Unit -INDIAN ECONOMIC DEVELOPMENT.

Ch- Development Experience ( 1947-90) and Economic Reforms since 1991

Part -A
1 Industrial revolution came first in:
(a) France
(b) Germany
(c) England.
(d) America.
Ans. C
2. In which year first train ran on rails in India:
(a) 1950
(b) 1953
(c) 1853
(d) 1901.
Ans B 1853
3. Development plans started in India in which year:
(a) 15 August 1947
(b) 1 April 1951
(c) 26 January 1950
(d) 15 July 1969.

Answer
Answer: (b) 1 April 1951

Question 4.
Which of the following organisation frame 5 year plan:
(a) YojanaAyog
(b) National development
(c) Finance ministry
(d) Home ministry.

Ans. (A) yojanaayog

Question 5.
In the year 1951 what % of contribution was from agriculture towards national income:
(a) 72%
(b) 65%
(c) 59%
(d) 51%.

Ans. ( C) 59%

Question 6.
In India green revolution was successful for:
(a) Wheat and Potato
(b) Wheat and Rice
(c) Cereals and Rice
(d) Pulses and Com.

Ans. (B)
7.
Small scale industry is:
(a) Labour intensive
(b) Capital intensive
(c) Complementary to large scale industries
(d) None of these.
Ans. ( A)

9.When was the first census data collected during British India

A. 1882
B. 1982
C. 1881
D. 1981
Ans.C

10. What was the condition of foreign trade under British rule

A. Surplus on account of foreign trade was spent on war expenses

B. All of these
C. Net exporter of raw materials
D. Net importer of finished goods reproduced by British India
Ans. B
11. Death rate and birth rate at the time of independence was

A. High birth rate and Low death rate

B. Low birth rate and low death rate
C. Low birth rate and high death rate
D. High birth rate and high death rate
Ans.D
12. What was the period of the 12th five-year plan of India?
(a) 2012 to 2017
(b) 2007 to 2012
(c) 2017 to 2022,(d) 2010 to 2015
Answer: a
13. What was the main theme of the 12th five-year plan of India
(a) Faster and more inclusive growth
(b) Faster, More Inclusive and Sustainable Growth
(c) Growth with justice and equity
(d) Sustainable development
Answer:b
14. What was the growth target of the 12th five-year plan of India?
(a) 7.8%
(b) 7%
(c) 8.5%
(d) 8%
Answer: d
15. Which of the following statement is not correct about the Five-Year Plan?
(a) The government targeted to reduce poverty by 10% during the 12th Five-Year Plan
(b) Dr. Manmohan Singh was the PM of India during the tenure of the 12th Five-Year Plan
(c) The first five-year plan of India was launched in 1952
(d) The government targeted to provide electricity to all villages during the 12 FY plan
Answer:c
16. Who was the last deputy chairman of the Planning Commission?
(a) Dr. Manmohan Singh
(b) C. Rangarajan
(c) Montek Singh Ahluwalia
(d) Shri Pranab Mukherjee
Answer: c
17. What was the total budget of the 12th Five Year plan?
(a) Rs.20.5 lakh crore
(b) Rs.47.7 lakh crore
(c) Rs. 36.44 lakh crore
(d) Rs.90 lakh crore
Answer: b
18. Which of the following is not matched correctly?
(a) Ninth Five Year Plan: from 1997 to 2002
(b) Tenth Five Year Plan: from 2002 to 2007
(c) 11th Five Year Plan: from 2007 to 2012
(d) Eighth Five Year Plan: from 1995 to 2000
Answer:d.
19. Which among the following is not a cereal?

a) Rice
b) Wheat
c) Gram
d) Maize
Ans. C
20. Which of the following was not an objective of the 1956 industrial policy?

a. Development of cooperative sector

b. Expansion of public sector
c. Develop heavy and machine making industries
d. None of the above
Ans. D
21. Consider the following statements and identify the right ones.

i. The 1991 industrial reforms exempted all industries from compulsory licensing
ii. There are six industries under compulsory licensing today

a. I only
b. ii only
c. both
d. none
Ans. B
22. Which of the following industries are to be given compulsory licensing?

a. Alcohol
b. Tobacco
c. Drugs and pharmaceuticals
d. All the above
Ans. D
23. When was Planning commission established

A. 20th March 1951

B. 5th March 1951
C. 15th March 1951
D. 25th March 1951
Ans C
24. In China how much percentage of workforce is engaged in agriculture

A. 51
B. 53
C. 55
D. 54
Ans D
25. Which of the following is not the parameter of human development

A. Population below poverty line

B. Infant mortality rate
C. Life expectancy
D. Adult mortality rate
Ans. C
26. Which is not true about inflation
A. None
B. Real increase fall
C. Purchasing power fall
D. Nominal income increase
Ans.D
27. Which Indian state uses biggest quantity of fertilizer in India?
A. Punjab

B. Karnataka

C. U.P

D. Maharashtra

Ans: A

28. The investment in productive assets and participation in management as stake holders
in business enterprises is

a. FDI
b. FII
c. Balance of payment
d. SDR
Ans. A
29. India’s share in word export is:
A less than 1%
B. 1%
C. 2%
D 3%
Ans. C
30.Which of the following is india’s highest exporting category?
A. Gems and jewellary
B. Agri- product
C. Readymade garments
D. Coffee
Ans. A
31. In which among the following year was ‘liberalised industrial policy’ in India was announced
for the first time?

A. 1992
B. 1995
C. 1991
D. 1996
Ans. C

Part B short and long question answer

1. State the meaning of economic reforms.

Ans.Economic reforms refers, those measures which are adopted for the speedy growth of
economy, efficiency in production and make

(a)competitive environment.

2. How does increase in fiscal deficit create the requirement of economic reforms?

Ans.Due to increasing fiscal deficit the interest paid by the Govt. for the borrowings beco
me 36.4% of the Govt. expenditure. So economic reforms become essential for the Govt.

3. State the name of economic reform which makes free to economy from direct or p
hysical controls imposed by the Govt.

Ans. Liberalization.

4. What is meant by foreign exchange reserve?

Ans.Stock of foreign currency held with the Govt. at given point of time called foreign exchan
ge reserve.
5. Why the requirement of fiscal reforms arose under liberalization?

Ans.Prior to liberalization, tax structure was highly complicated and evasive. Fearing a hea
vy burden of taxation it promote evade the payment of tax, so tax reforms become essential
for the Govt.

6. What is meant by direct tax?

Ans.Direct taxes are those taxes, the burden of which cannot be shifted on to other’s eg.
Income tax.

7. Define indirect tax with the help of example.

Ans.Indirect taxes are those taxes the burdon of which can be shifted on to other for exa
mple sales tax.

8. What is meant by devaluation?

Ans.Devaluation refers to lowering in the official value of a currency with respect to gol
d or foreign currency.

9. State the meaning of privatization.

Ans.Privatization is the general process of involving the private sector in the ownership o
f operation of a state owned enterprises.

10. What is meant by globalization?

Ans.Globalization may be defined as a process associated with increasing openness growin

g economic interdependence and deepening economic integration in the world economy.

11. Define the globalization.

Ans Globalization is the free movement of goods, services and people across the world in
a seamless and integrated manner.

12 .Privatization has done more harm than good. Justify your answer

Ans. Case for privatization:

i. It will help in reducing the burden on the exchequer.

ii. It will help in modernizing and diversifying PSUs.
iii. It will help in making PSUs more competitive.
iv. It will help in improving the quality of decision making of management.
 v. It will help in reviving sick units, which are eating away the revenue of government.
vi. It will help in developing capital market and international market.
vii. It is argued that a private firm has pressure from shareholders to perform efficiently. If
the firm is inefficient then the firm could be subject to a takeover. A state-owned firm
doesn’t have this pressure and so it is easier for them to be inefficient. Therefore
privatization incases the efficiency of firms.

Case against privatization

i. It will encourage growth of monopoly power in the hands of big business houses.
ii. It will increase disparities in income and wealth.
iii. Private sector has no interest in buying loss making and sick enterprises.
iv. Privatization may result in lop-sided development of industries in the country.
v. Private sector may have no interest in long gestation projects, infrastructure investment
and risky projects.
vi. Private sector may not have sufficient funds for many vital projects.
vii. Unexpectedly, all of the utilities create negative externalities (via pollution, spoiling the
environment, etc.) It can be argued that as public sector companies, the government can
regulate output and make sure that it is at the socially optimal level (i.e. allow for
externalities). In the private sector, maximization of profit is the only concern, so a
socially damaging level of externalities will occur.

13.Why should tariff and non-tariff barriers be removed to promote globalization?

Ans. Tariff and non-tariff barriers restrict the free flow of trade between the two
countries. Therefore, these barriers should be removed to promote globalization.
Otherwise, domestic goods would lose international competitiveness

14.Why did the Indian Government need to borrow from international

organization’s?

1. AnsA severe financial crisis due to unsustainable fiscal deficit, fall in foreign exchange
reserves and inability to pay interest to international lenders forced the Indian
Government to borrow from international organizations. It is because India's export
industry was lagging behind due to which she could obtain BOP surplus.

15.Those Public Sector Undertakings which are making profits should be

privatised. Do you agree with this view? Why?

1. Ans. No, I do not agree with this view. Even though disinvestment would increase the
revenue of the government, the profit-making Public Sector Units(PSUs) are revenue
generator for the government and they should be retained in the public sector because the
profits of these undertakings add to the revenues of the government and can be used to
develop other PSUs and the infrastructure of the company. The profit making PSUs
should not be privatised just for the reason that the government can get funds to cover the
deficit in government budget. A profit-making PSU should be privatised only if it can
 earn better revenues and thus higher profit if run more efficiently by the private sector.
Also, in the process of disinvestment, if the assets of the profit-making industries are
undervalued, it will lead to a substantial loss to the government. Also, the government
should retain the strategic profit making industries to avoid emergence of any monopoly
in the private sector.

16.In your opinion, what are the advantages of privatization to the economy?

Ans. Advantages of privatization are as under:

i. It will introduce efficiency and profitability in Public Sector Undertakings (PSUs).

ii. It promotes consumer’s sovereignty. High degree of consumer’s sovereignty implies
wider choice and better quality of goods and services.
iii. It will reduce budgetary deficits which result from expenditure on loss making PSUs.
iv. It promotes diversification of production. Also, unlike PSUs, private enterprises
invariably generate high profits.
v. Often privatization of state owned monopolies occurs alongside deregulation – i.e.
policies to allow more firms to enter the industry and increase the competitiveness of the
market.

17.Write a brief note on trade and investment policy reforms. How did it lead to
economic growth?

Ans.Liberalisation of trade and investment was initiated to increase international competitiveness

of industrial production and also the flow of foreign investments and technology into the
economy. Prior to these reforms, in order to protect domestic industries, India was following a
regime of quantitative restrictions on imports and restrictions of foreign investments. Foreign
trade and investment is an opportunity for the economy to grow faster and expand. Various
reforms in policies are carried out to improve foreign trade and investment and at the same time
keep domestic market safe. The liberalization of trade policy in 1991 was one of the major
reforms which are still carried on in the economy. Reducing import duties and encouraging
foreign investment is part of reforms under this sector.
These reforms are useful in the growth of country in the following ways:

i. It helps in lowering the cost of goods by removing tariff barriers.

ii. These reforms help in bringing economies of scale by increasing specialisation.
iii. These reforms help in maintaining friendly relations with other countries.
iv. These reforms increase competition, which in turn help firms to increase efficiency in
production.
v. It helps in earning foreign exchange
 18.What were the objectives behind Trade and Investment Policy reforms?

Ans. Trade and investment policy reforms were initiated to:

i. Remove the restrictions on foreign goods and to increase international competitiveness in

Indian markets.
ii. Attract foreign investment and to promote the adoption of modern technology into the
economy.
iii. Dismantling of quantitative restrictions on imports and exports.
iv. Reduction of tariff rates
v. Removal of licensing procedures for imports.
vi. To increase the efficiency of domestic market.

19.Explain the changing role of state in Indian economy since introduction of

reforms.

1. Ans. The changing role of state is reflected in the eighth five year plan which mentioned
that the planning in India will be indicative increasingly. In order to give some
correctness to the changing role of state the eighth five year plan has identified the
principles governing public sector. These are :
i. The public sector must withdraw from the areas where no public sector is served
by its presence.
ii. State should make investments only in those areas where investment is of main
infrastructural nature where private sector is not likely to come forth to an
adequate extent within a reasonable time perspective.

After that we saw a major shift in the Indian economy and the role of state has been
changing from a controller, regulator and participator to that of a facilitator, observer and
guide. The changes that took place in the role of state since 1991 are as under:

iii. Before economic reforms, government had its share in all sectors of the economy.
It was producing bread, butter, biscuits, milk, running hotels and many of these
were actually not required to be in public sector. Government withdrew herself
from these sectors through delicensing, deregulation and disinvestment.
iv. As a regulator, during 1947-1990, Government regulated all activities with the
laws and acts. But after 1991, except some basic and strategic goods and services,
decisions were made to be market driven. For this purpose, regulatory authorities
were set up for different sectors.
v. Since 1991, Government has focused its attention on development of social sector
like education, health, defence, law and order.

Overall, we can say that the role of state has changed from producer to production
facilitator.
20.Evaluate the positive and negative impacts of LPG policy.

Ans. Following are the dual effects of LPG policy on Indian economy:

i. A vibrant economy:
Indian economy has definitely become a more vibrant economy. The Overall level of
economic activity has definitely picked up after the introduction of the policies of
liberalisation, privatization and globalization. Results are evident in terms of an
impressive increase in the growth rate of GDP.
ii. A stimulant to industrial production:
LPG policies have worked as a great stimulant to industrial production in the Indian
economy. Presently, industrial production is hovering around 10 percent which is a big
jump from the pre-1991 level.
iii. A check on fiscal deficit:
Mounting fiscal deficit has been a serious threat to the process of investment in the Indian
economy. it was as high as 8.5 percent prior to 1991. thanks to the LPG policies, there
has been a significant increase in government revenue.
iv. A check on Inflation:
Owing to the greater flow of goods and services in the economy, there has been a check
on the rate of inflation. Till 2007-08, it ranged between 4-5 percent which is not a serious
threat to interest rate structure.
v. consumer’s sovereignty:
consumers sovereignty has definitely widened over time. this is evident from the actual
fact that a large kind of goods and services from the various international markets are
currently among the simple reach of the consumers. producers are widely responding to
consumers choice and preference.

Negative impact of LPG policies

i. neglect of agriculture:
growth of GDP has primarily been owing to substantial growth of the industrial sector. In
the wake of LPG policies, focus shifted from agriculture to industries. Consequently, the
growth rate in agriculture suffered a setback.
ii. Urban concentration of growth process:
LPG policies have resulted in the concentration of the growth process in urban areas.
think of any MNC, you will hardly find its trace in the rural areas of country. All MNCs
are focusing only on urban areas, where they find conductive infrastructural facilities.
iii. Economic colonialism:
India suffered nearly 200 years of political colonialism during British rule. Now while
MNCs are dominating the Indian economy, we might suffer a sort of economic
colonialism. Implying a situation where MNCs are exploiting the Indian markets to sell
their products.
iv. Spread of consumerism:
Spread of consumerism within the country as a consequence of LPG policies has resulted
during a large-scale unfold of consumerism. A variety of glo4bal brands in the market
lured the masses to become spendthrift, even beyond their means.
 v. cultural erosion:
Globalization has also caused cultural erosion of Indian society. Economic prosperity has
taken a lead over all other parameters of life. Everybody wants to be economically
independent and well off, regardlessly of his responsibility towards his family or society.

21.Write a brief note on International Bank for Reconstruction and Development (IBRD).

1. Ans. The IBRD, known as the World Bank, came into force on July 1, 1944, during the
Bretton Woods Conference. It is a sister institution to the IMF but has s separate, distinct
objective. Its head office is located in Washington D.C., USA. The current emphasis of
IBRD is to support the less developed countries as most of the developed countries’
economies recovered quickly.
Presently there are 185 members of the Bank. Membership is allowed only to those
countries who are also members of the IMF. A member country’s voting power is
dependent on the capital contribution. Like the IMF, the World Bank is also being
dominated by major Western countries.
World Bank focuses on making loans to government in order to rebuild railroads,
highways, and other infrastructure i.e., the areas where private sector enterprises do not
take interest.
The main objectives of IBRD are as follows:
i. To assist in the reconstruction and development of its member countries by
facilitating the investment of capital for productive purposes, thereby promoting
long range growth of international trade and improvements in the standard of
living.
ii. To promote private foreign investment by guarantees of and participation in loans
and other investments made by private investors.
iii. To maintain balance growth of international trade and to attain equilibrium in BoP
account.
iv. Motivating governments to act on preventing climate change, controlling
communicable diseases, managing international financial crises and promoting
free trade.

22.What was the focus of the economic policies pursued by the colonial government
in India? What were the impacts of these policies?

Answer :

The main focus of the economic policies pursued by the colonial government was to
make India a mere supplier of Britain’s own flourishing industrial base. The policies were
concerned mainly with the fortification and advancement for their home country. The
interests of the Indian economy were completely ignored. Such policies brought
structural changes in the Indian economy by transforming it to a supplier of raw materials
and consumer of finished products from Britain. The impacts of these policies are
discussed as follows in detail;
i. Low Economic Development

Throughout the British rule, Indian economy experienced very low level of economic
development. As per some researches, Indian economy grew at even less than two
percent during 1900-50. The reason for such a low level of development was that the
British government was more concerned with the promotion of economic interests of
their home country. Consequently, the colonial rule transformed India’s agriculture sector
to a mere supplier of raw materials for the British industries. This not only affected the
production of the agricultural sector but also ruined the small manufacturing units like
handicrafts and cotton industries. These manufacturing units faced a stiff competition
from the British machine made textiles and handlooms.

ii. Backwardness of Indian Agriculture

Under the colonial rule, India was basically an agrarian economy employing nearly 85%
of its population. Nevertheless, the growth of the agriculture sector was meager. This was
due to the prevalence of various systems of Land Settlement, particularly Zamindari
system. Under this system, the zamindars (owners of land) were required to pay very high
revenue (lagaan) to the British government, which they used to collect from the peasants
(landless labourers, who were actually cultivating). The zamindars were mainly
concerned with extracting high revenues from the peasants but never took any steps to
improve the productivity of the land. Moreover, in order to feed British industries with
cheap raw materials, the Indian peasants were forced to grow cash crops (such as, indigo,
cotton, etc.) instead of food crops (such as, rice and wheat). This commercialisation of
agriculture not only increased the burden of high revenues on the poor peasants but also
led India to face shortage of food grains. Therefore, Indian agriculture remained
backward and primitive.

iii. Deindustrialisation of Indian Economy

India failed to develop a sound and strong industrial base during the colonial rule. The
status of industrial sector during the British rule can be well defined by the term
‘systematic deindustrialisation’. The cause of deindustrialisation can be attributed to the
downfall of India’s handicraft industry and the cause of bleak growth of modern industry
was the lack of investment. On one hand, the British government imposed heavy tariffs
on the export of Indian handicraft products and on the other hand, allowed free exports of
Indian raw materials to Britain and free imports of British products to India. As a result
of the heavy tariffs, the Indian exports became costlier and its demand in the international
market fell drastically that led to the collapse of Indian handicrafts industries.
Simultaneously, the demand for the handicrafts products also fell in the domestic markets
due to stiff competition from the machine made textiles of Britain. As a result, the
domestic industries lacked investment and growth initiatives.
 iv. Regression in Foreign Trade

During the colonial rule, the British government owned the monopoly power over India’s
foreign trade. The British government used the trade policy according to the interests of
their home country. The exports and imports transactions were restricted only to India
and Britain. On one hand, the exports from India provided the cheap raw materials to the
British industries and on the other hand, India's imports from Britain provided a virgin
market for Britain’s products. In either ways, British industries were benefitted.
Moreover, the surplus generated from t foreign trade was not invested in the Indian
economy; instead it was used in administrative and war purposes by Britain to spread
their colonial power.

23. Name some notable economists who estimated India’s per capita income during the
colonial period.
Answer :
As the British government was never interested in upliftment of our country, so they never took
any initiative to measure India’s national and per capita income. Though some of the economists
tried to estimate India’s national income and per capita income during the colonial rule, but the
results are mixed and conflicting. The following are some of the notable economists who were
engaged in estimation of national income and per capita income:
i. DadabhaiNaroji
ii. William Digbay
iii. Findlay Shirras
iv. V.K.R.V Rao
v. R.C. Desai
Out of these, V.K.R.V Rao's estimates are considered to be significant. Most of these studies
revealed that Indian economy grew at even less than two percent during 1900-50 with half per
cent growth in per capita output per year.
24. What were the main causes of India’s agricultural stagnation during the colonial
period?
Answer :
Under the colonial rule, India was basically an agrarian economy, employing nearly 85% of its
population. Nevertheless, the growth of the agriculture sector was meager. The following are the
causes explaining stagnancy in Indian agriculture sector during the colonial rule:
1. Introduction of Land Revenue System
This was due to prevalence of various systems of Land Settlement, particularly Zamindari
system. This system was introduced by Lord Cornwallis in Bengal in 1793. Under this system,
the zamindars(owners of land) were required to pay very high revenue (lagaan) to the British
government, which they used to collect from the peasants (landless labourers, who were actually
cultivating). The zamindars were mainly concerned with extracting high revenues from the
peasants but never took any steps to improve the productivity of the land. This resulted in low
agricultural productivity and worsened the peasants economically.
2. Forceful Commercialisation
Initially before the British rule, the farmers were practicing conventional subsistence farming.
They used to grow crops like rice and wheat for their own consumption. But afterwards, in order
to feed British industries with cheap raw materials, the Indian farmers were forced to grow
commercial crops (like indigo required by
British industries to dye textiles) instead of food crops (like rice and wheat). This led to the
commercialisation of Indian agriculture. This commercialisation of Indian agriculture not only
increased the burden of high revenues on the poor farmers but also led India to face shortage of
food grains, resources, technology and investment. Therefore, Indian agriculture remained
backward and primitive.
3. Lack of Irrigation Facilities and Resources
Besides the above factors, Indian agricultural sector also faced lack of irrigation facilities,
insignificant use of fertilisers, lack of investment, frequent famines and other natural calamities,
etc. that further exaggerated the agricultural performance and made it more vulnerable..

25. Name some modern industries which were in operation in our country at the time of
independence.
Answer :
The second half of the nineteenth century witnessed the emergence of modern industries. At the
initial stage, development was confined to setting up of cotton and jute textile mills. The western
parts of the country Maharashtra and Gujarat was the hub for cotton textile mills which were
mainly dominated by the Indians whereas the jute industries were mainly concentrated in Bengal
and were dominated by the British. In the beginning of the 20thcentury, Iron and steel industries
also started emerging gradually. It was incorporated in 1907. Some other industries that were
operating at a smaller scale during the British era were sugar industry, cement industry and paper
industry.
26. What was the two-fold motive behind the systematic deindustrialisation affected by the
British in pre - independent India?
Answer :
The following are the two-fold motives behind the systematic deindustrialisation affected by the
British:
1. Making India a Supplier of Raw Materials: The main motive of the British government was to
make India a mere supplier of cheap raw materials to feed its own flourishing industrial base.
2. Making India a Market for Finished Goods: Another important objective of the British
government was to use India as a virgin market to sell the finished goods produced by the
British industries.

27.The traditional handicrafts industries were ruined under the British rule. Do you
agree with this view? Give reasons in support of your answer.

Answer :
Yes, we do agree with the above statement that the traditional handicrafts industries were
ruined under the British times. The following are the reasons in favour of the statement.

1. Discriminatory Tariff Policy: The British rule in India corresponded with its
industrialisation. The British rule used India both as a source of cheap raw materials as
well as easy accessible market for their finished products. Thereby, they imposed heavy
tariffs (export duties) on India’s export of handicraft products, while allowed free export
of India’s raw material to Britain and free import of British products into India. This
made Indian exports costlier and its international demand fell drastically leading to the
collapse of handicrafts industries.

2.Competition from Machine made Britain Goods: The demand for the handicrafts
products experienced a downward trend in the domestic markets as well. This was due to
stiff competition from the machine made textiles from Britain. This was because of the
reason that the goods produced mechanically in Britain were comparatively cheaper and
of superior quality than the Indian handicraft goods. This narrowed the market for Indian
industries.

3. Emergence of New Class: The British rule in India popularised western lifestyle in
India. There was an emergence of a new section of population (consisting mainly of
zamindars) in India who liked the British goods. This section used to spend lavishly on
the British products that provided impetus for the development of British industries at the
cost of the domestic industries. Hence, gradually Indian industries perished away.
 3. Disappearance of Princely State: Prior to the advent of British, India was ruled by
princely states. They used to patronise handicrafts industries and consequently, Indian
handicrafts gained reputation in the international markets. But during the British rule,
these princely states were ruined thereby ruining the protection of these handicrafts
industries. Thus, gradually Indian handicrafts lost its reputation and its importance
deteriorated.
28. What objectives did the British intend to achieve through their policies of
infrastructure development in India?
Answer :
One cannot deny the fact that under the British rule, there was significant change in the
infrastructural development in the country. But the bonafide motive of the British behind the
infrastructure development was only to serve their own colonial interests. There was
infrastructural development in the fields of transport and communication. The roads served the
purpose of facilitating transportation of raw materials from different parts of the country to ports,
and ports were developed for easy and fast exports to and imports from Britain. Similarly,
railways were introduced and developed for the transportation of finished goods of British
industries to the interiors of India. Railways assisted British industries to widen the market for
their finished products. Post and telegraphs were developed to enhance the efficiency and
effectiveness of the British administration. Hence, the aim of infrastructural development was
not the growth and development of the Indian economy but to serve their own interest.
.29. Critically appraise some of the shortfalls of the industrial policy pursued by the British
colonial administration.
Answer :
The focus of the industrial policies pursued by the colonial government in India was to make our
country a mere supplier of Britain’s own flourishing industrial base. The policies were concerned
mainly with the fortification and advancement for their own country. The industrial policy
pursued by the British colonial administration has the following shortfalls:

1. Neglect of Indian Handicraft Industries: The British followed a discriminatory tariff policy
under which they imposed heavy tariffs (export duties) on India’s export of handicraft products
while allowed free export of India’s raw material to Britain and free import of British products to
India. This made Indian exports costlier and its international demand fell drastically leading to
the collapse of handicrafts industries. Also, Indian handicrafts faced a stiff competition from
machine made textiles of Britain. The emergence of a new section of people who liked the
British goods more in comparison to the domestic goods encouraged British industries at the cost
of Indian industries. This led to the declining demand for Indian products and encouraged
foreign products.
2. Lack of Investment in Indian Industries: The modern industries in India demanded
investments in capital goods that were beyond the means of Indian investors. On the other hand,
British government was least interested in investing in Indian industries. Thus, due to the lack of
sufficient investment, the growth of Indian industries was acutely constrained.
30.What do you understand by the drain of Indian wealth during the colonial period?
Answer :
DadabhaiNaroji advocated the theory of ‘Drain of Wealth’ in the 19th century. The colonial
period was marked by the exploitation of Indian resources. The sole motive of Britain to conquer
India was to own a perennial source of cheap raw materials to feed its own industrial base in
Britain. Further, British government used India’s manpower to spread its colonial base outside
India. Also, the administrative expenses that were incurred by the British government to manage
the colonial rule in India were borne by Indian Exchequer. Thus, the British rule drained out
Indian wealth for the fulfillment of its own interests.
31Which is regarded as the defining year to mark the demographic transition from its first
to the second decisive stage?
Answer :
The year 1921 is regarded as the defining year or the ‘Year of Great Divide’ because prior to
1921, population growth in India was never consistent. India was in the first phase of
demographic transition till 1921 that was characterised by high birth rate and high death rate. It
implies low survival rate (or low life expectancy), which was nearly 8 per thousand per annum.
Therefore, the period before 1921 witnessed stagnant population growth rate. After 1921, India’s
population growth never declined and showed a consistent upward trend.
32.Give a quantitative appraisal of India’s demographic profile during the colonial period.
Answer :
India’s Demographic conditions during the British rule depict our economy as stagnant and
backward. Both the birth rate and death rate were as high as 48 and 40 per thousand. Due to high
birth rate and high death rate the population growth was stagnant. The Infant Mortality Rate was
also very high of about 218 per thousand. The Life Expectancy Rate was as low as 32 years
while presently it is 63.5 years. The literacy rate was less than 16 percent which denotes social
backwardness and gender bias in the economy. We can infer from the above figures that India
was featured with massive poverty, low standard and quality of living and low survival rate in
the country. The lack of health care facilities and lack of health awareness were the main causes
behind such demographic conditions of India.
33:Highlight the salient features of India’s pre-independence occupational structure.
Answer :
The occupational structure that refers to the distribution of population engaged in different
occupations, showed no variation throughout the British rule. The following are the salient
features of India’s pre-independence occupational structure:
1. Agriculture- The Prime Occupation: Under the colonial rule, India was basically an agrarian
economy, employing nearly 85% of its population. As India had a massive poverty during
the colonial rule, so a large proportion of the population was engaged in agricultural sector to
earn their subsistence. But due to the prevalence of Zamindari system, agricultural sector lacked
investment and, thereby, its growth was highly constrained. Thus, in other words, despite
employing a significant proportion of the population, the growth of agriculture sector was
meager.
2. Industry- The Bleak Occupation: Apart from agriculture, a small proportion of population
was employed in manufacturing sector. Nearly 10% of the total workforce was engaged in
manufacturing and industrial sector. This was due to the stiff competition that the Indian
industries faced from the machine made cheap goods from Britain. Further, the lack of
investment, initiatives and the unfavourable tariff structure constrained industrial sector. Thus,
the Indian industrial sector failed to contribute significantly to India’s GDP.
3. Unbalanced Growth: The three sectors of Indian economy, i.e. agricultural, industrial and
tertiary sector were unequally developed. While the agricultural sector was relatively developed,
whereas, the other two sectors were at their infant stage. In addition, there was regional variation
in the occupational structure of India. While on the one hand, states like Tamil Nadu, Andhra
Pradesh and Bombay experienced a fall in the agricultural work force on the other hand states
like Orissa, Rajasthan and Punjab experienced a rise in the agricultural workforce.
34.Underscore some of the India’s most crucial economic challenges at the time of
independence.
Answer :
The exploitative colonial rule of the British hampered almost every spheres of Indian economy
badly. As an end-result, India faced acute economic challenges at the time of independence. The
following are some of the economic challenges faced by the Indian economy:
1. Low Level of Agricultural Productivity: During the colonial rule Indian agricultural sector
was used by the British to suit to their own interest. Consequently, Indian agricultural sector
experienced stagnancy, low level of productivity, lack of investment, poor condition of landless
farmers and peasants. Thus, the immediate concern for India was to develop its agricultural
sector and its productivity. Some of the immediate reforms needed at the time of independence
were abolition of Zamindari system, need of land reforms, reducing inequality of land ownership
and upliftment of the peasants.
 2. Infant Industrial Sector: India failed to develop a sound industrial base during the
colonial rule. In order to develop the industrial sector, India needed huge capital,
investments, infrastructure, human skills, technical knowhow and modern technology.
Further, due to stiff competition from the British industries, India’s domestic industries
failed to sustain. Thus, developing small scale and large scale industries simultaneously
was the main concern for India to develop its industrial sector. Moreover, the need to
increase the share of industrial sector to India’s GDP was one of the important economic
challenges for India.
3. Lack in Infrastructure: Although there was a significant change in the infrastructural
development in the country but this was not sufficient to improve the performance of
agricultural and industrial sector. Also, there was a need to upgrade the existing
infrastructure and to modernise the infrastructure to enhance its efficiency and effectiveness.
4. Poverty and Inequalities: India was trapped in the vicious circle of poverty and
inequality. The colonial rule drained out a significant portion of India's wealth to Britain.
Consequently, majority of India’s population was poverty trodden. This further exaggerated
economic inequalities across the country
35.When was India’s first official census operation undertaken?
Answer :
India’s first official census operation was undertaken in the year 1881. After that the census has
been conducted after every 10 years. It involves a detailed estimation of population size, along
with a complete demographic profile of the country.
36. Composition of foreign trade of any country tells us about the nature of commodities
that are exported and imported.’ What can you state about the composition of foreign
trade at the time of Independence?

Ans. India's foreign trade under the British rule is described as below:

Thus, India was reduced to being a source of food for the British, a supplier of raw materials for
the British industries and a market for their finished products.

i. India exported raw materials to the home country of the British for their expanding
industries.
ii. The British followed a typical colonial pattern of trade in India, where it was made to
serve their interests.
iii. India was also developed as a market for the finished goods of the British industries.
37. Discuss occupational structure of Indian economy at the time of Independence

Ans. The occupational structure, which refers to the distribution of population working in
different sectors, showed no variation throughout the British rule. The following are the salient
features of India's pre-independence occupational structure

i. Predominance of agriculture: Under the colonial rule, India was basically an agrarian
economy, with nearly 70.75% of its workforce engaged directly or indirectly in
agriculture. Due to massive poverty and widespread illiteracy during the colonial rule, a
large proportion of the population was engaged in farming and related activities to earn
their subsistence. But agricultural sector suffered from low productivity and, thereby its
growth was highly constrained despite employing a significant proportion of the
population.
ii. Lack of Opportunities in Industry: Only a small proportion of population was
employed in manufacturing sector. Nearly 10% of the total workforce was engaged in
manufacturing and industrial sector. This was due to the stiff competition that the Indian
industries faced from the machine made cheap goods from Britain, Further, the lack of
investment initiatives and the unfavourable tariff structure constrained industrial sector.
Thus, the Indian industrial sector failed to provide significant employment opportunities.

38. Explain positive effects of introduction of railways by colonical Governmentin India

Ans. The founding stone of one of the largest railway networks in the world was laid by the
British. Most of the central stations were the work of the British Infrastructure. Indian Railways
is very large and complex, it connects several distant regions of the country, it’s the primary
form of transportation. Thus we can say that railways were intended to serve only British
interests, but it is proving useful to each and every Indian.
39. The railways affected the structure of the Indian economy positively, as well as
negatively.’ Discuss

Ans. The railways affected the structure of the Indian economy positively in the following
ways:

i. It enabled people to undertake long distance travel and thereby break geographical and
cultural barriers.
ii. Railways enabled the government to supply food grains speedily to famine affected areas.
iii. It fostered commercialisation of Indian agriculture as agricultural produce could be sent
to distant places. Farmers started viewing agriculture as a business rather than a way of
subsistence.

The railways affected the Indian economy negatively in the following ways:

i. Commercialisation of agriculture affected the self-sufficiency of the rural areas.

ii. It enabled the goods from British factories to be transported to various parts of the
country, thereby expanding their market.
 iii. It facilitated the transport of raw materials to the port cities and ensured their easy
exportability

40. Critically appraise some of the shortfalls the industrial policy pursued by the British
colonial rule.

1. Ans. The focus of the industrial policies pursued by the colonial government in India was
to make our country a mere supplier of Britain's own flourishing industrial base. The
policies were concerned mainly with the advancement of the British economic and
political power. The industrial policy pursued by the British colonial administration had
the following shortfalls:
i. Neglect of Indian Handicraft Industries: The British followed a discriminatory
tariff policy under which they imposed heavy tariffs (export duties) on India's
export of handicraft products while allowed free export of India's raw material to
Britain and free import of finished products from Britain to India. This made
Indian exports costlier and its international demand fell drastically loading to the
collapse of handicrafts industries. Also, Indian handicrafts faced stiff competition
from machine-made textiles of Britain.
ii. Lack of Investment in Modern Indian Industries: The modern industries in India
demanded investments in capital goods and technology that were beyond the
means of Indian investors. British Government was least interested in investing in
Indian industries as they never wanted India to become self reliant. Thus due to
the lack of sufficient investment, the growth of Indian industries was severely
constrained.

41. Give the achievements of Five Year Plans in India

1. Ans. Some major achievements of the Five Year Plans are:

i. Increase in National Income: The National Income of India increased at the rate
of 0.5% per annum prior to planning. The average annual growth rate in India had
been around 5% during the period of planning
ii. Growth and Diversification of Industry: During the period of planning, the
growth rate of industrial production has been around 7% per annum. Basic and
capital goods industries have shown tremendous growth. In consumer goods
industries, the country has become self-sufficient. Industrial sector has been
diversified and modernised.
iii. Increase in Per Capita Income: Per Capita Income increased at the rate of 2.9%
per annum during the planning period
iv. Institutional and Technical Changes in Agriculture: Planning has contributed
tremendously towards the development of agriculture in our country. During the
period of planning, the average growth rate of agricultural produce was 2.8% per
annum.
v. Economic and Social Infrastructure: During the period of planning, economic
infrastructures such as means of transport and communication, irrigation facilities
 and power, banking and insurance facilities have shown significant growth.
Health and educational facilities have recorded a significant rise.
vi. Employment: Concentrated efforts have been made to increase employment
opportunities during the plan period. The government fixed the target of creating
58 million jobs In the Eleventh Five Year Plan. The Twelfth Plan aims at creating
70 million jobs.
vii. International Trade: India’s international trade has also grown at a phenomenal
rate. In 1948-49, the value of foreign trade was Rs. 792 crore. In 2011-2012, it
stood at Rs. 38,11,422 crore.
So, we can say that our economy showed considerable progress during the plan
period.

42.Distinguish between planning objectives and plan objectives on any four basis

Ans. The differences between planning objectives and plan objectives are

Planning
Basis Plan Objectives
Objectives

They are
They are long-
objectives to be
term objectives to
Aim achieved in a
be achieved over a
short period say 1
long period.
to 5 years.

They are common They vary from

Nature
to all plans. plan to plan.

They are broad

They are planned
goals, which
Plans with greater
development plans
precision.
seek to achieve.

They aim at
They aim at
Changes quantitative
structural changes.
changes.

43. Mixed economy is the basic framework of planning in India’. Justify the given
statement.

Ans. Mixed economy is an economic system in which economic decisions are taken by the
Central Government authority, as well as, are left to free play of the market. It is the basic
framework of planning in India. In this economy, the market will provide whatever goods and
services it can produce economically and the government will provide essential goods and
services which the market fails to provide.
The following features of the Indian economy prove that a mixed economy is a basic
framework of planning in India:

i. Agriculture and most of the industrial and service sectors are in the private hands in
India.
ii. Over the period of time, many big business houses have come into being and have been
growing, such as Reliance, Infosys, Bajaj, etc.
iii. Market forces of demand and supply have a free role in determining prices in various
markets i.e., goods having higher demand will be highly priced and vice-versa.
iv. The government recognised the need to provide infrastructure for the growth of the
private sector after Independence. So, the public sector was developed on a large scale.

44. Why there was a need for protection of small scale industries? State the steps
undertaken by the government for their growth?

1. Ans. The policy of protection is based on the notion that industries of developing
countries are not in a position to compete against the goods produced by more developed
economies. It is assumed that if the domestic industries are protected they will learn to
compete in the course of time.
i. Deregulation of Industrial Sector: removed many of the restrictions.
ii. Industrial licensing was abolished from almost industries.
iii. Financial sector includes financial institutions, such as commercial banks,
investment banks, stock exchange operations and foreign exchange market.

45. Explain 'growth with equity’ as a planning objective.

Ans. Economic Growth is an increase in the aggregate output of goods and services in a country
in a given period of time. Equity refers to a reduction in inequality of income or wealth, uplifting
weaker sections of the society and equal distribution of economic power. Higher levels of growth
and social justice are the two main objectives of India’s economic planning. When these two
objectives are clubbed together, it is called development with social justice.
Growth is desirable as you must have the cake to distribute it but growth in itself does not
guarantee the welfare of society. Growth is assessed by the market value of goods and services
produced in the economy (GDP) and it does not guarantee an equitable distribution of the
income from this production. In other words, the major share of Gross Domestic Product (GDP)
might be owned by a small proportion of population which may result in the exploitation of
weaker sections of society.
Hence, growth with equity is a rational and desirable objective of planning. This objective
ensures that the benefits of high growth are shared by all the people equally and hence,
inequality of income is reduced along with growth in income.
 Ch- poverty
Part 1

1. According to UNO those countries are considered relative poor where per capita income
is less than
1. Three dollar
2. One dollar
3. Two dollar
4. Four dollar
2. When was National Food For Work Programme launched?

1. 2005
2. 1992
3. 2012
4. 2004

3.By which year governments are aiming to meet the Millennium Development Goals
including halving the rate of global poverty?

1. 2011
2. 2035
3. 2015
4. 2045

4.Which of the following is an indicator of poverty in India?

1. All of these
2. Illiteracy level
3. Income level
4. Employment level

5. What is the average calories required in rural areas for measuring poverty?
(A) 2400 calories per person per day

(B) 2100 calories per person per day

(C) 2800 calories per person per day

(D) None of these.

6. Which of the following is not considered as a social indicator of poverty?
(A) Less no. of means of transport

(B) Illiteracy level

(C) Lack of access to health care

(D) Lack of job opportunities

7. Which of the following programme was launched in the year of 2000?

(A) National Rural Employment Guarantee Act.

(B) Prime Minister RozgarYojana

(C) SwarnaJayanti Gram SwarozgarYojana

(D) Pradhan MantriGramodayaYojana

8. In which of the following countries did poverty actually rise from 1981-2001?
(A) Sub-Saharan Africa

(B) India

(D) China

(D) Russia.

9. Which of the following is not a valid reason for the poverty alleviation programme in
India?
(A) Lack of proper implementation

(B) Lack of right targeting

(C) Corruption at the highest level

(D) Overlapping of schemes.

10. In which year was N R E G A enacted?

(A)2005
(B)2000

(C) 1999

(D) 1993.

Ans

1. B
2. D
3. C
4. C
5. A
6. A
7. D
8. A
9. B
10.A
Question ans

1.Why is calorie-based norm not adequate to identify the poor?

Answer :

The calorie-based norm is not adequate to identify the poor because of the following reasons:

a) This mechanism does not differentiate a very poor from other poor. It categorises them into one
category that is, ‘poor’. Consequently, it indicates whole class of poor and not, especially, those
poor who are the most needy.

b) This mechanism uses inappropriate proxies for income like Monthly Per Capita Expenditure
(MPCE), etc. These items do not act as suitable and appropriate proxies for income to measure
calorie requirements.

c) This mechanism does not consider various important factors that are associated with poverty.
These factors are health care, clean drinking water, proper sanitation and basic education. Mere
estimation of calorie intake does not reflect the true economic condition of an individual.

d) Another shortcoming of calorie-based norm is that it fails to account for social factors that
exaggerate and worsen poverty like ill health, lack of access to resources, lack of civil and political
freedom, etc.
Therefore, because of these shortcomings in the calorie-based norm, it cannot be used to identify
the poor.

Question 2 :What is meant by ‘Food for Work’ programme?

Answer :

Food for Work (FFW) programme was started in 2000-01 with the objective of generating ample
employment opportunities for unskilled labourers concentrated in the drought-affected states of
Chattisgarh, Gujarat, Himachal Pradesh, M.P, Orissa, Rajasthan, Maharashtra and Uttaranchal.
This programme provides food in exchange of work done by labourers. This programme was
aimed to protect poor people against reduction in their purchasing power capacity in the natural
calamities prone areas. The work done by the labourers includes watershed development works,
water harvesting and construction of metal roads connecting rural and urban areas. This
programme not only provides labourers with food but also creates semi-durable assets that
facilitate economic and social development of the backward areas.

Question 3 :Why are employment generation programmes important in poverty

alleviation in India?
Answer :

The importance of employment generation programmes in poverty alleviation efforts in India are
as follows:-

(i) Direct Relationship between Employment and Poverty Alleviation

There exists a positive relationship between employment and poverty alleviation. If government
aims at creating new employment opportunities, then more people will be employed that will raise
their income and, thus, will pull them above the poverty line.

(ii) Higher Standard of Living

With the increase in income, consequent to the new employment opportunities, poverty trodden
people can enjoy higher standard of living and greater accessibility to education, better health
facilities, proper sanitation, etc.

(iii) Reduce Rural-Urban Migration

Poor people tend to migrate from rural to urban areas in sought of better employment and earning
opportunities. This creates undue burden on the urban areas to provide ample job opportunities to
these migrants. Failure of this leads to formation of informal sector that makes these people more
vulnerable in the urban areas. A positive point of employment generation programmes is that it
generates ample employment opportunities in rural areas so as to reduce rural-urban migration.
(iv) Creation of Durable Assets

The employment generation programmes aim at creation of durable assets like watershed
development works, water harvesting, irrigation facilities, canal building, construction of roads
connecting rural areas to urban areas and construction of dams. All these assets play an important
role in the social and economic development of the country.

(v) Self-sufficiency and Self-reliant Areas

The creation of these durable assets protects the poverty-trodden areas from natural calamities
such as floods and droughts thereby facilitating these areas to be self-sufficient and self reliant.

(vi) Impart and Enhance Skills

Most of the employment generation programmes help in human capital formation by enhancing
knowledge and imparting skills to the unskilled labourers. Such skills increase the employment
prospect of the unskilled labourers in the industrial and the service sectors. This not only enhances
income earning capacities of these people but also alleviates poverty simultaneously.

(vii) Reduce underemployment and disguised unemployment

Indian agricultural sector is characterised by disguised unemployment. This implies that although
a labourer is engaged in agriculture but the total output won’t be affected even if the labourer is
withdrawn. The role of employment generation programmes in reducing disguised unemployment
is very important. These programmes engage these extra labourers in economically fruitful
activities, thereby, reducing unnecessary burden on the agricultural sector.

Question 4 :How can creation of income earning assets address the problem of poverty?
Answer :

The income earning assets are those assets the ownership of which are controlled and owned by
the members of a household. These are land, capital, labour and different levels of skills. Poverty
and inequality of income arises due to improper distribution of and access to such income-earning
assets. The labour skills of the poverty-trodden population are usually traditional and poor in
quality that consequently leads to poor income and employment opportunities. Moreover, a
substantial proportion of population is engaged in the small scale production that often lacks
capital and modern technology. Consequently, such techniques directly hamper the income earning
capabilities of small scale industries. In addition to this, poor people often lack access to social
services like proper medical and health care facilities, better education, proper sanitation, etc. The
lack of access to such social services affects health, productivity and finally income earning
capabilities of the poor.

In order to alleviate the problem of poverty, the role of income earning assets cannot be substituted.
There are various measures that can create income earning assets for the poor people like providing
proper access to easy credit, capital, monetary assistance, imparting technical skills, allotment of
land to the landless and marginal farmers and better access to education, health services along with
better access to information and support services for increasing their productivity. All these
measures directly or indirectly contribute positively to the quality of human capital and their
endowment of income-earning assets. This in turn leads to increase in the income opportunities
and earning capabilities, thereby, contributing to the alleviation of poverty.

Question 5 :

The three dimensional attack on poverty adopted by the government has not succeeded in
poverty alleviation in India. Comment.

Answer :

In order to alleviate poverty, government has adopted the following three dimensional approaches:

(i) Trickle-down Approach- This approach is based on the expectation that the positive effects of
economic growth will be trickled down or benefit all sections of the society and also the poor
people.

(ii) Poverty Alleviation Approach- This approach aimed at the creation of income-earning assets
and employment generation opportunities.

(iii) Providing Basic Amenities- This approach aimed at providing the basic amenities like proper
medical and health care facilities, better education, proper sanitation etc. to the poor people. These
basic amenities positively affect health, productivity, income-earning opportunities and, thereby,
alleviate poverty.

A thorough analysis of the three dimensional approach yield the following conclusions:

3. Although there has been a reduction in the percentage of absolute poor in some of the states
but still the poor people lack basic amenities, literacy, and nourishment.
4. Secondly, there has not been significant change in the ownership of income-earning assets
and productive resources.
5. Thirdly, land reforms do not have high successful records (except West Bengal and Kerala)
that further added to the inequality of income from land.
6. Fourthly, lack of capital and availability of easy credit, lack of modern technology and poor
access to information and marketing became the major bottlenecks for the small productive
houses like cottage industries and other small scale industries.
7. Fifthly, improper implementation of poverty alleviation programmes by ill-motivated and
inadequately trained bureaucrats further worsened the situation.
8. Sixthly, corruption along with the inclination towards interest of elites led to an inefficient
and misallocation of scarce resources.

Therefore, it can be summed up that although various poverty alleviation programmes were well
planned on papers but these were not implemented properly.
Question 6 :

What programmes has the government adopted to help the elderly people and poor and
destitute women?

Answer :

The government has adopted various programmes to help the elderly people and poor and destitute
women. One of such programmes is National Social Assistance Programme, introduced by the
central government. This programme targets elderly people, widows and the poor and destitute
women who are alone and have no one to take care of them. Under this programme, these targeted
people are given pension to sustain their livelihood.

Question 7 :Is there any relationship between unemployment and poverty? Explain.
Answer :

Yes, there do exist a direct and positive relationship between unemployment and poverty.
Unemployment leads to poverty and poverty in turn leads to unemployment.

An unemployed person has no means to earn money and cannot fulfill his own and his family’s
basic needs. He and his family cannot avail quality education, medical facilities and has no means
to create income-earning assets. Such circumstances often compel indebtedness. Consequently, an
unemployed person exaggerates poverty for his family due to indebtedness. This confirms the
positive relationship between unemployment and poverty.

If government wants to alleviate poverty, then it should aim at creating new employment
opportunities. As a result, more people will get employed and perhaps their income will rise. This
rise in income will improve their access to quality education, better health care and other basic
amenities. Further, these newly employed people will experience appreciation in their living
standards and can create income-earning assets. The combined result of all these factors leads to
alleviation of poverty. Hence, there exists a positive (but a negative) relationship between
unemployment (employment) and poverty.

Question 8 :

Suppose you are from a poor family and you wish to get help from the government to set
up a petty shop. Under which scheme will you apply for assistance and why?

Answer :

For setting up a petty shop, I would apply for financial assistance under the programme of Prime
Minister’s RozgarYojana(PMRY). Under this programme, an unemployed educated person from
low-income family in rural and urban areas can set up any kind of enterprise that can generate
employment.
Question 9 :Illustrate the difference between rural and urban poverty. Is it correct to say
that poverty has shifted from rural to urban areas? Use the trends in poverty ratio to
support your answer.
Answer :

The major difference between rural and urban poverty in India lies in the standard of living. The
latter enjoys higher living standard compared to the former and the standard of living may be
attributable to the wide income disparity and gap between the two. Another major difference is
the level of education and also access to education. The urban Poor enjoy better access to quality
education than the rural counterparts. Thirdly, health care facilities prevalent in the urban areas
are far better than that of in the rural areas. Also the rural poor people lack access to these health
facilities and important medical information. Fourthly, the difference lies in the type of houses
they live in. The rural poor lives in kutcha house, while the urban poor resides in pucca houses
which are well developed with proper sanitation facilities. Fifthly, rural poverty is temporary as
the rural poor can migrate to urban areas to seek employment but, on the other hand, urban
poverty is permanent.

Year Poverty Ratio

Rural (%) Urban (%) Total (%)
1973-74 56.4 49.0 54.9
1977-78 53.1 45.2 51.3
1983 45.6 40.8 44.5
1987-88 39.1 38.2 38.9
1993-94 37.3 32.4 36.0
1999-2000 27.1 23.6 26.1
2004-05 28.3 25.7 27.5
comparable with
1993-94
Estimates Source: Planning Commission Estimates (Uniform Reference Period)

Yes, it is correct to say that poverty has shifted from rural to urban areas. The above data spells
out how rural poverty has declined significantly from 56.4% to 28.3% from 1973-74 to 2004-05
whereas decline in urban poverty (from 49% to 25.7%) is not so significant. Over the years, rural
poor has migrated to urban areas in order to seek for better employment opportunities and better
living standard. But on the other hand, since rural people lack skills and education, so the urban
industrial sector fails to absorb this excess supply of labour. Consequently, these unskilled
labourers form an informal sector (like rickshaw puller, barber, cobbler, etc.) that makes them even
more vulnerable. Thus, the trends in poverty in India support the statement that poverty has shifted
from rural to urban areas.

10. Discuss the causes behind failure of poverty alleviation programmes.

2. Ans. Poverty Alleviation Programmes could not succeed due to:

 1. Lack of Resources: Resources allocated to different programmes were far less
than required keeping in mind the magnitude of poverty.
2. Lack of Proper implementation: Due to corruption, lack of training, pressure from
local leaders, and lack of awareness amongst the beneficiary group, these
programmes were not properly implemented.
3. Lack of Active participation of Beneficiary Group: Poor people did not actively
participate in the implementation of these programmes.
4. Lack of Infrastructure: Infrastructure required for implementation of these
programmes was lacking in the economy.
5. Lack of political will: poverty has been a hindrance in the development of India as
a whole since Independence. There have been a lot of schemes aimed at poverty
alleviation like provision of ration cards, food for work, MGNREGA, etc yet all
of them have failed to get implemeted due to lack of penetration of democracy at
local levels, lack of political participation, lack of education, etc.
6. Lack in holistic approach: schemes that have been implemented in India to
alleviate poverty have been primarily aimed at just covering the monetary part.
E.g. in case of Food for work, only the food portion was being covered. In
MGNREGA, the beneficiary was entitled only for the monetary benefit. As per
the UN report, poverty is just not about money, and yet the governmental schemes
had failed to realize this.

11. Explain how rapid growth in population spreads poverty.

Ans. Following points imply how population growth causes poverty:

2. Increase in the population results in more family expenses.

3. Unemployment rate increases pushing families to poverty.
4. Increased number of people in agricultural families results in decreased portion of
divided land among the family members causing lower incomes.
5. Increased pressure of satisfying the expanded family needs creates stress on the bread
winner resulting in health related issues sometimes to the extreme of fatal. This would
push the family to poverty.

Hence, poverty and population are 2 factors which mutually compliment each other in each
other’s growth causing serious repercussions on the development of states and nations.

12. How are poverty and child labour related to each other?

Ans. There is a circular relation between poverty and child labour. They have a cause-effect
relationship. Child labour is both a cause as well as effect of poverty. Child labour continues to
remain in poverty for rest of his life and he becomes child labour because he was poor.
Various studies have been conducted and it was found that children work mainly due to poverty.
Poor parents are forced to send their children to work instead of school. Poverty reduction is the
key to reducing child labour. The government should provide some compensation to poor parents
for sending their children to school.

13. Explain the three main causes of poverty in India

Ans. The three main causes of poverty in India are as follows:

2. Rapid growth of population:

Rapid growth of population aggravates the poverty of the people. The growth of
population exceeds the rate of growth in national income. Population growth not only
creates difficulties in the removal of poverty but also lowers the per capita income which
tends to increase poverty. The burden of this reduction in per capita income is borne
heavily by the poor people. Population growth at a faster rate increases labour supply
which tends to lower the wage rate.
3. Lack of employment opportunities:
Unemployment is the reflection of poverty. Because of lack of employment
opportunities, people remain either unemployed or underemployed. Most of these
unemployed and underemployed workers are the small and marginal farmers and the
landless agricultural labourers.
4. Decline of village industries:
At present consequent upon industrialization new factories and industries are being set up
in rural areas. Village industries fail to compete with them in terms of quality and price.
As a result they are closed down. The workers are thrown out of employment and lead a
life of poverty.
14. Explain different causes of poverty in india
Ans There are various causes of poverty, some of them are discussed as under:
1. Poverty itself is the biggest cause of poverty: Poverty is a cause as well as effect of
poverty. A man is poor because he is poor. It is called vicious circle of poverty.
2. Low level of economic development: During British Rule, British Govt. ruined textile
industry of India. They used India as mere exporter of raw material and buyer of finished
goods. They exploited our economy and left us as depleted economy.
3. Income Inequalities: Due to Zamindari System, land was unequally distributed.Even
other income generating assets were unequally distributed. Even after independence this
inequality continued and exists till date. It has also lead to poverty. However efforts were
made during planning to remove inequality in the distribution of income through a
system of progressive taxation and other measures. But despite such measures the extent
of inequality has only increased overtime.
4. Caste System, gender inequality and other social evils: Social system of India has also
played its role in widening of poverty. The social structure of our country is full of
outdated traditions and institutions like caste-system, joint family system, laws of
inheritence and succession, etc. All these obstruct dynamic changes in the economy.
Growth rate is hampered and poverty is the net consequence.
5. Corruption: Due to corruption, poverty alleviation programmes which were framed
could not succeed. Thus corruption has also been a cause of poverty.
6. Low level of industrial growth: India did not pay much attention on secondary sector. It
kept people disguisedly employed in agriculture sector leading to unemployment, low
level of output and continuation of poverty.

15. Why did "Growth oriented Approach" of the government proved to be ineffective?

Ans. Growth-oriented approach was based on the expectation that the effects of economic
growth will spread over to the poor section of the society as well. This approach was the major
focus of planning in the 1950s and early 1960s. It was expected that rapid industrialisation and
transformation of agriculture through green revolution will benefit backward regions as well.
The benefits of economic growth has not trickled down to the poor because of the following
reasons:

1. Overall growth rate of industry and agriculture was quite low.

2. Population growth made per capita income to rise at further low levels.
3. The gap between the rich and the poor widened.
4. There was lack of political willingness and inability to redistribute lands.
5. The green revolution exacerbated the disparities regionally and between large and small
farmers.
6. Although various initiatives were taken by the government to improve the growth rate
and to reduce poverty however there is lack of basic amenities and educational facilities
in many regions of India particularly those regions where people are poor.

Therefore the benefits of growth did not trickle down to the weaker sections of the society.
 Human capital formation in India
Multiple choice Question

1. Which Five Year Plan recognised the importance of human capital?

a. Tenth
b. Seventh
c. Nineth
d. Sixth
2. Which of the following is an example of a curative medicine?
a. Spread of health literacy
b. All of these
c. Vaccination
d. Medical intervention during illness
3. Physical capital refers to
a. All of these
b. Stock of produced means of production
c. Process of acquiring and increasing the number of persons who have skill
d. Stock/shares of the companies
4. People of which age group are treated as productive labour force
a. 15-35
b. 60-70
c. 15-60
d. 0-6
5. Illiteracy is more among

A. None
B. Boys
C. Both
D. Girls

6. In 1950-51 India literacy rate was

A. 0.16
B. 0.12
C. 0.15
D. 0.18
7. A person becomes a human resource when he/she
A. All of the these
B. Belongs to particular age group
C. Is able to work
D. Is willing to work

8. The movement started by national literacy mission is

A. Education of children
B. Education for all
C. Education for life
D. Education literacy
9. Which Five Year Plan stressed upon the importance of human capital

A. 7th
B. 8th
C. 6th
D. 5th

10. Which of the following is not the feature of India Vision 2020 Report

A. 90% of literacy in India

B. If we double the investments in education it will increase the country’s GDP per capita by
four times
C. 100 % enrolment of all children of age group 6-14 years
D. Importance of technical education

Ans.

1. B
2. D
 3. B
4. C
5. D
6. D
7. A
8. B
9. A
10. A

PART-B
Question 1.What are the two major sources of human capital in a country?
Answer.Two main sources of human capital are investment in education and health.

Question 2. What are the indicators of educational achievement in a country?

Answer.Educational attainment is measured by primary education, youth literacy and adult
literacy.

Question 3.Why do we observe regional differences in educational attainment in India?

Answer.Regional differences in educational attainment in India is due to :

1. inequality of income
2. expenditure by the government in education facilities.

Question 4.Bring out the differences between human capital and human development.
Answer.Difference between Human Capital and Human Development

Human Capital

1. Human capital considers education and health as a means to increase labour productivity.
2. Human capital is a narrow concept which treats human beings as a means to achieve an end
which is higher productivity, failing which the investment is not considered to be productive.

Human Development
1. Human development is based on the idea that education and health are integral to human well-
being since only when people have the ability to read and apply their knowledge to derive
maximum benefit they will be able to lead a long and healthy life.
2. Human development is a broader concept which considers human beings as ends in
themselves. Human welfare can be achieved through investments in education and health. It
considers welfare — a right of every individual irrespective of their contribution to labour
productivity. Every individual has right to be literate and lead a healthy life.
Question 5.How is human development a broader term as compared to human capital?
Answer.

1. Human capital is a narrow concept which treats human beings as a means to

achieve an end which is higher productivity, failing which the investment is not
considered to be productive.
2. Human development is a broader concept which considers human beings as ends
in themselves. Human welfare can be achieved through investments in education
and health. It considers welfare—a right of every individual irrespective of their
contribution to labour productivity. Every individual has right to be literate and
lead a healthy life.

Question 6.What factors contribute to human capital formation?

Answer.Sources of Human Capital Formation :

1. Expenditure on Education
2. Training
3. Expenditure on Health
4. Migration
5. Expenditure on Information.

Question 7. Mention two government organisations each that regulate the health and
education sectors.
Answer.In India, the ministries of education at the Centre and State level, departments of
education andvarious organisations such as National Council of Educational Research and
Training (NCERT),
University Grants Commission (UGC) and All India Council of Technical Education (AICTE)
regulate the education sector. Similarly, the ministries of health at the Union and State level,
departments of health and various organisations like Indian Council for Medical Research
(ICMR) regulate the health sector.

Question 8.Discuss the following’as a sources of human capital formation

(a) Health infrastructure
(b) Expenditure on migration.
Answer.

1. Health Infrastructure. Health is another important source of human capital

formation. Preventive medicine (vaccination), curative medicine (medical
intervention during illness), social medicine (spread of health literacy) and
provision of clean drinking water and good sanitation are the various forms of
health expenditure. Health expenditure directly increases the supply of healthy
labour force and is, thus, a source of human capital formation.
2. Migration. People sometimes migrate from one place to the other in search of
better job. It includes
migration of people from rural areas to urban areas in India and migration of
 technical personnel from India to qther countries of the world. Migration in both
these cases involves cost of transport, higher cost of living in the migrated places
and psychic costs of living in a strange socio-cultural set-up. The enhanced
earnings in the new place outweigh the costs of migration. Expenditure on
migration is also a source of capital formation.

Question 9 Establish the need for acquiring information relating to health and education
expenditure for the effective utilisation of human resources.
Answer. People need to have information on the cost and benefit of investment in health and
education. When people know the benefits of their investment in these two areas, they make
more expenditure. The result is more human capital formation.

Question 10.Explain how investment in education stimulates economic growth. (or)

Explain the role of education in the development of a country.
Answer. Education is an important source of human capital formation. Investment in education
stimulates economic development in the following ways:

1. Raises production. Knowledgeable and skilled workers can make better use of
resources at their disposal. It will increase production in the economy. An educated
and trained person can apply his knowledge and skill at farm, factory and office to
increase production.
2. Raises efficiency and productivity. Investment in education increases efficiency
and productivity, and hence yields higher income to the people.
3. Brings positive changes in outlook and attitudes. Knowledgeable and skilled
people have modem outlook and attitudes, that they make rational choice in respect
of places and jobs.
4. Improves quality of life. Education improves quality of life as it provides better
job, high income and improves health. It results in better standard of living.

Question 11. Trace the relationship between human capital and economic growth.
Answer. Human capital formation raises the process of economic growth and
economic growth raises the process of human capital formation. There is a cause and
effect relationship between human capital and economic growth. It is shown in the
figure.
Question 12 What are the main problems of human capital formation in India?
Answer. Main problems of human capital formation in India are:

1. Rising Population. Rapidly rising population adversely affects the quality of human
capital formation in developing countries. It reduces per capita availability of
existing facilities. A large population requires huge investment in education and
health. This diverts the scarce money to production of human capital at the cost of
physical capital.
2. Long Term Process. The process of human development is a long term policy
because skill formation takes time. The process which produces skilled manpower
is thus slow.
3. High Regional and Gender Inequality. Regional and gender inequality lowers the
human development levels.
4. Brain Drain. Migration of highly skilled labour termed as “Brain Drain” adversely
affects the economic development.
5. Insufficient on-the-job-training in agriculture. Agriculture sector is neglected
where the workers are not given on-the-job training to absorb emerging new
technologies.
6. High Poverty Levels. A large proportion of the population lives below poverty line
and do not have access to basic health and educational facilities. A large section of
society cannot afford to get higher education or expensive medical treatment for
major disease.

Question 13 In your view, is it essential for the government to regulate the fee structure
ineducation and health care institutions? If so, why?
Answer. Yes, government intervention is necessary in regulating the fee structure in education
and health care institutions:

1. to maintain uniformity
2. to have accountability
3. to help poorer people.
Question 14.What are the two major sources of human capital in a country?

Answer :Human capital is a stock of skill and expertise of a nation at a particular point of time. The
contribution of human skills and expertise towards economic growth and development is invaluable.
This is because a stock of quality enriched human capital raises individual efficiency and productivity
thereby raising the aggregate production and economic well being of a country. Thus, the importance of
investment in enriching human capital is immense and long lasting. The following are the two prime
ways o to develop human capital qualitatively:

i. Investment in Educational Sector:Education not only raises the standard and quality of living
but also encourages modern attitude of the people. Moreover, education increases the productive
capacity and productivity of a nation’s workforce by honing their skills. Further, education
increases the acceptability of modern techniques and also facilitates a primitive economy to break
the shackles of tradition and backwardness. An investment in educational sector has two fold
benefits. It not only increases the income earning capacity but also reduces the skewed distribution
of income thereby forming an egalitarian society. The investment in educational sector has long
lasting returns. It not only enhances the present economic condition but also improves the future
prospects of a country. The importance of education is not only limited to making people educated.
but also in facilitating an underdeveloped economy to solve different but interrelated macro
economic problems like, povertyincome inequality, population, investments, under utilisation of
resources. Therefore, investment in education must be accorded high priority in an underdeveloped
country as it leads to the enhancement of human capital qualitatively.

ii. Investment in Health Sector: There is a saying “The greatest wealth is health”. The wealth of a
country can be increased with the efforts of healthy workforce. Investment in health sector
increases efficiency, efficacy and productivity of a nation’s workforce. In contrast to an unhealthy
person, a healthy person can work better with more efficiency and, consequently, can contribute
relatively more to the GDP of the country. Good health and medical facilities not only increase
life expectancy but also improves quality and standard of life. Investment in health sector ensures
the perennial supply of healthy workforce. Some of the common expenditures incurred in the
health sector are on providing better medical facilities, easy availability of life saving drugs,
common vaccination, spread of medical knowledge, provision of proper sanitation and clean
drinking water, etc. Thus, the expenditure incurred on health is important in building and
maintaining a productive work force that in turn leads to the development of quality human capital
in a country.

Question 15What are the indicators of educational achievement in a country?

Answer :

Education makes a person well equipped with skills. An educated person is more skillful and
productive than an uneducated person. Consequently, the former enjoys higher income earning
capacity than the latter. Therefore, the prime indicator of educational achievement is the income
earning capacity of an individual. Besides this, there are other essential indicators whose scope is
even wider. These are:
1. Adult Literacy Rate: This rate indicates the percentage of the literate adult population who are
aged 15 years and above. The word literacy in this context is confined only to the ability to read
and write. It provides a measure of the stock of literate persons within the adult population. This
rate is expressed in terms of percentage. Higher the percentage of adult literacy rate, higher the
educational achievement in a country. This rate is the most important indicator for a country as it
indicates the percentage of the population that can participate in the economic activity of the
country.

2. Youth Literacy Rate: This rate indicates the percentage of literate people between the age of
15-24 who can read and write. It denotes the stock of literate population within the youth
population. This is an important indicator of educational achievement in a country. This is because
of the fact that majority of a country’s population is not able to continue their education till this
age. Therefore, higher the youth literacy rate, higher will be the achievement of a country in terms
of education.

3. Primary Education Completion Rate:This rate indicates the percentage of students

completing the last year of primary school. Primary education includes students of the class group
1 to 8 in the age group of 6-14 years. It includes basic education in reading, writing and
mathematics along with an elementary understanding of other subjects such as history, geography,
natural sciences, social sciences, art and music. Lower primary education completion rate leads to
lower youth literacy rate and, hence, lower adult literacy rate.

Question 16How is human development a broader term as compared to human capital?

Answer :Human development is a broader term as compared to human capital because human capital
is a means to an end whereas human development is an end in itself.

Human capital considers education and health as a means to make a human being a good
productive person. Human capital is a means to an end, where means implies skills that are used
in the process of production and end denotes the consequent increase in the productivity. The
higher levels of output can be achieved through extensive application of human capital.

On the other hand, human development is an end in itself which refers to the holistic development
of the individuals. The development can be possible only by acquiring good education and
attaining good health. Therefore, education and health are the two main features of human
development. Human development occurs when majority of people in the economy are educated
and healthy. Thus, the end signifies the development of an individual via education and health.
Therefore, we can conclude that human development is a broader term as compared to human
capital.

Question 17 What factors contribute to human capital formation?

Answer :

Human capital formation is an aggregateoutcome of the investments in education, health, transport

and communication sector, technical know-how and on-the-job training and migration. These
factors are explained below.
i. Education

Education not only raises the standard and quality of living but also encourages modern attitudes
of people. Moreover, education increases the productive capacity and productivity of a nation’s
workforce by honing their skills. Further, education increases the acceptability of the modern
techniques and also facilitates a primitive economy to break the shackles of tradition and
backwardness. An investment in educational sector has two fold benefits. It not only increases the
income earning capacity but also reduces the skewed distribution of income, thereby, forming an
egalitarian society. The investment in educational sector has long lasting returns. It not only
enhances the present economic condition but also improves the future prospects of a country. The
importance of education is not only limited to making people educated but also in facilitating an
underdeveloped economy to solve different but interrelated macro economic problems like,
poverty, income inequality, population, investments, under utilisation of resources. Therefore,
investment in education must be accorded high priority in a country.

ii. Health

There is a saying “The greatest wealth is health”. The wealth of a country can be increased with
the efforts of healthy workforce. Investment in health sector increases efficiency, efficacy and
productivity of a nation’s workforce. In contrast to an unhealthy person, a healthy person can work
better with more efficiency and, consequently, can contribute relatively more to the GDP of a
country. Good health and medical facilities not only increase the life expectancy but also improve
quality and standard of living. Investing in health sector ensures the perennial supply of healthy
workforce. Some of the common expenditures incurred in the health sector are on providing better
medical facilities, easy availability of life savings drugs, common vaccination, spread of medical
knowledge, provision of proper sanitation and clean drinking water, etc. Thus, the expenditure
incurred on health is important in the building and maintaining a productive work force.

iii. On-the-Job Training

Training refers to the act of acquiring skills, knowledge and competency required to perform a
particular job efficiently and effectively. On-the-job training is the most effective kind of training
to a trainee, imparting him the technical skills and know-how at the actual work site. In this type
of training, a trainee is assisted (or hands on) and trained by a trainer (usually by an experienced
employee) when the trainee is actually doing the job. This helps the trainee not only to acquire the
theoretical and practical skills simultaneously but also enables him to learn from the experiences
of his trainer and, thereby, can increase his efficiency and productivity. This is the most common
type of training programs because the returns in terms of increased productivity far exceed the cost
of the training. Thus, the expenditures on such training improve the quality of human capital by
enhancing its productivity, efficiency and income earning capacity.

iv. Migration

Migration refers to the movement of people from underdeveloped or developing countries to

developed countries in search of better avenues. Migrations contribute to human capital formation
as it facilitates the utilisation of inactive or underdeveloped skills of an individual. The cost of
migration involves cost of transportation and cost of living at the migrated places. Usually, the
cost of migration is very high due to the high cost of transportation and high cost of livelihood in
the developed countries. But still, people migrate in search of better job opportunities and
handsome salaries. Migration of human capital helps the underdeveloped countries to acquire
technical skills, efforts reducing methods and efficient way of performing tasks. These skills and
know-how are transmitted by the migrated people to their home country that not only add to the
economic growth and development but also enhance the human capital of the home country.

v. Information

The degree of availability of jobs, salaries and admissions related information also play an
important role in the determination of human capital. The availability of jobs and admissions
related information not only helps the students to opt for the best choice according to their interest
areas but also lead to the effective utilisation of human skills and knowledge. Similarly, the
availability of medical information and health awareness determine the health of the people. Thus,
the expenditure on the spread of information (of education and health) determines the effectiveness
and efficacy of human capital.

Question 18:Discuss the following as a source of human capital formation

(i) Health infrastructure

(ii) Expenditure on migration.

Answer :

(i) Health infrastructure

There is a saying “The greatest wealth is health”. The wealth of a country can be increased with
the efforts of healthy workforce. Investment in health sector increases efficiency, efficacy and
productivity of a nation’s workforce. In contrast to an unhealthy person, a healthy person can work
better with more efficiency and, consequently, can contribute relatively more to the GDP of the
country. Good health and medical facilities not only extends life expectancy but also improves
quality and standard of life. Investing in health sector ensures the perennial supply of healthy
workforce. Some of the common expenditures incurred in the health sector are on providing better
medical facilities, easy availability of life savings drugs, common vaccination, spread of medical
knowledge, provision of proper sanitation and clean drinking water, etc. Thus, the expenditure
incurred on health is important in building and maintaining a productive work force.

(ii) Expenditure on migration

Migration refers to the movement of people from underdeveloped or developing countries to t

developed countries in search for better avenues. Migrations contribute to human capital formation
as it facilitates the utilisation of inactive or underdeveloped skills of an individual. The cost of
migration involves cost of transportation, and cost of living at the migrated places. Usually, the
cost of migration is very high due to the high cost of transportation and high cost of livelihood in
the developed countries. But still, people migrate in search of better job opportunities and
handsome salaries. Migration of human capital helps the underdeveloped countries to acquire
technical skills, efforts reducing methods and efficient ways of performing tasks. These skills and
know-how are transmitted by the migrated people to their home country that not only add to the
economic growth and development but also enhance the human capital of the home country. If the
gains from migration outweigh the migration costs then it can be inferred that migration leads to
better utilisation of human capital skills.

Question 19. How does investment in human capital contribute to growth?

Answer :Human capital and economic growth goes hand in hand. Human capital formation accelerates
the economic growth whereas economic growth in turn facilitates human capital formation. The
interrelationship between economic growth and human capital formation can be explained with the
help of the below mentioned points.

1. Increase in the Productivity of Physical Capital: Physical capital refers to the stock of
produced means of production. It consists of machines, production plants, tools and equipments.
The skilled workers handle the productive assets in such a manner that these not only enhance their
productivity and but also lead to an efficient utilisation of the physical capital. When the
productivity increases, the pace of growth is automatically accelerated.

2. Innovation of Skills: An educated person is more productive and skillful. He has the potential
to develop new skills and innovate new techniques that can be more efficient and productive.
Greater the number of skilled and trained personnel, greater will be probabilities of innovations.

3. High Participation Rate and Equality: Human capital endowed with higher technical skills
and innovating power is more productive and efficient. This increases the participation of more
people in the process of economic growth and development. Higher the participation rate, higher
is the degree of social and economic equality across the country.

Thus, we can conclude that human capital and economic growth goes hand in hand. Human capital
formation accelerates the economic growth whereas economic growth also facilitates human
capital formation.

Question 20. Argue in favour of the need for different forms of government intervention in
education and health sectors.

Answer :India being a federal country, expenditures on both education and health are carried out by all
the three tiers of the government. In India, the education and health sectors services are provided both
by the public as well as by the private institutions. While, the private institutions are guided by the
market and profit motive, on the other hand, the public institutions are guided by the main motive of
rendering services and to enhance human capital. As the cost of education and health facilities provided
by private institutions is higher, so it is difficult for the majority of population to avail these services
because of their economic inability. Thus, it is very important for the government to provide quality
education and health facilities to this section of the population. Moreover, private institutions are
unable to reach remote and rural areas where people lack initiative for education and health. In this
context, the role of government to encourage them and to make them aware of advantages of
education and health cannot be substituted. Also, there are some underprivileged sections of
population like, ST, SC, OBC, the interests of whose can only be protected by the interference of
government. Moreover, people as individual consumers do not have complete information about the
quality of services and the related costs. This often leads to exploitation of people. Hence, government
intervention in health and education sector is must in order to enhance the quality of human capital.

Rural development

Multiple choice Question

1.What does the Micro Credit programme mean?

1) Credit provision made by small farmers
2) Credit provision made by self-help group to its members
3) Credit provision made by large farmers
4) None of the above
Answer. 2) Credit provision made by self-help group to its members.
2.What is NABARD full form?
1) National Bank of Agriculture and Rural Development
2) Native Bank of Agriculture and Rural Development
3) Native Bank of Agriculture and Real Development
4) National Bank of Agriculture and Real Development
Answer. 1) National Bank of Agriculture and Rural Development.
3. Non-institutional sources of agriculture credit are?
1) Commercial Bak
2) NABARD
3) Regional Bank
4) Traders
Answer. 4) Traders.

4. Why short term loan is required by rural population?

1) For buying cattle
2) For buying tractors
3) For meeting consumption expenditure
4) For paying old debt
Answer. 3) For meeting consumption expenditure.

5.Which of the following is false regarding SHG’s

1) Small and informal association for a poor person
2) Provide rural credit by mobilizing their own resources
3) Introduced in 1982
4) Improve rural poor access to a formal credit system
Answer. 3) Introduced in 1982.

6.Below mentioned are the major producers of the marine product except
1) Gujarat
2) Punjab
3) Maharashtra
4) Kerala
Answer. 2) Punjab.
7.Write two instruments to safeguard the interest of farmers by the government.
Answer: The two instructions are a fixation of minimum support price (MSP) and Buffer stock.

8. Rural population require long-term loans because

1) For buying Fertilizers
2) Buying agricultural machinery
3) Buy seeds
4) To make minor improvements on land
Answer: 2) Buying agricultural machinery
9. Which is the apex institute at national level which provide re-finance facilities to institutions
engaged in providing rural credit

a. NBAARD
b. DABARD
c. NABADR
d. NABARD

d. Ans. D NABARD
Explanation: National Bank for Agriculture and Rural Development bank has been
entrusted with "matters concerning policy, planning and operations in the field of credit
for agricultural and other economic activities in rural areas in India

10.An academy called _______ for rural prosperity has been established

e. Janta Tata National Virtual Academy

f. JamshedjiTatron National Real Academy
g. Jamshedji Tata Net Virtual Academy
h. Jamshedji Tata National Virtual academy

d. Ans D, Jamshedji Tata National Virtual Academy

Explanation: This academy is to impart operational training to nearly 10 lakh rural
people to run 'info- kiosks'.

PART-B

Question 1 :What do you mean by rural development? Bring out the key issues in rural
development.
Answer :Rural areas support the bulk of India’s population. Simultaneously, these areas are the
breeding ground of poverty, hunger and starvation. So, to accelerate the process of growth and
development of a country, rural development must be accorded priority. Rural development refers to
the actions and initiatives taken for the social and economic development of the rural or backward
areas. The key issues in rural development are as follows:

1. Human Capital Formation- Rural areas lack quality human capital. Therefore, rural
development programmes should aim at development of human resources by investing in
education, technical skills development through on-the-job training, health care, etc.

2. Development of Productive Resources- Productive resources help in generating employment

opportunities. In rural areas, the main occupation is agriculture that usually suffers from low
productivity, lack of infrastructure and disguised unemployment. Thus, rural development must
aim at development of alternative sources of occupation. Development of productive resources
reduces excess burden on the agricultural sector, thereby, increasing productivity and income of
the rural people.
3. Development of Rural Infrastructure- Infrastructure development is a very crucial issue at
the micro level. It provides a support system to all the production activities in the economy, the
absence of which makes economic growth and social development impossible. Development of
rural infrastructure includes development of bank, credit societies, electricity, means of transport,
means of irrigation, development of markets, facilities for agricultural research, etc.

4. Land reforms- Land reforms along with technical reforms must be initiated in the rural areas.
These enable the use of modern techniques and methods, thereby, increasing the productivity and
aggregate volume of farm output. In addition, land reforms lead to efficient and optimum use of
land, enabling large scale production.

5. Lessening Poverty- Poverty is one of the main causes of rural underdevelopment. Poverty is
not a problem in itself; in fact, it gives rise to many other interrelated problems like unemployment,
inferior human capital, underdevelopment and backwardness, inequalities, etc. An important step
that should be taken in order to tackle t poverty is to develop income-earning assets. Such assets
would generate income, raise living standards and make rural people self-sufficient.

Question 2 :Discuss the importance of credit in rural development.

Answer :

Finance and credit are the two essential requirements for rural development. The rural areas often
suffer from low income leading to low rate of savings. Farmers find it very difficult to increase
their productivity by investing on their farm lands. Further, the limited number of banks that are
available in the rural areas prefer to forward credit to the farmers with large land-holdings. Getting
credit from banks being difficult, the small and marginal farmers fall easy prey to the money
lenders. The infusion of credit is very essential for the growth of agricultural sector, leading to
rural economic development. The importance of credit in rural development is highlighted in the
following points:

1. Credit helps the farmers to commercialise their farming. In other words, commercial farming
requires funds that are provided via credit. As the small and the marginal farmers produce only for
their subsistence, they fail to generate sufficient surplus to reinvest on their lands leading to
degradation of the land.

2. Secondly, given the long gestation period between sowing and harvesting of the crops, credit is
extended to the farmers for meeting their initial requirements of farm inputs like seeds, fertilisers,
etc.

3. Credit saves the farmers from the vicious circle of poverty. The farmers require funds for
meeting their general and specific needs. These needs are to be fulfilled via credit.

4. Lastly, agriculture has always been dependent at the vagaries of climate. In the absence of good
monsoon or crop failure, farmers are worst hurt. Thus, in order to save them from such tragedy,
crop insurance and farm credit plays a vital role.
Question 3 :Explain the role of micro-credit in meeting credit requirements of the poor.
Answer :

Micro credit refers to credit and other financial services provided to the poor through Self Help
Groups (SHGs) and non government organisations. The Self Help Groups are playing a crucial
role in meeting the credit requirements of the poor by inculcating saving habits among the rural
households. The individual savings of many farmers are pooled together to meet the financial
requirements of the needy members of the SHGs. The members of these groups have been linked
with the banks. In other words, SHGs enable the economically poor individual to gain strength as
part of a group. Also, the financing done through SHGs reduces transaction costs for both the
lenders and the borrowers. The National Bank for Agricultural and Rural Development (NABARD)
played a key role in providing credit at special concessional rates. Presently, more than seven lakhs
SHGs are operating across different rural areas. SHGs' programmes are becoming popular among
the small and marginal borrowers owing to their informal credit delivery mechanism along with
minimum legal formalities.

Question 4 :Explain the steps taken by the government in developing rural markets.
Answer :

The following are the various steps initiated by the Indian government to develop the rural markets:

1. Regulated Markets: The government came up with the concept of regulated market where the
sale and purchase of the products are monitored by the Market Committee. This Market Committee
consists of farmers, government agents and traders. This practice infuses greater transparency in
the marketing system through the use of proper scales and weights. Such committees ensure the
farmers and the consumers in receiving fair price in exchange of their products

2. Infrastructure Development: The present infrastructure is not sufficient to meet the growing
demands of the farmers. Indian government provided cold storages and warehouses that help the
farmers to sell their product at the time when the price is attractive. Also, railways offer subsidised
transport facilities to the farmers. This enables the farmers to bring their product to urban areas
where they can earn huge profits.

3. Co-operative Agricultural Marketing Societies: The government also started co-operative

marketing under which the farmers get access to fair prices. This is due to the better and enhanced
bargaining power of the farmers via collective sale in the market.

4. MSP Policy: Minimum Support Price is a minimum legislated price that a farmer may charge
in exchange for his products. This enables them to sell their products in the open market at a higher
price. The MSP insulates the farmers in case of price fall as this is the minimum price that they
can receive. The need of such assurance to the farmers is of immense importance as farming in
India is subject to many uncertainties.

Question 5: How are credit and marketing significant for the progress of agriculture?
 1. Answer: Importance of Credit: In agriculture there is a long gap between crop sowing
and realisation of income, farmers are in strong need for credit. Farmers need money to
meet initial investment on seeds, fertilisers, implements and other family expenses
especially when they are seasonally unemployed. Therefore, credit is one of the factors
which contribute in rural development. If institutional sources are not be available,
farmers will borrow from informal sources which will increase cost of borrowing and
thereby cost of production. Therefore growth of rural economy depends primarily on
infusion of capital from time to time to tealise higher productivity in agricultural and non
agricultural sectors.
Importance of Marketing: Marketing is important for any production process. What if
goods are produced but due to lack of marketing facilities the do not reach to the
consumer especially agriculture produce which will perish after some time? It will be
total waste of output. Therefore, we need marketing facilities in the form of regulated
markets, proper transportation and communication facilities, market information, storage,
insurance etc. Even today 10% of goods produced in farms are wasted due to lack of
storage. So orderly and transparent marketing is very important for rural development.

Question 6 :Critically evaluate the role of the rural banking system in the process of rural
development in India.
Answer :

With the nationalisation of the commercial banks after 1969, the concept of social banking came
into existence. It implies extending institutional credit at moderate rate of interest. The National
Bank for Agricultural and Rural Development (NABARD) has made a significant progress in the
field of rural credit. It cannot be denied that the institutional credit has freed the farmers from the
trap of money lenders and mahajans. But, on the other hand, institutional credit is not free from
deficiencies. The rural or institutional credit has invariably been associated with security or
collateral. Consequently, a substantial number of farmers cannot avail credit. Also, the commercial
banks failed to encourage the habit of thrift among farmers. In addition to this, the leniency on the
part of the government to collect taxes was another setback in the rural banking. This further led
to the emergence of the feeling among the farmers of not repaying the borrowed amount. This
increased the defaulter’s rate and led to financial unfeasibility for the rural banks.

Question 7 :What do you mean by agricultural marketing?

Answer :

Agricultural marketing refers to all those processes that are involved from harvesting to final sales
of the products by the farmers. These processes involve:

a) gathering the product after harvesting.

b) processing the product

c) grading the product, according to, different quality norms

d) packaging the product

e) storing the product for future use

f) selling the product at attractive prices

In other words, it does not simply refer to the farmers’ act of bringing their product to the market
for the purpose of sale. But it also includes all those activities that help the farmers to fetch the
maximum price for his product.

Question 8 :Mention some obstacles that hinder the mechanism of agricultural

marketing.
Answer :

Agricultural marketing does not simply refer to the farmers’ act of bringing their product to the
market for the purpose of sale. But it also includes all those activities that help the farmers to fetch
the maximum price for their product. The following are some of the obstacles that hinder the
mechanism of agricultural marketing:

i. Farmers are vulnerable to defective weighing techniques and misappropriation of accounts.

ii. Farmers are often ill-informed about market prices and market conditions. Being ignorant,
farmers are forced to sell their product at lower prices.

iii. The farmers lack access to proper storage facilities to store their produce for future sell at better
prices.

iv. The farmers cannot avail agricultural credit, leading to their exploitation by the moneylenders
and mahajans.

Question 9 :What are the alternative channels available for agricultural marketing? Give
some examples.
Answer :

The small and marginal farmers, selling their product through the middlemen, were exploited by
these middlemen. The farmers were not given appropriate price for their product. In this context;
there arose a need for an alternative marketing channel. Under this channel, the farmers can sell
their product directly to the consumers that would fetch them comparatively higher price, thereby,
attractive profits. Some of the examples of alternative agricultural marketing are ApniMandi in
states like Punjab, Haryana and Rajasthan, HadasparMandi in Pune, Rythu Bazars in Andhra
Pradesh, UzhavarSandies in Tamil Nadu. Another alternative channel for agricultural marketing
is the contract of direct sales between the farmers and the national and international companies.
These companies offer advance payments to the farmers for supplying products at pre-determined
rates. These alternative agricultural channels raise farmer’s income and simultaneously reduce
price risk for the small and marginal farmers.
Question 10 :Distinguish between ‘Green Revolution’ and ‘Golden Revolution’
Answer :

Green Revolution Golden Revolution

The combined use of HYV seeds and increased
use of fertilisers and developed irrigation facilities
jointly to increase the production of rice and
wheat. This increase in the production of the food
grains is known as the Green Revolution.
The rapid growth in the production of the horticultural
crops such as fruits, vegetables, tuber crops, flowers,
etc. is known as Golden Revolution.

It led to increase in the production, especially, of It led to increase in production of fruits, vegetables,
rice and wheat. flowers, aromatic plants, spices, etc.

As a result of this revolution, India became self- As a result of this revolution, India became a world
sufficient in the production of wheat and rice. leader in the production of mangoes, bananas, coconut
and spices.

Question 12 :Explain the role of non-farm employment in promoting rural diversification.

Answer :

The non-farm areas of employment are essential with a view to raise income and exploring
alternative avenues of sustainable livelihood besides agriculture. The following are the importance
of non-farm employment opportunities in promoting rural diversification:

1. A substantial portion of Indian farming is dependent on the vagaries of monsoon, making it a

risky affair to rely upon solely. Hence, non-farm employment opportunities are to be explored to
enable the farmers to earn from alternative non-farm occupations. This will lessen the excess
burden on agriculture by reducing disguised unemployment.

2. The kharif season opens up ample opportunities for agricultural employment. However, due to
lack of irrigation facilities, the farmers fail to get gainful employment opportunities during the
Rabi season. Therefore, absence of opportunities in agriculture sector should be compensated in
non-farm sectors.

3. Agriculture being over crowded cannot further generate employment opportunities to the
farmers. Therefore, the prospects of the non-farm sectors should be opened up in the rural areas to
provide job opportunities, thereby, diverting workforce from the already crowded agricultural
sector.

4. The non-farming sector has several segments that have dynamic linkages. Such linkages
enhance the healthy growth of the rural areas.
5. The non-farm sector provides employment opportunities for the whole year as compared to the
farming occupation. So, it helps to eradicate poverty from the rural areas.

6. Most of the output of non-farm sectors acts as an input for the large scale industries. For example,
agro-processing industries, food processing industries, leather industry, tourism,etc. This has two-
fold benefits. First, the large scale industries can specialise in their final output by relying on the
processed inputs from the non-farm sectors. Secondly, such dependence of the large scale
industries provides impetus to the non-farm sectors reducing the urban-rural regional disparities.

Question 13 :

Bring out the importance of animal husbandry, fisheries and horticulture as a source of
diversification.

Answer :

Importance of Animal Husbandry

Animal husbandry is the most important non-farm employment in India. It is also known as
Livestock Farming. Poultry, cattle and goats/sheep are the important components of livestock
farming in India. Most of the rural families carry out livestock farming together with crop farming
in order to increase their income. The share of livestock farming is comparatively higher in the
semi arid and arid areas than the irrigated areas. This is because the arid areas have lesser access
to irrigation facilitiesand thereby, crop farming is less feasible. Thus, in other words, it can be said
that livestock farming provides sustainable livelihood to the people in the semi arid and arid
regions where farming can’t be performed well. Further, capital investment in livestock farming
is comparatively less than that in crop farming. In addition, livestock farming is an important
source of employment for rural women. Presently, animal husbandry is the most important source
of alternative employment, employing approximately 70 million small and marginal farmers.
Besides providing employment, livestock farming has resulted in increased production of milk,
eggs, meat, wool and other by-products, enhancing the consumption bundle qualitatively and
nutritionally.

Importance of Fisheries

‘Fisheries’ are an important source of livelihood in the coastal states such as Kerala, Maharashtra,
Gujarat and Tamil Nadu. The fishing community in India depends on water bodies- both inland
and marine water bodies. Inland sources include rivers, lakes, ponds, and streams, while, the
marine sources include seas and oceans. The increasing efforts by the state governments have
attracted funds in this sector, boosting the production. But this community remains one of the
backward communities in the country due to low per capita earnings, lack of labour mobility to
other sectors, illiteracy and indebtedness. Despite a significant segment engaged, this sector
contributes only 1.4% to India’s total GDP.

Importance of Horticulture
Horticulture is emerging as an important source of livelihood in the rural areas. Horticultural crops
include fruits, vegetables, medicinal and aromatic plants and flowers. Presently, India is the second
largest producer of fruits and vegetables that includes mangoes, bananas, coconuts, cashew nuts
and variety of species. There has been a considerable rise in the income levels of families engaged
in horticultural production. The increase in horticultural production has lowered the vulnerability
of small and marginal farmers. This has provided a gateway of opportunities for employment for
women. It generates employment for 19% of India’s total labour force. In contrast to fishing,
Horticulture does not suffer from ecological and environmental problem. Hence, horticulture must
be promoted with sufficient investment and infrastructure.

Question 14 :Discuss some of the institutional weaknesses in Indian agriculture.

Answer: Some of the institutional weaknesses in Indian agriculture are as follows:

1. We need to involve the small and marginal farmers and the landless labour in deriving
benefits of increased agricultural exports through integrated co¬operatives like the
mother dairy, and other service co-operatives; contract farming, etc.
2. Present system of credit does not ensure timely availability of credit. In many states, land
reform remains woefully unfinished and tenancy regimes need urgent reform.
3. Indian agricultural credit system is suffering from the problems of subsidised interest
rates, poor recovery of loans, high intermediation costs of cooperatives and commercial
banks and debt write-offs.
4. We also need to make efforts to develop new technologies for the farming sector and
making it available for small farmers so that they may diversify their production towards
high value commercial and export commodities.
5. We need to create institutions like trading houses, market intelligence services and
creation of network of information on national and international prices.
6. We also need infrastructure for processing, marketing and grading of produce, investment
in information etc.

Question 15: Explain the importance of self help groups (SHGS) in rural areas
1. Answer: In order to change the face of socio-economic scenario, micro-enterprises and
SHGs are playing significant role in the self-employment by raising the level of income
and standard of living rural people. In this framework, one of the most vital aspects of
rural self-employment is the formation of SHGs which is a valuable investment in human
capital through training and capacity-building measures. From dairy to mechanised
farming, weaving, poultry, food processing units, mushroom cultivation; Rural India has
been busy setting up micro-enterprises by forming SHGs. The group members use
collective wisdom and peer pressure to ensure appropriate use of fund and its timely
repayment. These are informal groups in nature where members come together towards
collective action for common cause. The common need is meeting their emergent
economic needs without depending on external help. SHG movement is supposed to
build economic self-reliance of rural poor, overcome misuse and create confidence
predominantly among women who are mostly unseen in the social structure.
 Employment and unemployment
Multiple choice Question
QUESTION 1
In a rural area, what is the female worker’s participation rate?
1) Lower in a rural area
2) Higher in rural areas
3) Higher in urban areas
4) Lower in both the areas
Answer: 2) Higher in rural areas
QUESTION 2
The job security that a worker enjoys is in which sector?
1) Unorganized Sector
2) Agriculture Sector
3) Organized Sector
4) Private Sector
Answer: 3)
QUESTION 3
In a tertiary sector which of the following economic activity does not exist?
1) Bee-keeping
2) Teaching
3) Banking
4) Working in the Call Center
Answer: 1) Bee-keeping
QUESTION 4
In rural area unemployment is
1) Disguised Unemployment
2) Industrial Unemployment
3) Seasonal Unemployment
4) 1 & 3
5) 1 & 2
Answer: 4) 1 & 3
QUESTION 5
Inflation means.
1) Rise in prices of only selected items
2) The continuous rise in the general price level
3) Rise in a general price level
4) A continuous rise in the general price level over a long period
Answer: 4) Continous rise in the general price level
QUESTION 6
A long run solution of inflation lies in
1) Controlling Demand
2) Enhancing Supply
3) Both
4) None
Answer: 2) Enhancing Supply
QUESTION 7
When does underemployment occur?
1) When people do not want to work
2) When people are not skilled
3) When people are not paid for their work
4) When people are working less than they are capable of
Answer: When people are working less than they are capable of
QUESTION 8
What type of unemployment does urban area suffer from?
1) Open Unemployment
2) Disguised Unemployment
3) Seasonal Unemployment
4) None
Answer: 1) Open Unemployment
QUESTION 9
An establishment with four hired workers is known as which sector establishment.
1) Informal
2) Formal
3) Both
4) None
Answer: 1) Informal sector
QUESTION 10
Which of the following is false regarding disguised unemployment
1) The mounting pressure of population in rural areas with no alternative employment
2) The marginal productivity of a worker is high
3) A feature of the agrarian economy
4) None
Answer: 2) The marginal productivity of a worker is high

PART-B

Question 1 :Who is a worker?

Answer :

People work for earning their livelihood. A person who is involved in production activity
contributing to the flow of goods and services in the economy is called a worker. In other words,
a worker is regarded as an economic agent who contributes to the production of goods and services,
thereby, to the GDP during a particular year. A worker renders services to others and receives
rewards in the form of wages, salaries or in kind. Hence, we can say that when an individual is
engaged in a production activity or self employed and contributes to the generation of GDP, then,
that person is referred to as a worker. For example, a doctor, an engineer working in a factory, etc.

Question 2 :Define worker-population ratio.

Answer :

Worker-Population ratio is defined as the proportion of population that is actively contributing to

the production of goods and services. It is measured by the ratio between the country’s workforce
and its total population. This ratio acts as an indicator for assessing the employment level in a
particular country at any point of time. Higher the worker-population ratio higher is the
engagement of people in the productive activities and vice-versa. Worker-population ratio is
estimated by dividing the total work force by the total population and multiplying by 100.
Algebraically,

Question 3 : Are the following workers — a beggar, a thief, a smuggler, a gambler? Why?
Answer :

No, a beggar, a thief, a smuggler, a gambler cannot be called as workers. A worker is involved in
a production activity that contributes to the GDP of a country. As none of them (a beggar, a thief,
a smuggler and a gambler) are involved in any legal economic production activity that contributes
to the national income of the country, hence, none of them can be regarded as workers.

Question 4 :

Find the odd man out (i) owner of a saloon (ii) a cobbler (iii) a cashier in Mother Dairy (iv)
a tuition master (v) transport operator (vi) construction worker.

Answer :

Tuition master and the owner of a saloon are the odd man out. This is because all others are hired
while these two are self employed. Tuition master and the owner of a saloon are engaged in their
own business and own profession, whereas, the cobbler, the construction worker, the transport
operator and the cashier in the Mother Dairy are hired and render their services to others in
exchange of rewards in the form of salaries or wages.

Question 5 :

The newly emerging jobs are found mostly in the ____________sector.

(service/manufacturing).

Answer :

The newly emerging jobs are found mostly in the service sector.

The service sector is taking a lead over the manufacturing sector as a source of employment. It
includes trade, commerce, banking, insurance, health and other services. These services are
developing at a faster pace than the manufacturing and other allied production activities. This is
because of the globalization of the economy.

Question 6 :An establishment with four hired workers is known as __________

(formal/informal) sector establishment.
Answer :
An establishment with four hired workers is known as informal sector establishment.

An informal sector is an unorganised sector of the economy. It includes all enterprises that hire
less than 10 workers, except farming and self employment ventures. Therefore, an establishment
with four hired workers is known as informal sector establishment

Question 7 :

Raj is going to school. When he is not in school, you will find him working in his farm. Can
you consider him as a worker? Why?

Answer :

Yes, Raj can be considered as a worker. This is because his work is contributing to the total output
of the farm. Further, as implied by the definition of worker, a person who is engaged in an
economic activity or is assisting anyone in an economic activity and, thereby, contributing to the
GDP of the country is regarded as worker, so, Raj is a worker.

Question 8 :Compared to urban women, more rural women are found working. Why?
Answer :

The percentage of female workforce in the rural areas is nearly 30 % while it is only 14 % in the
urban areas. This depicts that as compared to the urban women more rural women accounts for
higher share in the female workforce. While on the one hand, the rural women are less educated,
unskilled and low productive, on the other hand, urban women being more educated and more
skilled and productive have higher probability to get employment. Ironically, the urban female
accounts for lesser share in the female workforce as compared to their rural counterparts. The
following are the reasons for low share of urban females in the total female workforce:

1. As in the agricultural and allied activities, high degree of skills and specialisations is not
required, so, rural women engage themselves to support their family on farms.

2. As poverty in the rural areas is more widespread than in the urban areas, so, the rural
women engage themselves in low productive jobs just to support the livelihood of their
families.

3. As the urban families usually earn comparatively higher income than the rural families and,
further, poverty in the urban areas is not as widespread as that of in the rural areas, so, there
is lesser need for female members to get themselves employed.

4. The decision to take up jobs by the female members rests on the family’s decision rather
than her individual decision.

5. Although female literacy in India is improving, yet it has to get much better before urban
female accounts for higher share in the total female workforce.
Question 9 :

Meena is a housewife. Besides taking care of household chores, she works in the cloth shop
which is owned and operated by her husband. Can she be considered as a worker? Why?

Answer :

A person who is involved in the production activity and contributes to the generation of GDP is
referred to as worker. As here Meena works in the cloth shop to support her husband and
contributes to GDP by rendering her services, so, she can be considered as a worker.

Question 10 :

Find the odd man out (i) rickshaw puller who works under a rick- shaw owner (ii) mason
(iii) mechanic shop worker (iv) shoeshine boy.

Answer :

Shoe shine boy is a odd man out. All others (a rickshaw puller, a mason, and mechanic shop worker)
are hired workers. They render their services to their employers and receive rewards in the form
of salaries or wages in return. On the other hand, shoe shine boy is a self-employed worker and
carries out his occupation himself. In other words, he is engaged in his own profession.

Question 11 :

The following table shows distribution of workforce in India for the year 1972-73. Analyse
it and give reasons for the nature of workforce distribution. You will notice that the data is
pertaining to the situation in India 30 years ago!

Workforce (in millions)

Place of Residence
Male Female Total
Rural 125 69 195

Urban 32 7 39

Answer :

(i) The total workforce in India in the year 1972-73 was 234 million that includes 195 million
workforce of rural and 39 million of the urban population. This indicates a greater involvement of
rural workforce comprising of 83 % of the total workforce as compared to 17% of the urban
workforce. This is because a majority of rural population was engaged in agricultural and allied
sectors.
(ii) The rural workforce comprises of 64% of the male workforce and 36% of female workforce.
On the contrast, the urban workforce comprises of about 82% of male workforce and 18% of
female workforce. The participation of males in both rural as well as in the urban areas is higher
than the females because of the lack of opportunities available to women for acquiring education.
Also, families often discouraged female members to take up job and, consequently, women were
confined to household works only.

(iii) Comparing urban female work force with that of the rural female workforce, we can conclude
that the females in the rural areas formed 36 % of the workforce, whereas, the females in the urban
areas formed only 18% of the workforce. In the rural areas, despite a majority of the population
was engaged in farming and allied activities, agricultural sector had low productivity. Consequent
to the low productivity, rural people had low earnings that further led to widespread poverty in the
rural areas.

Thus, it can be concluded by analysing the above data that Indian economy suffered from low
productivity, acute unemployment and widespread poverty, disguised unemployment in
agricultural sector and low female participation rate in the workforce 30 years ago

Question 12 :

The following table shows the population and worker population ratio for India in 1999-
2000. Can you estimate the workforce (urban and total) for India?

Estimates of Worker Estimated No. of

Region population Population Workers
(in crores) Ratio (in crores)
Rural 71.88 41.9

Urban 28.52 33.7 ?

Total 100.40 39.5 ?

Answer :

Estimates of Worker Estimated No. of

Region population Population Workers
(in crores) Ratio (in crores)
Rural 71.88 41.9
 Urban 28.52 33.7

Total 100.40 39.5

Question 13 :

Why are regular salaried employees more in urban areas than in rural areas?

Answer :

Regular salaried employees are those hired workers who are on the permanent payrolls of their
employers. They are usually skilled workers and are entitled to all types of social security benefits.
The concentration of these workers is higher in the urban areas as compared to the rural areas
because such jobs require skilled and specialised workers. The opportunities to acquire and
enhance such skills are available more in the urban areas. And these skills are acquired through
the process of training and education that cannot be accessed in the rural areas due to the lack of
investment, infrastructure and low literacy level of rural people. Further, the big companies are
concentrated only in the urban areas due to the presence of infrastructure and availability of
modern facilities like banks, transport and communication, etc. Therefore, the bulk of the jobs for
the regular salaried employees are concentrated more in the urban areas resulting in the increase
in number of the regular salaried employees.

Question 14 :Why are less women found in regular salaried employment?

Answer :

Lesser women are found in regular salaried employment as compared to men because a larger
proportion of women are engaged in the economic activities without stable contracts and steady
income. The stable contracts and steady income are two features prevalent in the regular salaried
employment. Women are engaged in informal segments of the economy, where they are not
entitled to any social security benefits. Moreover, women work in more vulnerable situations than
men and have lower bargaining power and, consequently, are paid lesser than the male workforce.
Thus, the women workers are more likely to be found in the self-employment and casual work as
compared to men rather than regular salaried employment.

Question 15 :Analyse the recent trends in sectoral distribution of workforce in India.

Answer :
The three major sectors of an economy i.e. Primary, Secondary and Tertiary collectively are known
as occupational structure of an economy. The primary sector includes agriculture, forestry, fishing,
mining, etc. The secondary sector consists of manufacturing and construction activities. Tertiary
sector includes various services like transport, communication, trade, etc. Primary sector is the
prime source of employment for the majority of the workers in India. Its contribution is as high as
57.3 % of our total workforce. About 17.6% and 25.1% of the total workforce is employed in the
secondary and the service sector respectively. People living in the urban areas are largely engaged
in secondary and tertiary sectors and those in the rural areas are involved basically in primary
sectors. Also, the tertiary sector is taking a lead over the secondary sector as a source of
employment and increasing share in India’s GDP. As far as the distribution of male and female is
considered, a high percentage of total female workforces are engaged in the primary sector than in
the secondary and tertiary sectors.

Question 16 :

Compared to the 1970s, there has hardly been any change in the distribution of workforce
across various industries. Comment.

Answer :

India being an agrarian economy has majority of population dependent on the agricultural sector
to earn their livelihood. Although, the developmental strategies in India have aimed at the
reduction of population dependent on agriculture, yet the reduction in the population engaged in
agricultural sector has not been significant. In 1972-73, about 74 % of the work force was engaged
in primary sector which reduced to 60% in 1999-00. On the other hand, the shares of secondary
and tertiary sectors in employment rose from 11 % to 16 % and 15 % to 24 % respectively. The
work force distribution indicates that over the last three decades i.e. from 1972-2000, people have
moved from self-employment and regular salaried employment to casual wage worker. This
particular pattern of moving from self employment and regular salaried employment to casual
wage work is termed as casualisation of work force. Thus, it can be concluded that although
changes in the distribution of workforce have taken place, yet industrial and tertiary sector need to
increase their share in the workforce distribution by generating more employment opportunities
and absorbing excess labour from the agricultural sector.

Question 17 :

Do you think that in the last 50 years, employment generated in the country is
commensurate with the growth of GDP in India? How?

Answer :

Economic growth implies growth in the GDP, i.e. growth in the aggregate output produced during
an accounting period within the domestic territory of an economy. The increased output level is
achieved by generating more employment opportunities and through employing better technology.
During the recent past, India has witnessed jobless economic growth that raised the aggregate
output level without the proportionate rise in the employment opportunities and, consequently,
unemployment continued to exist. The reason is that the rise in GDP is caused by employing
modern and improved technology that substituted labour for machines. This failed to generate new
employment opportunities in the industrial and the tertiary sectors. Thus, the industrial and the
tertiary sectors failed to absorb the excess labour from the agricultural sector. As a result, disguised
unemployment in the agricultural sector continued along with low levels of productivity and
massive poverty. In addition to this, MNCs that played an important role in India’s economic
growth provided employment only to the educated and specialised workforce. These MNCs aimed
at achieving higher output levels by employing better technology rather than generating greater
employment opportunities. Thus, employment generated in the country does not commensurate
with the growth of GDP in India.

Question 18 :

Is it necessary to generate employment in the formal sector rather than in the informal
sector? Why?

Answer :

Formal Sector refers to the organised sector of the economy. It includes government departments,
public enterprises and private establishments that hire 10 or more workers. Workers of the formal
sectors enjoy social security benefits and also they remain protected by the labour laws. On the
other hand, the informal sector is an unorganised sector of the economy. People engaged in this
sector do not enjoy any social security benefits and do not have any trade unions and, consequently,
have low bargaining power. This makes them more vulnerable to the uncertainties of the market.
Creating more jobs in the formal sector will not only absorb workforce from the informal sector
but also helps in reducing poverty and income inequalities. Thus, in order to safeguard the interests
of the informal sector and to utilise this portion of the workforce for achieving economic growth,
it is very important to generate more employment opportunity in the formal sector rather than in
the informal sector.

Question 19 :

Victor is able to get work only for two hours in a day. Rest of the day, he is looking for
work. Is he unemployed? Why? What kind of jobs could persons like Victor is doing?

Answer :

Yes, Victor is an unemployed worker. He works for two hours a day but a major portion of the day
he is looking for work and is unemployed. This implies that he is an underemployed worker. The
situation of underemployment refers to a situation in which a person gets work for lesser time than
the time he actually can and wants to work. According to the National Sample Survey Statistics, a
person who is employed for less than 28 hours in a week is called underemployed. Victor could
do jobs that are part time in nature like dropping news papers, working in a restaurant, delivering
couriers, bank tellers, etc.
Question 20 :

You are residing in a village. If you are asked to advice the village panchayat, what kinds of
activities would you suggest for the improvement of your village which would also generate
employment.

Answer :

The following are the suggestions that can generate employment opportunities in village:

i. Increase Production: It is of prime importance to increase production in the agricultural and

industrial sectors in order to increase employment. For this purpose, small scale and cottage
industries should be promoted. This will not only generate new employment opportunities but also
assist the industrial sector, as the production of the small scale and cottage industries act as
subsidiaries to the industrial sector.

ii. Increase Productivity: The demand and productivity for labour are directly related to each
other. The higher productivity generates higher profits that in turn implies higher investment and
generates higher demand for labour. Rural workers should be imparted technical knowledge and
modern know-how that will not only increase their productivity but also enhance their acceptability
of modernisation.

iii. Control over Population: Population explosion is one of the important concerns for India. It
hinders economic growth prospects. The rising population leads to the rise in unemployment and,
therefore, poverty. Thus, rural people should be made aware of various birth control measures and
also the benefits associated with family planning and nuclear-family.

iv. Creating Non-agricultural Employment: India being an agrarian economy employs a major
proportion of workforce in the agricultural sector. The development of this sector is still a far cry
and, consequently, suffers from disguised unemployment. Moreover, as agriculture is a seasonal
occupation, so, many farmers remain unemployed for three to four months in a year. Thus, it is
necessary to engage these people in non-agricultural sectors for the phase they are off from
cultivation. Creation of non-agricultural job like pottery, handicrafts, not only reduces disguised
unemployment but also contributes to enhanced income to the farmers in the off-season, which
could be invested in the farm to improve farm productivity and farm products.

v. Easy Credit and Finance: Often, the rural people find it difficult to access finance due to the
lack of sufficient financial institutions in the rural areas. Even if the finance or the credit is
available, then this is provided at higher lending rates. The lack of credit acts as a bottleneck for
the rural growth. Thus, financial institutions and banks should be set up to provide easy credit to
the rural people.

vi. Education and Health Facilities: Rural areas have always lagged behind in education and
health care facilities. This not only impedes their productivity but also reduces their life expectancy
and quality of standard of living. Along with primary and secondary schools, night schools for
adults, imparting technical education and technical know-how, proper sanitation and hospitals
should be established in the rural 8areas

Question 21: What are different aspects of quality of employment?

Answer: There are certain criteria on the basis of which we can check quality of employment
such as productivity of employment; proportion of workers engaged in regular and casual labour;
and proportion of workers in organized and unorganized sectors.

1. Productivity of employment: Only the status of being employed does not itself
necessarily ensure a decent level of living in India. In 1999-2000, of the total employed
persons about 23.87% are the working poor. This means that the major problem relates to
that of the working poor as the productivity of employment is very low. Low educational
and skill levels of the workers are main causes of the low productivity of employment.
2. Proportion of workers in organized and unorganized sector: If the share of
unorganized employment increases it means an overall deterioration in the quality of
employment. The quality of employment can be considered low if the size of unorganized
sector is larger than the organized sector. It was only about 7% of the total employment
in 1999-2000 and over the years the share of the organized sector employment has been
shrinking. We may note that manufacturing construction, trade and transport are sectors
where there is large concentration of unorganized workers. The share of the unorganized
sector employment which was estimated to be around 93% before 1997 should have gone
up and may further increase over the coming years as there was an increase in the
absolute numbers. Many studies at micro level show that flexibility in the labour market
increased after the introduction of economic reforms in the country. Despite the existence
of restrictive labour laws, the firms have been able to retrench a large number of
permanent workers while many units were closed leading to unemployment of thousands
of workers during the reform period.
3. Proportion of workers engaged as regular and causal labour : At present , low
earning ,poor condition of work , lack of social protection vulnerability to the risks,
hazards, irregularity and uncertainty of work availability .Such problems in the economy
has been felt due to the increase in the casualisation of the workforce . This is also a
dimension of deterioration in the quality of employment. Those in regular wage paid or
salaried jobs continue to constitute around 14% of all workers for over two decades from
1977-78 to 1999-2000. The category of casual employment has steadily increased from
27% in 1977-78 to 32% in 19993 -1994 and rose further to 33% in 1999-2000.

Question 22: How is unemployment measured in India? Also give trends by these
measures
Answer: Measurement of Unemployment:

1. Usual Status (UPS):

The Usual Status approach to measuring unemployment uses a reference period of 365
days i.e. one year preceding the date of the survey of NSSO for measuring
unemployment.
The Usual Status approach of measuring unemployment also looks at the principal
activity and subsidiary activity status of the worker.
2. Current Weekly Status:
The Current Weekly Status (CWS) approach to measuring unemployment uses seven
days preceding the date of survey as the reference period.
A person is considered to be employed if he or she pursues any one or more of the gainful
activities for at least one-hour on any day of the reference week. On the other hand, if a
person does not pursue any gainful activity, but has been seeking or available for work,
the person is considered as unemployed.
3. Current Daily Status (CDS): The current daily status approach to measuring
unemployment seeks to ascertain the activity status of an individual for each day of the
reference week. It reports time disposition of an individual on each day of the reference
week. This means that in addition to recording the activity being pursued, time intensity
is also recorded in quantitative terms for each day of the reference week.

Unemployment Rates (2004 per 1000)

Rural Rural Urban Urban

Males Females MAles Females

UPS 24 22 46 89
 CWS 47 45 57 10

CDS 90 93 81 117

Question 23: What steps have been taken by the govemmentto solve the problem of
unemployment in rural areas?
2. Answer: Apart from the programmes which are mainly aimed at the development of
infrastructure, such as construction of small and large dams, canals and roads, the
government strategies to generate employment are closely associated with
poverty¬alleviationprogrammes. Nevertheless, the government has undertaken many
special programmes to generate employment opportunities. The major ones among them
are:
1. MGNREGA: NREGA was launched in 2005 which has been renamed as
MGNREGA (Mahatama Gandhi National Rural Employment Guarantee Act,
2005) which ensures 150 days of employment guarantee to all rural people willing
to do unskilled manual work.
2. Rural Works Programme: This programme aims at construction of civil works
of permanent nature in rural areas.
3. Integrated Dry Land Agricultural Development: Under this scheme,
permanent works like soil conservation, development of land and water
harnessing are undertaken.
4. National Rural Employment Programme: This programme aims to create
community assets for strengthening rural infrastructure, like drinking water wells,
community irrigation wells, village tanks, minor irrigation works, rural roads and
schools.
5. The Rural Landless Employment Guarantee Programme: It aims at
generating gainful employment, creating productive assets in rural areas and
improving the overall quality of rural life.
6. Skill Development: One of the major issues relating to unemployment is skill
development. Change in the production methods has led to increase in demand for
skilled labor. A skilled laborer is one who has proper training and education to
work in a particular field. Training and education increase the productivity of
workers.

Question 24: Compared to urban women more rural women are found working.
Why?

Answer: The difference in participation rates is very high between urban and rural
women. In urban areas, for every 100 urban females, only about 14 are engaged in
some economic activities. In rural areas, for every 100 rural women, about 26
participate in the employment market.
It is common to find that where men are able to earn high incomes, families
discourage female members from taking up jobs. Earnings of urban male workers are
 generally higher than rural males and so urban families do not want females to work.
Apart from this, many activities of the household in which urban women are engaged,
are not recognised as productive work, while women working on farms in the rural
areas are considered a part of the workforce if they are being paid wages in cash or in
the form of foodgrains.
It is because of poverty that women in rural areas are forced to seek employment. On
the other hand, women belonging to affluent families in urban areas generally do not
work.
In agriculture and allied activities, high skill and expertise are not required, hence
women work to support their families. Also in the rural area, the size of the families is
large so the women work to feed their large families.

Question 25 Mention the salient features of the unemployment situation in India

Answer: Some of the salient features of the unemployment situation in India are mentioned
below:

1. The incidence of unemployment is much higher in urban areas than in rural areas.
2. Underemployment is higher in case of women.
3. Unemployment rates for women are higher than those for men.
4. Incidence of unemployment among the educated is much higher.

Ch- Infrastructure

Part A
QUESTION 1
National Rural Health Mission was launched in which year?
1) 2006
2) 2005
3) 2000
4) 2009
Answer: The National Rural Health Mission was launched in the year 2005
QUESTION 2
What percentage of tap water is available in the rural household and how much population drink
open source water.
1) 24,76
2) 60,40
3) 40,60
4) 70,30
Answer: In the present, the percentage for both is 24,76.
QUESTION 3
Which programme was launched in 2006 with objective of correcting regional imbalances in
provision of healthcare

1) Pradhan MantriSwasthya Suraksha Yojna

2) National Rural Health mission
3) Janani Suraksha Yojna
4) Integrated Disease Surveillance
5) Answer: A, Pradhan MantriSwasthya Suraksha Yojna, Explanation: The Pradhan
MantriSwasthya Suraksha Yojana (PMSSY) aims at correcting the imbalances in the
availability of affordable healthcare facilities in the different parts of the country. The
scheme was approved in March 2006.

QUESTION 4 : All the support structures which facilitates development of a country constitute
its

1) None
2) Infrastructure
3) Manufactures
4) Construction

6) Answer: B, Infrastructure, Explanation: Infrastructure is the basic physical systems of a

business or nation; transportation, communication, sewage, water and electric systems are
all examples of infrastructure. They are vital to a country's economic development and
prosperity.

QUESTION 5: India's infant mortality rate at 1000 live birth is: (1)

1) 56
2) 78
3) 46
4) 68

Answer: 4
QUESTION 6
The word ‘Health’ means
1) Ability to realize one’s potential
2) Absence of disease
3) Both
4) None
Answer: 3) Both
QUESTION 7
One community health worker for every village at the norm of 1000 population is provided
under which plan?
1) National Health Programme
2) IDPS
3) HRHM
4) JSY
Answer: 4) JSY. Which means Janani Suraksha Yojna
QUESTION 8
In 20014, which project was launched?
1) JSY
2) NRHM
3) IDPs
4) None of the above
Answer: 3) IDPs (Internally Displaced Persons)

QUESTION 9
In a rural area, what is the female worker’s participation rate?
1) Lower in a rural area
2) Higher in rural areas
3) Higher in urban areas
4) Lower in both the areas
Answer: 2) Higher in rural areas

Part B
Question 1:

Explain the term infrastructure.

ANSWER:

The term infrastructure refers to the underlying tangible and organisational structures that are
essential for the smooth and prosperous functioning of an economy. In other words,
infrastructure is regarded as a core support system that enables an economy to grow and develop.
Generally, the term infrastructure means technical structure such as roads, transport,
communication, bridges, dams, power, public institutions like schools, hospitals, etc. These
structures not only serve as basic input for various economic activities like production,
investment, but also enable an economy to break the shackles of traditional and primitive social
structures and customs. The difference between a developed country and an underdeveloped
country can be mainly attributed to the lack of sufficient and technically advanced infrastructure
in the latter. Infrastructure has two-fold benefits- as an input and as a support system.
Infrastructure as an input (roads, bank and power) facilitates the production process and attracts
investment from domestic as well as from foreign investors. Infrastructure as a support
system (such as schools, hospital) develops the quality of human capital by imparting quality and
technical education and health facilities. This raises the standard and quality of living and helps
the economy to eradicate major economic problems like poverty, unemployment and inequality.
Hence, it can be concluded that the presence of quality and sufficient infrastructure is a necessary
and sufficient condition for accomplishing economic growth and development.
Question 2:

Explain the two categories into which infrastructure are divided. How are both interdependent?
ANSWER:

Infrastructure is broadly classified under two categories:

a. Economic infrastructure

b. Social infrastructure

Economic Infrastructurerefers to the elements of economic change that aid in the process of
production and distribution. It improves the quality of economic resources and, thus, raises the
productivity of the economy as a whole. In this way, it serves as a support system to economic
growth. Energy, transportation, communication, banking and financial institutions are some of
the examples of economic infrastructure. Greater the economic infrastructure, greater will be the
production and more generation of employment opportunities. Thus, expenditure incurred on the
economic infrastructure can be regarded as a necessary condition for economic growth.
Social Infrastructure refers to all those facilities and institutions that enhance the quality of
human capital. Educational institutions, hospitals, nursing homes, housing facilities etc. are some
of the examples of social infrastructures. The availability of such infrastructures raises the human
productivity, thereby, improves the quality of standard of living. Unlike, economic infrastructure,
social infrastructure indirectly increase the productivity and production of goods and services.
For example, availability of better health care and medical facilities enable a perennial supply of
healthy workforce that in turn is reflected in the form of increased production levels.

Both economic and social infrastructures are interdependent on and complementary to each
other. While economic infrastructure fosters economic growth, social infrastructure enhances the
quality of standard of living and thereby leads to the welfare of the economy as a whole. The
combined effect of these two infrastructures contributes to the prosperity of the economy. The
economic growth attained with the help of economic infrastructure is imperfect without t human
development which is attained by means of social infrastructure. Thus, one infrastructure
supports the other.
Question 3:

How do infrastructure facilities boost production?

ANSWER:

Infrastructure-social and economic, facilitates production. The role of infrastructure in economic

production can be understood with the help of an example. If agriculture is devoid of irrigation
facilities, then it would entirely depend on the monsoon that may hamper its production and
productivity. As irrigation is essential to enhance productivity of agricultural sector, in the same
manner, infrastructure is essential for smooth and efficient production of all sectors of the
economy. Similarly, industrial production in the absence of proper means of transportation may
lead to delays in the movement of raw materials, capital goods and finished goods. This,in turn,
leads to delays in the production process and, thereby, hampers industrial production. Thus,
infrastructure is the necessary condition for higher productivity and higher production.
Question 4:

Infrastructure contributes to the economic development of a country. Do you agree? Explain.

ANSWER:

Yes, infrastructure acts as a support system for production activity in the economy and, thereby,
contributes to economic development. The following points will further explain the role of
infrastructure in the economic development of a country:

i. Infrastructure Increases Productivity: Infrastructure-social and economic facilitates

production. The availability of quality infrastructure guarantees increase in production and
productivity. Infrastructure ensures easy movement of goods and raw materials,thereby, reducing
inefficiencies and lead to efficient utilisation of scarce resources and eliminate wastages.

ii. Infrastructure Encourages Investment: Infrastructure provides an environment conducive

to investment. Lack of facilities discourage investment. For example, an investor will not invest
in absence of basic infrastructure such as transport and communication.

iii. Infrastructure Generates Linkages in Production: Infrastructure promotes economic

development by way of various linkages– forward and backward linkages. In other words,
infrastructure provides scope for expansion of one industry due to the expansion of the other by
way of forward and backward linkages. The process of economic growth becomes a dynamic
process in the presence of sufficient infrastructure facilities. This can be explained with the help
of a forward linkage. For example, if irrigation facilities boost agricultural production, then the
related industries that depend on agriculture for the supply of raw materials simultaneously
experience increased production.

iv. Infrastructure Enhances Size of the Market: Infrastructure widens the size of the market.
The fast and cost-effective movement of raw materials and finished goods in bulk enables a
producer to offer his products across the country and even across international boundaries.
Question 5:

What is the state of rural infrastructure in India?

ANSWER:

During the colonial rule,the British aimed at developing infrastructure to facilitate their trade
affairs. At the time of independence, Indian government found lack of sound infrastructure to
realise their dream of economic development and growth. Most of the infrastructural
development concentrated in the urban areas. The infrastructural development in the rural areas
is still very meagre as compared to the size of the rural population. The women in the rural areas
are still making use of bio fuels like cow-dung and fuel wood to meet their energy needs. The
census of 2001 states that only 56% of the households has electricity connection, whereas, 43%
still use kerosene. About 90% of the rural households use bio fuels for cooking. Tap water is
used by only 24% of the rural households and improved sanitation is available to only 20%. As
the infrastructure is an essential element of economic growth, so, it becomes a need of the hour
to address the problem of infrastructure. The government of India invested only small proportion
of GDP on infrastructure i.e. only 5% that is lesser than that of China and Indonesia. The
economists see India as the third biggest economy in the world. For that to happen, India will
have to boost its infrastructure, especially rural infrastructure. This will not only promote
economic development of our country but also enhance economic welfare.
Question 6,:

What are the main characteristics of health of the people of our country?
ANSWER:

Health is not only mere absence of disease but also includes the state of complete physical,
mental, and social well-being of an individual. In other words, it means a sound physical and
mental state of the individual. A person’s ability to work depends on his health. A healthy person
can contribute more actively. Hence, health and development of a person are the integral parts of
a nation's social and economic development.
It is very difficult to assess public health in terms of the single set of measures. So, various other
indicators have been taken into account like infant mortality rate, maternal mortality rate, life
expectancy and nutrition level along with the communicable and non communicable diseases.
The various health indicators in India have been tabulated in the table below.

Health Indicators in India

Health Indicators India

Infant Mortality Rate/1,000 live-births 68

Under-5 mortality/1,000 live-births 87
Birth by skilled attendants 43
Fully immunised 67
Health expenditure as % of GDP 1.4
Government health spending to 5 total government spending (%) 5
Per Capita spending in International Dollars 96

Source: World Health Record 2005 and Economic Survey 2007-08

Question 7

What is a global burden of disease?

ANSWER:

Global Burden of Disease (GBD) is an indicator used by the experts to measure the number of
people dying prematurely due to a particular disease. This also includes the number of years
spent by them in a state of disability due to various diseases. India bears a frightening 20 % of
the GBD. More than half of the GBD is accounted by communicable diseases such as diarrhea,
malaria and tuberculosis.

Question 8

Discuss the main drawbacks of our health care system.

ANSWER:

In recent years, India has embarked upon the development of vast health infrastructure.. This is
evident from the fall in the death rate, infant mortality rate and rise in life expectancy. But more
need to be done in the field of health care. The following are some of the deficiencies in the
Indian health care:

a. Unequal Distribution of Health Care Services: The health care services are unequally
distributed across rural and urban areas. Rural areas that supports 70 % of the population, has
only of the hospitals. Further, the doctor-population ratio is as worse as 1:2,000. This
implies that for every 2,000 people, there is only one doctor in India. Only half of the
dispensaries are set up in villages. Most of the health care facilities have been confined mostly to
the urban areas.

b. Communicable Diseases: various communicable diseases like AIDS (Acquired Immune

Deficiency Syndrome), HIV (Human Immune Deficiency Syndrome), and SARS (Severe Acute
Respiratory Syndrome)have made their way to India.. All these deadly diseases pose serious
threat to t human capital reserve, thereby,impeding economic growth.

c. Poor Management: The health care centres lack trained and skilled personnel in the rural
areas. Therefore, rural people have to rush to the urban health care centres. This becomes worse
in the absence of proper roads and other cost-effective means of transportation.
d. Lack of Modern Techniques and Facilities:The government health centres are usually
devoid of the basic facilities like blood testing, X-rays, etc. These centres lack modern
techniques and medical facilities like, CT-scan, sonography, etc. In order to avail these services,
people need to depend on the private hospitals that charge exorbitant fees.

e. Privatization The inability of the government to provide sufficient health care centres and
other medical facilities paved the way for the private sector to step in. The private sector is
governed by price signals, thereby, catering to the need of the higher income group, leaving the
low income group and the poor at their own mercy. This is due to the privatization of the health
care sector The private hospitals are attracting more patients than the government hospitals as the
government hospitals are devoid of facilities.

Queestion9:

How has women’s health become a matter of great concern?

ANSWER:

Half of the total population in India constitutes women. Women are lagging behind in education,
health care, and economic participation as compared to men. The child sex ratio has declined
from 945 in 1991 to 927, showing the growing incidents of female foeticide in the country. The
married women population close to 3,00,000 have already given birth to one child. About 50 %
of the married women between the age of 15 and 49 suffer from anemia. This resulted in 19 % of
maternal deaths. The major cause of maternal morbidity and mortality in India is abortions.
These factors point towards the women's health due to which it has become a matter of great
concern.
Question 10:

Describe the meaning of public health. Discuss the major public health measures undertaken by
the state in recent years to control diseases.
ANSWER:

Public health refers to the act of protecting public’s health through education, research and
developmentand promotion of healthy lifestyle. It aims at the improvement and well being of the
people around the globe. It focuses on the protection and improvement of health of the entire
population rather than individual.

In the recent years, India has embarked upon the development of vast infrastructure.. At the
village level, a variety of hospitals were set upby the name of Primary Health Centres (PHCs).
The large number of hospitals is run by various voluntary agencies and by the private sector. The
hospitals are managed by professionals and by Para Medical professionals trained in medical,
pharmacy and nursing colleges. There has been a significant expansion in the provision of health
services. The number of hospitals and dispensaries has increased from 9300 to 43300 and
hospital beds from 1.2 to 7.2 million during 1951 to 2000. Also, nursing personnel has increased
from 0.18 to 8.7 lakh and allopathic doctors from 0.62 to 5 lakhs during the same period. The
provision of various facilities has resulted in the eradication of small pox, polio, leprosy, and
other deadly diseases.
Question 11.

Differentiate the six systems of Indian medicine.

ANSWER:

The following are the six systems of medicines constituted by ISM (Indian Systems of
Medicines).

a. Ayurveda

b. Yoga

c. Siddha

d. Naturopathy

e. Unani

f. Homeopathy

Ayurveda is one of the traditional systems of medicine that is still used in India. It is a holistic
way to achieve health through body, mind and spirit. The ayurvedic practitioners recommend
diet and lifestyle changes along with drug therapy. They have identified a number of medicinal
preparations and surgical procedures for curing various ailments and diseases that cannot be
completely curable in other medical systems. The methods of ayurveda such as applying herbs
and massage can also be applied along with other systems.

Yoga as an art originated and was practised in India from thousand years. It has references in
‘Upanishads’ and ’Puranas’ composed by Indian Aryans in the Vedic period. The main credit for
systematising yoga goes to Patanjali who wrote ‘Yoga Sutra’, two thousand years ago. Yoga
Sutra is the most important basic text on Yoga. It is through this means that the essential message
of yoga is spread throughout the world. It is defined as an art of righteous living or an integrated
system for the benefit of the body, mind and inner spirit.

Siddha comes from the word Siddhi which means an object to attain perfection or heaven. This is
the oldest among the Indian Medical Systems namely Ayurveda and Unani. It is also known
as Siddha Vaidya in India and also the oldest medical system in the world. As nowadays,
people’s preference to natural health remedies and herbal health remedies is increasing day by
day, Siddhahas emerged as an important and unique system of Indian medicine when compared
to other traditional medical systems in existence.

Naturopathy deals with the healing power of nature as it assumes that all healing powers are
within our body. This means that within every human organism there is a healing energy.
Naturopathy regards that when we go against nature only then we fall ill. ‘Fasting’ has been
described as Nature’s way to recover. A thorough rest that includes fasting is the most favorable
condition in which an ailing body can purify and recover itself.

Unani has a long and impressive record in India. It was introduced in India around 10th century
A.D. with the spread of Islamic civilisation. Now Unanipathy has become an important part of
Indian Systems of Medicine. India is one of the leading countries in terms of its popularity. It is
very much similar to our Ayurveda. Unani established that disease is a natural process and that
the symptoms are the reactions of the body to the disease.

Homeopathy consists of two words ‘Homeo’ meaning similar and ‘Pathos’ meaning suffering or
treatment.In this system, a drug and a disease that produce similar symptoms cancels each other.
It is popular among the people due to its remarkable healing capacity. Also, its remedies are free
from side effects.
Question 12.

How can we increase the effectiveness of health care programmes?

ANSWER:

Health is a public good and a basic human right. Therefore, it should be provided to all and no
person should be deprived of health care facilities. These facilities can be provided to all if
public health services are decentralised. It implies that the power of providing these services
should be delegated from the central to the local authorities. The success of health care depends
upon education, spread of knowledge, awareness and efficient health infrastructure. It is crucial
to create awareness about health and hygiene among people. The telecom and IT sectors can
further aggravate the effectiveness of health care programmes. Further, providing quality
medical facilities at nominal costs can promote its worthiness and popularity. In order to enhance
the effectiveness of health care programmes, the main focus should be on increasing the number
of hospitals, modernisation of medical facilities, development of infrastructure, improving the
doctor-population ratio and increasing the number of medical colleges in India. The availability
and development of medical facilities in the rural areas is still a far cry. Further, there must be
some regulation to check the exorbitant fees charged by the private medical centres to make
health care facilities accessible and affordable to all.
 Ch- Environment and sustainable development

QUESTION 1
What is the factor that contributes to global warming?
1) Deforestation
2) A decrease in cattle production
3) Burning of petroleum and coal products
4) Hydrogen gas released in animal waste
Answer: 3) Burning of petroleum and coal products
QUESTION 2
Does ozone depletion refer to the phenomenon of reduction in the amount of ozone in the?
1) Exosphere
2) Stratosphere
3) Troposphere
4) Mesosphere
Answer: 2) Stratosphere
QUESTION 3
The problem of ozone depletion is caused by stratosphere by high levels of compounds.
1) Chlorine and Bromine
2) Chlorine and Carbon
3) Silicon and Bromine
4) Silicon and Hydrogen
Answer: 1) Chlorine and Bromine
QUESTION 4
What is the full form of CFG?
1) Chlorofluorocarbons
2) Hydrofluorocarbons
3) Ultra Fluorocarbons
4) Photo Fluorocarbons
Answer: 1) Chlorofluorocarbons
QUESTION 5
What is the example of overuse of environmental resources of?
1) Land Degradation & Deforestation
2) Land Up gradation & Reforestation
3) None
4) Both
Answer:1) Land Degradation & Deforestation
QUESTION 6
The Deccan Plateau black sol is particularly suitable for the cultivation of?
1) Jute
2) Maize
3) Textile
4) Cotton
Answer: 4) Cotton
QUESTION 7
The Chipkoo Movement, for protection of the forest, was in which part of India?
1) Kerala
2) Himalaya
3) Karnataka
4) Maharashtra
Answer: 2) Himalaya
QUESTION 8
Name the factor responsible for land degradation
1) Shifting Cultivation
2) A gain of vegetation occurring due to deforestation
3) Improper crop rotation
4) Unsustainable fuelwood and fodder extraction
Answer: 2) A gain of vegetation occurring due to deforestation

Question 9.
A UN Conference on Climate Change, held in _____ in 1997, resulted in an international
agreement to fight global warming which called for reductions in emissions of greenhouse
gases by industrialised nations.

a. China
b. USA
c. Japan
d. Brazil

Answer: c Japan
Explanation: A UN Conference on Climate Change, held at Kyoto, Japan, in
1997, resulted in an international agreement to fight Global Warming which
called for reductions in emissions of greenhouse gases by industrialised
nations.

Question 10.Following are abiotic elements except

e. Water
f. Land
g. Air
h. Plants

d. Ans D. Plants
Explanation: All living elements are biotic like birds, animals and plants, forests,
fisheries, etc... whereas all non- living elements are abiotic like air, water, land, etc...

B part

Question 1 :

What is meant by environment?

Answer :

Environment refers to all the surroundings which have an impact on human lives. It is the
sum total of the surroundings and resources that effect our existence and quality of life. It
includes all the biotic and abiotic factors. Biotic factors include all the living creatures like
plants, animals, forests, etc. while abiotic factors include all non-living things like air, water,
land, etc. that are provided free of cost by nature. Biotic and abiotic both make up our
surroundings and impact our existence and quality of life. In other words, environment
encompasses the r the biotic and abiotic components and their relations.

Question 2 :

What happens when the rate of resource extraction exceeds that of their regeneration?

Answer :

Environment performs several functions, but its essential function of sustaining life carries
much significance. Environment provides us with life supporting elements like Sun light, soil,
water and air. On extracting resources at a more rapid pace than its regeneration, the
carrying capacity of the environment reduces, leading to a failure in its life sustaining
function. This results in environmental crises, one of the common problems faced by almost
all the countries of the world.

Question 3 :

Classify the following into renewable and non-renewable resources

(i) trees (ii) fish (iii) petroleum (iv) coal (v) iron-ore (vi) water

Answer :

Renewable resources are those inexhaustible resources capable of being replenished easily.
Water, trees and fish are the renewable resources.

Non-renewable resources are those resources that are likely to be exhausted or depleted on
use. Petroleum, coal and iron ore are non-renewable resources. The pace of re-occurrence of
these resources is slower than that of their exploitation.

Question 4 :

Two major environmental issues facing the world today are_____________

and_____________.

Answer :

Two major environmental issues facing the world today are global warming and ozone
depletion.

Global warming refers to the phenomenon of sustained increase in global temperature due
to environmental pollution and deforestation. It is caused by the emission of Green House
Gases, particularly, carbon dioxide. The increase in the level of carbon dioxide raises the
temperature of the earth surface, accelerating the melting of polar ice. This leads to the rise
in the sea level. Thus, the disturbed ecological balance leads to increasing natural calamities,
posing a threat to human survival.

Ozone acts as a cover for the earth surface that is very essential for the sustenance of life. It
prevents the harmful ultra violet radiations from penetrating the earth surface. But its
depletion is becoming a global concern these days. This is due to the excessive use of cooling
substances in the air conditioners and the refrigerators. As ozone depletes, the possibility of
ultra violet radiations penetrating to the earth surface increases, posing a threat to the life
on earth.

Question 5 :

How do the following factors contribute to the environmental crisis in India? What
problem do they pose for the government?

(i) Rising population

(ii) Air pollution

(iii) Water contamination

(iv) Affluent consumption standards

(v) Illiteracy

(vi) Industrialization

(vii) Urbanization

(viii) Reduction of forest coverage

(ix) Poaching

(x) Global warming.

Answer :

(i) Rising Population

Rising population has exerted an excessive burden on the environment in terms of two basic
aspects. The intensive and extensive extraction of both renewable and non-renewable
resources has led to exhaustion of the vital resources. Also, the explosive population size has
triggered excessive demand for housing, thereby, resulting in widespread deforestation and
fast depletion of other natural resources leading to ecological imbalances. Therefore, it is
high time for the Indian government to take preventive measures to control population
explosion.

(ii) Air Pollution

Air consists of oxygen that supports life. Air pollution implies contamination of air, i.e.
absence of fresh air (oxygen) to breathe. Various pollutants like CO 2, CO, SO2, SO, etc.
pollutes air. Air pollution causes hypertension, asthma, respiratory and cardio-vascular
problems. Thus, the Indian government should take various steps to control air pollution,
avoid deforestation, increase health investment and also search for new alternative pollution
free technology such as CNG, etc.

(iii) Water Contamination

Contamination of water or pollution of water is posing a serious threat to human life. It is

one of the principal causes of all deadly diseases such as diarrhea, hepatitis, cholera, etc. It
occurs due to dumping of industrial waste, agricultural waste and sewerage into the water
bodies. Thus, the Indian government should put a check on wastewater disposal. This calls
for high capital investment for installation and maintenance of purifier machines.

(iv) Affluent Consumption Standards

Affluent Consumption Standards have placed a huge stress on the environment in terms of
resources supply and assimilation of waste. The resources have become extinct and wastes
generated are beyond the absorptive capacity of the environment leading to environmental
crises. The government is compelled to spend huge amounts on research and development to
explore alternative environment friendly resources. Also, upgradation of environmental
quality entails huge cost

(v) Illiteracy

Man, if illiterate will not use the resources judiciously that will ultimately lead to overuse or
misuse of the scarce resources. The resources can be judiciously and efficiently exploited
(with minimum waste) only when people are aware of and skillful in utilising the resources.
Otherwise lack of knowledge and skills may lead to excessive extraction of resources and,
thereby, its misuse. Thus, the government should take measures to create awareness and
spread technical knowledge among people about various efficient and economising methods.

(vi) Industrialisation

Industrialisation, on one hand, enhances our living standards but, on the other hand, it
causes deforestation, depletion of natural resources. In the blind rage to achieve economic
development, industrialisation acts as a catalyst. In order to speed up the process of
industrialisation, natural resources are exploited at a rapid pace. More trees are being felled
and, increasing volume of toxics and industrial wastes are dumped into the water bodies. All
these culminate to ecological imbalances posing threat to sustainable economic development.
Thus, the government should take measures to check undue and unnecessary industrial
growth in order to restore ecological balance.

(vii) Urbanisation

Urbanisation, on the one hand, infuses modernisation of lifestyle but, on the other hand, it
leads to deforestation. In order to meet the growing demand for houses, more trees are to be
felled, decreasing the land-per-man ratio. Rapid urbanisation puts an excess burden on the
natural resources, causing depletion. Urbanisation also reduces the availability of land for
farming purpose and lowers farm outputs. Hence, the government should take measures to
mitigate the impact of urbanisation by promoting small and cottage rural industries, rural
infrastructural development, thereby, reducing the rural-urban migration. Further, the
government should also promote afforestation and most importantly, adopt measures to
arrest population explosion.

(viii) Reduction of forest coverage

The need for reduction of forest coverage or deforestation arises due to the growing demand
for land, wood, rise in population and river valley projects. Deforestation leads to reduction
in oxygen level in air, soil erosion, climate change and global warming due to rise in the
CO2 level. Thus, measures are needed to promote afforestation, opening up of sanctuaries
and national park such as Jim Corbett National Park.

(ix) Poaching

Poaching is the illegal capturing, killing and hunting of animals. Due to this, many animals
are on the verge of extinction. The excessive hunting and killing of animals result in serious
ecological imbalances. Thus, in order to save the rare species such as Tiger, Asian Elephants,
Grevy’s Zebra, etc. more sanctuaries and national parks are to be set up. There is also need
for various environmental legislations like Endangered Species Act in the USA that imposes
strict penalties on the law breakers.

(x) Global warming

Global warming refers to the phenomenon of sustained increase in global temperature due
to environmental pollution and deforestation. It is caused by the emission of Green House
Gases that include, particularly, carbon dioxide. The increase in the level of carbon dioxide
raises the temperature of the earth surface. This risen temperature accelerates the melting
of polar ice that further leads to the rise in the sea level. Thus, the incidence of natural
calamities rises due to disturbed ecological balance, thereby, posing a threat to human life.

Question 6 :

What are the functions of the environment?

Answer :
The environment performs the following four dynamic functions:

1. Offer Production Resources: Environment provides us with wide tangible resources like
minerals, water and soil. These are the gifts of nature. These resources act as an input for
converting natural resources into productive and useful things. In other words, environment
provides input for production that enhances human life qualitatively.

2. Sustains Life: Environment provides us with vital ingredients like sun, soil, water and air
that are necessary for the survival of life. Absence of these essential elements implies absence
of life. It supports biodiversity.

3. Assimilates Waste: The activities of production and consumption generate waste. This
waste in the form of garbage is absorbed by the environment automatically.

4. Enhances Quality of Life: Environment includes surroundings such as rivers, oceans,

mountains and deserts. It provides scenic beauty that man admires in life and adds to the
quality of human life.

Question 7 :

Identify six factors contributing to land degradation in India.

Answer :

Degradation of land refers to the gradual but consistent loss of fertility.. This is emerging as
a serious concern in the context of environmental issues in India. The following are the
factors that contribute to land degradation in India:

a. Soil Erosion: The removal of upper layer of the soil caused by agents like strong winds or
floods is termed as soil erosion. The top most layer of the soil carries major and essential
nutrients like nitrogen, phosphorous and potassium. Consequently, the loss of this layer
deteriorates the quality and productivity of land.

b. Alkalinity and Salinity of Soil: The salinity and alkalinity is caused by the problem of
water logging. Water logged on the top layer of soil absorbs all the nutrients present in the
soil, thereby, reducing its fertility.

c. Deforestation: The growing population along with their ever growing demand lead to large
scale destruction of forest cover. The reduction of forest coverage leads to soil erosion that
in turn causes climate change

d. Shifting Cultivation: The practice of shifting cultivation and subsistence farming carried
by the small and the marginal farmers result in the replenishment of soil nutrients and, hence,
its fertility.
e. Excessive use of Fertilisers: The excessive use of chemical fertilisers, insecticides and
pesticides lowers the quality and fertility of soil.

f. Desertification: The spread of deserts in arid and semi arid areas is referred to as
desertification. It occurs due to overgrazing of the animals. This results in the reduction of
lush green areas that in turn leads to replenishment of soil fertility.

Question 8 :

Explain how the opportunity costs of negative environmental impact are high.

Answer :

Opportunity cost is the cost that is foregone when we make a choice or a decision. If a piece
of land is to be used for wheat production then the production of say, rice, is to be sacrificed.
The loss of rice production is the opportunity cost of producing wheat. In the similar way,
the cost of negative environment is the opportunity cost of huge expenditure incurred on
health and searching new alternatives. This is explained elaborately in the following
paragraph;

When the resources are extracted at a more rapid pace than its regeneration, then we say
that the carrying capacity of the environment reduces. In such situation, environment fails
to perform its function of sustaining life, thereby, resulting in environmental crises. In other
words, environmental crises are an aggregate outcome of excessive exploitation of natural
resources and excessive generation of wastes. Therefore, there arises a need for exploration
of new alternative eco-friendly resources to avoid environmental crisis. Moreover,
environmental crises lead to greater incidence of respiratory and water borne diseases,
necessitating higher health expenditures and investments. The costs involved in searching
new alternative resources together with the greater health expenditures constitute the
opportunity costs of negative environmental impact. Such opportunity costs are very high
and require voluminous financial commitments by the government. Therefore, the
opportunity costs of negative environmental impact are high.

Question 9 :

Outline the steps involved in attaining sustainable development in India.

Answer :

Sustainable development refers to the achievement of economic development by careful and

judicial utilisation of the natural resources so that the present generations’ needs are fulfilled
without compromising that of the future generations’. It becomes our moral responsibility
to hand over earth in good order to the future generation. Aligned with the view of a leading
environmental economist, Herman Daly, India has taken the following steps to achieve the
aim of sustainable development:
i. Population Control Measures

India has promoted various measures to arrest population explosion. The various population
control measures include spread of awareness and knowledge of birth control measures and
literacy.

ii. Use of Environment Supportive Fuel

As the fuels such as petrol and diesel emit huge amount of carbon dioxide that leads to global
warming, so, the Indian government has promoted the use of CNG and LPG. These are clean,
eco-friendly fuels that emit lesser smoke.

iii. Use of Solar and Wind Energy

India being a moderate country is enriched with sunlight and wind power. These are two
free gifts of nature that is non-exhaustible. It solves the problem of economic growth with
due focus on sustainable development.

iv. Recycling and Ban on Plastic Bags

The industrial and household wastes are accumulated on daily basis. There is a need to
develop the habit of recycling of waste products in order to sustain the environment.
Household waste can be used as manure for organic farming. A very recent step taken by
the Indian government is banning the use of plastic bags. This is a very good step as plastic
bags do not get decomposed easily and leads to pollution while recycling.

v. Pollution Tax and Fines

Indian government has taken many steps to control pollution. Some of the measures are
regular vehicle checkups, levying pollution tax on the industries emitting smoke. These
measures are coupled with huge fines and even imprisonment for the law breakers.

vi. Use of the Input Efficient Technology

The input efficient methods have been devised that not only increases the production and
productivity but also efficiency with which the inputs are used. The efficient use of input, on
one hand, leads to lesser exploitation of the natural resources and, on the other hand,
enhances the future economic growth prospects of India.

Question 10 :

India has abundant natural resources - substantiate the statement.

Answer :
India is fortunate enough to have abundant natural resources. It comprises of rich and fertile
soil, plenty of rivers and tributaries, green forests, mineral deposits, mountains, etc. The
Indo-Gangetic plains are the most fertile, densely populated and cultivated plains in the
world. It stretches from the Arabian Sea to the Bay of Bengal. The black soil of the Deccan
Plateau is suitable for the cultivation of cotton in the country. India’s lush green forests serve
as a natural cover for the majority of the population. India holds more than 20 % of the
world’s total iron ore reserves. There are mountain ranges that facilitate the operation of the
mini hydel plants. It also has vast variety of flora of 15,000 species of plants. The country is
also endowed with numerous minerals that are found under the earth’s surface like coal,
natural gas, copper, diamonds, etc.

Question 11 :

Is environmental crisis a recent phenomenon? If so, why?

Answer :

Yes, the environmental crisis is a very recent phenomenon; the sparks of such crisis were
never visible in the past. In the early centuries before industrialisation, the population
growth was on a tight rein. The demand of the environmental resources was much lower
than its supply. Environment supported the world’s population in the past as the rate of
usage of the resources was lesser. Also, the rate of regeneration of resources exceeded the
rate with which the resources were exploited. In other words, the threat of environment crisis
was never felt in the past as the exploitation of natural resources was within the carrying
capacity of the environment. But, today, due to heavy industrialisation, urbanisation, man
has started exploiting nature to its maximum. Nuclear and industrial wastes being dumped
into the water bodies, pollution of land and air has affected the environment in three-fold
manner. Now, the rate of exploitation of natural resources is lagging behind the rate of
regeneration of the natural resources. Consequently, the mounting pressure on the carrying
capacity of the environment is paving the way for environmental crises.

Question 12 :

Give two instances of

(a) Overuse of environmental resources

(b) Misuse of environmental resources.

Answer :

(a) Overuse of environmental resources

i. Drying up of Rivers: The increasing irrigation and construction of flood storage reservoirs
are resulting in the drying up of rivers.
ii. Excessive Deforestation: The growing population and their ever growing demand are
resulting in large scale deforestation. This leads to soil erosion, making the soil infertile.

(b) Misuse of environmental resources.

i. Use of Rivers to Discharge the Waste:Water is essential for life. The misuse of water as a
resource is responsible for its pollution and contamination. The factors responsible for water
pollution are the discharge of domestic sewerage, industrial waste, and thermal power plants
into the rivers.

ii. Use of Wood for Cooking Food: Wood is a non-renewable source of energy. It is obtained
from trees. Using wood instead of eco friendly alternative fuels for cooking purposes brings
about deforestation.

Question 13 :

State any four pressing environmental concerns of India. Correction for environmental
damages involves opportunity costs. Explain.

Answer :

Air pollution, water contamination, soil erosion, deforestation and wild life extinction are
some of the most pressing environmental concerns for India. But the priority issues include
global warming, land degradation, ozone depletion and management of fresh water.

Opportunity cost is the cost that is foregone when we make a choice or a decision. If a piece
of land is to be used for wheat production then the production of say, rice, is to be sacrificed.
The loss of rice production is the opportunity cost of producing wheat. In the similar way,
the opportunity cost of correction for environmental damages refers to the huge amount of
expenditure incurred on searching for new efficient alternatives. The heavy intensive and
extensive extraction of both renewable and non-renewable resources demands expenditure
for exploring new alternative resources in order to avoid an environmental crisis. The
discovery of such resources requires heavy investment by the government. Also,
implementation and maintenance of these alternative resources involve very high cost. The
best example is the advent of CNG in order to reduce the rising problem of pollution in Delhi.
The government has incurred heavy investment to popularise CNG and to make the
consumers aware regarding its uses. Therefore, the correction for environmental damages
involves opportunity cost that is very high.

Question 14 :

Explain the supply-demand reversal of environmental resources.

Answer :
From the very inception of civilisation till the advent of industrialisation, the rate of
extraction of the natural resources was far behind the rate of their regeneration. That is, in
other words, the demand for resources falls short of the supply of the resources. The
exploitation of nature by man was within the absorptive capacity of the environment. But,
in today’s scenario with population explosion and industrial revolution, the demand for
resources for both production and distribution has risen at a much more rapid rate. However,
the rate of regeneration of these resources is relatively much lower than the rate of their
extraction. In other words, the rate of consumption (demand) of the natural resources
exceeds that of their supply. This is beyond the absorptive capacity of the environment and
has made environmental crisis more probable. This reversal in the demand and supply
relationship is referred to as the supply-demand reversal of the environmental resources.

Question 15 :

Account for the current environmental crisis.

Answer :

The population explosion and affluent consumption have placed an undue and excess burden
on the environment. The resources are increasingly exhausted day by day, but the
regeneration of resources is constant. So, when the resources are extracted at a rapid pace
than its regeneration, then the carrying capacity of the environment reduces. Then
environment fails to perform its function of sustaining life, consequently, resulting in an
environmental crisis. The current environmental crises include two major global issues,
namely, global warming and ozone depletion. Global warming is the result of rising
temperature globally due to the emission of green house gases, especially, carbon dioxide.
The rise in temperature accelerates the melting of polar ice leading to the rise of water level
in the sea. This leads to ecological imbalances. Ozone depletion is another major concern
that is caused due to the excessive use of chlorofluorocarbon (CFCs) in the air conditioners
and refrigerators. As ozone depletes, the possibility of ultra violet radiations penetrating into
earth surface increases, posing a threat to the living organisms. The culminated effect of
these two accounts for major concern of environmental crisis in the present time.

Question 16 :

Highlight any two serious adverse environmental consequences of development in India.

India’s environmental problems pose a dichotomy-they are poverty induced and, at the
same time, due to affluence in living standards. Is this true?

Answer :

The two serious issues or consequences of development in India are land degradation and
biodiversity loss. The developmental activities in India exerted tremendous pressure on the
natural resources and also affected human health and well being.
Land Degradation: The gradual but consistent loss of fertility of land is referred to as
degradation of land. This is emerging as a serious concern in the context of environmental
issues in India. The following are the factors that contribute to land degradation in India:

a. Soil Erosion: The removal of upper layer of the soil caused either by the strong winds or
floods is termed as soil erosion. This top most layer of the soil carries major nutrients like
nitrogen, phosphorous and potassium that are essential for the growth of plants. Therefore,
the loss of this layer reduces the productivity of the land.

b. Alkalinity and Salinity of Soil: The salinity and alkalinity is caused by the problem of
water logging. The water logged on the top layer of soil absorbs all the nutrients present in
the soil leading to the deterioration of fertility of land.

c. Deforestation: The growing population and their ever growing demand leads to a large
scale destruction of forest cover. The removal of forest cover affects the ecological balance
by reducing the level of oxygen in the air. This leads to increase in the pollutants that cause
various health hazards.

d. Shifting Cultivation: The practice of shifting cultivation along with the subsistence
farming carried by small and marginal farmers resulted in the replenishment of soil
nutrients and fertility.

The environmental problems points to the paradoxical situation in the country.

Deforestation in India is a rapid consequence of population explosion and widespread
poverty. The poor people in the rural areas are compelled to fell trees for earning their
livelihood. The growing demand for natural resources to carry out production activity in the
urban areas is also equally responsible for the present environmental degradation. There are
two different opinions on the effect of environmental activities. One opinion advocates for
India’s prosperity by resorting to industrial production, while, the other opinion highlights
the threat of pollution due to rapidly growing industrial sector. This can be understood as in
the wake of rapid urbanisation, the expansion of vehicular traffic generates pollution of noise
and air.

Question 17 :

What is sustainable development?

Answer :

Meeting the basic needs of all that requires distribution of resources is our moral
responsibility. It becomes a moral obligation to hand over the earth to the future generation
in good order. But, it is realised that if the resources (non renewable) are utilised fully then
these will deplete so fast that it will not meet the production capacity of the future generation.
The economic development achieved today in such manner cannot be sustained for a long
time as the production capacity of the future generations in absence of productive resources
reduces. Therefore, sustainable development is the process of economic development that
aims at meeting the needs of the present generation without comprising the needs of the
future generations. Sustainable development maximises welfare of both present and future
generations. In other words, it is that process of economic growth that is sustained over a
long period of time without causing any fall in quality of life of the future generations.

Question 18 :

Keeping in view your locality, describe any four strategies of sustainable development.

Answer :

Sustainable development means a judicious or optimum utilisation of resources in such a

manner that the pace of economic growth sustains with inter-generational equity.

The following are the four strategies of attaining sustainable development:

1. Use of Environment Friendly Fuel

The growing use of fuel such as petrol and diesel emits huge amount of carbon dioxide that
adds to the Green House impact. In order to control pollution, the use of CNG and LPG
should be promoted. These fuels are cleaner fuels, smokeless and eco-friendly.

2. Use of Renewable Resources

India is well enriched with sunlight, water and wind energy. These are the free gift of nature
that are non–exhaustible and pollution free. Thus, attempts should be made to harness solar
and wind energy by employing different technologies. It not only solves the problem of
economic growth but also the problem of sustainable economic development.

3. Recycling

The industrial and household wastes should be accumulated on daily basis. These wastes
should be distinguished as bio-degradable and non-biodegradable wastes. The bio-
degradable wastes are those wastes that can be decomposed and can be used as manure for
organic farming. The non-biodegradable wastes like plastic, etc. can be recycled and re-used.

4. Use of the Input Efficient Technology

The input efficient methods and techniques should be devised so that more production is
possible at per unit of input. This efficient utilisation of the natural resources leads to lesser
exploitation of the natural resources.

Ch- Development Experience of india, pakistan and china- A Comparative

study
Part A
QUESTION 1
Which one of the following is not true for China?
1) Sex ratio is biased and low
2) The density of population is low
3) The population is very small
4) The fertility rate is low
Answer: 3) The population is very small
QUESTION 2
What is the infant mortality rate as per thousand in China compared with per thousand in India?
1) 30,60
2) 30,35
3) 35,65
4) 24,45
Answer: 2) 30,35
QUESTION 3
The production process engaged in transforming one good to another is known as.
1) Primary Sector
2) Secondary Sector
3) Tertiary Sector
4) None
Answer: 2) Secondary Sector
QUESTION 4
The highest fertility rate is in
1) India
2) Pakistan
3) China
4) None
Answer: 2) Pakistan
QUESTION 5
What is the percentage of the workforce engaged in agriculture in China?
1) 55
2) 54
3) 60
4) 53
Answer: 2) 54 % workforce is engaged in agriculture in China
QUESTION 6
Per capita income is highest in
1) India
2) Pakistan
3) China
4) None
Answer: 1) India has the highest per capita income
QUESTION 7
Gini index is associated with
1) Income Inequality
2) Infant mortality rate
3) Health
4) Education
Answer: 1) Income Inequality
QUESTION 8
In an economy, Human Development Index measures
1) Birth rate
2) Death rate
3) Quality of life
4) Quality of education
Answer: 3) Quality of life
QUESTION 9
Full form of UNDP
1) United Nation Development Policy
2) United Nation Development Programme
3) Union Nation Development Programme
4) None of the above
Answer: 2) United Nation Development Programme
QUESTION 10
UNDP prepares quality life index for how many countries
1) 186
2) 187
3) 188
4) 185
Answer: 2) 187

Part B
Question 1:

Why are regional and economic groupings formed?

ANSWER:

With the objective of understanding various means and strategies to strengthen the economies,
different nations of the world are motivated to form regional and global economic groups like
SAARC, European Union, ASEAN, etc. The formation of such regional and economic groups
helps the member countries to know the development strategies and measures adopted by other
member countries. This enables them to analyse their strength and weakness and, thereby,
formulate policies to accelerate social progress and cultural development among its member
countries. Secondly, another important purpose behind setting up of these groups is maintenance
of peace and stability of the member countries. In addition to this, these groups provide a
common platform to raise their voice in a unified manner on common issues to safeguard their
common interests.
Question 2:

What are the various means by which countries are trying to strengthen their own domestic
economies?
ANSWER:

The following are the various means through which the nations are trying to strengthen their own
domestic economies:

1. Nations are forming various regional and economic groupings like SAARC, European
Union, G-8, G-20, ASEAN etc. in order to strengthen their economies. These groups
provide a common platform to the member countries to raise their voice in a unified
manner on common issues to safeguard their common interests.
2. Further, they are also interested in knowing the developmental process adopted by their
neighbouring nations, so as to analyse their strengths and weaknesses. Accordingly, they
formulate policies to accelerate social progress and cultural development among the
member countries.
3. Moreover, nations also resort to liberalising their economies. This minimises the
government interference in economic activities. The economy is governed by market
forces, i.e. demand and supply forces.
4. Nations also resort to the process of globalization to open up their economies to provide
wide international market to their domestic producers.
Question 3:

What similar developmental strategies have India and Pakistan followed for their respective
developmental paths?
ANSWER:

India and Pakistan both have followed a similar developmental strategy. The main similarities
between the developmental strategies can be summed up as:

i. India and Pakistan both have started their developmental programmes based on economic
planning soon after their independence in 1947.

ii. Both the countries relied on the public sector for initiating the process of growth and
development.

iii. Both of them have followed the path of mixed economic structure involving the participation
of both the state as well as the private sector.

iv. Both of them introduced economic reforms at the same time to strengthen their economies.
Question 4:

Explain the Great Leap Forward campaign of China as initiated in 1958.

ANSWER:

The Great Leap Forward (GLF) was a campaign initiated in 1958 in China. The aims of this
campaign are as follows:

1. The aim of the campaign was to initiate large scale industrialisation in the country
concentrating not only in the urban areas but also in the rural ones.
2. The people in the urban areas were motivated to set up industries in their backyards.
3. In the rural areas, Commune System was implemented. Under this system, people were
engaged in collective farming.

Question 5:

China’s rapid industrial growth can be traced back to its reforms in 1978. Do you agree?
Elucidate.
ANSWER:

Yes, it cannot be denied that China’s rapid industrial growth is an aggregate outcome of the
various economic reforms that were introduced in phases since 1978. In the initial phase, reforms
were initiated in agriculture, foreign trade and investment sectors. The system of collective
farming known as Commune System was implemented. Under this system, land was divided into
small plots that were allocated to the individual households. These households were allowed to
keep the remaining income from land after paying the taxes to the government. In the later phase,
reforms were initiated in the industrial sector. During this phase, the private firms and village
and township enterprises were allowed to produce goods and services and to compete with the
State Owned Enterprises. The reforms also included dual pricing. The dual pricing implies that
the farmers and the industrial units were required to buy and sell a fixed quantity of inputs and
output at the price fixed by the government and the remaining quantities were traded at the
market price. Gradually, with the rapid increase in the aggregate production in the later years, the
quantities traded in the market increased by many folds. The reforms also included setting up of
Special Economic Zones to attract foreign investors. Therefore, China’s rapid industrial growth
is attributable to the success of different phases of its economic reforms
Question 6:

Describe the path of developmental initiatives taken by Pakistan for its economic development.
ANSWER:

a) With the aim of economic development, Pakistan adopted the pattern of mixed economy
where both private and public sectors coexist

b) Pakistan introduced a variety of regulated policy framework for import substitution,

industrialisation during 1950s and 1960s. This implies producing goods domestically to
substitute imports, thereby, discouraging imports and simultaneously encouraging and
developing domestic industries.

c) In order to protect domestic industries producing consumer goods, policy measure was
initiated to create t tariff barriers.

d) The introduction of Green Revolution mechanised agriculture leading to the increase in the
production of food grains.

e) The mechanisation of agriculture was followed by the nationalisation of capital goods

industries in 1970s.

f) In the late 1970s and early 1980s, Pakistan shifted its policy orientation by denationalising the
thrust areas, thereby, encouraging the private sector.

g) All these above measures created an environment conducive to initiate the economic reforms
that were ultimately initiated in 1988.

Question 7:

What is the important implication of the 'one child norm' in China?

ANSWER:

The important implication of the one-child norm in China is the low population growth. This
measure also led to the fall in the sex ratio in China, i.e. the proportion of females per thousand
males. However, the country believes that in the coming decades there will be more elderly
people in proportion to the young people. This will oblige the country to provide social security
measures with fewer workers.

Question 8:

Mention the salient demographic indicators of China, Pakistan and India.

ANSWER:

The important demographic indicators of Indian, China and Pakistan are tabulated as below.

Demographic Indicators, 2000-01

Estimated Annual Growth Density

Sex Fertility
Country Population Rate of Population (per sq. Urbanisation
Ratio Rate
(in millions) (1990-2003) km)
 India 1103.6 1.7 358 933 3.0 27.8

China 1303.7 1.0 138 937 1.8 36.1

Pakistan 162.4 2.5 193 922 5.1 33.4

Source: NCERT Book Chapter- 10, Pg- 185

The important demographic indicators are as follows:

a) Total Population: China is the largest populated country in the world followed by
India. The above table depicts that China’s population in 2000-01 was approximately
1303.7 million and that of India and Pakistan was 1103.6 million and 162.4 million
respectively.
b) Annual Growth Rate of Population: Although China is the largest populated country
but a strong positive point for China is that, its annual growth rate of population is just
1% per annum while that of India and Pakistan is 1.7% and 2.5% per annum. With such a
high growth rate it would not be wrong to expect that in the forthcoming decades India
will surpass the total population of China.
c) Density of Population: In spite of the fact that China is highly populated and
geographically occupying the largest area among the three nations, its density of
population is the lowest. It is as low as 138 persons per square kilometer of area
compared to 358 and 193 persons in India and Pakistan respectively. Lower the degree of
density of population the lower is the pressure on the country’s natural resources and
higher is the probability of sustainable development.
d) Sex Ratio: This ratio counts the number of females per 1000 males. The sex ratios in all
the three countries are almost same with China having a marginally higher sex ratio of
937 females per 1000 males. This depicts the low economic and social status of women
in India and Pakistan.
e) Fertility Rate: This rate refers to the number of children a woman gives birth to during
her lifetime. China enjoys an upper hand in this case. The fertility rate of Chinese woman
is only 1.8 whereas those of India and Pakistan are 3.0 and 5.1. This implies that in India
and Pakistan a woman usually gives birth to approximately 3 and 5 children. This is the
most important concern for both India and Pakistan, as with such a high fertility rate,
population in the coming decades will surpass that of China.
f) Urbanisation: Lastly, China is comparatively more urbanised than India and Pakistan.
The rate of urbanisation in China is 36.1% while that in India and Pakistan is 27.8% and
33.4% respectively. The degree of urbanisation depicts the standard and quality of living
of people of a particular country. Also, this confirms the shift in the economic structure
 of an economy. Higher degree of urbanisationreveals higher industrialisation and
development of tertiary sector in the economy.

Thus to sum up, although China is the largest populated country but its other demographic
indicators are stronger than those of both India and Pakistan. It would not be wrong to expect a
decline in China’s population in the coming decades due to implementation of various policy
measures and also due to low annual growth rate of population.

Question 9:

Compare and contrast India and China’s sectoral contribution towards GDP in 2003. What does
it indicate?
ANSWER:

The comparison of India’s and China’s sectoral contribution towards their respective GDP can
be done with the help of the data tabulated below:

Sectors Contribution to GDP (in %) (2003)

India China
Primary (Agriculture) 23 15
Secondary (Industry) 26 53
Tertiary (Service) 51 32

1. Contribution of Primary Sector to GDP: The data above reveals that the contribution
of the primary sector to India’s GDP is 23% compared to 15% of China’s GDP. This
confirms the agrarian nature of Indian economy.
2. Contribution of Secondary Sector to GDP: The data also reveals that China has
comparatively a strong industrial base as compared to India. The contribution of
secondary sector to China’s GDP is 53% against the contribution of mere 26% to India’s
GDP. From this, we can infer that India’s industrial sector is far behind that of China.
3. Contribution of Tertiary Sector to GDP: We can also analyze that although India’s
industrial sector is not as strong as that of China yet the contribution of India’s service
sector is much stronger to its than that of China.
Thus, analysing the above data helps us to conclude that a significant portion of India’s GDP is
contributed by tertiary sector followed by its agriculture sector. On the contrary, the major
contributor to China’s GDP is the secondary sector followed by its tertiary
sector.

The process of economic growth has led to a tremendous shift in the sectoral share of output and
employment. The percentage share of the primary sector in total output and employment tends to
decrease while that of the secondary and tertiary sector tends to increase. The following facts
explain the sectoral share in output and employment of India and China.
i. Both India and China have shown a noticeable structural transformation from the primary
sector to other two sectors. The primary sector in both the countries is no longer the important
contributor to the nation’s GDP.
ii. While India is relying more on its tertiary sector China is relying more on its secondary sector
in terms of the sectoralcontribution to their GDP. The experience of China is similar to that of
the other developed countries in the world. The experience of the developed countries shows that
secondary sector followed by the tertiary sector emerge as the leading sectors of the economy.
Compared to China, India showed a direct shift from the primary sector to tertiary sector. This is
due to the fast integration of these two economies with the other market economies of the world
Question 10:

Mention the various indicators of human development.

ANSWER:

The indicators of human development are:

i. Life Expectancy.

ii. Adult Literacy Rate.

iii. Infant Mortality Rate.

iv. Percentage of the population below poverty line.

v. GDP per capita

vi. Percentage of the population having access to improved sanitation

vii. Percentage of the population having access to improved water sources.

Question 11:

Define liberty indicator. Give some examples of liberty indicators.

ANSWER:

Liberty Indicator may be defined as the measure of the extent of demographic participation in the
social and political decision making. In other words, it is an index used to measure the
participation of the people in taking decisions. Some examples of liberty indicators are the
measures of the extent of the Constitutional Protection Rights given to the citizens and the extent
of the Constitutional Protection of the independence of the Judiciary and Rule of Law.
Question 12:

Evaluate the various factors that led to the rapid growth in economic development in China.
ANSWER:

China’s rapid economic development is an aggregate outcome of the introduction of the reforms
in phases since 1978. The following are the various factors that led to the rapid growth in the
economic development in China:

1. In the initial phase, reforms were initiated in agriculture, foreign trade and investment
sectors. The system of collective farming known as Commune System was implemented.
Under this system, land was divided into small plots that were allocated to the individual
households. These households were allowed to keep the remaining income from land
after paying the taxes to the government.
2. In the later phase, reforms were initiated in the industrial sector. During this phase, the
private firms, village and township enterprises were allowed to produce goods and
services and to compete with the State Owned Enterprises.
3. The dual pricing were implemented. This implies that the farmers and the industrial units
were required to buy and sell a fixed quantity of inputs and output at the price fixed by
the government and the remaining quantities were traded at the market price. Gradually,
with rapid increase in aggregate production in the later years, the quantities traded in the
market increased by many folds.
4. The reforms also included setting up of Special Economic Zones to attract foreign
investors and to encourage its exports.

Therefore, the aggregate focus of all these economic reforms resulted in rapid industrial growth
and economic development in China.
Question 13:

Group the following features pertaining to the economies of India, China and Pakistan under
three heads

• One-child norm
• Low fertility rate
• High degree of urbanisation
• Mixed economy
• Very high fertility rate
 • Large population
• High density of population
• Growth due to manufacturing sector
• Growth due to service sector

ANSWER:

India China Pakistan

Mixed economy One-child norm Mixed economy
High density of Low fertility rate Very high fertility rate
population
Growth due to High degree of urbanisation Large population
service sector
Growth due to
manufacturing sector

Question 14:

Give reasons for the slow growth and re-emergence of poverty in Pakistan.
ANSWER:

The following are the main reasons for the slow growth and re-emergence of poverty in Pakistan:

1. Greater Dependency on the Public Sector Enterprises: The main cause behind the
slow economic growth in Pakistan is the greater dependence on Public Sector
Enterprises. Pakistan relied largely on the policy of protection by assigning central role to
the Public Sector Enterprises. The operational inefficiencies of Public Sector Enterprises
along with the misallocation of scarce resources resulted in dormant economic growth
rate.
2. Traditional Agricultural Practices: The agricultural practices in Pakistan relied heavily
on traditional methods and the vagaries of climatic conditions resulting in low
productivity. Consequently, the agricultural sector was not able to flourish to the extent it
was thought of.
3. Undeveloped Manufacturing Sector:The major portion of the foreign exchange
earnings of Pakistan was in the form of remittances from Pakistani workers in the
Middle-east and exports of highly volatile agricultural products. This can be regarded as
one of the reasons for the slow economic growth. This is because the inflow of foreign
exchange in the form of remittances substituted the need for development of
manufacturing sector to earn foreign exchange by exporting manufactured goods.
4. Increasing Dependence on Foreign Loans: There was an increasing dependence on
foreign loans for meeting t foreign exchange requirements. Pakistan faced increasing
difficulty in repaying these loans along with the mounting interest obligations in the years
 of agricultural failure. The increasing burden of huge foreign loans impeded the
economic growth prospects of Pakistan.
5. Lack of Political Stability: The lack of political stability demanded huge public
expenditure for maintaining law and order in the country. This huge public expenditure
acted as a drain on the country’s economic resources.
6. Insufficient Foreign Investment:Pakistan also failed to attract sufficient foreign
investment due to lack of political stability, low degree of international credibility and
lack of well developed infrastructure.

Question 15:

Compare and contrast the development of India, China and Pakistan with respect to some salient
human development indicators.
ANSWER:

The following are the indicators of human development:

i. Life Expectancy

ii. Adult Literacy Rate

iii. Infant Mortality Rate

iv. Percentage of the population below poverty line

v. GDP per capita

vi. Percentage of the population having access to improved sanitation

vii. Percentage of the population having access to improved water sources.

On the basis of individual indices of these parameters, a Human Development Index (HDI) was
constructed. The higher the value of HDI, higher will be the level of growth and development of
a country. The rankings are accorded to the countries as per their HDI. China ranked 81, India
128th and Pakistan 136th. High ranking of China is due to the higher GDP per capita. Moreover,
the one-child norm led to sustained rise in the GDP, consequently, China was ranked higher than
India and Pakistan in HDI.

Question 16:

Comment on the growth rate trends witnessed in China and India in the last two decades.
ANSWER:

India, with democratic institutions, performed moderately, but the majority of its people still
depend on agriculture. Infrastructure is lacking in many parts of the country. It is yet to raise the
Standard of living of more than one-fourth of its population that lives below the poverty line.

On the other hand, the lack of political freedom and its implications in China are the major
concern in the last two decades. The country used the market system without losing political
commitment and succeeded in raising the level of growth along with poverty alleviation. China
used the market mechanism to create additional social and economic opportunities. The country
has also ensured social security in the rural areas by retaining collective farming known as
Commune System. Public intervention in social infrastructure prior to the introduction of the
economic reforms has brought positive results in the human development indicators of China.