Come For Commerce: A Complete House of Commerce

COME FOR COMMERCE BY HARSH GOYAL
COME FOR COMMERCE

COACHING CLASSES
A complete house of commerce
KEY FEATURE
* All subjects under one roof
* Regular tests
* Extra time for difficulties
* Individual attention to weak students
Location :- kanchan nagar, near bus stand

Mobile :- 7427051485 , 7424863207
Email :- harshgoyal1632000@gmail.com
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UNIT I
DEVELOPMENT POLICIES AND EXPERIENCE
( 1947- 90 )
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1. INDIAN ECONOMY AT THE TIME OF INDEPENDENCE
I. MID 18TH CENTURY INDIA (1750)
A. STATE OF AGRICULTURE
1. Subsistence cultivation
2. Primary crops were food crops
3. No organised market
4. Local merchants did exist
B. INDUSTRIES
1. Rural industries (craftsman and artisians )
2. Urban industries ( large industries )
a) Features
(1) Organisation into trade guilds
(2) Division of labour
(3) Domestic system of industry
(4) Occupation used to be hereditary
C. INTERNAL AND EXTERNAL TRADE

1. Internal trade ( not developed)
2. External trade ( developed)
D. TRANSPORT AND COMMUNICATION
1. Roads and canals (underdeveloped)
2. Rivers and bullock carts were used
E. BANKING
1. Only urban areas were developed
F. FEUDALISM AND NEW BORN CAPITALISM
1. Feudalism ( feudal lords and serfs)
2. New born capitalism ( better off artisans and poor artisans)
G. SOCIAL INSTITUTIONS
1. Caste system ( brahmins, kshatriyas, vaishyas, shudra)
2. Joint family system ( karta and other members)
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II. ARRIVAL OF BRITISHERS (1858)

A. CHARACTERISTICS OF MARKET ECONOMY
1. Production for market
2. Market determined price
3. Market for factor services
4. Maximisation of profit
5. Enlarged market
6. Rivalry and competition
7. Use of money
B. CONSTRUCTIVE ROLE OF BRITISHERS
1. Destroying the old social order
2. Break the rigidity of caste system
3. Introduced railway system
4. Development of communication
5. Political and economic unification
6. Established court of justice
7. Greatest human blessing – peace
C. DESTRUCTIVE ROLE OF BRITISHERS
1. exploitation of India’s natural resources and wealth
( drain of national wealth )
a) Forms Of Drain
(1) Excess of export over import
(2) Remittance to England
(3) Profits of private foreign capital
(4) Expense incurred in England by secretary of govt. paid from India
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III. INDIAN ECONOMY AT THE EVE OF INDEPENDENCE

A. WIDESPREAD POVERTY
1. Average per capita income (low)
2. Expenditure per head (jail)
3. Famines
B. LOW NATIONAL INCOME AND PER CAPITA INCOME
1. Composition of national income
2. Per capita income
C. POPULATION ( rapid increase)
D. AGRICULTURE ( main source of livelihood and low productivity)
E. INDUSTRY
1. Only few large scale industries
2. Dominated by small scale industries
3. Characteristics Of Development Of Modern Industries
a) Concentration of enterprise in few hands
b) Dominance of finance capital ( managing agency system)
c) Concentration at few centres ( Calcutta and Bombay)
d) Similar pattern of growth
F. INFRASTRUCTURE
1. Types of infrastructure
a) Economic ( located within the system of production & distr. of goods)
b) Social ( located outside the system of production & distr. Of goods)
2. Importance Of Infrastructure
a) Provides support services to the producers of goods
b) Helps in quicker movement of raw material and goods
c) Increase mobility of factor services
d) Mobilise savings into investement
e) Raise quality of human population
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3. Satate Of Economic Infrastucture

a) Transport
(1) railways (growth)
(2) roads
b) Power
(1) oil and gas
(2) water
(3) coal
c) Irrigation
(1) Canals
(2) Tanks
(3) Wells
(4) Other
4. State Of Social Infrastructure
a) Education
(1) Developed only for richer section
(2) Not developed for poor section and girls
(3) Quality of education was poor
b) Health facilities
(1) limited to big towns
G. OCCUPATIONAL STRUCTURE
1. Agriculture ( primary )
2. Industry (secondary )
3. Service ( tertiary )
H. COMPOSITION AND DIRECTION OF FOREIGN TRADE
1. Composition
a) Import ( cotton manufactures and sugar )
b) Export ( agriculture raw materials, toacco and gold )
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2. Direction
a) Before world war ( great Britain )
b) After world war ( Japan, Germany, America )
2. COMMON GOALS OF FIVE YEAR PLANS

I. MEANING AND IMPORTANCE OF ECONOMIC PLANNING
A. ERA OF DEVELOPMENT PLANS IN INDIA
1. Ideas on planning before independence
2. Constitution of planning commission
3. Five year plans ( first plan 1951-1956)
B. OBJECTIVES OF FIVE YEAR PLANS

1. Rapid increase in production
2. Rapid increase in employment
3. Achievement of economic equalities
4. Stable growth
5. Modernisation of economy
6. Other objectives
a) Diversification of economic activity
b) Maximising the usage of resources
c) Achieving price competitiveness
d) Establishing and promoting mixed economy
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C. CHANGE IN EMPHASIS ON DIFFERENT SECTORS
1. 1 plan – agriculture
2. 2 plan – industry
4. 4 plan – agriculture
6. 6 plan – power
7. 7 plan – power
8. 8 plan – transport and communication
9. 9 plan – infrastructure
10. 10 plan – consolidate past gain
11. 11 plan – inclusive growth
II. STRATEGY OF DEVELOPMENT
A. EVOLUTION OF STRATEGY IN INDIAN PLANNING
1. 1 plan ( formulate )
2. 2 plan ( adopted )
B. IMPORTANT COMPONENTS OF STRATEGY

1. Emphasis on industrialisation
a) High productivity rates
b) Increase in employment
c) Exploitation of resources
d) Correct the lop sided economic structure
e) Promote growth in other sectors
2. Emphasis on heavy industries
a) Producers goods ( fast economic growth and self sustained growth)
b) Consumer goods
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C. SIDE ISSUES CONNECTED WITH STRATEGY
1. CONSUMER GOODS
a) Promoting cottage industries
b) Rationing
c) Abstinence from present consumption
2. SAVING
a) Plough back of incremental income
b) External assistance
3. EXPORTS
a) Consolidate market for traditional goods
b) Explore new market for goods
D. ROLE OF PUBLIC SETOR IN STRATEGY
1. THESE REQUIRE HEAVY CAPITAL INVESTEMENT
2. LONG GESTATION PERIOD ( purchase – sell )
3. DIRECT BEARING ON CONSUMER WELFARE
E. LATER DEVELOPMENTS
1. AGRICULTURE AS WELL AS INDUSTRIES
F. MORE RECENT DEVELOPMENTS

1. EMPHASIS ON GROWTH OF INFRASTUCTURE SECTOR
2. CONSOLIDATION OF PUBLIC SECTOR RATHER THAN SPREADING IT
FURTHER
3. OPPORTUNITY TO PRIVATE ENTERPRENEURS
4. GOVT. TO CONCENTRATE ON SOCIAL SECTOR
III. MAJOR ACHIEVEMENTS AND FAILURES
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ACHIEVEMENTS FAILURES
1. Food production up by more than 3 1) Population growth continues unabated at

times since 1950 1.6 %
2. GDP growth rate pushed upto 6% 2) Employment growth at 2% p.a. is far to slow
during 1990s from 3.5% in 1950s to bring down unemployment
3. Industrial groth rate upto 8% p.a. in 3) Stagnation in saving and saving rate
1990s and 2000 between 22 and 24% of GDP
4. Capital raised from market shot upto 4) Sticky incremental capital output ratio
40000 crores in 2009-10 5) Massive increase in urban population,
5. The % of people below poverty line straining basic amenities in cities and towns
down from 54% in 1961 to 25% now
A. OBJECTIVE ASSESMENT OF PLANNING

1. Production and national income
2. Employment
3. Equality
4. Stability
5. Modernisation
6. Sum up ( limited success )
B. CAUSES FOR LIMITED SUCCESS
1. Economic factors
a) Lack of capital
b) Technological backwardness ‘
c) Dynamic entrepreneurship
d) Absence of skilled labour
e) High ICOR ( incremental capital output raio )
f) Absence of financial institutions
2. NON ECONOMIC FACTOR
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a) Social and religious
b) Political
3. STEPS TO RAISE THE ECONOMIC GROWTH
a) Generate savings
b) Mobilise savings into investements
c) Profitable channels for investements
(1) Providing strong infrastructure
(2) Providing opportunities for technical education
(3) Importing technology
(4) Making innovations
(5) Making available essential developed inputs
3. AGRICULTURE DURING PLANS

I. SIGNIFICANCE OF AGRICULTURE IN INDIAN ECONOMY
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A. Contribution to national income
B. Major source of livelihood
C. Role in foreign trade
D. Primary source of saving in economy
E. Interdependance between agriculture and industry
1. Product linkage
2. Demand linkage
3. Investment linkage
II. FEATURES OF INDIAN AGRICULTURE

A. Gradual shift from subsistance cultivation to commercial farming
B. Increasing application of advance inputs and machines
C. Some improvement in productivity
D. Increasing availability of finance
E. Falling size of holdings
F. Increasing shift to superior cereals from inferior cereals
III. GROWTH OF AGRICULTURE OUTPUT
IV. AGRICULTURE POLICIE AND PROGRAMMES DURING PLANS
A. TECHNOLOGICAL REFORMS
B. INSTITUTIONAL REFORMS ( LAND REFORMS )
AGENDA OF LAND REFORMS

1. Redistribution of land
2. Safeguarding interest of tenants
3. Preventing fragmentation and subdivision of holdings
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1. Abolition of intermediaries
2. Tenency reform
a) Regulation of rent
b) Security of tenure
c) Right to purchase land
d) Compensation for improvements
3. Ceilings on land holding
4. Consolidation of land holding
5. Cooperative farming
6. Computerisation of land records
C. INFRASTRUCTURAL REFORMS
1. Setting up financial institutions
2. Setting up market agency
3. Setting up public distribution system
V. NEW AGRICULTURE STRATEGY AND GREEN REVOLUTION
A. FEATURES
1. Betting on the best
2. Introduction of new advanced inputs
3. Active role of state
B. Disparities due to green revolution
1. Inter crop
2. Inter regional
3. Inter personal
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VI. PROBLEMS OF INDIAN AGRICULTURE

A. LOW PRODUCTIVITY
B. RISING COST OF PRODUCTION IN AGRICULTURE
C. INFRASTRUCTURAL INADEQECIES
1. Inadequate and costly finance
2. Absence of efficient market services
3. Organise and efficient outlets for export not available
4. Absence of cheap and efficient means of transport and
communication
D. POVERTY OF FARMER
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4. INDUSTRY DURING PLANS

I. IMPORTANCE OF INDUSTRIALISATION
A. PRODUCTIVITY OF LABOUR
B. EMPLOYMENT GENERATION
C. MOBILISATION OF SURPLUS
II. INDUSTRIAL POLICY IN INDIA ( 1948-91)
A. ACCEPTANCE OF MIXED ECONOMY
B. DEVELOPMENT STRATEGY ADOPTED IN PLANS
1. INDUSTRIAL POLICY RESOLUTION 1956 (IPR 1956)
a) MAIN FEATURES OF IPR 1956
(1) Classification Of Industries
(a) SCHEDULE A (17 industries public utility, heavy investement)
(b) SCHEDULE B (12 industries machine tool antibiotic sea )
(c) SCHEDULE C ( others)
(2) Role Of Small Scale And Cottage Industries
(a) Subsidy and differential taxation system
(3) Need For Removing Regional Disparities
(4) Training Of Technical And Managerial Personel
(5) Amenities For Labour
b) INDUSTRIAL LICENSING AND OTHER CONTROLS
(1) Objectives Of Industrial Licensing
(a) Development of industrial investemnet according to targets
(b) Protection and encouragement to small enterpreneurs
(c) Prevention of concentration of economic power
(d) Balanced economic development of different regions
(2) Other Controls
(a) Import licensing
(b) Environment clearance
(c) Foreign collaboration approval
(d) Price regulation
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(e) Labour legislation
(f) Other measures
III. INDUSTRIAL GROWTH IN INDIA

A. SHARE IN GDP
IV. FEATURES OF INDUSTRIAL GROWTH

A. DIVERSIFICATION OF INDUSTRIAL SECTOR
B. GROWTH OF PRIVATE ENTERPRISE
1. Political stability
2. Unified large market
3. Decline of feudal system
4. Protection against foreign competition
5. Government assistance
6. Growth of public sector
C. GROWTH OF PUBLIC SECTOR

1. Need for public sector
a) Growth of heavy capital goods industries
b) Establishment of socialistic pattern of society
c) Balanced regional growth
d) Provides power to growth of private sector
e) Maintain essential supplies for the consumer
f) Availability of technology and management to small scale industry
D. ROLE OF FOREIGN CAPITAL

1. Loan from foreign sources were encouraged
2. Direct investment by foreigners were permitted ( upto 40 %)
3. Technical collaboration were given preference over financial
collaboration
4. Foreign exchange regulation act 1973 followed
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E. CONCENTRATION OF ECONOMIC POWER

1. Tata, birla, Singhania, reliance, modi etc
V. PROBLEMS OF INDIAN INDUSTRIES

A. Technological backwardness
B. Low productivity and inferior quality
C. Higher cost of production and weak compititive position internationally
D. poor infrastructure
E. Lack of resources for investement
F. Govt. Controls and unnecessary intervention
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5. FOREIGN TRADE OF INDIA

I. ROLE OF FOREIGN TRADE IN ECONOMIC GROWTH
A. IMPORT
1.Import And Economic Growth
a. import of raw material required for different industries
b. import of capital goods required to setup and expand industries
c. import of technology to improve its productivity
d. import food grains and other consumer goods to meet domestic requirement
2.Limitations
a. Decline in foreign exchange
b. Competition for domestic manufactures
B. EXPORT
1.Export And Economic Growth
a. Bring in valuable foreign exchange
b. Export creates market for domestic enterprise
II. FOREIGN TRADE POLICIES

A. IMPORT SUBSTITUTION POLICY ( INWARD ORIENTED)
1. Conservation of foreign exchange
2. Promotion of domestic industry
B. EXPORT PROMOTION POLICY ( OUTWARD ORIENTED)
III. FOREIGN TRADE POLICY OF INDIA

A. Imports were generally prohibited except in emergencies
B. Import of less essential producer goods were subject to high duties
C. Import of raw material and intermediate goods were allowed subject to
quotas,permits
D. Import of capital goods were permitted subject to quotas
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E. In earlier half no export promotion policy adopted but in later half export
promotion policy adopted
IV. FEATURES OF INDIAS FOREIGN TRADE

A. VOLUME AND VALUE OF FOREIGN TRADE
1. Import were increasing faster than export
2. India’s export were increasing but not fast enough
3. India’s export were growing at a slower rate than growth of world
export
B. COMPOSITION OF TRADE ( TYPE OF GOOD)
1. Export more of manufactured goods
2. Import more of raw material
C. DIRECTION OF FOREIGN TRADE ( COUNTRIES)
1. Usa, Europe
V. PROBLEMS OF INDIAS FOREIGN TRADE

A. RISING TRADE DEFICITS
B. FOREIGN EXCHANGE CRISIS
C. RISING DEBT BURDEN
D. RISING SUBSIDY BILL
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UNIT II
ECONOMIC REFORMS SINCE 1991
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6. LIBERALISATION, GLOBALISATION AND
PRIVATISATION
I. ECONOMIC REFORMS
A. BACKGROUND OF NEW ECONOMIC POLICY (1951)
1. All key and basic industries were exclusively resereved for public
sector
2. All private investement in large scale industries was subject to
industrial licensing
3. Permission from government to renovate or expand business
4. No free imports were allowed
5. MNCs were not allowed to setup their production units in India
6. Govt. controlled all source of credit
7. Stock exchange were under strict control of govt.
8. Rates of taxation were very high (97.5%)
ADVANTAGES
1 developed a strong industrial base
2 self reliance in food grains
DISADVANTAGES
1 industries were not efficient
2 low productivity in agriculture
3 could not promote export
4 govt. had assumed more responsibilities
5 unemployment, poverty, inflation etc.
B. OBJECTIVES OF NEW ECONOMIC POLICY

1. To consolidate past gains
2. Strengthen the growth impulses in economy
3. Make own production units more efficient and highly
productive
4. To increase the competitive ability of our production units
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5. To make use of global resources for our own progress and
development
C. MAJOR POLICY CHANGES (LPG)

1. Industrial licensing system has been almost abolished
2. Producers are free to decide their scale and level of production
3. Private capital is allowed for investement
4. Doors have been left open for MNCs
5. MRTP act has been liberalized
6. Import of almost all goods were freely allowed
7. Incentives to private enterprise to enter infrastructure industry
II. ECONOMIC LIBERALISATION
A. LIBERALISATION CAN TAKE ANY OR ALL OF THE FOLLOWING TERM
1. Providing more opportunities to private enterprise and capital
2. Removal of restrictions on movement of goods and services
3. Pricing of the goods to be done by the producers themselves
4. All distribution of goods to be made free
5. Tax rates to be reduced
B. LIBERALISATION AND MARKET ORIENTED ECONOMY
1. Producers are not subject to any controls and restrictions
imposed by govt.
2. There are no floors or ceiling fixed on level of production
3. The price are not fixed by govt.
4. Import and export are relatively free
5. Foreign capital can freely come
6. Rates of taxation are moderate
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III. PRIVATISATION
A. PRIVATISATION MAY RESULT FROM ANY OF FOLLOWING POLICY
INCENTIVES
1. Denationalisation -> ownership ( public -> private )
2. Disinvestment -> eqity shares ( public -> private )
3. Opening up of more industrial areas for private enterprise and
capital
4. Restriction on further expansion and setting up of new units in
public sector
IV. GLOBALISATION
A. THIS IS ACHIEVED BY REMOVING ALL RESTRICTIONS BETWEEN
NATIONS ON MOVEMENT OF
1. Goods
2. Service
3. Capital
4. Technology
B. ADVANTAGES
1. Every nation specializes in production of commodity that it can
produce most efficiently
2. Low cost and low prices
3. Consumers get access to commodities produced in any part of
the world
4. Producers can sell their goods throughout the world
5. Technology spreads fast
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V. SECTORAL POLICY REFORMS
A. AGRICULTURE AND POLICY REFORMS
1. Creation of a favourable economic environment
2. Private sector investement in agriculture will be encouraged
3. Domestic agriculture market will be liberalized
4. Restriction on movement of agriculture commodities
throughout the country will be removed
5. Promotes agriculture export
6. Lease market for increasing the size of holdings
7. Encourage consolidation of holdings
8. Permitting future trading
9. Facilitating the flow of credit to farmers
10. Keep agriculture outside regulatory and tax system
B. INDUSTRY AND POLICY REFORMS

1. INDUSTRIAL LICENSING POLICY
a) Industrial licensing has been abolished
b) Only 3 indutry groups reserved exclusively for public
sector
c) Import of capital goods are allowed
(1) Foreign exchange availability
(2) CIF value < 25% of total plant and machinery or 2 crore
d) No requirement of obtaining industrial approval for
location not falling within 25 km of cities having
population of more than 1 million
e) Industries of non polluting nature can be located within
25 km of cities with more than 1 million population
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f) Removal of convertability clause for term loan
g) All existing registration schemes will be abolished
h) Licensing for expansion exempted
2. FOREIGN INVESTEMENT
a) Automatic approval is available to FDI
b) Access to international market
c) Foreign investement promotion board has been
constituted
3. FOREIGN TECHNOLOGY AGREEMENT
a) automatic permission will be given for foreign
technology agreements
4. PUBLIC SECTOR
a) Some reservation for public sector is retained
b) Public enterprise which are chronically sick will be closed
c) A part of govt. shareholding would be offered to mutual
fund, financial institutions and public
5. MRTP ACT
a) Mrtp act has been amended
b) Provision of concentration of economic power, pre entry
restriction, amalgamation, merger, deleted
c) Emphasis placed on controlling and regulating
monopolistic, restrictive and unfair trade practice
C. EXTERNAL SECTOR AND POLICY REFORM

1. FOREIGN TRADE AND POLICY REFORM
a) There has been a clear shift in emphasis from import
substitution to export promotion
b) Export incentives
c) Shift from direct export subsidy to indirect promotional
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measures
d) All quantitative restriction on import have been
abolished
e) Custom duties on import have been drastically cut
2. FOREIGN CAPITAL AND POLICY REFORM
a) The various changes in policy can be broadly classified
into 4 categories
(1) Choice of product
(2) Choice of market
(3) Choice of ownership structure
(4) Simplification of procedures
3. OBJECTIVES OF EXTERNAL SECTOR AND POLICY REFORMS
a) Maximum benefits from global market opportunities
b) Access to essential raw material, intermediate goods
c) Enhance technology strength
d) Provide consumers with good quality products
D. OTHER AREAS OF ECONOMIC ACTIVITY AND REFORMS

1. BANKING , FINANCIAL INSTITUTION, MONEY AND CAPITAL
MARKET REFORM
a) Reduction in SLR and CRR
b) Computerisation of banking of banking transactions
c) Commercial banks also permitted for equity issue
d) Assets reconstruction company setup. It will help the
banks to reduce their NPA
e) Securitisation, reconstruction of financial asset and
enforcement of security rights act has been enacted
f) Allowed entry of private indian and foreign banks
g) RBI has setup the board for financial supervision
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VI. APPRAISAL OF ECONOMIC REFORMS

A. POSITIVE ACHIEVEMENTS
1. Acceleration in the rate of growth
a) Growth in rate of GNP
b) Growth in per capita income
2. Composition of national product
a) Low productive agriculture sector has been replaced by high
productivity service sector
3. Saving and investement in indian economy
a) Both are encouraging
4. Rapid industrial growth
5. External sector achievements
a) Share of foreign trade in Indias GDP increased
b) Indias share in world export increased
c) Inflow of foreign capital increased
d) Increase in foreign exchange reserve
6. Other areas and economic reforms
a) Expansion of science and technology in india
b) Infrastructure development
c) Increase in bank deposit / insurance business
d) Health and education
B. FAILURES
1. Widespread poverty
2. Growing unemployment
3. Growing personal disparities
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4. Growing regional disparities
5. Failure on the agriculture front
6. Infrastructure inadequacies
7. Environment degradation
UNIT III
CURRENT CHALLENGES FACING THE INDIAN
ECONOMY
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7. POVERTY IN INDIA
I. MAGNITUDE OF POVERTY IN INDIA

A. ABSOLUTE POVERTY AND RELATIVE POVERTY
1. Absolute poverty ( A is poor )
2. Relative poverty ( A is poor than B )
B. POVERTY LINE
1. Rural ( 2400 calories per person per day )
2. Urban ( 2100 calories per person per day )
C. WHO ARE POOR S
1. Rural
a) Small land holders
b) Agriculture labour household
c) Village artisians
2. Urban
a) No or little paid jobs
b) Hawkers
c) Rickshaw or cartpullers
d) Unskilled labour
e) Who lives in slum and jhuggi jhopri colonies
D. CAUSE OF POVERTY
1. economic factors
a) slow growth of employment opportunities
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b) fast rise in population
c) low productivity in agriculture
d) unutilized natural resources
e) inequalities in income distribution
2. social factors
a) social customs
E. HOW TO REMOVE POVERTY

1. Increase in production
a) Minimum economic land holding to be fixed
b) Land tenure system must be reformed
c) Assisting farmer
d) Innovation
2. Equitable distribution
a) Employment opportunities for poor
b) Progressive tax rate system should be adopted
c) Other
3. Capital formation
a) Govt. can introduce incentive scheme for production
b) Use of capital resource in unproductive occupation should be checked
c) Human resource should be properly utilized
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d) Foreign capital invited
4. Population control
a) Small family norm of 1 or 2 children
b) Family planning methods
c) Financial assistance to motivator of family planning
d) Making health service available
e) Promoting female education and employment
f) Arrangement for education in health and biology of reproduction
g) Promotion of delayed marriages
5. Suitable atmosphere
a) People should break the bonds of traditionalism and superstition
b) Providing education
6. Special programmes to benefit the poor

a) Create employment opportunities for poor
b) Availability of essential goods at cheap rates
c) Free service like hospital , education etc
F. GOVERNMENT POLICY
1. All assets should be redistributed on a functional basis
2. Distribution of essential commodity in favour of low income group
3. Assist and guide small scale production
II. POVERTY ALLEVIATION PROGRAMMES

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A. POLICY MECHANISM OF POVERTY ALLEVIATION PROGRAMMES
1. Precise identification of weaker section
2. Formulation of programmes to raise their income and employment
3. Provision of special extension facilities
4. Providing credit
a) Available
b) All types
c) Lower interest rates
d) Repaid in installment
5. Providing a complete package of infrastructure
6. Evaluation of programmes
B. ADVANTAGES
1. Increase purchasing power of poor
2. Increasing wages upto legal minimum
3. Rural infrastructure will be strengthen
4. Abolition of lendors, masters, exploiters
5. Check on undesirable migration
6. Village level institution will become more representative and
democratic
C. CAUSE OF LIMITED SUCCESS

1. Development administration ( low performance )
a) Low efficiency of implementing staff
b) Complex procedural requirements
c) Non existing monitoring machinery
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d) Lack of proper follow up attention
2. Supporting institutions
a) Unsatisfactory performance
3. Planning deficiency
a) Unscientific definition of poor
b) Non poor taking advantage of programme
c) Unsuitability of plans at micro levels
4. Deficiency in wage employment programme

5. In built limitation of strategy
6. Disjointed programmes
7. Lack of peoples participation
8. RURAL DEVELOPMENT IN INDIA
I. ISSUES IN RURAL DEVELOPMENT

1 Rural credit
2 marketing of agriculture produce
3 role of co operatives
4 agriculture diversification
5 alternative farming
A. RURAL CREDIT
1. TYPES OF LOAN
a) Short term or crop loan
(1) For consumption
(2) For inputs
b) Medium term or long term / production loan
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(1) For purchase of fixed assets
2. SOURCE OF RURAL CREDIT

a) Non institutional
(1) Money lenders
(2) Landlords
Benefits (i) any time money ( ATM )
(ii) flexible
Limitations (i) expensive
(ii) unproductive
b) Institutional source
(1) Cooperatives
(a) Short term cooperative
(i) Primary agriculture credit society
(ii) Central cooperative bank
(iii) State cooperative bank
(b) Long term cooperative credit structure
(i) Primary cooperative agriculture and rural
development bank
(ii) State cooperative bank and rural
development bank
(2) commercial banks
(3) regional rural bank
(4) NABARD ( 1982 )

Weakness (i) inefficient cooperative
(ii) cautious approach of bank
Suggestions (i) greater involvement of newer financial
agencies or SHGs or NBFC
(ii) new innovation
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(iii) link between credit and marketing
(iv) integration of financial market
B. MARKETING OF AGRICULTURE PRODUCE

1. IMPORTANT FUNCTIONS OF EFFICIENT MARKETING SYSTEM
a) More productive agriculture technique
b) Satisfactory price between producer and consumer
c) Ensure availability of products and inputs at reasonable prices
2. WEAKNESS OF MARKETING SYSTEM
a) Forced sales
b) Inadequate storage capacity
c) Expensive means of transportation
d) Absence of market information
e) Middleman and malpractices
f) Absence of grading and standardisation
3. GOVERNMENT MEASURES
a) Traditional
(1) Establishement of regulated market
(2) Promotion of cooperative farming
(3) Provision of storage and marketing facilities
(4) Fixing of standard weights and grading
(5) Provision of better transport
(6) Provision of finance
b) New measures
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(1) Establish new market in any area
(2) No compulsion to sell through regulated market
(3) Establishment of direct purchase system
(4) Promotion of public private partnership
(5) Prohibition of commission agency
(6) Marketing committee
C. ROLE OF COOPERATIVES
1. BASIC PRINCIPAL OF COOPERATIVE
a) Voluntary association
b) Democratic organisation
c) Self help through mutual help
d) Common welfare
e) Honesty and integrity
2. TYPES OF COOPERATIVE
a) Cooperative credit society
b) Cooperative non credit society
3. SUGGESTIONS TO BUILD UP COOPERATIVES
a) Long term objectives should be as follows
(1) Create and sustain nation wide presence
(2) Effectively deliver needs of farmer
(3) Reduce cost on marketing
(4) Compete in market place
37
(5) Fetch a fair return to farmer
b) two parallel structure of rural cooperative
(1) credit and banking
(2) supply and marketing
c) development of human resource
d) allow to enter capital market
e) winding up of inactive cooperative society
D. DIVERSIFICATION OF AGRICULTURE
1. CONCEPT
a) Shift from farm to non farm activities
b) Diverse and complementary activities
c) Low value culture to high value culture
2. ADVANTAGES
a) Improving food security
b) Increasing income of farmer
c) Stabilizing income over season
d) Alleviating poverty
e) Generating employment opportunities
38
f) Promoting exports
g) Improving productivity of scarce resources
3. SUGGESTIONS TO PROMOTE AGRICULTURE

DIVERSIFICATION
a) Encouragement to private sector involvement in marketing
b) Policy changes in area of management
c) Strong contract farming system ( cooling facility )
d) Extension services and supply of input
E. ALTERNATIVE FARMING ( ORGANIC FARMING )

1. PROBLEMS OF USING FERTILISERS
a) Soil degradation
b) Raising average cost of production
c) Burden on balance of trade
2. ADVANTAGES
a) Saving of petroleum ( non renewable )
b) Organic fields have more nutrients
c) More biological activity and biodiversity
d) Price stability
e) Fertility increase over time
f) Higher level of vitamins
3. DISADVANTAGES
a) Expensive
39
b) More work intensive
c) Harbor deadly bactaria
d) 20% less yields
9. HUMAN CAPITAL FORMATION IN INDIA

I. ROLE IN ECONOMIC DEVELOPMENT
1. 21st century will promote people who respond to technology
2. Technological shift to knowledge based, brainpower industries
3. As literacy rate improve, proportion of people living below
poverty line falls
4. Promote independence and initiatives
5. As female literacy rate rises, birth rate falls
6. A person with more education will have higher earning
II. INDICATORS OF HUMAN CAPITAL FORMATION
A. HUMAN DEVELOPMENT INDEX
1. It is based on
a) Longevity
(1) life expectancy ( 25-85 years )
b) Education
(1) Adult literacy 2/3 ( 0-100 % )
(2) Combined enrolment 1/3 ( 0-100% )
c) Standard of living
(1) Real GDP per capita ( PPP$ ) ( 100-40000 )
HDI = Actual value - Minimum value

Maximum value - Minimum value
III. HUMAN CAPITAL FORMATION IN INDIA
A. NATIONAL LEVEL
1. Improvement in both
a) rural area
b) urban area
40
B. STATE LEVEL
1. Bihar, UP, MP, Rajasthan, Orissa ( low {half}
2. Kerela ( high {double} )
3. Analysis
a) Less developed states -> low HDI
b) Better off states -> high HDI
c) Middle income states -> no relation
C. ACHIEVEMENTS OF EDUCATIONAL SECTOR

1. Open the doors of education at every level
2. Explosive growth in education
3. India has 2nd largest pool of educated and skilled men and
women in world
4. Development of institution of excellence at every level
5. Increase in literacy rate
D. WEAKNESS OF EDUCATIONAL SECTOR
1. Narrow coverage
2. Inequitous
3. High cost of education
4. Low quality
5. Bias
E. MEASURES TO REFORM EDUCATION SYSTEM
1. Equality reform
2. Quality reform
3. Reform for administrative ease
F. FUTURE EDUCATION POLICY
1. Primary education reached to availed by all children
2. Focus on education of women
3. Make education worthwhile ( actual needs )
4. Education for SC and ST people
5. Provision of nutrition for children
IV. NATIONAL KNOWLEDGE COMMISSION ( 2005 )
A. AGENDA
1. Increasing access to knowledge for public benefits
41
2. Developing higher education concept
3. Revive science and technology institution
4. Encouraging intensive use of knowledge based services by govt
10. EMPLOYMENT IN INDIA

I. LABOUR FORCE AND WORK FORCE
A. LABOUR FORCE ( 15-64 YEARS )
1. Work force ( doing work )
2. Unemployed ( willing and able to work but no job )
B. OUT OF LABOUR FORCE ( NOT ABLE AND WILLING TO WORK )

II. MEASUREMENT OF EMPLOYMENT
A. USUAL PRINCIPAL STATUS ( UPS )
1. Engaged in economic activity for 183 or more days in a year
B. CURRENT WEAKLY STATUS ( CWS )

1. Employed for at least an hour during the reference week
C. CURRENT DAILY STATUS ( CDS )
1. Person days
III. DETERMINENT OF EMPLOYMENT

A. EMPLOYMEN TELASTICITY OF GROWTH
1. Formula = growth rate of employment
Growth rate of GDP
2. Level of employment depends upon size and composition of
GDP
42
IV. MAGNITUDE OF EMPLOYMENT IN INDIA
A. WORK PARTICIPATION RATE
1. Formula = Total no of workers x 100
Total population
B. CAUSE OF LOW PARTICIPATION RATE
1. Age composition of population
2. Very low activity rate among adult women
V. NATURE OF EMPLOYMENT IN INDIA

A. DISTRIBUTION OF WORK FORCE
1. By sex
a) Male ( 51.9% )
(1) Main ( 45.3% )
(2) Marginal ( 6.6% )
b) female ( 25.7% )
(1) main ( 14.7% )
(2) marginal ( 11% )
2. By states
a) Without UT
(1) Punjab ( 30.8% )
(2) Sikkim ( 48.91% )
b) With UT
(1) Lakshdweep ( 26.43% )
(2) Dadra and nagar haveli ( 53.25% )
3. Urban and rural

a) Urban ( 32.2% )
(1) Male ( 50.8% )
43
(2) Female ( 11.5% )
b) Rural ( 42% )
(1) Male ( 52.43% )
(2) Female ( 31% )
4. Main and marginal workers

a) Main ( 30.5% ) ( 183 days or more )
b) Marginal ( 8.7% ) ( less than 6 months )
5. By occupation
a) Primary ( 60.4% )
b) Secondary (15.8% )
c) Tertiary ( 23.8% )
VI. INFORMALISATION OF LABOUR

A. FACTORS THAT PROVES INFORMALISATION OF LABOUR
1. Rising proportion of unorganized sector workers
a) Organized ( 7% )
b) Unorganized ( 93% )
2. Increase in proportion of casual labour
a) Self employed ( 53% )
b) Regular salaried ( 14% )
c) Casual ( 33% )
B. FACTORS RESPONSIBLE FOR INFORMALISATION OF LABOUR

1. Pressure to cut cost
2. Rigid labour laws
3. Need for upgradation of skills
4. No scope for hidden cost
5. Demand supply imbalance
6. Shortcoming of planning
44
VII. ELEMENTS OF SUGGESTED EMPLOYMENT STRATEGY
A. SUGGESTIONS TO PROMOTE EMPLOYMENT IN URBAN AREA
1. Make it vocational
2. Low capital intensive
3. Long gestation period should be avoided
4. Decentralisation and dispersal of industrial activity
5. Promote small industries
B. SUGGESTIONS TO PROMOTE EMPLOYMENT IN RURAL AREAS

1. Local capital construction projects
2. Land development and settlement
3. More labour intensive methods
4. Development of activities like fishing and forestry
5. Promotion of rural social activities
6. Development of small scale industries
C. OTHER MEASURES
1. Better transportation and communication
2. Supply of basic goods and services
11. INFRASTRUCTURE IN INDIA

I. INFRASTRUCTURE AND ECCONOMIC GROWTH
45
A. TYPES OF INFRASTRUCTURE
1. Social
a) Health
b) Education
c) Sanitation
2. Physical
a) Irrigation
b) Transport
c) Telecommunication
B. INFRASTRUCTURE AND ECONOMIC GROWTH

1. Infrastructure promotes economic growth
a) Output of infrastructure used as input for production
b) Infrastructure development improve productivity
c) Infrastructure provides key to modern technology
d) Infrastructure and GDP
e) Poverty reduction
2. Growth brings about change in infrastructure
a) Low income countries -> basic infrastructure
b) Middle income countries -> demand for transport
c) High income countries -> power and telecommunication
C. NATURE OF INFRASTRUCTURE
1. Public goods
2. Externalities
3. Monopolies
4. Public sector domination
II. PRIVATISATION AND COMMERCIALISATION OF

INFRASTRUCTURE
A. NEED FOR COMMERCIALISATION OR PRIVATISATION
46
1. Massive investment needs
2. Managerial constraints in the public sector
3. Changes in technology
4. Globalisation
5. New dynamism in world capital market
B. PRE REQUISITES FOR PRIVATE INVESTEMENT

1. Commercialisation of infrastructure
2. Pricing policy
3. Demand orientation of services ( toll tax )
4. Allocation of risk
5. Direct participation by govt
III. ENERGY : PROBLEMS AND POLICIES

A. SOURCE OF ENERGY
1. Commercial
a) Coal
b) Oil ( petroleum )
c) Natural Gas
d) Hydro power
e) New sources
(1) Gobar gas
(2) Solar energy
(3) Wind power
(4) Geothermal energy
2. Non commercial
a) Firewood
b) Dung cakes
c) Agriculture waste
B. ENERGY PROBLEMS IN INDIA

47
1. Power sector
a) Power shortage
b) Unsatisfactory capacity utilisation of power system
c) SEBs are short of resources to invest
d) Transmission and distribution loss
2. Oil sector
a) Domestic oil production has reached a plateau
b) No major discoveries during last 7 years
c) Slow progress
3. Natural gas sector
a) Enormous waste
b) Mismatch between creation and usage
4. Coal sector
a) Average quality of coal is poor
b) Low labour productivity
c) Rising prices of coal
5. Non commercial energy

a) Limited supply
b) Based on subsidies
6. Policy coordination
a) Freight inequality in oil and coal
b) Inequality in pricing
c) Policies are not consistent
d) Lower price leads to higher demands
C. ENERGY POLICY
1. Objectives of energy policy
a) Balance between energy supply and demand
b) Increase energy productivity
48
c) Exploitation of new and renewable resources
2. Measures taken by govt
a) Pricing measures
(1) Meeting maximum energy needs of low income consumers
(2) Encouraging shift from oil products to domestically produced

fuels
(3) Providing pricing subsidies
(4) Permitting pricing stability
b) Non price measures

(1) Substitution of heavy fuel oil by coal
(2) Regulation and management of energy demand
(3) Larger production of crude oil and refined products
D. SUGGESTIONS
1. Increasing use of coal
2. Reduce petroleum demand
3. Increase the exploitation of potential hydroelectric resources
4. Tax incentives for renewable source producers
5. Energy utilisation strategy
IV. HEALTH : PROBLEMS AND ISSUES

A. CAUSE OF POOR HEALTH
1. High birth rate
2. Malnutrition
49
3. Unsanitary condition and housing
B. HEALTH CARE SYSTEM

1. It consists of
a) Primary, secondary and tertiary care institutions
(1) Primary -> village or city level
(2) Secondary -> urban and district hospitals
(3) Tertiary -> medical collages
b) Medical collages and para professional training institutions

c) Programme managers at central, state and district level
d) Health management information system
2. Deficiency in health care system
a) Communicable diseases
b) Longevity and changing life style
c) Under nutrition
d) Inequitable distribution of institutions and manpower
e) Less number of doctors
3. Issues in health care
a) Demographic transition
b) Epidemiological transition
c) Social transition
d) Managerial transition
4. National health policy ( NHP 2002 )
a) Expanding and improving primary health care facilities
b) Restructuring of national public health system
c) Specific programmes for under serviced sections
d) Programme for control of disease like TB, malaria, HIV AIDS
e) Disaster management plan
5. National rural health mission
a) The vision
50
(1) Effective healthcare for rural population
(2) Health plan for each village
(3) Special focus on 18 states
(4) Safe drinking water, nutrition, sanitation
(5) 24 hour functional hospital
(6) Community health insurance for poor
12. ENVIRONMENT AND SUSTAINABLE ECONOMIC

DEVELOPMENT
I. WHAT IS ENVIRONMENT
A. MAJOR FORMS OF ENVIRONMENT
1. Natural environment
a) Physical
(1) Land
(2) Water
(3) Air
b) Biological
(1) Plants and animals
2. Cultural environment
a) Road
b) Railways
c) Building, etc.
B. ECONOMIC DEVELOPMENT AND ENVIRONMENT

1. Positive effects of economic development
a) Increasing income provide the resources for public services such
as sanitation
b) Investment in environmental conservation
c) Conservation of resources
d) Innovations generate new knowledge to conserve environment
2. Negative effects of economic development
a) Reckless use of resource begin to take place
b) Emissions of hazardous gas
C. POLLUTION
1. Types of pollution
a) Air pollution
51
b) Water pollution
c) Land pollution
2. Cause of air pollution
a) Industrialisation
b) Decrease in forest
c) Large population
3. Cause of water pollution

a) Washing of clothes, cattle, in river
b) Release of sewage from urban centres
c) Leakage of oil from ships
d) Factories release effluents into rivers
e) Use of pesticides and fertilizer for agriculture
4. Measures to check pollution
a) Air pollution
(1) Reduce burning of fossil fuels
(2) Afforestation
(3) Use of non polluting resources for energy
(4) Better automobiles engine
(5) Factories must be located away from residential area
b) Water pollution
(1) Effluents from factories should not be channelized into rivers
and seas
(2) Factory effluents should be recycled
(3) Educate people
II. CONCEPT OF SUSTAINABLE DEVELOPMENT

A. MEANING
1. Renewable resource ( more use )
2. Non renewable resource ( less use )
B. PROBLEM
1. Scarcity of renewable resources
2. How to cope up with population
C. MAIN FEATURES OF SUSTAINABLE DEVELOPMENT
1. Balance between needs of present and future generations
2. Emphasises distributional activity
3. Preservation of human, physical and natural capital
52
4. Cost of environment should be taken care of
III. ENVIRONMENTAL DEGRADATION AND PROTECTION IN

INDIA
A. PROBLEM
1. Depletion in forest
2. Degradation of land
3. Shortage of fuel wood
4. Threat to faunal and floral species
5. Adverse impact of mining, industrialisation
6. Pollution of water from domestic and industrial waste
7. Use of hazardous chemical
B. ACTION TAKEN
1. Legal
2. Constitutional
3. Administrative
53
UNIT IV
DEVELOPMENT EXPERIENCE OF INDIA :
A COMARISON WITH NEIGHBOURS
54
13. INDIA, PAKISTAN, CHINA

I. BRIEF PROFILE
A. INDIA ( 1947 )
B. PAKISTAN ( 1947 )
C. CHINA ( 1949 )
II. GDP GROWTH, COMPOSITION AND DISTRIBUTION
A. GDP
1. Area
a) China ( 95,61,000 sq km )
b) India ( 32,87,263 sq km )
c) Pakistan ( 7,96,095 sq km )
2. Population
a) China ( 1320 million )
b) India (1123 million )
c) Pakistan ( 162 million )
3. Densly Populated
a) India ( 378 person per sq km )
b) Pakistan ( 211 person per sq km )
c) China ( 142 person per sq km )
4. GDP
a) China ( 3121 billion )
b) India ( 1069 billion )
c) Pakistan ( 141 billion )
5. GDP in PPP$
b) India (3078 billion )
B. PER CAPITA GDP

1. China ( 2360 )
2. India (950 )
55
3. Pakistan ( 870 )
C. COMPOSITION OF GDP
1. China
a) Agriculture ( 12% )
b) Industry ( 48% )
c) Service ( 40% )
2. India
b) Industry ( 29% )
c) Service ( 53% )
3. Pakistan
b) Industry ( 20% )
c) Service ( 53% )
D. DISTRIBUTION OF INCOME
1. China ( unfair )
2. India ( unfair )
3. Pakistan ( unfair )
III. HUMAN DEVELOPMENT
A. HUMAN DEVELOPMENT INDEX ( HDI )
1. China ( 0.777 )
2. India ( 0.619 )
3. Pakistan ( 0.551 )
B. COMPONENTS OF HDI
1. Proportion of population below poverty line
2. Growth rate of population
56
3. Urban population
4. Life expectancy
5. Adult literacy rate
6. Child malnutrition
IV. EXTERNAL SECTOR

A. FOREIGN TRADE
1. Size of foreign trade
b) India ( 362 billion )
2. Size of export in GDP
a) China ( 36.6 % )
b) Pakistan ( 13.5% )
c) India ( 13.2% )
3. Share of export in worlds export
a) China ( 8% )
b) India ( 1% )
c) Pakistan ( 0.15%)
4. Composition of export
a) Manufacture goods ( in all cases )
B. FOREIGN CAPITAL
1. China ( most )
2. India ( small )
3. Pakistan ( small )
57
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COME FOR COMMERCE BY HARSH GOYAL

COME FOR COMMERCE

A complete house of commerce

* Extra time for difficulties

* Individual attention to weak students

Location :- kanchan nagar, near bus stand

C. INTERNAL AND EXTERNAL TRADE

II. ARRIVAL OF BRITISHERS (1858)

III. INDIAN ECONOMY AT THE EVE OF INDEPENDENCE

3. Satate Of Economic Infrastucture

2. COMMON GOALS OF FIVE YEAR PLANS

B. OBJECTIVES OF FIVE YEAR PLANS

B. IMPORTANT COMPONENTS OF STRATEGY

F. MORE RECENT DEVELOPMENTS

III. MAJOR ACHIEVEMENTS AND FAILURES

1. Food production up by more than 3 1) Population growth continues unabated at

A. OBJECTIVE ASSESMENT OF PLANNING

(1) Providing strong infrastructure

(2) Providing opportunities for technical education

(3) Importing technology

(4) Making innovations

(5) Making available essential developed inputs

3. AGRICULTURE DURING PLANS

II. FEATURES OF INDIAN AGRICULTURE

AGENDA OF LAND REFORMS

VI. PROBLEMS OF INDIAN AGRICULTURE

4. INDUSTRY DURING PLANS

III. INDUSTRIAL GROWTH IN INDIA

IV. FEATURES OF INDUSTRIAL GROWTH

C. GROWTH OF PUBLIC SECTOR

D. ROLE OF FOREIGN CAPITAL

E. CONCENTRATION OF ECONOMIC POWER

V. PROBLEMS OF INDIAN INDUSTRIES

5. FOREIGN TRADE OF INDIA

II. FOREIGN TRADE POLICIES

III. FOREIGN TRADE POLICY OF INDIA

IV. FEATURES OF INDIAS FOREIGN TRADE

V. PROBLEMS OF INDIAS FOREIGN TRADE

B. OBJECTIVES OF NEW ECONOMIC POLICY

C. MAJOR POLICY CHANGES (LPG)

B. INDUSTRY AND POLICY REFORMS

C. EXTERNAL SECTOR AND POLICY REFORM

D. OTHER AREAS OF ECONOMIC ACTIVITY AND REFORMS

VI. APPRAISAL OF ECONOMIC REFORMS

I. MAGNITUDE OF POVERTY IN INDIA

c) low productivity in agriculture

d) unutilized natural resources

e) inequalities in income distribution

E. HOW TO REMOVE POVERTY

b) Family planning methods

c) Financial assistance to motivator of family planning

d) Making health service available

e) Promoting female education and employment

f) Arrangement for education in health and biology of reproduction

g) Promotion of delayed marriages

6. Special programmes to benefit the poor

b) Availability of essential goods at cheap rates

c) Free service like hospital , education etc

II. POVERTY ALLEVIATION PROGRAMMES

C. CAUSE OF LIMITED SUCCESS

b) Non poor taking advantage of programme

c) Unsuitability of plans at micro levels

4. Deficiency in wage employment programme