Chapter 1: Introduction

Choose the correct answer:

1. If you are in a job, you are working for payment, you are called
a) unemployed b) labour c) employee d) none
2. Scarcity is the root of
a) all economic problems b) social problems c) political problems d)
all problems
3. The long queues at the railway station, bus stand, cinema theatre are all
manifestations of:
a) publicity b) scarcity c) plenty d) quantity
4. Alternative use of resources give rise to problem of
a) rights b) price c) choice d) chance
5. This subject is mainly around the study of mankind in the ordinary
business of
a) district b) economics c) political science d) sociology
II) Fill in the blanks:
1. When you buy goods, you are called a consumer
2. When you sell goods for profit, you are called a seller
3. Resources are limited, but wants are unlimited
4. The National income divided into wage, profit, rent and interest is
calleddistribution.
5. Statistics deals with collection ,analysis ,interpretation and presentation
of data.
III) Answer in one word or one sentence
1. Who is a producer?
A producer is one who produces goods and services with the intension of
earning profit.
2. Give an example of non-food crop
Cotton
3. What is economics according to Alfred Marshall?
“The study of mankind in the ordinary business of life……..”
 4. What are economic data?
Economic facts are known as economic data.
5. What is Statistics?
Statistics deals with collection ,analysis ,interpretation and presentation of
data.
6. Give the meaning of economic policy
The solutions to solve economic problems is called economic policy

IV Answer the following in four sentences

1. Generally in which three parts economics is discussed?
Consumption,production and distribution are the three parts of
[Link]- The act of consuming goods and services to
satisfy one wants is called consumption. Production- Production of
goods and services takes the help of certain factors of production.
Production creates utility. Distribution - The national income of the
country is distributed into rent, wages, interest and profit.
2. Mention the difference between employee and employer
Employee Employer

A person who works under A person who appoints or provides

somebody else. job to others

Get salary/ wages Gets Profit

Follows rules and regulation Frames rules and regulation

framedby the employees

Cannot take decisions Employees can take decisions

Eg : Railway employer Eg: Railways Bank employee Bank

3. Mention any two scarcities in your daily life
Scarcity of water, Scarcity of land, Scarcity of money scarcity of
electricity, scarcity of number of seats in the bus during peak & hours of
Scarcity of transport facilities, shortage of essential commodities.
4. With any two resources which has alternative uses
Water, land, and labour, are the resources which have alternative .
V. Answer the following in 12 sentences
1. We are not as lucky as Aladdin in real life. Explain this statement & In
the story of Aladdin and his Magic Lamp, Aladdin was a lucky guy.
Whenever and whatever he wanted, he just had to rub his magic lamp and
a genie appeared to fulfill his wish. When he wanted a palace to live in,
the genie instantly made one for him .
In real life we cannot be as lucky as Aladdin, We have unlimited wants,
we do not have a magic lamp. Take, for exam ourpocket money that we
get to spend. If you had more of it then we could have purchased almost
all the things we wanted but since our pocket money is limited, we have
to choose only those things that we want the most.
2. Scarcity is the root of all economic problems. Explain the statement
Scarcity is the root of all economic problems . Had there been no scarcity
there would have been no economic problem . In our daily life, we face
various forms of scarcity. The long queues at railway booking counter,
crowded buses and trains shortage of essential commodities, the rush to
get a ticket to watch a new film etc., are all manifestations of scarcity .We
face scarcity because the things that satisfy our wants are limited in
availability.
Prof. Lionel Robbins define economics as
“Study of human behaviour as a relationship between
ends and scarce means which have alternative uses.”
3. Briefly explain how statistics helps us to study economics
Statistics deals with the collection, analysis, interpretation and
presentation of numerical data.
 Uses of Statistics:
1. Statistics enables an economist to present economic facts in a precise and
definite form that helps in proper comprehension of what is stated. Eg:
National income, poverty percentage.
2. Statistics also helps in condensing mass data into a few numerical
measures.
Eg: average income.
3. Statistics is used in finding relationships between different
economicfactors
4. Statistics helps in formulating suitable policies
5. Statistics helps the government to plan for the development of economy
6. Statistics helps in forecasting or predicting future
4. Statistics methods are no substitute for common sense" Explain with an
example
There is an interesting story which is told to make fun of statistics. It is
said that a family of four persons (husband, wife and two children) once
set out to cross a river. The father knew the average depth of the river.
So, he calculated the average height of his family members. Since the
average height of his family members were greater than the average depth
of the river, he thought they could cross safely. Consequently, some
members of the family (children) drowned while crossing the river.
 Chapter 1 Indian Economy on the Eve of Independence
I. Choose the correct answer
1. Whose estimate of per capita income of India during colonial period was
considered the most significant
a) Dadabai Naoroji b) V. K. R.V Rao
c) William Digby d) R.C. Desai
2. During British rule stagnation in agriculture sector was caused mainly
because of
a) Mahalwari Systemb) Ryotwari system
c) Zamindari System d) Ceiling on land holdings
3. Railway transport introduced in India in the year
a) 1835 b) 1776
c) 1850 d) 1853
4. During British rule more than half of India's foreign trade was restricted
to
a) Britain b) Iran
c) China d) Srilanka
5. In India census is carried out once in
a) 5 yrs b) 10 yrs
c) lyr d) 2yrs
II. Fill in the blanks :-
1. Before Independence the India's Jute industries were concentrated in
eastern part of the country
2. Under colonial the cotton textile industries were dominated by Indians
3. 1921 is the year of second stage of demographic transition of India
4. Railway transport is considered as most important contribution of British
rule.
III. Answer the following questions in a world of sentence :-
1. When was the first census carried out in pre-independent India? 1881
Name the important "Revenue Settlement System" during British rule -
Zamindari system
 2. Expand TISCO :Tata Iron and Steel Company (1907)
3. What is capital goods industries? - Capital goods industries means
industries which can produce machines tools which are in term used for
producing other goods
4. When was the official census carried on out in India ? 1951
5. Why did the colonial government banned canal transport - Though the
canal was built at a huge cost, yet it failed to compete with the railways,
which was running parallel to the canal and had to be ultimately
abandoned .
IV. Answer the following questions in 4 Sentences each :-
1. What was the objective of the economic policies pursued by the colonial
government in India? –
The economic policies pursued by the colonial government in India were
concerned more with the protection and promotion of the economic interests
of their home country than with the development of the Indian economy.
Such policies brought about a fundamental change in the structure of the
Indian economy - transforming the country into supplier of raw materials
and consumer of finished industrial products from Britain
2. List out the important export goods of India before Independence
i) Raw silk
ii) Cotton
iii) wood
iv) Sugar
v) Indigo
vi) Jute etc.
3. Name the modern industries which were in operation in our country at the
time of Independence
- During the second half of the nineteenth century, modern industry began to
take root in India, but its progress remained very slow. The cotton textile
mills, mainly dominated by Indians were located in the western parts of the
country, namely, Maharastra and while the jute mills dominated by the
 foreigners were mainly concentrated in Bengal & few other industries in the
fields of sugar. cement, paper etc. came up after the second world war.
4. What are the infrastructure facilities developed during colonial period?
Under the colonial regime, basic infrastructure such as railways, ports.
Roadways, water transport, posts and telegraphs did develop .The British
introduced the railways in India in 1850 and the postal services also were
introduced.
V. Answer the following in 12 sentences
1. The traditional handicraft industries were ruined under British rule.
Justify the Statement - India had an independent economy before the
advent of the British rule. Though agriculture war the main source of
livelihood for most people, yet the country's economy was characterized
by various kinds of manufacturing activities. India was particularly well
known for its handicraft industries in the fields of cotton and silk textiles,
metal and precious stones [Link] produced products enjoyed a
worldwide market based on reputation of the fine quality of material
used and the high standards of craftsmanship .
2. Indicate the volume and direction of trade at the time of independence
India has been an important trading nation since ancient [Link] the
restrictive policies of , trade and tariff pursued by the colonial
government adversely affected the structure, composition and volume of
India's foreign trade. Consequently, India became an exporter of primary
products such as Raw silk, cotton, wool, sugar indigo, jute and an
importer of finished consumer goods like cotton silk, and woollen
clothes and capital goods like light machinery produced in the factories
of Britain. Britain maintained monopoly control over India's exports and
imports .More than half of India's foreign trade was restricted to Britain
while the rest were allowed with a few other countries like China,
Ceylon (Sri Lanka) and Persia (Iran). The opening of the Suez Canal
further intensified British control over India's foreign [Link] most
important characteristic of India's foreign trade throughout the colonial
 period was the generation of a large export surplus. But this surplus
come at huge cost to the country's economy. Several essential
commodities-food grains, clothes, kerosene etc, - werescarcely available
in the domestic market. Furthermore, this export surplus did not result in
any flow of gold or silver in to India. Rather, it was used to make
payment for the expenses incurred by an office Set up by the colonial
government in Britain, expenses on war again fought by the British
government.
3. What do you understand by the drain of Indian wealth - The colonial
government's restrictive policies of trade and tariff adversely affected the
structure, composition and volume of India's trade with other countries
Consequently, India became an exporter of primary products for the
upcoming modern industries in Britain at low prices and importer of
finished consumer goods and capital goods produced in Britain at high
cost. Britain control over India's foreign trade The most important
characteristic of India's Jest foreign trade throughout the colonial period
mai the generation of a large expert Surplus. But this Surplus can at a
huge cost to the country's economy. This expert surplus did not result in
any flow of gold & Blucer into India. Rather, this was used to make
payments for the Expenses incurred by-an office set up by colonial
government in Britain, expenses on war and import of invisible item. All
this led to the Drain of Indian wealth
VI Answer the following in 20 sentences :-
1) Explain the Status of India's agriculture during colonial period.
The agriculture sector did not perform well during the British rule
although 85% of the population was dependent on agriculture
 Causes for low agriculture productivity

Zamindar Lack of irrigation Partition of the

System Lack of uses of chemical country
fertilizers, modem
equipment, etc.
Zamindari System
The zamindari system which was implemented in the Bengal presidency
comprising /including parts of India’s present Eastern State. The Zamindars
were interested only in collecting rent and not improving the economic
condition of the farmer.
Lack of irrigation facilities, lack of use of chemical fertilizer, modern
equipment etc.
No proper storage facility, less use of good quality seeds and commerciazation
of agriculture.
The Partition of the country: The position of the country also lead to the loss of
agriculture land
2) India could not develop a sound industrial sector under British rule. Justify
the statement. -
India could not develop a sound industrial base under the colonial rule even as
the country's would famous handicraft industries declines, no corresponding
modern industrial base was allowed to comeup. Deindustrialization policy was
adopted. Theymade India Supplier of raw materials and market for finished
goods. Cotton industries were started in part of Maharastra and Gujrat. Indians
had control over it .Jute mills dominated by British which were started in parts
of Bengal presidency. TISCO (Tata Iron and Steel company) were Started in
1907 After the second world war few industries such as sugar paper, cement etc.
were started. The Britishers did not promote the establishment of capital goods
industries Capital goods industries means industries which can produce
machines, tools which are in turn, used for producing other goods The industrial
sector did not contribute much to the GDP of the country because of less public
sector interference.
3) Where there any positive contribution made by the British in India
1. The Britishers started some basic infrastructure facilities such of railways
roadways, watertransport, post and telegraphs etc.
2. The British introduced railways in the year 1850 the railway affected the
Indian economy structure in two ways
i) it help people to go for long distance travel breaking geographical and
cultural barriers
ii) It helps commercialization of Indian agriculture
3. During the British period there was absence of all weather roads .It was
difficult to reach out to the rural areas during rainy season. The roads which
were built during the British period was for mobilising army within India
and also to help transport of raw materials to the [Link] station and
ports ware started.
4. During the British period development of the inland trade and seaways were
also developed. The canal on the orissa coast was constructed at a huge cost
but it failed because it could not compete with the railways which are
running parallel to the canal and therefore the canal had to be abandoned
5. Electric telegraph in India was started during the British period to maintain
law and order.
 Chapter 2: Indian Economy 1950-1990
I. Choose the correct answer
1) Which is not the goal of five year plans
a) growth
b) modernization
c) Self efficiency
d) Self reliance
2) First phase of green revolution achieved approximately
a) Mid 1960 - Mid 1970
b) 1950-1960
c) Mid 1970 - Mid 1980
d) 1970-1980
II. Fill in the blanks
1) Chairperson of planning commission prime minister
2) Small Scale industries use more of labour than large scale industries
3) Regional equality was the main purpose of industrial licensing
III Match the following :-

A B

1) Prime minister 1) Seeds that give large proportion of

output(4)

2) Quota 2) Chairperson of planning

commission(1)

(3) land Reforms 3) Quantity of imported(2)

4) HYV Seeds 4) Monitory assistance given by

government for the production (5)

5) Subsidy 5) Improvement in the field of

agriculture to increase its
productivity(4)
 IV. Answer in one word or one sentence
1) Define planning –
Planning is the processs which decide how the resources of a nation
should be put to use .A plan should have general goals as well as specific
goals
2) What do you mean by land reforms?
Land reform refer to change in ownership of land holdings
3) What is marketed surplus?
The portion of agricultural produce which is sold in the market by the
farmer is called marketed surplus
4) Give the meaning of land ceiling
It means fixing the maximum size of land which could be owned by an
individual
5) Mention one public sector industry –
BSNL
6) Give the meaning of GDP
GDP is the market value of all the goods and services produced in a
country during a year
V. Answer the following in 4 sentences :-
1) What are the goals of five year plan
Growth: The growth of the economy is measured in terms of GDP. GDP
refers to the total value of final goods and services produced in the
country during a specific period of time
Modernization :Adoption of new technology is called modernization
Self sufficiency or self reliance: Any country can achieve higher economic
growth not only by modernization but also by becoming self reliant.
Equity:The fourth important objective is equity. It is important because benefit
of economic prosperity should reach all section of societies society particularly
the poor section of society instead of only the rich people enjoying the benefits.
 2) write the two advantages of small scale industries
 Provide employment opportunities
 Promote exports
 Helps in reducing the pressure of population on agriculture
3) Why the state had to play an existence extensive role in promoting
Industrial Sector –
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; nor was the market big enough to
encourage industrialists to undertake major projects even if they had the
capital to doso. It is principally for these reasons that the state had to play
an extensive role in promoting the industrial sector
4) Give the meaning of tarrif and quotas –
Tariffs- Tax which is levied on goods which come into the country it
import tariff
Quotas- these are quantitative restrictions ,they specify the quantity of
goods that can be imported
VI. Answer the following questions in 12 sentences each :-
1) Write a short note on green revolution land reforms in India
Land reforms refers to change in ownership of land holdings
Zamindar System abolished- Once India got independence steps were taken in
order to abolish intermediaries and to make tillers the owner of land. Zamindar
system was the main reason for loss agricultural productivity during the British
rule. The first two five year plans took the necessary measures to abolish the
zamindars, a result of this many landless farmers became the owner of the land
Land ceiling -This means fixing maximum size of land which could be owned
by an individual .The main aim of this was to achieve equity
2) Write a short note on green revolution
Meaning: Green revolution refers to increase in agricultural products due to new
strategy and mechanization .In India Green Revolution took place in two phases
I phase - mid 1960's to Mid 1970's In this phase only rich states like Punjab,
Tamil Nadu, Andhra Pradesh started implementing green revolution. Wheat
production producing states got the benefits by using HYV seeds. II Phase -
Mid 1970's to Mid 1980's In this time period other states also started implanting
given revolution and also other crops also got the benefit of HYV seeds The
credit of green revolution in India goes to Nobel Prize winner Dr. Norman E
Bollang. Its credit also goes to MS Swaminathan
Main elements
1. HYV seeds- These HYV seeds are the main reason for increase in
agricultural production within a short period of time
2. Chemical fertilizer: With green revolution use of chemical fertilizers in India
have increased.
3. Irrigation facilities- In green revolution rose of essential special attention was
paid towards small irrigational project
4 Mechanization of agriculture :- Farmers started using tractors, harvester –
tubewells and other equipment used in agriculture.
Advantages
1 Increase in agricultural production
2. Development of industries
3. Self - sufficiency
4. Rural income increases und
5. Improvement in Standard of living
6. Buffer Stock
7 Marketed Surplus
8. Commercialization of agriculture

Disadvantages
1. Regional inequality
2. Limited crops
3. Short term effect
4. Income disparities White that economic justification of the policy of
subsidies
Conclusion
Green revolution is due to the use of HYV seeds, chemical fertilizers and new
techniques
3) Write the economics justification of the policy of subsidies -
Subsidies provide incentive to the farmers for adopting new technology, HYV
seeds etc. It was necessary to use subsidies to provide an incentive for adoption
of the new HYV technology by farmers in general and small farmers in
particular Any new technology will be looked upon as being risky by farmers
Subsidies were, therefore needed to encourage farmers to use the new
technology. On the other hand, some economist believe that the government
should continue with agricultural subsidies because farming in India continues
to be a risky business. Most farmers are very poor and they will not be able
toafford the required inputs without Subsidies. Eliminating subsidy Will
increase the inequality between rich and poor farmers and would not achieve the
goal of equity .Some experts argue that subsidies are largely benefiting the
fertilizer industry and big farmers, the policy is not to abolish subsidies but to
keep take steps to ensure that only the poor farmers enjoy the benefits
5) Briefly explain the goals of five year plans.
Growth:The growth of the economy is measured in terms of its GDP.
GDP refer to the total value of final goods and services produced in the
country during a specific period of time. To increase the GDP of the
country production activities in the different sectors such as primary
Secondary and Tertiary Sector Should increase. Higher the GDP growth
rate better is the Standard of living of the people. The contributions made
by each sector is called Structural composition of GDP.
Modernization Modernization can be used to increase production of goods and
services Modernization also keeps helps in change in social outlook Self
sufficiency or self reliance. Any country can achieve higher economic growth
not only by modernization but along also by becoming zelf reliant. First seven
few year plans gave importance to self reliance which means reducing importe
and producing goods by ourself Dependence on imported goods, foreign
technology foreign capital may. affect our country's progress
Equity The fourth important objective is equity. It is important because benefits
of economic property should reach all sections of the Society particularly the
post section of society instead of only the benefit.
Every citizen of a country should be able to meet his/her basic needs such as
food, decent house, education and healthcare. Similarly, inequality in the
distribution of income and wealth should be decreased.