CLASS XII – ECONOMICS
Indian Economic Development — Chapter: Rural Development
Comprehensive Practice Worksheet Board: CBSE
Time Allowed: 3 Hours Maximum Marks: As indicated per section
General Instructions:
• This worksheet is divided into Sections A to I.
• Section A has 15 Multiple Choice Questions of 1 mark each.
• Section B has 10 Fill in the Blanks of 1 mark each.
• Section C has 10 True/False questions of 1 mark each.
• Section D has 10 Very Short Answer questions of 1 mark each.
• Section E has 8 Short Answer questions of 3 marks each (answer in about 60–80 words).
• Section F has 5 Long Answer questions of 6 marks each (answer in about 100–150 words).
• Section G has 5 Assertion-Reason questions of 1 mark each.
• Section H has 5 Case-Based/Source-Based questions carrying sub-parts.
• Section I has 5 Competency-Based/Application-Based questions.
SECTION A — Multiple Choice Questions (1 × 15 = 15 Marks)
1. Rural development is a comprehensive term which primarily focuses on:
(a) Development of urban infrastructure only (b) Development of rural areas including farm and non-farm
sectors
(c) Development of the industrial sector alone (d) Development of the service sector only
2. Which of the following is an institutional source of rural credit?
(a) Moneylenders (b) Traders and commission agents
(c) Cooperative credit societies (d) Landlords
3. NABARD stands for:
(a) National Agency for Bank and Rural Development (b) National Bank for Agriculture and Rural Development
(c) National Association for Banking and Rural Development (d) National Board for Agriculture and Rural Development
4. Which of the following is a non-institutional source of rural credit?
(a) Commercial banks (b) Regional Rural Banks
(c) Moneylenders (d) Cooperative societies
5. Agricultural marketing refers to:
(a) The process of storing agricultural produce only (b) A process involving the assembling, storage, processing,
transportation and distribution of agricultural produce
(c) The process of producing agricultural goods only (d) The process of pricing industrial goods
6. Which of the following is a defect of agricultural marketing in India?
(a) Presence of a large number of intermediaries (b) Adequate warehousing facilities in every village
(c) Direct access of farmers to international markets (d) Absence of malpractices in mandis
7. Which government initiative was introduced to protect farmers from price fluctuations by announcing minimum prices in advance?
(a) Minimum Support Price (MSP) (b) Green Revolution
(c) Land Reforms (d) Cooperative Marketing
8. Agricultural diversification refers to:
(a) Cultivation of a single crop throughout the year (b) A shift from crop farming to other allied and non-farm activities
(c) Reduction in the area under cultivation (d) Exclusive dependence on food grain production
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9. Which of the following is an example of non-farm employment in rural areas?
(a) Wheat cultivation (b) Poultry farming and horticulture
(c) Rice cultivation (d) Sugarcane cultivation
10. Organic farming is a method of cultivation that:
(a) Uses chemical fertilizers and pesticides extensively (b) Relies on organic inputs like farmyard manure, green manure
and bio-pesticides
(c) Requires only genetically modified seeds (d) Is practised only in urban areas
11. One of the major limitations of organic farming in the initial years is:
(a) Higher yield than chemical farming from the very first year (b) Lower yield as compared to chemically farmed crops
(c) No requirement of labour (d) Zero cost of production
12. The "Green Revolution" led to increased dependence on which of the following, thereby raising the demand for institutional credit?
(a) Traditional farming methods (b) HYV seeds, fertilizers and pesticides
(c) Organic manure only (d) Barter system of exchange
13. Which of the following best describes the role of cooperative marketing societies?
(a) They help farmers sell their produce directly and get (b) They increase the role of middlemen
remunerative prices
(c) They discourage collective bargaining by farmers (d) They only provide credit and have no role in marketing
14. Diversification into productive non-farm employment requires promoting activities such as:
(a) Animal husbandry, food processing, tourism and handicrafts (b) Only heavy industries
(c) Only IT-based services in cities (d) Only mining activities
15. Which of the following is regarded as an advantage of organic farming?
(a) It is capital intensive and requires chemical inputs (b) It is less expensive and produces environment-friendly,
chemical-free products
(c) It degrades soil fertility over time (d) It leads to greater dependence on imported fertilizers
SECTION B — Fill in the Blanks (1 × 10 = 10 Marks)
Choose the correct word/term to fill in the blank.
1. __________ development is a key condition for the sustained growth of the Indian economy.
2. __________ was set up in 1982 as an apex institution for providing credit for the promotion of agriculture and rural development.
3. Moneylenders, traders and landlords are examples of __________ sources of rural credit.
4. __________ marketing involves activities such as assembling, grading, packaging, transportation and distribution of agricultural produce.
5. The price fixed by the government in advance to protect farmers from price fluctuations is known as __________.
6. A shift from crop farming to activities such as animal husbandry, fisheries and horticulture is called __________.
7. __________ employment refers to employment generated in activities other than crop farming, such as poultry, food processing and
handicrafts.
8. __________ farming is a whole system of farming that restores, maintains and enhances ecological balance without the use of synthetic
chemicals.
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9. The produce grown through organic methods is generally free from __________ and is considered healthier.
10. __________ credit societies were formed to provide cheap and timely credit to farmers, replacing dependence on moneylenders.
SECTION C — True or False (1 × 10 = 10 Marks)
State whether the following statements are True or False.
1. Rural development includes development of both farm and non-farm sectors in rural areas. (True / False)
2. Institutional sources of rural credit include moneylenders and landlords. (True / False)
3. NABARD is the apex institution that coordinates the activities of institutions involved in rural financing. (True / False)
4. Non-institutional sources of credit generally charge lower rates of interest than institutional sources. (True / False)
5. Presence of a large number of middlemen is one of the defects of agricultural marketing in India. (True / False)
6. Minimum Support Price is fixed to protect farmers against a sharp fall in prices of agricultural produce. (True / False)
7. Agricultural diversification refers only to diversification of crop production and does not include non-farm activities. (True / False)
8. Organic farming uses chemical fertilizers and pesticides to increase crop yield. (True / False)
9. Organic farming generates less employment as compared to chemical farming due to labour-intensive practices such as composting.
(True / False)
10. Promotion of non-farm employment can help reduce the excessive pressure of population on agriculture. (True / False)
SECTION D — Very Short Answer Questions (1 × 10 = 10 Marks)
1. Define rural development.
2. Name any two institutional sources of rural credit.
3. What is the full form of NABARD?
4. Name any two non-institutional sources of rural credit.
5. What is meant by agricultural marketing?
6. What is Minimum Support Price (MSP)?
7. What is meant by agricultural diversification?
8. Give any two examples of non-farm employment.
9. Define organic farming.
10. State one limitation of organic farming.
SECTION E — Short Answer Questions (3 × 8 = 24 Marks)
1. Distinguish between institutional and non-institutional sources of rural credit.
2. Explain the role of NABARD in providing rural credit.
3. Explain any three defects of agricultural marketing in India.
4. Explain any three measures taken by the government to improve agricultural marketing.
5. Explain the importance of agricultural diversification for sustainable development.
6. Explain the role of non-farm employment in rural development.
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7. Explain any three advantages of organic farming.
8. Explain any three problems/limitations of organic farming.
SECTION F — Long Answer Questions (6 × 5 = 30 Marks)
1. Discuss the importance of rural development for the overall development of the Indian economy.
2. Examine the sources of rural credit in India, distinguishing between institutional and non-institutional sources.
3. Analyse the major problems of agricultural marketing in India and suggest measures to overcome them.
4. "Diversification of the rural economy is necessary for sustainable livelihoods." Justify this statement with reference to agricultural
diversification and non-farm employment.
5. Evaluate the advantages and limitations of organic farming as a means of sustainable agriculture in India.
SECTION G — Assertion-Reason Questions (1 × 5 = 5 Marks)
Directions: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark your answer as per the codes provided
below:
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
1. Assertion (A): Institutional sources of rural credit are preferred over non-institutional sources.
Reason (R): Institutional sources generally provide credit at lower and regulated rates of interest as compared to moneylenders.
Choose the correct code (a/b/c/d).
2. Assertion (A): Agricultural marketing in India is free from defects and functions efficiently.
Reason (R): The presence of a large number of middlemen and inadequate storage facilities leads farmers to receive a lower share of the price
paid by final consumers.
Choose the correct code (a/b/c/d).
3. Assertion (A): Diversification of the rural economy into non-farm activities is essential.
Reason (R): Dependence solely on agriculture leads to disguised unemployment and low income among the rural population.
Choose the correct code (a/b/c/d).
4. Assertion (A): Organic farming leads to higher yield than chemical farming in the very first year of cultivation.
Reason (R): Organic farming requires a period of time for the soil to regain fertility after the shift from chemical-intensive farming.
Choose the correct code (a/b/c/d).
5. Assertion (A): Minimum Support Price safeguards the interests of farmers.
Reason (R): MSP ensures that farmers receive a pre-announced minimum price for their produce even if market prices fall.
Choose the correct code (a/b/c/d).
SECTION H — Case-Based / Source-Based Questions
Case 1: Ramesh, a farmer from a small village, has traditionally borrowed money from the local moneylender at a high rate of interest to
purchase seeds and fertilizers before the sowing season. Recently, a cooperative credit society was set up in his village, offering loans at a
much lower rate of interest along with timely disbursement.
(i) Identify the non-institutional source of credit mentioned in the passage.
(ii) Name the institutional source of credit that has now become available to Ramesh.
(iii) Explain one advantage of institutional credit over non-institutional credit.
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Case 2: Farmers in a district often sell their produce to local traders immediately after harvest at low prices, as they lack adequate storage
facilities and are in urgent need of cash to repay old debts. As a result, the traders, who later sell the produce in urban markets, earn a much
higher margin than the farmers themselves.
(i) Identify one defect of agricultural marketing highlighted in the passage.
(ii) Why are farmers compelled to sell their produce immediately after harvest?
(iii) Suggest one measure that could help farmers get a better price for their produce.
Case 3: A group of farmers in a village decided to shift a part of their land from paddy cultivation to poultry farming, dairy, and horticulture,
along with taking up food processing activities as a secondary occupation. This allowed them to generate additional income and reduced their
dependence on a single crop.
(i) What term is used to describe the shift undertaken by the farmers?
(ii) Identify any two non-farm activities mentioned in the passage.
(iii) Explain how such a shift benefits farmers and the rural economy.
Case 4: A farmer decided to switch from chemical farming to organic farming on his land. In the first two years, his yield was lower than
before, but the cost of cultivation gradually declined as he stopped purchasing chemical fertilizers and pesticides. By the third year, both the
soil quality and the market price for his chemical-free produce had improved.
(i) Identify the farming method adopted by the farmer.
(ii) Why did the farmer's yield decline in the initial years?
(iii) Explain any two advantages the farmer experienced by the third year.
Case 5: A rural development programme in a state focused on setting up regional rural banks, promoting self-help groups for micro-credit,
encouraging cooperative marketing societies, and providing training for non-farm skills such as handicrafts and food processing among the
rural population.
(i) Identify any two institutional measures mentioned in the passage related to rural credit.
(ii) What role do cooperative marketing societies play in agricultural marketing?
(iii) Analyse how the promotion of non-farm skills contributes to rural development.
SECTION I — Competency-Based / Application-Based Questions (5 Questions)
1. A farmer wants to borrow money urgently to purchase seeds before the sowing season begins, but the nearest bank branch is far from his
village and requires several days for loan approval, while a local moneylender is willing to lend the amount instantly at a high rate of interest.
Evaluate the trade-off faced by the farmer and suggest what long-term measures could resolve this problem.
2. A cooperative in a district purchases produce directly from farmers at a fair price and sells it in urban markets, bypassing local traders.
Analyse how this arrangement is likely to affect the income of farmers and the extent of exploitation by middlemen.
3. A village that earlier depended entirely on paddy cultivation is severely affected by a drought, leading to a sharp fall in household incomes.
Using the concept of agricultural diversification, suggest and justify measures the village could adopt to reduce this vulnerability in the future.
4. A group of young people in a rural area is deciding between taking up traditional crop farming or setting up a small food processing unit
using locally grown produce. Examine the factors they should consider, using the concept of non-farm employment, before making this
decision.
5. Two farmers cultivate similar-sized plots of land: one uses chemical fertilizers and pesticides, while the other has adopted organic farming
methods. Compare the likely costs, yields and long-term sustainability of the two approaches, and evaluate which approach is more suitable
for a resource-poor farmer.
— End of Worksheet —
Chapter: Rural Development | Indian Economic Development | CBSE Class XII Economics
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