ECONOMICS NCERT

CLASS 9
 INDEX

TOPICS PAGES

1) THE STORY OF VILLAGE 02-04

PALAMPUR
2) PEOPLE AS A RESOURCE 05-07

3) POVERTY AS A CHALLENGE 08-10

4) FOOD SECURITY IN INDIA 11-13

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 CHAPTER 1
THE STORY OF VILLAGE PALAMPUR
Introduction
Palampur is fairly connected with a well-developed system of roads, transport, electricity,
irrigation, schools and health centres. The story of Palampur takes us through the different
types of production activities in the village. In India, farming is the main production activity
across villages.

Organisation of
Production

Land and other Physical Capital such

natural resources as tools, machines,
Labour
such as water, buildings, raw
forests, minerals materials and money

A variety of raw materials are required during the process of production, such as the yarn used by
the weaver and clay used by the potter. Money is also essential during production and both of them
in hand are called working capital. The fourth requirement is knowledge and enterprise to be able
to put together land, labour and physical capital and produce an output. The factors of production
are combining of land, labour, physical capital and human capital.

Farming in Palampur

1. Land is fixed
For Palampur, village farming is their main production and the wellbeing of these people is
related to production on the farms. But, there is a basic constraint in raising farm production. 2
Land area under cultivation is practically fixed.
2. Practice of growing more than one crop from the same land
In the rainy season, Kharif farmers grow jowar and bajra followed by the cultivation of potato between
October and December. In winter, farmers grow wheat and a part of the land is devoted to sugarcane
harvested once every year. Due to well-developed irrigation, farmers can grow three different crops.
Electricity transformed the system of irrigation. Multiple cropping means to grow more than one crop on
a piece of land. Another way for higher yield is modern farming. In the later 1960s, the Green Revolution
introduced the Indian farmer to cultivation of wheat and rice using high yielding varieties (HYVs) of seeds.

3. Sustainability of Land
Modern farming methods have overused the natural resource base. Due to increased use of chemical
fertilisers, the soil lost its fertility. Natural resources like soil fertility and groundwater are destroyed and
it is very difficult to restore them.

4. Distributed of land between the farmers of Palampur

Land is important for any kind of farming. In Palampur, about one-third of the 450 families are landless. Dalits
have no land for cultivation. 240 families cultivate small plots of land less than 2 hectares in size. In Palampur,
there are 60 families of medium and large farmers who cultivate more than 2 hectares of land.

5. Who will provide the labour

Small farmers cultivate their own lands. Medium and large farmers hire labourers to cultivate their fields
who come either from landless families or families cultivating small plots of land. Farm labourers will
not have any right over the crops grown on the land. They will be paid on wages for their work which can
be cash or in-kind, e.g. crop. Sometimes labourers get meals also. Wages vary from region to region, crop
to crop, one farm activity to another. Farm labourers are employed on a daily basis, or for one particular
farm activity like harvesting, or for the whole year.

6. Capital needed in farming:

Modern farming methods require a great deal of capital.
o Most small farmers borrow money from large farmers or the village moneylenders or the traders
who supply various inputs for cultivation. The rate of interest on such loans is very high.
o The medium and large farmers have their own savings from farming. They are thus able to
arrange for the capital needed.

7. Sale of Surplus Farm Products

The wheat the farmers produce from the land is retained in part for their family consumption and they sell the
surplus wheat. Only the medium and large farmers supply wheat to the market.

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 Non-Farm Activities in Palampur
25 per cent of the people working in Palampur are engaged in activities other than
agriculture.
1. Dairy
Other than agriculture, some people
are engaged in dairy and the milk is
sold in the nearby village.
3.The shopkeepers of Palampur
Traders of Palampur buy various
goods from wholesale markets in the
cities and sell them in the village.
2. An example of small-scale
manufacturing in Palampur
People are engaged in small-scale
manufacturing which is carried out
at home or in the fields. This
manufacturing involves very simple
production methods.
4.Transport: a fast developing sector
Transport services include rickshaws,
tonga, jeep, tractor, truck drivers,
traditional bullock cart and bogey.
They transport people and goods
from one place to another and in
return get paid for it.
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 CHAPTER 2
PEOPLE AS RESOURCE

INTRODUCTION:
People as Resource is a way of referring to a country’s working people in terms of their existing
productive skills and abilities. Like other resources, the population is also considered as a
human resource. When the existing ‘human resource’ is further developed by becoming more
educated and healthy , it is called human capital formation. Investment in human capital
(through education, training, medical care) yields a return just like investment in physical
capital.
Human capital is superior to other resources like land and physical capital. Total productivity
adds to the growth of the economy. Investment in human resource (via education and medical
care) can give high rates of return in future. Countries, like Japan, have invested in human
resources.

Economic
Activities

Primary Secondary Tertiary

Primary activities: are directly dependent on environment as these refer to utilization of earth's
resources such as land, water, vegetation, building materials and minerals. It includes, hunting and
gathering, pastoral activities, fishing, forestry, agriculture, mining and quarrying.

Secondary activities: is an activity performed by a unit in addition to its principal activity.

The result of a secondary activity is called secondary production.

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Tertiary activity: consists of all service occupations. Transport, communication, trade, health,
education and administration are important examples of tertiary activities. These tertiary activities help
in the development of the primary and secondary sectors. So these are also known as support services.

Quality of Population:
The quality of population depends upon the literacy rate, health of a person indicated by life expectancy
and skill formation acquired by the people of the country. It ultimately decides the growth rate of the
country and a literate and healthy population were an asset.

Economic
activities have
two parts

Market Non-market
activities activities

Market activities involve remuneration to anyone who performs i.e., activity performed for pay
or profit. These include production of goods or services, including government service.

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 Non-market activities are the production for self-consumption. These can be consumption
and processing of primary product and own-account production of fixed assets.

Education:
Education contributes to the growth of society and enhances the national income, cultural richness and
increases the efficiency of governance. Literacy is needed for citizens to perform their duties and enjoy
their rights properly. Sarva Siksha Abhiyan, which was introduced in the year 2010 provides elementary
education to all children in the age group of 6–14 years. To encourage attendance and retention of
children and improve their nutritional status, a mid-day meal scheme was introduced. The 12th plan
focused on increasing access, quality, adoption of state-specific curriculum modification,
vocationalisation and networking on the use of information technology, distance education,
convergence of formal, non-formal, distance and IT education institutions.

Health:
Improvement in the health status of the population has been the priority of the country. The National
Policy, too, aimed at improving the accessibility of healthcare, family welfare and nutritional service,
especially for the underprivileged segment of the population. India over the last five decades has
developed its manpower required in the primary, secondary and tertiary sector.

Unemployment:
In India, we have unemployment in rural and urban areas, though the nature of unemployment differs in
rural and urban areas. In rural areas, unemployment was seasonal and disguised. In urban areas,
unemployment was educated unemployment. Seasonal unemployment occurred when people were not
able to find jobs during a few particular months of the year. In disguised unemployment people appeared
to be employed. Educated unemployment became a common phenomenon in urban areas.
Unemployment leads to wastage of manpower resource, tends to increase economic overload, has a
detrimental impact on the overall growth of an economy. In India, statistically, the unemployment rate
is low.
In the primary sector, employment structure is characterised by self-employment. Agriculture is the
most labour absorbing sector of the economy. But, in recent years, there has been a decline in the
dependence of population on agriculture. Some of the surplus-labour in agriculture has moved to either
the secondary or the tertiary sector. In the secondary sector, small scale manufacturing was the most
labour absorbing. In case of the tertiary sector, various new services are now appearing like
Biotechnology, Information Technology and so on.

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 CHAPTER 3
POVERTY AS A CHALLENGE
Poverty means hunger and lack of shelter, lack of clean water and sanitation facilities,
lack of a regular job at a minimum decent level. Poverty is considered as one of the
biggest challenges of independent India. India would be truly independent only when
the poorest of its people become free of human suffering.

Poverty as seen by social scientists:

Social scientists look at poverty through a variety of indicators. Usually, the indicators
are used to relate to the levels of income and consumption. But, now poverty is looked
through other social indicators like illiteracy level, lack of general resistance due to
malnutrition, lack of access to healthcare, lack of job opportunities, lack of access to
safe drinking water, sanitation, etc.

Poverty Line:
The poverty line is a method to measure poverty based on income or consumption levels. Poverty line
varies according to time and place. In India, the poverty line is determined through a minimum level of
food requirement, clothing, footwear, fuel and light, educational and medical requirement, etc.. These
physical quantities are multiplied by their prices in rupees. In India poverty is calculated on the basis of the
desired calorie requirement. The accepted average calorie requirement in India is 2400 calories per person
per day in rural areas and 2100 calories per person per day in urban areas. On the basis of these
calculations, for the year 2011–12, the poverty line for a person was fixed at Rs 816 per month for rural
areas and Rs 1000 for urban areas. The Poverty Line is estimated periodically (normally every five
years) by conducting sample surveys carried out by the National Sample Survey Organisation (NSSO).

Vulnerable Groups:
Social groups, vulnerable to poverty are Scheduled Caste and Scheduled Tribe. Similarly, among the
economic groups, the most vulnerable groups are the rural agricultural labour households and urban casual
labour households. According to a recent study, except scheduled tribe, all the other three groups (i.e.
scheduled castes, rural agricultural labourers and the urban casual labour households) have seen a decline
in poverty in the 1990s.

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Inter-State Disparities:
In India, the proportion of poor people is not the same in every state. Bihar and Odisha continued to
be the two poorest states with poverty ratios of 33.7 and 32.6 percent, respectively. Urban poverty is
high in Odisha, Madhya Pradesh, Bihar and Uttar Pradesh. Kerala, Maharashtra, Andhra Pradesh,
Tamil Nadu, Gujarat and West Bengal saw a decline in poverty. Punjab and Haryana have traditionally
succeeded in reducing poverty with the help of high agricultural growth rates. Kerala has focused
more on human resource development. In West Bengal, land reform measures have helped in
reducing poverty. In Andhra Pradesh and Tamil Nadu, public distribution of food grains is responsible
for the improvement.

Global Poverty Scenario:

In China and Southeast Asian countries, poverty declined substantially as a result of rapid economic
growth and massive investments in human resource development. In Sub-Saharan Africa, poverty
declined from 51 per cent in 2005 to 41 per cent in 2015. In Latin America, the ratio of poverty has
declined from 10 per cent in 2005 to 4 per cent in 2015.

Causes of Poverty in India:

1. Under British control, India had a low level of economic development. New policies of the colonial
government ruined traditional handicrafts and discouraged development of industries. like textiles. Low
rate of growth and an increase in population combined to make the growth rate of per capita income
very low. With the spread of irrigation and the Green revolution, many job opportunities were created in
the agriculture sector. However, these were not enough to absorb all the job seekers.
2. Another feature of high poverty rates has been the huge income inequalities. One of the major
reasons for this is the unequal distribution of land and other resources. In India, lack of land resources
has been one of the major causes of poverty in India, but proper implementation of policy could have
improved the lives of millions of rural poor.
3. Small farmers needed money to buy agricultural inputs like seeds, fertilizer, pesticides, etc. So, they
used to borrow money and were unable to repay the loan because of poverty.

Anti-Poverty Measures

The current anti-poverty scheme is divided into two parts.

1 Promotion of economic growth
2 Targeted anti-poverty programmes
Since the eighties, India’s economic growth has been one of the fastest in the world. There is a strong
link between economic growth and poverty reduction. Some of the schemes which are formulated to
affect poverty directly or indirectly are: 9
1. Mahatma Gandhi National Rural Employment Guarantee Act, 2005 – It aimed to provide 100
days of wage employment to every household to ensure livelihood security in rural areas. It also aimed at
sustainable development to address the cause of drought, deforestation and soil erosion. One-third of the
proposed jobs have been reserved for women.
2. In 1993, Prime Minister Rozgar Yojana (PMRY) was started. The main aim of the programme is
to create self-employment opportunities for educated unemployed youth in rural areas and small towns.
3. In 1995, Rural Employment Generation Programme (REGP) was launched. The aim of the
programme is to create self-employment opportunities in rural areas and small towns.
4. In 1999, Swarnajayanti Gram Swarozgar Yojana (SGSY) was launched. The programme aims
at bringing the assisted poor families above the poverty line by organising them into self-help groups,
through a mix of bank credit and government subsidy.
5. In 2000, the Pradhan Mantri Gramodaya Yojana (PMGY) was launched. Under this programme,
additional central assistance is given to states for basic services such as primary health, primary
education, rural shelter, rural drinking water and rural electrification.

The Challenges Ahead In Reduction of Poverty

In India, Poverty has certainly declined in India, but it still remains India’s most
compelling challenge. Poverty reduction is expected to make better progress in the
next ten to fifteen years. This can be achieved by higher economic growth, increasing
stress on universal free elementary education, declining population growth, increasing
empowerment of the women and the economically weaker sections of society.

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 CHAPTER 4
FOOD SECURITY IN INDIA

Food security:
Food security means availability, accessibility and affordability of food to all people at
all times. Food security depends on the Public Distribution System (PDS) and
government vigilance and action at times, when this security is threatened.
Food security has the following dimensions:
❖ Availability of food means food production within the country, food imports and
the previous year stock stored in government granaries.
❖ Accessibility means food is within reach of every person.
❖ affordability implies that an individual has enough money to buy sufficient, safe
and nutritious food to meet one’s dietary needs.
❖ Food security is ensured in a country only if
❖ Enough food is available for all the persons
❖ All persons have the capacity to buy food of acceptable quality
❖ There is no barrier on access to food.

Need for Food Security:

During natural calamity such as drought, production of food grains get decreased, creating a shortage
of food in the affected areas. The prices get increased due to shortage of food. People cannot afford to
buy food and if such a calamity happens in a very wide spread area or is stretched over a longer time
period, it might cause a situation of starvation. Massive starvation might take a turn into a famine. A
Famine is characterised by widespread deaths due to starvation and epidemics caused by forced use of
contaminated water or decaying food and loss of body resistance due to weakening from starvation.

Food Insecure

In India, a large section of people suffers from food and nutrition insecurity. People having little or no
land, traditional artisans, providers of traditional services, petty self-employed workers and destitute
including beggars are the worst affected groups. In the urban areas, the food-insecure families are those
who are generally employed in ill-paid occupations and the casual labour market. These workers are
largely engaged in seasonal activities and are paid very low wages.

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The social composition along with the inability to buy food also plays a role in food insecurity. People of
SC, ST and OBC communities who have either poor land-base or very low land productivity are prone to
food insecurity. People affected by natural disasters, who migrate to other areas in search of work, are
among the most food-insecure people. A large proportion of pregnant and nursing mothers and children
under the age of 5 years constitute an important segment of the food insecure population.
Another aspect of food insecurity is hunger, which is not just an expression of poverty, it brings about
poverty. Hunger has chronic and seasonal dimensions. Chronic hunger is a consequence of diets
persistently inadequate in terms of quantity and/or quality. Seasonal hunger is related to cycles of food
growing and harvesting.
Since Independence, India has been aiming at self-sufficiency in food grains. After Independence, Indian
policymakers adopted all measures to achieve self-sufficiency in food grains. In the field of agriculture,
India adopted a new strategy, which resulted in the ‘Green Revolution’.

Food Security in India

Since the Green Revolution, the country has avoided famine even during adverse weather conditions.
India has become self-sufficient in food grains during the last 30 years because of a variety of crops
grown all over the country. The availability of food grains has been ensured with a carefully designed
food security system by the government. This system has two components:
(a) buffer stock
(b) public distribution system.

Buffer stock:

Buffer Stock is the stock of food grains, namely wheat and rice, procured by the government through the
Food Corporation of India (FCI). The stock of wheat and rice are purchased by the FCI from the farmers
where there is surplus production. The farmers are paid a pre announced price for their crops, called
Minimum Support Price (MSP). Every year, the MSP is declared by the government before the sowing
season to provide incentives to farmers for raising the production of these crops. Buffer Stock is created
to distribute food grains in the deficit areas and among the poorer section of the society at a price lower
than the market price also known as Issue Price.

Public Distribution System

FCI distributes the food procured from the farmer through government-regulated ration shops. It is called
the Public Distribution System (PDS). Ration shops also, known as Fair Price Shops, keep stock of food
grains, sugar, and kerosene for cooking. Rationing in India was introduced during the 1940s against the
backdrop of the Bengal famine. In the mid-1970s, three important food intervention programmes were
introduced:

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 1. Public Distribution System (PDS) for food grains
2. Integrated Child Development Services (ICDS) a
3. Food-for-Work (FFW).

At present, there are several Poverty Alleviation Programmes (PAPs), mostly in rural areas, which have
an explicit food component also. Employment programmes greatly contribute to food security by
increasing the income of the poor.

Current Status of Public the Distribution System

Public Distribution System (PDS) is the most important step taken by the Government of India towards
ensuring food security. In 1992, Revamped Public Distribution System (RPDS) was introduced in the
country. From June 1997, Targeted Public Distribution System (TPDS) was introduced to adopt the
principle of targeting the ‘poor in all areas’. In 2000, two special schemes were launched Antyodaya Anna
Yojana (AAY) and Annapurna Scheme (APS).
Over the year, the PDS proved to be the most effective instrument of government policy in stabilising prices
and making food available to consumers at affordable prices. However, the Public Distribution System has
faced severe criticism on several grounds. High level of buffer stocks of food grains is very undesirable
and wasteful. In states such as Punjab, Haryana, Western Uttar Pradesh, Andhra Pradesh mainly two
crops— wheat and rice— are grown. The intensive utilisation of water in the cultivation of rice has also led
to environmental degradation and fall in the water level, threatening the sustainability of the agricultural
development in these states.
PDS dealers started malpractice like diverting the grains to open market to get better margin, selling poor
quality grains at ration shops, irregular opening of the shops, etc. In recent years, there is another factor
that has led to the decline of the PDS. The three types of cards and the range of prices that you see today
did not exist. Now, with TPDS of three different prices, any family above the poverty line gets very little
discount at the ration shop. The price for APL families is almost as high as open market price, so there is
little incentive for them to buy these items from the ration shop.

Role of cooperatives in food security

In India, the cooperatives are also playing an important role in food security especially in the southern and
western parts of the country. The cooperative societies set up shops to sell low priced goods to poor
people. Some of the examples of cooperative societies are Mother Dairy in Delhi, Amul from Gujarat,
Academy of Development Science (ADS) in Maharashtra.

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