Questions Answers

Privatization of the railway is supported on the following

grounds:
1. Once the railways permit private players, there is scope
for capacity augmentation. This is a very pertinent point
because, in 2018-19, 8.85 crore people were on the
waiting list and railways were able to provide
reservations to only 16% of the waiting list passengers.
2. The Railway Board says five crore intending passengers
could not be accommodated during 2019-20. Travel
demand was in excess of supply during festivals and
summer seasons. The demand exceeded the capacity of
1. What is the need for the privatization of
railways.
the Indian Railway?
3. The main objective of this move is to introduce a new
train travel experience for passengers who are used to
traveling by aircraft and air-conditioned buses.
4. Cleanliness in trains and quality of food could be
addressed with privatization.
5. Time is precious, and the punctuality of trains needs to
be improved.
6. With the infusion of more funds through the private
sector, there is scope for bringing in more technology
thereby increasing the safety and comfort aspects of
trains.

● From some quarters there is criticism that railways are

the common mode of transportation for common man,
hence they will face the brunt of price rise in the
railway’s ticket fares.
● There is criticism that the move to privatize railways will
2. What are the challenges or criticisms of
affect the job opportunities of people belonging to the
the Privatization of the railway?
economically and socially backward class.
● Many trade unions like AITUC, HMS, CITU, and
independent federations like AIDEF and AIBEA opposed
the decision of the government.
● Private players may find it difficult to compete due to
various complex factors.

Following are the objectives of the National Rail Plan 2030

(NRP):
3. What are the objectives of the National
1. To generate capacity ahead of demand by 2030, which
Rail Plan 2030?
in turn would cater to growth in demand up to 2050.
2. To raise the modal share of Railways from the current
27% to 45% in freight by the year 2030 as part of a

4. Who proposed the Sarvodaya
Plan?
5. Throw some light on NDC.
national commitment to decrease carbon emission and
to continue to sustain it.
3. To forecast traffic growth in both passenger and freight
year on year up to 2030 and on a decadal basis up to
2050.
4. To frame strategies based on both operational capacities
and commercial policy programs to heighten the modal
share of the Railways in freight to 45% by 2030.
5. To bring down the transit time of freight significantly by
enhancing the average speed of freight trains from the
current 22 kmph to 50 kmph.
6. To diminish the overall cost of rail transportation by
almost 30% and pass on the benefits to the customers.
7. To map the growth in demand on the Indian Railway
route map and simulate the capacity behavior of the
network in the future.
8. To identify the bottlenecks that would arise in the future
based on the above simulation.
9. To select projects along with appropriate technology in
both track work, signaling, and rolling stock to reduce
these bottlenecks well in advance.
● The Sarvodaya Plan was drafted by Jaiprakash
Naryan in 1950.
● It emphasized the importance of agriculture and village
industries, especially small-scale textile & cottage
industries, in the process of economic development.
● National Development Council (NDC) or the
Rashtriya Vikas Parishad is the apex body for decision
making and deliberations on development matters in
India presided over by the Prime Minister.
● It was set up on August 6, 1952, to strengthen and
mobilize the effort and resources of the nation in
support of the Plan, to promote common economic
policies in all vital spheres, and to ensure the balanced
and rapid development of all parts of the country.
● It is one of the key organizations of the planning
system in India. It symbolizes the federal approach to
planning and is the instrument for ensuring that the
planning system adopts a truly national perspective.
● The NDC has experienced numerous ups and downs in
its fortunes. Its status has been determined by the
prevailing political climate and the support provided to
it by the government in power at the center and the
effectiveness of the pressures exerted by state
governments. Notwithstanding the vicissitudes that it
 has faced during the past six decades, its continuing
presence in the apex policy structure has always been
felt.
● Way back in 1946, the Planning Advisory Board under
the chairmanship of KC Neogi, had recommended the
setting up of an advisory organization that would
include representatives of the provinces, princely
states, and other interests. Although this idea was not
implemented before independence, its rationale was
well appreciated. The Planning Commission of the
Government of India, in the initial days of its inception,
had recognized the potential utility of such a
coordinating body.
● In the Draft First Five Year Plan, it was stressed by the
Planning Commission that in a vast country like India,
where under the constitution, the states enjoy
autonomy in the performance of their functions, there
was a need for a body like the National Development
Council that may facilitate the periodical evaluation of
planning and its various facets by the Prime Minister
and the state Chief Ministers. Accordingly, the National
Development Council was set up by a proposal of the
Cabinet Secretariat of the Government of India in
August 1952.

Incremental Capital Output Ratio (ICOR) is the additional

capital required to increase one unit of output. This ratio is
6. Define ICOR. used to measure the efficiency of an industrial unit or country
as an economic unit. The smaller the ICOR, the more efficient
the organization will be.

● The Gadgil formula is named after Dhananjay

Ramchandra Gadgil, a social scientist and the first critic
7. Throw some light on the Gadgil formula. of Indian planning.
● It was evolved in 1969 for determining the allocation of
central assistance for state plans in India.

● The term ‘Hindu rate of growth’ was coined by Prof

Raj Krishna.
● It refers to the low annual growth rate of the economy
of India before the liberalization of 1991, which
stagnated around 3.5% from the 1950s to 1980s, while
8. Explain the Hindu rate of growth.
per capita income growth averaged 1.3%.
● The word “Hindu” in the term was used by some early
economists to imply that the Hindu outlook of fatalism
and contentedness was responsible for the slow growth.
However many later economists pointed out that the

9. What is the rolling plan in the context of
planning in India?
10. Discuss the Nehru Mahalanobis model
in the context of planning in India.
11. In which plan was the Harrod Domar
model implemented?
12. What is a “plan holiday” in the context
of planning in India?
13. What do you mean by NITI Aayog?
What are the objectives of NITI Aayog?
so-called Hindu rate of growth was a result of socialist
policies.
The Janata Party Government terminated the fifth five-year
plan in 1977-78 and launched its own sixth five-year plan for
the period 1978-83 and called it a Rolling Plan.
In rolling plans every year three new plans are framed and the
existing one shall roll into the new plan. The planners can
integrate the targets and objectives of a prospective plan (15
– 20 years) into a medium-term plan (4 – 5 years) into an
annual plan and this helps the planners to revise plan targets.
● It was a growth model prepared by Prof.P.C.
Mahalanobis in which he emphasized that to achieve a
rapid long-term rate of growth it would be essential to
devote a major part of the investment to build­ heavy
industries.
● It was adopted during the 2nd five-year plan.
● As a result, The second five-year plan focused on
industry, especially heavy industry
● Three steel plants were built-Rourkela, Bhilai, and
Durgapur.
● The Harrod-Domar model was designed by Sir Roy
Harrod in 1939 and Evsey Domar in 1946.
● It is a growth model that primarily exhibits that the rate
of economic growth in an economy is influenced by the
extent of saving and the capital-output ratio.
● In the 1950s and 1960s, this model was applied to
economic planning in developed economies.
● The First Five-Year Plan was based on the
Harrod–Domar model with few modifications.
● Due to the miserable failure of the Third Plan, the
government was forced to declare "plan holidays"
(from 1966–67, 1967–68, and 1968–69).
● Three annual plans were drawn during this intervening
period. During 1966–67 there was again the problem of
drought. Equal priority was given to agriculture, its
allied activities, and the industrial sector.
● The government of India declared "Devaluation of
Rupee" to increase the exports of the country. The main
reasons for plan holidays were the war, lack of
resources, and an increase in inflation.
● The National Institution for Transforming India,
also called NITI Aayog, was formed via a resolution of
the Union Cabinet on January 1, 2015.
 ● NITI Aayog is the premier policy ‘Think Tank’ of the
Government of India, providing both directional and
policy inputs. While designing strategic and long-term
policies and programs for the Government of India, NITI
Aayog also provides relevant technical advice to the
Centre and States.

Objectives of NITI Aayog are mentioned below:

1. The active participation of States in the light of national
objectives and to provide a framework for the 'national
agenda’.
2. To promote cooperative federalism through well-ordered
support initiatives and mechanisms with the States on
an uninterrupted basis.
3. To construct methods to formulate a reliable strategy at
the village level and aggregate these gradually at
higher levels of government.
4. An economic policy that incorporates national security
interests.
5. To pay special consideration to the sections of the
society that may be at risk of not profiting satisfactorily
from economic progress.
6. To propose strategic and long-term policy and program
frameworks and initiatives, and review their progress
and their effectiveness.
7. To grant advice and encourage partnerships between
important stakeholders and national-international Think
Tanks, as well as educational and policy research
institutions.
8. To generate knowledge, innovation, and entrepreneurial
support systems through a shared community of
national and international experts, etc.
9. To provide a platform for the resolution of inter-sectoral
and inter-departmental issues in order to speed up the
accomplishment of the progressive agenda.
10.To preserve a state-of-the-art Resource Centre, be a
repository of research on good governance and best
practices in sustainable and equitable development as
well as help their distribution to participants.
11.To effectively screen and assess the implementation of
programs and initiatives, including the identification of
the needed resources to strengthen the likelihood of
success.
12.To pay attention to technology improvement and
capacity building for the discharge of programs and
initiatives.

14. What do you mean by Indicative and
Imperative Planning?
15. What do you mean by Import
substitution?
16. Defining economic growth and
economic development, highlight the
difference between them.
13.To undertake other necessary activities in order to
implement the national development agenda and the
objectives.
Indicative planning is a form of economic planning
implemented by a state in an effort to solve the problem of
imperfect information in market economies by coordination of
private and public investment through forecasts and output
targets. Planning by inducement is often referred to as
indicative planning.
Under Imperative Planning, the planning authority decides
about every aspect of the economy to the minute details, sets
targets, and administers its implementations.
● Import substitution is a strategy under trade policy
that abolishes the import of foreign products and
encourages production in the domestic market.
● The purpose of this policy is to change the economic
structure of the country by replacing foreign goods with
domestic goods.
Economic growth
Economic growth measures an increase in Real GDP (real
output). GDP is a measure of the national income / national
output and national expenditure. It basically measures the
total volume of goods and services produced in an economy.
Economic development
Development looks at a wider range of statistics than just GDP
per capita. Development is concerned with how people are
actually affected. It looks at their actual living standards and
the freedom they have to enjoy a good standard of living.
Measures of economic development will look at:
● Real income per head – GDP per capita.
● Levels of literacy and education standards.
● Levels of healthcare e.g. number of doctors per
1000 population.
● Quality and availability of housing.
● Levels of environmental standards.
● Life expectancy.
It is expected that economic growth will enable more
economic development. Higher real GDP enables more to be
 spent on health care and education. However, the link is not
guaranteed. The proceeds of economic growth could be
wasted or retained by a small wealthy elite.

The Green Revolution is referred to as the process of

increasing agricultural production by incorporating modern
tools and techniques. The Green Revolution is associated with
agricultural production. It is the period when agriculture of the
country was converted into an industrial system due to the
adoption of modern methods and techniques like the use of
high-yielding variety seeds, tractors, irrigation facilities,
pesticides, and fertilizers.

Features of the green revolution:

1. Introduced High Yielding Variety seeds in Indian
agriculture.
2. The HYV seeds were highly effective in regions that had
rich irrigation facilities and were more successful with
the wheat crop. Therefore, the Green Revolution at first
focused on states with better infrastructure such as
Tamil Nadu and Punjab.
3. During the second phase, the high-yielding variety
17. What is the green revolution? seeds were given to other states, and crops other than
wheat were also included in the plan.
4. The most important requirement for the high yielding
variety seeds is proper irrigation. Crops grown from
HYV seeds need good amounts of water supply and
farmers could not depend on the monsoon. Hence, the
Green Revolution has improved the irrigation systems
around farms in India.
5. Commercial crops and cash crops such as cotton, jute,
oilseeds, etc were not a part of the plan. The green
revolution in India mainly emphasized food grains such
as wheat and rice.
6. To enhance farm productivity, the green revolution
increased the availability and use of fertilizers,
weedicides, and pesticides to reduce any damage or
loss to the crops.
7. It also helped in promoting commercial farming in the
country with the introduction of machinery and
technology like harvesters, drills, tractors, etc.

Planning in India
● At the time of independence, India was a backward
18. Write a short note on Planning in India.
underdeveloped country. There was a lot of exploitation
of India during the British colonial rule.
 ● This made Indian people very poor. The aim of the
freedom struggle was not merely gaining political
freedom from British rule but also to attain economic
freedom for the Indian people. Economic freedom
implies the removal of mass poverty that prevailed in
India.
● At the time of independence, there was a deficiency of
good entrepreneurs who could use the natural resource
endowment of India for economic development.
● To improve the living standards of the people, it was
necessary to accelerate the rate of economic growth. It
was thought that the private sector lacked the
necessary resources and the proper mindset to bring
about rapid economic growth.
● Inspired by the Russian experience, planning as an
instrument of economic development was adopted.
● The Planning Commission was set up on 15 March
1950 and the plan era started from 1 April 1951 to
prepare five-year plans which would indicate directions
in which the Indian economy should move. Resources
were to be allocated both at the Centre and in the
States according to the priorities decided in a five-year
plan.
● The basic objective of Indian planning was the
acceleration of economic growth so as to raise the living
standards of the people. Further, various five-year plans
also gave high priority to the generation of employment
opportunities and the removal of poverty.

● A frequently used tool that explains the relationship

between the level of investment made in the economy
and the consequent increase in GDP is the
capital-output ratio. The concept of the capital-output
ratio expresses the relationship between the value of
capital invested and the value of output.
● The capital-output ratio is the amount of capital needed
to produce one unit of output.
19. What do you mean by High Capital
● A high capital-output ratio implies that a higher level
Output Ratio?
of capital or investment is needed to produce one unit
of output. It is not a desirable situation.
● A lower capital-output ratio shows that only a low level
of investment is needed to produce a given growth rate
in the economy.
● This is considered a desirable situation.
● The lower capital-output ratio shows that capital is very
productive or efficient.
 NITI Aayog replaced the Planning Commission due to
the following reasons:

● The new National Institution for Transforming India

(NITI) will act more like a think tank or forum, say its
supporters, in contrast with the Commission which
imposed five-year-plans and allocated resources to hit
set economic targets.
● NITI will include leaders of India's 28 states and seven
union territories. But its full-time staff - a deputy
chairman, Chief Executive Officer, and experts - will
answer directly to the Prime Minister, who will be
chairman. It is different from the planning commission,
which used to report to the National Development
Council.
● The major difference in approach to planning, between
NITI Aayog and Planning Commission, is that the
former will invite greater involvement of the states,
while the latter took a top-down approach with a
one-size-fits-all plan.
● The Planning Commission’s role was the formulation of
broad policy and its capacity was more advisory. NITI
20. Why was the Planning Commission Aayog shall have powers for resource allocation to
replaced by NITI Aayog? states, based on their respective needs.
● The states had little direct say in policy planning, which
was the purview of the Planning Commission. The
involvement of the states was indirect through the
National Development Council; it will not be repeated in
the NITI Aayog.

The NITI Aayog aims to enable India to better face

complex challenges, through the following:

● Leveraging India's demographic dividend, and

realization of the potential of youth, men, and women,
through education, skill development, elimination of
gender bias, and employment.
● Elimination of poverty, and the chance for every Indian
to live a life of dignity and self-respect.
● Redressal of inequalities based on gender bias, caste,
and economic disparities.
● Integrate villages institutionally into the development
process.
● Policy support to more than 50 million small businesses,
which are a major source of employment creation.
● Safeguarding of our environmental and ecological
 assets.

● According to the Trickle Down theory of Economic

growth, it was believed that economic growth alone
would be able to pull people out of the poverty trap by
increasing the investment in the economy which will
lead to employment generation and higher
consumption.
21. What do you mean by the Trickle-down
● Later on, it was realized that economic growth
effect?
undoubtedly reduces poverty but also increases
inequality.
● Therefore, the concept of inclusive growth was
introduced in the 11th Five Year Plan which focuses on
the distribution of growth opportunities to each and
every section of the society.

● After independence, India relied on food crop supplies

from the United States under Public Law 480.
● The P. L. 480 agreements aimed at the supply of
22. What is the PL-480 program? surplus agricultural commodities from the U.S.A.
against payment of the rupee equivalent of the dollar
cost of these commodities plus 50 percent of the ocean
freight cost.

The capital-output ratio is the amount of capital needed to

23. What is the difference between produce one unit of output. Whereas, The incremental
Incremental Capital Output Ratio and capital-output ratio (ICOR) is a frequently used tool that
Capital Output Ratio? explains the relationship between the level of investment
made in the economy and the consequent increase in GDP.

Unemployment may be defined as “a situation in which the

24. What do you mean by unemployment? person is capable of working both physically and mentally at
the existing wage rate, but does not get a job to work”.

Types of Unemployment:
Unemployment is broadly classified into the following
categories.
● Structural Unemployment: This type of
unemployment arises due to drastic changes in the
economic structure of a country. These changes may
25. What are the different types of
affect either the supply of a factor or demand for a
unemployment?
factor of production. Structural employment is a natural
outcome of economic development and technological
advancement and innovation that are taking place
rapidly all over the world in every sphere.
● Frictional unemployment: This type of
unemployment refers to a transition period of looking
 for a new job, for different reasons, such as seeking a
better job, being fired from a current job, or having
voluntarily quit a current job. The period of time
between the current job and a new job is referred to as
frictional or temporary unemployment.
● Cyclical Unemployment: It is caused by trade cycles
at regular intervals. Generally, capitalist economies are
subject to trade cycles. The downswing in business
activities results in unemployment. Cyclical
unemployment is normally a short-run phenomenon.
● Seasonal Unemployment: It is unemployment that
occurs during certain seasons of the year. In some
industries and occupations like agriculture, holiday
resorts, ice factories, etc., production activities take
place only in some seasons. So they offer employment
for only a certain period of time in a year. People
engaged in such types of activities may remain
unemployed during the off-season.
● Disguised Unemployment: It is a situation in which
more people are doing work than actually required.
Even if some are withdrawn, production does not suffer.
In other words, it refers to a situation of employment
with surplus manpower in which some workers have
zero marginal productivity.
● Educated Unemployment: Among the educated
people, apart from open unemployment, many are
underemployed because their qualification does not
match the job. The faulty education system, mass
output, preference for white-collar jobs, lack of
employable skills, and dwindling formal salaried jobs
are mainly responsible for unemployment among
educated youths in India. Educated unemployment may
be either open or underemployed.
● Chronic Unemployment: If unemployment continues
to be a long-term feature of a country, it is called
chronic unemployment. The rapid growth of the
population and inadequate level of economic
development on account of the vicious circle of poverty
are the main causes of chronic unemployment.

● The marginal product of labour is the change in

output when additional labour is added, such as when
an additional employee is hired. It is important to point
26. What do you mean by the marginal
out that all other factors remain constant.
productivity of labour?
● In other words, with the marginal product of labour,
only the amount of labour changes, not any other factor
involved in the production.

27. What do you mean by PLFS?
28. What is Employment elasticity?
29. What do you mean by the
unemployment rate?
30. Discuss the Labour force participation
rate?
● For example, in a factory, if you want to determine the
marginal product of labour, you might hire one more
worker to see if the additional labour adequately
increases the number of cars you are able to produce,
or if it is necessary to hire more people to meet your
quota.
● Periodic Labour Force Survey (PLFS) is a survey
launched in 2017 by the National Statistical Office
(NSO) to collect labour force data more frequently.
The objective of PLFS is primarily twofold:
1. To estimate the key employment and unemployment
indicators (viz. Worker Population Ratio, Labour Force
Participation Rate, Unemployment Rate) in the short
time interval of three months for urban areas only in
the Current Weekly Status (CWS).
2. To estimate employment and unemployment indicators
in both usual status and CWS in both rural and urban
areas annually.
● Employment elasticity is a measure of the
percentage change in employment associated with a
one percentage point change in economic growth.
● The employment elasticity indicates the ability of an
economy to generate employment opportunities for its
population as a percent of its growth (development)
process.
The unemployment rate is the percentage of the labour
force that is jobless. It is a lagging indicator, meaning that it is
generally rising or falling in the wake of changing economic
conditions, rather than anticipating them. When the economy
is in poor shape and jobs are scarce, the unemployment rate
can be expected to rise. When the economy is growing at a
healthy rate and jobs are relatively plentiful, it can be
expected to fall.
The Labour force Participation Rate is the measure to
evaluate the working-age population in an economy. The
participation rate refers to the total number of people or
individuals who are currently employed or in search of a job.
People who are not looking for a job such as full-time
students, homemakers, individuals above the age of 64, etc.
will not be a part of the data set.
 ● The formal and informal sectors constitute the
Indian economy. Formal sectors represent all jobs with
specific working hours and regular wages and the
worker’s job is assured. The workers are employed by
the government, state, or private sector enterprises. It
is a licensed organization and is liable to pay taxes. It
includes large-scale operations such as banks and other
corporations.
● Conversely, informal sectors are the ones where the
31. Differentiate between formal and
employees or the workers do not have regular working
informal sectors.
hours and wages and are exempted from taxes. It is
mainly concerned with the primary production of goods
and services with the primary aim of generating
employment and income on a small scale. A street
vendor selling his farm products on the street to
generate and earn his daily bread is an example of an
informal economy. Ragpickers, moneylenders, brokers
are considered as a part of an informal economy. It is
also described as the grey economy.

In India, labour is a subject in the Concurrent List.

● Since it is in the Concurrent List, both the Parliament
and the state legislatures can enact laws on it.
● As per the Central Government, before the new labour
codes were passed, there were more than 40 central
laws and more than 100 state laws on labour and
related matters.
● The Second National Commission on Labour (2002)
recommended that the central labour laws should be
integrated into groups like:
● Industrial relations
● Wages
● Social security
32. Give a brief account of Labour Reforms
● Safety
Background in India.
● Welfare and working conditions
● This was recommended by the Commission because the
existing labour laws were archaic, complex and had
inconsistent definitions. The Commission suggested
simplification of the labour codes for the sake of
transparency and uniformity.
In 2019, the Central Government introduced four bills on
labour codes to consolidate 29 central laws. These are:
1. Code on Wages
2. Industrial Relations Code
3. Social Security Code
4. Occupational Safety, Health and Working Conditions
Code
 ● While the Wages Code was passed in 2019, the other
three bills were referred to a Standing Committee on
Labour. As per the recommendations of the Committee,
the government replaced these bills with new ones in
September 2020, and these were passed in the same
month.
● The Rules for all the four labour code bills would be
notified in one go according to the Labour Ministry.
Hence, even though the draft Rules for the Wages Code
had been circulated in 2019 itself, the Ministry withheld
its finalization and implementation.

● The four new labour codes – Code on Social Security

2020, Occupational Safety, Health and Working
Conditions Code 2020, Industrial Relations Code 2020,
and Code on Wages 2019 – will subsume the existing
29 central labour and industrial laws and aim to avoid
33. What are the new Labour Codes in
multiplicity of laws.
India?
● Many of the provisions of the codes have been termed
as anti-worker by trade unions and workers’
organizations. Some experts say that they give more
power to the employer, especially to hire and fire
arbitrarily.

There are many issues plaguing the labour market in India.

Some of the issues are mentioned below:
1. Migrant labourers – There are 2 types in this section,
domestic migrant workers and overseas migrant
workers. Overseas migrant workers are predominantly
located in middle east countries. In some cases, they
face labour issues such as unsafe working conditions,
poor living conditions, and unpaid salaries.
2. Bonded Labour – This is a form of employment in
which an employee is forced to work with an employer
due to the inability to repay the debt due to
34. Give an account of the issues facing
high-interest rates. Bonded labour lasts for an indefinite
the Labour Sector in India.
time period. Sectors that employed bonded labourers
are in agriculture, illegal mining, brick kilns, stone
quarries, etc. India enacted the Bonded Labour System
Abolition Act 1976 that prohibits and criminalizes
bonded labour practice.
3. Child Labour – A large number of children were forced
into labour activities due to lack of school education and
poverty. India passed the Child Labour Prohibition and
Abolition Act 1986 to stop child labour in India.
4. Skill gap: Skills gap refers to the difference between
the skills required for a job and the skills an employee
 actually possesses. Because of the skills gap,
employees might not be able to perform the complete
job. In 2019, 53 percent of Indian businesses were
unable to hire candidates due to a lack of future skills.
According to the ILO, in 2019 several job positions that
required future skills remained unfulfilled owing to the
skill gap that exists across various industries.
5. Casualisation of labour: It is the process in which
employment shifts from a preponderance of full-time
and permanent positions to casual and contract
positions.

Casualization of the workforce is a process in which

employment shifts from full-time and permanent positions to
35. What do you mean by casualization of
casual or contract positions. All daily wage-earning employees
labour?
and some categories of contract employees are casual
labourers.

● Gig workers refer to the workers outside of the

traditional employer-employee relationship including
freelancers, workers who are employed on a contractual
basis with their employers, project-based work, and
short-term work.
36. What do you mean by gig workers?
● Most commonly, platform-based work where workers
earn money by providing specific services, including
food delivery services like Zomato, Swiggy, or
e-commerce platforms such as Amazon, Flipkart, etc.,
use gig workers.

● Jobless growth means that the economy under

consideration is experiencing growth, i.e., increasing
GDP but at the same time either employment is
constant or is in fact decreasing.
● India is also facing jobless growth. The National Sample
Survey Office’s (NSSO) estimates for the year 2017-18
show that India’s joblessness was 6.1 percent of the
labour force, which is amongst the highest since
1972-73.
37. What do you understand about jobless
● At 27.2%, urban women are worst-affected, followed by
growth? Suggest measures to overcome it.
their male counterparts at 18.7%. More men in villages
(17.4%)are jobless than women (13.6%).
Reasons for jobless growth in India.
● In India, growth is attributed to the service sector,
whereby both employment and wages have seen a rise,
but overall contribution in total employment is less than
30%.
● Lower growth in agriculture (2%) which employs nearly
45% of the total workforce.
 ● Lower growth in the Labour-intensive manufacturing
sector.
● Outdated labour laws force firms to go for
capital-intensive manufacturing rather than
labour-intensive manufacturing.
● Lack of skilled workforce to match the demands of
industries.
Ways to overcome jobless growth:
● Focus on shifting excess labour force from the
agriculture sector to the manufacturing and service
sector.
● Focus on labour-intensive manufacturing such as the
textile and leather industries.
● Skill development.
● Reforming labour laws.
● Improving the labour market information system to
match demand and supply of skills.

● Inclusive growth means economic growth that

creates employment opportunities and helps in reducing
poverty. It means having access to essential services in
health and education by the poor. It includes providing
equality of opportunity, empowering people through
education and skill development. It also encompasses a
growth process that is environment-friendly, aims for
good governance, and helps in the creation of a
gender-sensitive society.
● The agenda for inclusive growth was envisaged in the
38. What do you mean by inclusive
Eleventh Plan document which intended to achieve
growth?
not only faster growth but a growth process that
ensures broad-based improvement in the quality of life
of the people, especially the poor, SCs/STs, other
backward castes (OBCs), minorities and women and
which seeks to provide equality of opportunity to all.
Bringing these excluded sections of the society into the
mainstream of society so that they are able to reap the
benefits of faster economic growth is the kind of
‘inclusion’ that is being envisioned in the concept of
inclusive growth.

● Sustainable economic growth means a rate of

growth that can be maintained without creating other
significant economic problems, especially for future
39. What do you mean by Sustainable
generations.
economic growth?
● There is clearly a trade-off between rapid economic
growth today, and growth in the future. Rapid growth
today may exhaust resources and create environmental

40. What do you mean by Pace and Pattern
of growth?
41. What do you mean by Pro-poor
growth?
42. Write a note on the International
Monetary Fund (IMF).
problems for future generations, including the depletion
of oil and fish stocks, and global warming.
● Economic growth is the most powerful instrument for
reducing poverty and improving the quality of life in
developing countries. The pace of growth refers to rapid
and sustained economic growth for poverty reduction.
● But under different conditions, similar rates of growth
can have very different effects on poverty, the
employment prospects of the poor, and broader
indicators of human development. The extent to which
growth reduces poverty depends on the degree to
which the poor participate in the growth process and
share in its proceeds.
● Therefore, the pattern of growth implies the degree to
which growth involves the participation of the poor. That
is why it is said that both the pace and pattern of
growth matter for reducing poverty.
● Economic growth that is good for the poor is known as
'pro-poor growth'. Broadly, pro-poor growth can be
defined as one that enables the poor to actively
participate in and significantly benefits from economic
activity. It is a major departure from the trickle-down
development concept.
● Pro-poor growth is a term used for primarily national
policies to stimulate economic growth for the benefit of
poor people (primarily in the economic sense of
poverty).
● Pro-poor growth can be defined as absolute, where the
poor benefit from overall growth in the economy, or
relative - which refers to targeted efforts to increase
the growth specifically among poor people.
● The formation of the IMF was initiated in 1944 at the
Bretton Woods Conference. IMF came into operation on
27th December 1945 and is today an international
organization that consists of 189 member countries.
Headquartered in Washington, D.C., IMF focuses on
fostering global monetary cooperation, securing
financial stability, facilitating and promoting
international trade, employment, and economic growth
around the world. The IMF is a specialized agency of the
United Nations.
● The breakdown of international monetary cooperation
during the Great Depression led to the development of
the IMF, which aimed at improving economic growth
and reducing poverty around the world.
 ● The International Monetary Fund (IMF) was initially
formed at the Bretton Woods Conference in 1944. 45
government representatives were present at the
Conference to discuss a framework for postwar
international economic cooperation.
● The IMF became operational on 27th December 1945
with 29 member countries that agreed to abide by this
treaty. It began its financial operations on 1st March
1947. Currently, the IMF consists of 189 member
countries.
● The IMF is regarded as a key organization in the
international economic system which focuses on
rebuilding the international capital along with
maximizing national economic sovereignty and human
welfare.

India is a founder member of the IMF. India’s Union Finance

Minister is the Ex Officio Governor on the IMF’s Board of
Governors. Each member country also has an alternate
governor. The alternate governor for India is the Governor of
the RBI. There is also an Executive Director for India who
represents the country at the IMF.
● India’s quota in the IMF is SDR 13,114.4 million giving
43. Discuss in brief about India & IMF. India a shareholding of 2.76%. Read about the Special
Drawing Rights – Created in 1969 by the International
Monetary Fund (IMF) at the linked article.
● This makes India the eighth largest quota holding
country at the organization.
● In 2000, India completed the repayment of all the loans
it had taken from the IMF.
● Now, India is a contributor to the IMF.

● Supplementary Foreign Exchange Reserves are defined

44. What do you mean by SDR?
and are maintained by the International Monetary Fund
(IMF) and are known as Special Drawing Rights.
● When there was a shortfall of highly preferred foreign
exchange reserve assets such as US Dollars and Gold,
Special Drawing Rights were created in 1969 by the
International Monetary Fund (IMF).
● XDR is the currency code of Special Drawing Rights.
● The International Monetary Fund (IMF) allocates Special
Drawing Rights (SDR) to different countries.
● Private parties cannot hold Special Drawing Rights
(SDR). During the 2009 global financial crisis to give
liquidity in the global economic system more than $ 180
billion XDR was allocated. It is usually held by a few
organizations and IMF member countries.

45. How is SDR traded?
46. How are SDRs allocated by the IMF?
47. What is the Reserve Tranche
Mechanism?
● The International Monetary Fund reviews a group of key
international currencies over a time period of 5 years
and then decides the value of Special Drawing Rights.
● The latest currency that was added to the basket of
currencies by the International Monetary Fund to
determine the value of XDR is the Chinese Yuan in
2016.
● The other international currencies in the basket of
currencies are the British Pound, Japanese Yen, US
Dollar, and Euro.
There is no market for SDR. A country that wants to sell SDR
will notify the SDR department. This department will help in
settling the trade between seller and buyer. Exchanging
currency and SDR is not prohibited. SDR is predominantly
traded through Voluntary Trading Agreements (VTA).
● An allocation requires Board of Governors approval by
an 85 percent majority of the total voting power of the
members in the SDR Department.
● Once agreed, the general allocations of the Special
Drawing Rights (SDRs) are distributed to the member
countries on the basis of their quota shares at the
International Monetary Fund.
● A reserve tranche is a portion of the required quota of
currency each member country must provide to the
International Monetary Fund(IMF) that can be utilized
for its own purposes without a service fee or economic
reform conditions.
● The IMF is funded through its members and their quota
contributions. The reserve tranche is basically an
emergency account that IMF members can access at
any time without agreeing to conditions or paying a
service fee.
● In other words, a portion of a member country’s quota
can be withdrawn free of charge at its own discretion.