Indian Economy 1950-1990

Chapter 2
Indian Economy (1950 –1990)
I. Choose the correct answer (1Mark)

1. Which is not the goal of five year plans
(a) Growth (b) Modernization
(c) Self-efficiency (d) Self-reliance
Ans. (c) Self-efficiency.
2. First phase of Green Revolution achieved approximately

(a) Mid 1960 – Mid 1970 (b) 1950 – 1960
(c) Mid 1970 – Mid 1980 (d) 1970 – 1980
Ans. (a) Mid 1960 – Mid 1970.
II. Fill in the blanks (1Mark)

1. Chairperson of planing commission
Ans. Prime Minister.
2. Small Scale Industries use more of than large scale industries.
Ans. Labour.
3. Regional equality was the main purpose of
Ans. 1956 Industrial Policy.
III. Match the Following (1Mark) .
A B
1. Prime A. Chairperson of the Planning Commission
Minister
2. Quota B. Quantity of imported
3. Land Reforms C. Improvements in the field of agriculture to increase its
productivity.
4. HYV Seeds D. Seeds that give large proportion of Output
E. The monetary assistance given by government for
5. Subsidy production activities .
IV. Answer the following question in a word / sentence each. (1 Mark)

1. Define planing.
Ans. Planning can be defined as making major economic decisions by conscious decision of a
determinate authority, on basis of a comprehensive survey of the economy as a whole.
2. What do you mean by Land Reforms?
Ans. It primarily refers to change in the ownership of landholdings
3. What is Marketed Surplus?
Ans. Marketable surplus refers to that portion of agricultural produce which is sold in the market by
the farmers, after meeting their own consumption requirement.
4. Give the meaning of Land Ceiling.
Ans. Land ceiling refers to the fixing the maximum size of land which could be owned by an
individual
5. Mention any one Public Sector Industry.
Ans. National Thermal Power Corporation (NTPC),
Bharat Heavy Electricals Limited (BHEL), Gas Authority of India Limited (GAIL)
6. Give the meaning of Gross Domestic Product.

Ans. GDP refers to the market value of all final goods and services produced within the domestic
territory of the country during a year.
V. Answer the following question in four sentences each. (2 Marks)

1. What are the goals of five year plans?
Ans. The Goals of the Five Year Plans are
 Growth
 Modernization
 Self-reliance
 Equity.
2. Write the two advantages of Small Scale Industries.
Ans. 1) Small scale industries requires small amount of investment.
2) Small-scale industries generate more employment than the large-scale industries as they
are morelabour intensive.
3. Why the State had to play an extensive role in promoting industrial sector.
Ans. B e c a u s e At the time of independence, Indian industrialists did not have the capital to
undertake investment in industrial ventures required for the development of our economy & The
market was not big enough to encourage industrialists to undertake major projects even if they
had the capital to do so
4. Give the meaning of tariffs and quotas.

Ans.
i. Tariffs are monetary restrictions in the form of tax on imported goods; they make
imported goodsmore expensive and discourage their use.
ii. Quotas are non-monetary or quantitative restrictions on imports, specify the
quantity of goodwhich can be imported.
VI. Answer the following question in twelve sentences each. (4Marks)

1. Write a short note on land reforms in India.
Ans. Land Reforms (or institutional reforms): are primarily refers to change in
the ownership of land holdings. The need for the land reforms arises due to the
following reasons -
 At the time of independence, the land tenure system was characterised by
intermediaries such as zamindars, who merely collected rent from the actual tillers
without contributing towards improvements on the farm.
 The low productivity in the agricultural sector forced India to import food from
United States ofAmerica.
 The agricultural sector accounted for the largest share of workforce (70-75%).
 To achieve the objective of equity in agriculture.
Various Land Reform Measures
i. Abolition of Intermediaries or Zamindari system –

 The policy of ‘land to the tiller’ was adopted and steps were taken to abolish
intermediaries and tomake the tillers the owners of land.
ii. Land ceiling act -
 This means fixing the maximum size of land which could be owned by an individual.
2. Write a short note on Green Revolution.

Ans.
This refers to the large increase in production of food grains resulting from the use of high yielding
variety (HYV) seeds, especially for wheat and rice along with the use of fertiliser and pesticide in
the correct quantities as well as regular supply of water
At the time of independence, about 75% of the country’s population was dependent on
agriculture. Productivity in the agricultural sector was very low because of the use of old
technology and the absence of required infrastructure for the vast majority of farmers. The
stagnation in agriculture during the colonial rule was permanently broken by the greenrevolution.
Indian Economy experienced the success of Green Revolution in two phases:
a. In the first phase of the green revolution (mid 1960s upto mid1970s), the use of HYV
seeds was restricted to more affluent states such as Punjab, Andhra Pradesh, Tamil Nadu.
Further the use of HYVseeds primarily benefited the wheat growing regions only.
b. In the second phase of the green revolution (mid1970s to mid1980s), the HYV
technology spread to alarger number of states and benefited more variety of crops.
3. Write the economic justification of the policy of Subsidies.

Ans. Subsidy, in context of agriculture, means supply of certain inputs to the farmers at
prices lower than the market price.
The economic justification of subsidies in agriculture is, at present, a hotly debated question. It
is generally agreed that it was necessary for the government to grant subsidies to provide an
incentive for adoption of the new HYV technology by farmers in general and small farmers
in particular.
Secondly, any new technology will be looked upon as being risky by farmers. Subsidies were,
therefore,needed to encourage farmers to test the new technology.
Arguments in favour of Subsidies:
a. Some believe that the government should continue with agricultural subsidies because
farming inIndia continues to be a risky business.
b. Most farmers are very poor and they will not be able to afford the required inputs without
subsidies.
c. Eliminating subsidies will increase the inequality between rich and poor farmers and
violate the goalof equity.
Arguments against Subsidies

a. Some economists believe that once the technology is found profitable and is widely
adopted, subsidiesshould be phased out as their purpose had been served.
b. Further, subsidies are meant to benefit the farmers but a substantial amount of fertiliser subsidy
also
benefits the fertiliser industry.
c. Among farmers, the subsidy largely benefits the farmers in the more prosperous regions.
Therefore, it is argued that there is no case for continuing with fertiliser subsidies; it does not
benefitthe target group and it is a huge burden on the government’s
4. Briefly explain the goals of Five Year Plans.
Ans. The Goals of Five-Year Plans are - Growth, Modernisation, Self-reliance and Equity.
1. Growth:
 It refers to increase in the country’s capacity to produce the output of goods
and serviceswithin the country.
 A good indicator of economic growth is steady increase in the GDP (Gross
Domestic Product) (GDP refers to the market value of all final goods and services
produced within the domestic territory of the country during a year.)
 The GDP of a country is derived from the different sectors (namely the agricultural
sector, the industrial sector and the service sector) of the economy. The contribution
made by each of these sectors to the GDP makes up the structural / sectoral
composition of the economy.
2. Modernisation:
 It refers to the adoption of new technique of production to increase the production
of goods andservices by the producers.
For e.g. A farmer can increase the output on the farm by using new seed varieties
instead of using the old ones. Similarly, a factory can increase output by using a new
type of machine.
 Modernisation does not refer only to the use of new technology but also to changes in
social outlook such as the recognition that women should have the same rights as
men..
3. Self-reliance:
 It refers to promotion of economic growth and modernisation by using nation’s
own resources rather than by using resources imported from other nations.
 The first seven five-year plans gave importance to self-reliance which means avoiding
imports ofthose goods which could be produced in India itself.
 The policy of self-reliance was considered a necessity:
 in order to reduce our dependence on foreign countries, especially for food
as India hadquite recently gained freedom from foreign domination.
4. Equity:
equity is also important:
 to ensure that the benefits of economic prosperity reach the poor sections as
well instead ofbeing enjoyed only by the rich.
 Every Indian should be able to meet his or her basic needs (such as food, a
decent house,education and healthcare) and
 Inequality in the distribution of wealth should be reduced.
***

Indian Economy 1950-1990

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Chapter 2

Indian Economy (1950 –1990)

I. Choose the correct answer (1Mark)

2. First phase of Green Revolution achieved approximately

II. Fill in the blanks (1Mark)

III. Match the Following (1Mark) .

IV. Answer the following question in a word / sentence each. (1 Mark)

6. Give the meaning of Gross Domestic Product.

V. Answer the following question in four sentences each. (2 Marks)

4. Give the meaning of tariffs and quotas.

VI. Answer the following question in twelve sentences each. (4Marks)

i. Abolition of Intermediaries or Zamindari system –

2. Write a short note on Green Revolution.

3. Write the economic justification of the policy of Subsidies.

Arguments against Subsidies

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