1. Name the countries with which Belgium shares its boundaries.

Ans. Belgium shares its boundaries with France, Netherlands, Germany and Luxembourg.

2. Where does the majority of population of Belgium live?

Ans. The majority of population of Belgium lives in the Flemish region.

3. Which two languages are generally spoken in Belgium?

Ans. French and Dutch are the two languages spoken in Belgium.

4. Which language is spoken by the majority of population in Brussels, the capital city of Belgium?

Ans. French language

5. How have Belgium and Sri Lanka dealt with the question of power sharing differently?

Ans. In Belgium, existence of regional differences and cultural diversities were recognised by the leaders. The
Belgian constitution was amended four times to accommodate a proper arrangement of power sharing. Equal
representation was given to the Dutch- and French-speaking communities in the central government. Powers of
the central government were shared with state government. Community government was introduced to take
decisions on culture, education and language-related issues.

On the other hand, Sri Lanka adopted majoritarian measures to establish Sinhala dominance. Sinhala was
declared official language disregarding Tamil. Sinhala’s were preferred for university positions and government
jobs. Buddhism was made the state religion. Sri Lankan Tamils were denied equal political rights, discriminated
against in the matter of jobs.

This led to strained relations between the Sinhala and Tamil community resulting in the civil war.

6. What do you mean by power sharing?

Ans. Power sharing means sharing of responsibility and powers among different organs and levels of government.

It is a strategy for resolving disputes over exercising of power. It ensures the stability of the political order.

It is a powerful approach to unite the diversities by making them party to the decision making process.

7. Name the government having two or more levels of government.

Ans. Federal government has two or more levels of government.

8. Define 'jurisdiction'?

Ans. It is an area of functioning over which someone has legal authority to perform.

9. What are the two main objectives of a federal system?

Ans. To safeguard and promote unity of the country

To accommodate regional diversity

10. What does the 'coming together' involve?

Ans. The 'coming together' involves independent states come together on their own to form bigger unit where
the constituent states have equal powers.

11. What was the basic idea behind decentralisation?

Ans. Problems and issues can be best settled at the local level as people know better about their problems and
can manage them at their initial levels.

12. For whom, seats are reserved in the local government bodies?

Ans. Seats are reserved for the Scheduled Castes, Scheduled Tribes and Other Backward Classes. One-third of all
are positions are reserved for women.

13. What is a Gram Panchayat?

Ans. It is a council consisting of several ward members, often called panch, and a president or sarpanch. It is the
decision-making body for the entire village.

14. How are the members of a Panchayat elected?

Ans. They are directly elected by all the adult population living in that ward or village.

15. What is Panchayat Samiti?

Ans. They are directly elected by all the adult population living in that ward or village.

16. What constitutes the Zila Parishad?

Ans. All panchayat samities and mandals in a district together constitute the zila parishad.

17. Shift from ----------------- areas to urban areas is known as occupational mobility. Ans. rural

18. ----------------------------- needs to be expressed in politics. Ans. Gender Division

19. At present, caste continues to be closely linked to ---------------------------- Ans. economic status

20. Communal politics is based on the idea that religion is the principal basis of social community. (True/False)
Ans. True

21. People within the same caste or community have different interests depending on their economic condition.
(True/False) Ans. True

22. Communalism signifies an ideology which stands for regional harmony and economic equality.(True/False)
Ans. False

23. What is gender division? Ans. Division of work between the men and the women.

24. What do you mean by 'Feminist?

Ans. A man or woman who believes in equal rights and opportunities for men and women.

25. Which two factors helped improve women's role in public life?

Ans. Political expression of gender division and political mobilisation

26. Name some countries where participation of women in public life is very high.

Ans. Sweden, Norway and Finland.

27. What does the term patriarchy refer to?

Ans. A system that values men more and gives them power over women.

28. What is the literacy rate of men and women in India?

Ans. Literacy rate of women: 54% Literacy rate of men: 76%

29. How did women achieve gender equality? Or

What are Feminist Movements? What were their major demands?

Ans. Women all over the world tried to achieve gender equality in the following ways:

(a) Women in different parts of the world organized themselves into movements and agitated forequal treatment
and equal rights.

(b) Their main demands were the extension of voting rights to women and equal status in private and public life.

(c) The radical movement also demanded Enhancement of the political and legal status of women through
political empowerment.

30. In what ways women's role has improved in public life?

Ans. Women's role has improved in public life in the following ways:

(a) Political expression of gender division and political mobilisation on the gender issue helped women to improve
their role in public life. Now, women are working as scientists, doctors, engineers, lawyers, managers and
teachers at college and university levels.

(b) The proportion of women in highly paid and valued jobs has been increasing.

(c) They are playing an important part in decision making in public spheres.

31. Communist Party of India is the oldest political party. (True/False) Ans . False

32. Opposition parties are known as political minority.(True/False) Ans. True

33. Trinamool congress is a regional party of Odisha. (True/False) Ans . False

34. What is one of the most visible institutions in a democracy? Ans. Political parties

35. What is democracy equal to for most common people?

Ans. For most common people democracy is equal to political parties.

36. To what have the political parties been identified with?

Ans. In the recent decades, political parties have been identified with social and political divisions.

37. Explain the meaning of 'Political Party".

Ans. A political party is a group of people who come together to contest elections and hold power in the
government. For e.g., Indian National Congress, Bharatiya Janata Party.
38. Define Partisan'.

Ans. A person strongly committed to a party, group or faction is called partisan.

39. Name the three components of political parties.

Ans. The leaders, the active members and the followers.

40. Mention the difference between the party system of USA and India.

Ans. In USA, members and supporters of a party choose its candidates where as in India, top party leaders choose
candidates for contesting elections.

41. What provides policy direction to be formulated by the government?

Ans. A large number of similar opinions grouped together.

42. In what way do political parties play the role of an opposition?

Ans. By voicing different views and criticising the government for its failures or wrong policies.

43. Why are some political parties called national parties?

Ans. Because all their units in the country follow the same policies and programmes and strategies that are
decided at the national level.

44. Which organisation does recognise 'Political Parties' in India? Ans. Election Commission

45. Define defection.

Ans. It means leaving a political party to join another for some personal gains.

46. Define an 'affidavit.

Ans. It is a signed document submitted to offices, where a person makes a sworn statement regarding his/her
personal information.

47. Explain three components of a political party. Ans. The following are the three elements of a political party.

(a) The leaders: The leaders contest elections and, if they win, perform the administrative jobs.

(b) The active members: The active members attend, party meetings and are close to the party leaders. They can
be called the assistants of the leaders.

(c) The followers: The followers are the dedicated workers of the party. They work under the able guidance of the
active members.

48. What is the role of 'Opposition' in democracy?

Ans. The various roles of the opposition parties in a democracy are listed as follows:

(a) It acts like a watchdog of democracy. It keeps a check on the role of the government and restricts them from
misusing the power.

(b) It provides to the people alternative policies and criticises government for its failures or wrong policies.
(c) The opposition is always a viable alternative to the ruling government.

49. Differentiate between national and regional parties.

Ans. The following are the differences between the national parties and regional parties.

National Parties Regional Parties

(a) National parties have influence all over the (a) The influence of regional parties is limited to a
country. particular region or state.

(b) National parties deal with national problems. (b) Regional parties are concerned with the
problems and demands of a particular region only.

(c) The national parties give priority to the national (c) The activities of regional parties are restricted
problems over the regional problems. to the region or the state in which they function.
They focus more on local problems.

(d) In order to become a national party, a party has (d) In order to become a regional party, a party has
to secure at least six per cent of total votes in Lok to secure at least six per cent of total votes in the
Sabha or Assembly elections in four states and win legislative election and win at least two seats.
at least four seats in the Lok Sabha.
(e) BJP, Congress and BSP are the examples of (e) Janta Dal, Assam United Democratic Front and
national parties. Manipur People's Party are the examples of
regional parties.

In the given questions (Q.8 and Q.9), there are two statements marked as Assertion (A) and Reason (R). Read the
statements and choose the correct option from the following:

(a) A is correct but R is wrong.

(b) A is wrong but R is correct.

(c) Both A and R are true and R is the correct explanation of A.

(d) Both A and R are true but R is not the correct explanation of A.

50. Assertion (A): For development, people look at a mix of goals.

Reason (R): The developmental goals that people have are not only about better income but also about other
important things in life. Ans . (c )

51. Assertion (A): For comparison between countries, total income is always and the only useful measure.

Reason (R): Since, countries have different population, comparing total income will not tell us what an average
person is likely to earn. Ans. (b)

52.---------------------- ensures availability of essential commodities like wheat, rice, sugar, edible oils and kerosene,
etc. to the consumers through a network of outlets or fair price shops. Ans. Public Distribution System (PDS)

53. Economic development is a wider term as compared to human development. (True/False)

Ans. False, as economic development is a narrower term.

54. According to recent World Development Report, countries which had per capita income of US dollar 12236
per annum are rich countries. (True/False) Ans. True

55. Kerala has low infant mortality rate. (True/False) Ans. True

56. A decent standard of living is a variable of Human Development Index. (True/False) Ans. True

57. What do people need to get more income?

Ans. People need regular work, better wages and decent price for crops to get more income.

58. Define infant mortality rate.

Ans. The number of children that die before the age of one year as a proportion of 1000 live children born in that
particular year is known as infant mortality rate.

59. Why does Kerala have low infant mortality rate?

Ans. Kerala has low infant mortality rate because it has adequate provisions of basic health and educational
facilities.

60. What is net attendance ratio?

Ans. Net attendance ratio is the total number of children of age group 14 and 15 years attending school as a
percentage of total number of children in the same age group.

61. What does HDI stand for?

Ans. HDI stands for Human Development Index. It is a tool developed by the United Nations to measure a
country's overall achievement in its social and economic dimensions.

62. What is Life Expectancy at Birth?

Ans. Life Expectancy at Birth is the average expected length of life of a person at the time of birth.

63. Name the two neighbour countries of India which have low per capita income than India, yet they are better
than India in life expectancy according to Human Development Report 2018.

Ans. Nepal and Bangladesh.

64. Development for one may be the destruction for other. Do you agree with the statement? Justify your
answer.

Ans. I certainly agree with the statement that development for one may be the destruction for other. People have
different developmental goals. They seek what is most important for them and fulfill their aspirations and desires.
For example, the establishment of a dam leads to infrastructural development, generation of electricity, etc., but
at the same time, it may lead to the large-scale displacement of people, loss of livelihood, shelter, etc. of the
people living near the proposed dam site. Hence, construction of dam may be development for some, but may be
destruction for others.

65. Mention any three characteristics of development.

Ans. The following are the three major characteristics of development.

(a) Different people can have different developmental goals.

(b) What may be development for one may not be development for the other. It may be destructive for the other.

(c) People tend to look at a mix of goals for their development.

66. Assertion (A): Intermediate goods are used up in producing final goods and services.

Reason (R): The value of final goods already includes the value of all the intermediate goods. Ans. (d

67. Assertion (A): Workers in the agricultural sector are underemployed.

Reason (R): There are more people in agriculture than is necessary. People are apparently working but all of them
are made to work less than their potential. Ans. (c)

68. ------------------ refers to the activities which are undertaken by people with the object of earning money.

Ans. Economic activities

69. A housewife looking after the household is an example of ------------------------ Ans. non-economic activities

70. All goods which are used as raw material for further production of other goods or for resale in the same year
are called----------------------------------- Ans. intermediate goods

71. The Act guaranteed 100 days of employment in a year or unemployment allowances to the people should be
provided by the government is known as ---------------------------------

Ans. The Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA 2005)

72. ----------------------- sector is governed by various laws such as Factories Act. Minimum Wages Act etc.

Ans. Organised

73. What are sectors? Classify the economic activities.

Ans. Sectors are group of economic activities classified on the basis of some criteria.

Three types of classification of economic activities are:

(a) On the basis of nature of activity:

(i) Primary Sector (ii) Secondary sector (iii) Tertiary sector

(b) On the basis of conditions of work:

(i) Organised sector (ii) Unorganised sector

(c) On the basis of ownership of assets:

(i) Public sector (ii) Private sector

74. A ------------------- is the apex institution of monetary system of a country.

Ans. Central Bank (RBI in case of India)

75. Currency (coins and notes) is a ------------------- whichcannot be refused in payment for transactions.

Ans. Legal tender money

76. The deposits in a bank which are payable on demand are called ------------------
Ans. Demand deposits

77. ------------------- is an agreement whereby a financial institution agrees to lend a borrower a maximum amount
of money over a given period of time. Ans. Credit

78. Money eliminates the need for double coincidence of wants. (True/False)

Ans. True, as money acts as the medium of exchange.

79. Credit card is a paper instructing the bank to pay a specific amount from the person's account to the person in
whose name it has been made. (True/False)

Ans. False, as it is cheque which is a paper instructing the bank to pay a specific amount from the person's
account to the person in whose name it has been made.

80. Informal sector credit includes loans from banks and cooperatives. (True/False)

Ans. False, as informal sector credit includes loans from friends, relatives, moneylenders, traders etc.

81. Rich households largely depend on informal sources of credit. (True/False)

Ans. False, as rich households largely depend on formal sources of credit.

82. How does money solve the problem of double coincidence of wants? Explain with an example of your own.

Ans. In barter system, where goods are directly exchanged without the use of money, 'double coincidence of
wants' (i.e. a person desires to sell exactly what the other person wishes to buy) is an essential feature. But it,
indeed, is a very cumbersome process.

By serving as a medium of exchange, money removes the need for double coincidence of wants and the
difficulties associated with the barter system.

For example, it is no longer necessary for a shoe manufacturer to look for a farmer who will buy his shoes and at
the same time sell him wheat. All he has to do is find a buyer for his shoes, who will exchange his money for
shoes. Now, he can purchase wheat or any other good in the market with the help of the money earned. Thus,
the problem of double coincidence of wants gets solved.

83. Why should credit at reasonable rates be available for all?

Ans. Credit is an important aspect of economic activity. Right from a small farmer to a big business tycoon,
everyone needs to borrow at some time to improve productivity. In case of unreasonable rates, the borrower
always runs the risk of falling in the debt- trap which is not good for the society and the economy as a whole.
Hence, reasonable rates are important for all.

84. 'Credit has its own unique role for development.' Justify the statement with arguments.

Ans. Credit has a unique role in the economic development of the country. It is needed by all the three sectors of
the economy. In urban sector, big businessmen and small manufacturers need loans either to expand their
enterprises, bring new technology or diversifying their businesses.

In rural sector, the main demand for credit is for crop production. Crop production involves cost of seeds.
fertilizers, pesticides, water, electricity, repair of equipment. Cheap credit would thus lead to increase in
production.
Even tertiary sector needs loans to buy the latest equipment and technology. Thus, we can say that credit has a
unique role in the development of a country

85. How has transportation technology stimulated the globalisation process? Explain with suitable examples.

Ans. Transportation technology has stimulated the globalisation process in the following ways:

(a) Faster trains connecting every nook and corner of a country and faster planes that cover the distance within a
few hours have enabled the faster delivery of goods.

(b) Improvements done in transportation technology in the past fifty years have also helped in the quick
movement of goods. For example, containers carrying goods have led to huge reduction in port handling costs
and an increased speed, with which exports can reach markets.

(c) Reduced cost of air transport has enabled much greater volumes of goods being transported by airlines.

86. How do banks play an important role in the economy of India? Explain.

Or

"Banks plays an important role in the economic. development of the country." Support the statement with
examples.

Ans, Banks play an important role in developing the economy of India by taking the following steps:

(a) Banks keep money of the people in safe custody to be used by the depositors in future.

(b) They provide excellent saving and investment options to the depositors and thus help the nation.

(c) Banks also increase the savings of the depositors by paying interest on the money deposited.

(d) Banks mediate between people who have surplus and those who need money. This is done through granting
loans. People avail themselves of these loan facilities to increase production and income.

(e) Banks, being the formal source of credit, give loans at a very low rate of interest at flexible terms and
conditions.

Special provisions are made through banks for the upliftment of agriculture and industry like waiving of loans of
the farmers. (any five)

87. Why are the deposits in the banks called 'demand deposits'? What are the benefits of deposits with the
banks?

Ans. People deposit the surplus or extra money in the banks. The banks keep the money safe and provide interest
on it. The deposits can be drawn at any time. on demand by the depositors. That is why they are called demand
deposits.

The benefits of deposits with the banks are: They can be encashed by issuing cheques in the name of the person
to whom the payment is to be made

They make it possible to directly settle paymentswithout the use of cash.

Since demand drafts/cheques are widely accepted as a means of payment along with currency, they constitute
money in the modern economy.

88. Read the passage below and answer the following questions:
Demand deposits offer another interesting facility. It is this facility which lends it the essential characteristics of
money (that of a medium of exchange). You would have heard of payments being made by cheques instead of
cash. For payment through cheque, the payer who has an account with the bank, makes out a cheque for a
specific amount.

(a) What are demand deposits?

(i) Loan given by bank to the people on demand

(ii) Deposits in the bank accounts, which can be withdrawn on demand

(iii) Interest given by banks on saving deposits

(iv) Money given by RBI to commercial banks

(b) What is a Cheque?

(i) A cheque is a paper instructing the bank to pay a specific amount from the person's account to the person in
whose name the cheque has been issued.

(ii) A cheque is a card from which a person in whose name it has been issued can take out the amount from the
bank directly.

(iii) A cheque is a for of cash which the payer who doesn't has an account with the bank, can take the money from
the bank and makes the payment.

(iv) A cheque is a paper instructing the bank to pay from a specific amount from one person's bank account to the
account of another person in the same bank only.

(c) What is the advantage of using the facility of cheques against demand deposits?

(i) It makes possible to directly settle payments without the use of cash.

(ii) It makes possible that money is transferred from one bank account to another bank account in a month.

(iii) It makes possible to directly settle payments with the use of cash.

(iv) It makes possible to indirectly settle payments without the use of cash.

(d) Banks use the major portion of the deposits to ------------------.

(i) keep with themselves as cash (ii) extend loans

(iii) convert cash into gold (iv) give to the RBI as the interest payment

Ans. (a) (ii), (b) (i), (c) (i), (d) (i)

89. Read the passage below and answer the following questions:

Power can be shared among governments at different levels a general government for the entire country and
governments at the provincial or regional level. Such a general government for the entire country is usually called
federal government. In India, we refer to it as the Central or Union Government. The governments at the
provincial or regional level are called by different names in different countries.

(a) Who clearly lays down the powers of different levels of government in India?

(i) Union Government (ii) State government

(iii) Federal government (iv) The Constitution

(b) Which of the following is the level of government lower than the State government?

(i) Municipality (ii) Panchayat

(iii) Both (i) and (ii) (iv) None of the above

(c) Division of powers involving higher and lower levels of government is called:

(i) Vertical division of power (ii) Horizontal division of power

(iii) Circular division of power (iv) Balance of Power

Ans. (a) (iv), (b) (iii), (c) (i)

90. Read the passage below and answer the following questions:

Boys and girls are brought up to believe that the main responsibility of women is housework and bringing up
children. This is reflected in a SEXUAL DIVISIONOF LABOUR in most families: women do all work inside the home
such as cooking, cleaning, washing clothes, tailoring, looking after children, etc., and men do all the work outside
the home. It is not that men cannot do housework; they simply think that it is for women to attend to these
things. When these jobs are paid for, men are ready to take up these works. Most tailors or cooks in hotels are
men

(a) What is the meaning of sexual division of labour?

(i) A system in which all work inside the home is either done by the women of the family, or organised by them
through the domestic helpers.

(ii) A system in which all work outside the home is done by the women of the family only.

(ii) A system in which all work inside and outside the home is done by the women of the family only.

(iv) A system in which all work inside the home is done by the men of the family.

(b)Why most tailors or cooks in hotels are men?

(i) Because these are easy work. (ii) Because these jobs are paid for.

(iii) Because these jobs are highly paid. (iv) Because these are most difficult work.

(c) Which of the following works women are paid for?

(i) Fetch water (ii) Collect fuel

(iii) Work in the fields (iv) Work in offices

(d) How does women affected by this sexual division of labour?

(i) Their work is valued more than men. (ii) They do domestic labour only.

(iii) Their work is not valued and does not get recognition. (iv) Their work get recognition outside home.

Ans. (a) (i) , (b) (ii), (c)(iv). (d) (iii)

Long Answer Type Questions [5 Marks]

91. Mention any five features which make India a federal country.

Ans. The Constitution declared India as a Union of states. The following points clearly show that the Indian Union
is based on the principles of federalism -

(a) Under a federal government different tiers of the government govern the same citizens. India too has three
levels of government Union, State and Local.

(b) There is a three-fold distribution of legislative powers between the Union government and the State
governments in the three lists Union, State and Concurrent lists.

(c) This sharing of power is basic to the structure of the Constitution and it cannot be changed easily by the
Parliament alone. It requires two-thirds majority of both the Houses of Parliament.

(d) In a federation, judiciary solves the disputes between different levels of government. In case of any dispute,
High Court and the Supreme Court make a decision.

92. Why is power sharing good for democracy? Give any three suitable arguments.

Ans. Power sharing is desirable for various concrete reasons. Two sets of reasons have been listed out which
favour power sharing in two different manners like: Prudential reason and Moral reason. Prudential Reason

(a) According to prudential reason, power sharing accommodates social diversity hence, helps in reducing the
possibility of conflict between social groups.

(b) Power sharing in another way ensures the political stability through competition among various political
parties.

(c) Besides, power sharing is also desirable to the promotion of national unity and integrity. Moral Reason

(d) Moral reason is a very deeper reason of power sharing.

(e) According to moral reason, power sharing is desirable to produce an accountable, responsible and legitimate
government.

(f) It implies maximum popular participation through decentralization of powers so that people would be
consulted on how they are to be governed. In this way, both the sets of reasons signify the importance of power
sharing in the forms of community government, reserved constituencies and decentralization of powers.

93. How does communalism take various forms in politics? Explain any five.

Ans. Communal politics is based on the idea that religion is the principal basis of social community. It can take
various forms in politics:

(a) Communalism in every day beliefs: The most common expression of communalism is in everyday beliefs.
These routinely involve religious prejudices, stereotypes of religious communities and belief in the superiority of
one's religion over other religions.

(b) Communalism as Majoritarian Dominance and Political Dominance: A communal mind often leads to a quest
for political dominance of one's own religious community. For those belonging to majority community, this takes
the form of majoritarian dominance. For those belonging to the minority community, it can take the form of a
desire to form a separate political unit.

(c) Communalism as Political Mobilisation: Political mobilisation on religious lines is another frequent form of
communalism. This involves the use of sacred symbols, religious leaders, emotional appeal and plain fear in order
to bring the followers of one religion together in the political arena.

(d) Communalism in the Form of Communal Violence: Sometimes communalism takes its most ugly form of
communal violence, riots, and massacre. For instance, India and Pakistan suffered some of the worst communal
riots at the time of Partition in 1947.

(e) To sum up, communalism leads to the belief that people belonging to different religions cannot live as equal
citizens within one nation. Either, one of them has to dominate the rest or they have to form different nations.

94. Describe the role of opposition party in democracy.

Ans. The various roles of the opposition parties in a democracy are listed as follows

(a) It acts like a watchdog of democracy. It keeps a check on the role of the government and restricts them from
misusing the power.

(b) It provides to the people alternative policies and criticises government for its failures or wrong policies.

(c) The opposition is always a viable alternative to the ruling government.

95. Why can modern democracies not exist without political parties? Explain.

Ans. In a democratic set-up, political parties are required because without political parties

(a) every candidate in the elections will be independent. No promises could be made and the utility of the
government formed will remain uncertain.

(b) no one will be responsible for running the country. Elected representatives will only be accountable to their
constituency.

(c) there will be no agency to gather and present different views to the government on various issues.

(d) no one will be responsible for bringing various representatives together so as to form a responsible
government.

(e) there will be no mechanism to support the government, make policies or to justify or oppose them.

(any three)

96. Describe any five conditions or aspects that you would consider before accepting a job.

Ans. Before accepting a job offer, I would look into the following conditions or aspects.

(a) Working conditions: Safe and comfortable working conditions are desirable.

(b) Work environment: Co-workers should be friendly and cooperative.

(c) Future growth: A job should offer future growth and promotions.

(d) Location: Too far a working place is not a good choice. Travelling can eat up most of the productive time and
energy.
(e) Benefits: Salary is just one part of a job. We must also consider health benefits, paid time off, medical leaves
and insurance, funds, bonus, etc.

97. Why is the 'tertiary sector' becoming important in India? Explain any three reasons.

Ans. Tertiary sector is the service sector that provides support to the primary and secondary sectors and to itself.
Over the forty years, between 1973 and 74, and 2013 and 14, while production in all the three sectors has
increased, it has increased the most in the tertiary sector. The following factors are making the tertiary sector
important in India.

(a) Basic services: In any country, several services such as hospitals, educational institutions, post and telegraph
services, police stations. courts, village administrative offices, municipal corporations, defense, transport, banks
and insurance companies, are required. These can be considered as basic services. In a developing country, the
government has to take responsibility for the provision of these services.

(b) Development of primary and secondary sector. The development of agriculture and industry leads to the
development of services such as transport, trade and storage. The greater the development of the primary and
secondary sectors, the more would be the demand for such services.

(c) Rise in income levels: As income levels rise, certain sections of people start demanding many more services
like eating out, tourism, shopping, private hospitals, private schools and professional training centers. We can see
this change quite sharply in cities, especially in big cities.

(d) Rise in information technology: Over the past decade or so, certain new services, such as those based on
information and communication technology have become important and essential. The production of these
services has been rising rapidly.

(e) Globalization: Due to globalization, people have become aware of new services and activities, and
communication because of which the tertiary sector has gained importance.

98. How do banks play an important role in the economy of India? Explain.

Ans. Banks play an important role in developing the economy of India by taking the following steps:

(a) Banks keep money of the people in safe custody to be used by the depositors in future.

(b) They provide excellent saving and investment options to the depositors and thus helps the nation.

(c) Banks also increase the savings of the depositors by paying interest on the money deposited.

(d) Banks mediate between people who have surplus and those who need money. This is done through granting
loans. People avail themselves of these loan facilities to increase production and income.

(e) Banks, being the formal source of credit, give loans at a very low rate of interest at flexible terms and
conditions.

(f) Special provisions are made through banks for the upliftment of agriculture and industry like waiving of loans
of the farmers.

(any five)