questions:

Question: After independence the number of industrial policies declared till now are:
(a) 8
(b) 10
(c) 6
(d) 5
Answer: C

Question: “Small capital to get into business “ in the above case refers to an investment in the fixed capital upto Rs. _________.
(a) Rs 5 Crore
(b) Rs 15 Crore
(c) Rs 1 Crore
(d) Rs 10 Lakh
Answer: C

Question: Growth with equity is ___________________
(a) To ensure Social Justice
(b) To ensure equality
(c) Rural Development
(d) Urban Development
Answer: A

Question: The industrial sector got well diversified by 1990, due to ________________
(a) Private Sector
(b) Public Sector
(c) FDI
(d) All of the Above
Answer: B

CASE STUDY-2

In order to improve efficiency, infuse professionalism and enable them to compete more effectively in the liberalised global environment, the government identifies PSEs and declare them as maharatnas, navratnas and miniratnas. They were given greater managerial and operational autonomy, in taking various decisions to run the company efficiently and thus increase their profits. Greater operational, financial and managerial autonomy has also been granted to profit-making enterprises referred to as miniratnas. The Central Public Sector Enterprises are designated with different status. A few examples of public enterprises with their status are as follows:
(i) Maharatnas – (a) Indian Oil Corporation Limited, and (b) Steel Authority of India Limited,
(ii) Navratnas – (a) Hindustan Aeronautics Limited, and (b) Mahanagar Telephone Nigam Limited;
(iii) Miniratnas – (a) Bharat Sanchar Nigam Limited, and (b) Airport Authority of India.
Many of these profitable PSEs were originally formed during the 1950s and 1960s when self-reliance was an important element of public policy. They were set up with the intention of providing infrastructure and direct employment to the public so that quality end-product reaches the masses at a nominal cost and the companies themselves were made accountable to all stakeholders. The granting of status resulted in better performance of these companies. Scholars allege that instead of facilitating public enterprises in their expansion and enabling them to become global players, the government partly privatised them through disinvesment. Of late, the government has decided to retain them in the public sector and enablethem to expand themselves in the global markets and raise resources by themselves from financial markets.

Questions:

Question: How has government made attempts to improve the efficiency of PSUs?
Answer: By giving them autonomy in taking managerial decisions.

Question: What are the special status granted to PSUs?
Answer: PSUs have been granted special status as maharatnas, navratnas and miniratnas.

Question: Indian Railway Catering and Tourism Corporation Limited is categorized under Maharatna or miniratna?
Answer: Miniratna

Question: Indian Oil Corporation Limited is categorized under Maharatna or miniratna?
Answer: Maharatna

CASE STUDY- 3

In July 1991, a package of economic reforms was announced,which marked the beginning of process of ‘Liberalisation’ in India.Liberalisation involves deregulation and reduction of government controls and greater autonomy of private investment, to make economy more competitive. The purpose of liberalisation was to unlock the economic potential of the country by encouraging private sector and multilateral corporations to invest and expand.

Questions:

Question: Which of the following is a policy initiated under New Economic Policy?
(a) Globalisation
(b) Privatisation
(c) Disinvestment
(d) Liberalisation
Answer: D

Question: Liberalisation means _____________ of entry and growth restrictions on the private sector.
Answer: Removal

Question: Match the following:

Chapter 2 Indian Economy (1950 – 1990) Case Study Questions
Answer: (b) Liberalisation

Question: Liberalisation is a process of opening a larger part of the economy for non-government sector. (True/ False)
Answer: False

CASE STUDY-4

Outsourcing was first recognized as a business strategy in 1989 and became an integral part of business economics throughout the 1990s. The practice of outsourcing is subject to considerable controversy in many countries. Those opposed argue that it has caused the loss of domestic jobs, particularly in the manufacturing sector. Supporters say it creates an incentive for businesses and companies to allocate resources where they are most effective, and that outsourcing helps maintain the nature of free-market economies on a global scale.

Questions:

Question: What is meant by outsourcing?
Answer: Outsourcing refers to contracting out some of its activities to a third party which were earlier performed by the organisation.

Question: Name some services outsourced from India.
Answer: Voice-based business processes, Record keeping, Accountancy, Music recording e.t.c

Question: Why outsourcing is good for India?
Answer: Provides employment to large number of unemployed Indians, enables the exchange of ideas and technical know-how, improves the standard of living of people, enhances India’s international worthiness credibility.

Question: Why are developed countries opposing outsourcing to India?
Answer: Outsourcing reduces the employment generation and creates job insecurity in the developed countries.

CASE STUDY-5

Import substitution policy is a set of measures aimed at stimulating production and competitiveness of domestic goods, increasing of domestic demand optimization of demand for imports. It is determined by the need to reduce the dependence of transitive economy on economic leaders. The main objective of the policy of import substitution is to encourage national production, to development the new products to stimulate demand and import restrictions. Actual directions: industrial restructuring, the balance of foreign trade, protection of the domestic market during the transition period. In the Commonwealth of Independent states import substitution is a complementary mechanism for diversification of production.

Questions:

Question: The main objective of the policy of import substitution is _____________ .
Answer: To encourage national production, to development the new products to stimulate demand and import restrictions.

Question: Import substitution policy aimed at stimulating production. (True /false)
Answer: True

Question:What is the meaning of import substitution strategy?
Answer: It means producing in domestic economy itself those goods which the country has to import.

Question: Give any one way how to protect import substitution in domestic industry.
Answer: By putting high tariffs on industrial goods.

CASE STUDY-6

Developed countries have been trying to pursue developing countries to liberalize the trade and allow more flexibility in business policies to provide equal opportunities to multinational firms in their domestic market. International Monetary Fund(IMF) and World Bank helped them in this endeavour. Liberalization began to hold its foot on barren lands of developing countries like India by means of reduction in excise duties on electronic goods in a fixed time frame. Indian government did the same and liberalized the trade and investment due to the pressure from World Trade Organization. Import duties were cut down phase-wise to allow MNC’s operate in India on equality basis. As a result globalization has brought to India new technologies, new products and also the economic opportunities.

Questions:

Question: ____________facilitates International Trade through removal of tariffs as well as non tariff barriers
Answer: WTO

Question: India had compulsion to introduce reforms as dictated by
a) World Bank
b) IMF
c) both a and b
d) None of the above
Answer: C

Question: Why was Indian economy liberalized in 1991?
Answer: BOP crisis

Question: Trade liberalization benefits developed countries more than developing economies. (True / False)
Answer: True

CASE STUDY-7

Owing to globalisation, you might find many Indian companies have expanded their wings to many other countries. For example, ONGC Videsh, a subsidiary of the Indian public sector enterprise, Oil and Natural Gas Corporation engaged in oil and gas exploration and production has projects in 16 countries. Tata Steel, a private company established in 1907, is one of the top ten global steel companies in the world which have operations in 26 countries and sell its products in 50 countries. It employs nearly 50,000 persons in other countries. HCL Technologies, one of the top five IT companies in India has offices in 31 countries and employs about 15,000 persons abroad. Dr Reddy’s Laboratories, initially was a small company supplying pharmaceutical goods to big Indian companies, today has manufacturing plants and research centres across the world.

Questions:

Question: Define Globalization ?
Answer: It is an outcome of the set of various policies that are aimed at transforming the world towards greater interdependence and integration. It involves creation of networks and activities transcending economic, social and geographical boundaries.

Question: Which is the most important outcome of the process of Globalization ?
Answer: Outsourcing

Question: What type of services are generally outsourced ?
Answer: In outsourcing, a company hires regular service from external sources, mostly from other countries, which was previously provided internally or from within the country (like legal advice, computer service, advertisement, security — each provided by respective departments of the company).

Question: In the modern (recent) times , which services are being outsourced ?
Answer: In recent times, because of the growth of fast modes of communication, particularly the growth of Information Technology (IT). Many of the services such as voice-based business processes (popularly known as BPO or call centres), record keeping, accountancy, banking services, music recording, film editing, book transcription, clinical advice or even teaching are being outsourced by companies in developed countries to India

CASE STUDY-8

Read the following table carefully and Answer: the questions

Questions:

Question: While the service sector continued to witness a high level of growth – higher than the overall GDP growth in 2014-15, this sector witnessed the high growth rate of_________ percent.
Answer: 9.8

Question: During the reform period, the growth of agriculture has__________ (increased/decreased)
Answer: Decreased

Question: The opening of the economy has led to a rapid increase in foreign direct investment and foreign exchange reserves. The foreign investment, which includes foreign direct investment (FDI) and foreign institutional investment(FII), has increased from about US $100 million in 1990-91 to ___________ in 2017-18. There has been an increase in the foreign exchange reserves from about US $6 billion in 1990-91 to about __________ in 2018-19.
Answer: US $ 30 billion, US $ 413 billion

Question: The reform process has been able to address the basic problems facing our economy especially in areas of employment, agriculture, industry, infrastructure development and fiscal management.(True/ False)
Answer: False

CASE STUDY-9

The global trade organisation to administer all multilateral trade agreements by providing equal opportunities to all countries in the international market for trading purposes. WTO aims at enlarging production and trade of services to ensure optimum utilisation of world resources. India has kept in commitments towards liberalisation of trade made in the WTO by removing quantitative restrictions on imports and reduced tariff rates.

Questions:

Question: The World Trade Organisation was founded in___________ .
Answer: 1995

Question: ‘The objective of WTO is to establish rule based regime. ‘ True/false with Reason.
Answer: True. It provides equal opportunities to all countries in the international market for trading purposes.

Question: _____ implies free interaction among all the countries in various fields like trade, technology, outsourcing etc.
Answer: Globalization

Question: From the set of information in column A and corresponding relevant fact in column B.
Answer: C

CASE STUDY-10

In his July 1991 Budget speech, marked by remarkable clarity, Dr Manmohan Singh laid out his analysis of what was ailing the Indian economy at the time, and his strategy to revive it. His argument was that protection and state-supported industrialisation had outlived their utility. The protection granted to industry had made it uncompetitive in the global market. This had hurt export growth, contributing to the Balance of Payments crisis of 1991. The way out, as Dr Singh saw it, was to open up the Indian economy so that Indian manufacturers could compete with global players in local conditions. Once they succeeded in the domestic market they would be able to find a place in the global market as well. India would then move from being, primarily, an exporter of agricultural products to one that had a global presence in industrial products as well.

Questions:

Question: Three main policies of New Economic Policy are Liberalization __________ And ___________ .
Answer: Privatisation and Globalisation

Question: Economic reforms have (Increased /reduced) the role of public sector.
Answer: Reduced

Question: Name any one industry, for which license is needed.
Answer: Atomic Energy Generation, Defence Equipments or any other correct option.

Question: Which of the following is not a tax reform.
(a) Reduction in taxes
(b) Reforms in Indirect Taxes
(c) Simplification of Tax Process
(d) Devaluation of Rupee
Answer: D