cdw4a indian economy unit i -v - … · agricultural land. land reform. tm cdw4a –indian economy...

CDW4A

INDIAN ECONOMY

UNIT I -V

TM

CDW4A – INDIAN ECONOMY - II 1

Agriculture

Contribution To Economic Development

Green Revolution

Agriculture Productivity

Land Reforms

Sources of Farm Credit-

Food Subsidy

Public Distribution System.

UNIT I: Syllabus

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Agriculture

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Contribution to Economic

development

Introduction:• Agriculture plays a vital role in India's economy. Over 58 per cent

of the rural households depend on agriculture as their principal

means of livelihood.

• Agriculture and allied sectors like forestry and fisheries

accounted for 13.7% of the GDP (gross domestic product) in

2013, about 50% of the workforce.

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• Agricultural Production

• Reduction in wastage of produce

• Credit support to farmers and a thrust to the food processing sector,

was introduced in the Union Budget

The Indian Agriculture

Sector

video link

https://www.youtube.com/watch?v=PLMZfHEafS4

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Agriculture Sector and

Allied Activities

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Lack of Resources

• Most of the rural families are dependent on agrobased activities for

their livelihood, where land is the limiting factor.

• Over 75% of the farmers own less than two hecster land.

• As only about 28% agricultural land is under irrigation and the rest

under rainfed areas, a large number of people are seasonally

employed, causing severe underemployment for over 250 days in a

year.

Problem Faced by the

Agriculture Sector in India

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Problems Faced by Farmers

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Lack of Confidence among

Poor People:

• Our natural resources although scarce, are not optimally utilised due

to lack of education, awareness and confidence. This has resulted in

neglect of various development schemes which were introduced

for sustainable use of these resources.

• Presently, about one half of the geographic area is categorised as

wastelands. Over 70% of the rain water flows back to the sea causing

flood and soil erosion.

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• Rural development projects are often implemented without adequate

planning. In the absence of an integrated approach to tackle

multidimensional interrelated problems,

• Sectorial development activities may not deliver expected results.

Apart from integration of various sectors, many of these projects also

lack proper planning and resource mobilisation.

Lack of Management:

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The introduction of high-

yielding varieties of seeds

after 1965 and the increased

use of fertilizers and irrigation

are known collectively as the

Green Revolution.

video link

Green Revolution:

https://www.youtube.com/watch?v=WIOYNvIKrJ4

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• Let us now turn our analysis towards the

achievement of new agricultural strategy adopted

in India. The most important achievement of new

strategy is the substantial increase in the

production of major cereals like rice and wheat.

Achievements of Green

Revolution

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• Land reform involves the changing of laws, regulations or customs

regarding land ownership. Land reform may consist of a government-

initiated or government-backed property redistribution, generally of

agricultural land.

Land Reform

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• India has one of the largest food subsidy programes in the world

that has created a relatively effective social safety net but is also

under increasing criticism because of its large contributions to

government budget deficits, economic inefficiency and poor

targeting.

• The Food Corporation of India is always under attack from all

quarters for perceived operational inefficiencies leading to increase

in the food subsidy burden.

Food Subsidy in India

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Public Distribution system

(PDS)

• P.D.S. makes a distinction between below poverty line B.P.L. and (A.P.L)

above poverty line B.P.L. card holder get foodgrains at 50 percent cost

of F.C.I. procurement price whereas A.P.L. gets foods grain at economic

cost of F.C.I. „s.

video link

https://www.youtube.com/watch?v=1HGhPDLs2UQ



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Unit II: syllabus

Industry

Role of Industries in Economic Development

Industrial Development under the Planning Regime

New Economic Policy 1991

Role of Public Sector and Restructing the Public Sector

Role of Small Scale Industries in Economic Development.

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• An industry is a group of manufacturers or businesses that produce a

particular kind of goods or services. Workers in the

textile industry design, fabricate, and sell cloth. Industry comes from

the Latin industria, which means"diligence, hard work," and the word

is still used with that meaning.

Industry

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Role of Industry in the

Economy:

• It has the ability to produce different products

• It has the capacity to give employment

• It has the capacity to adjust to thechanging tastes of the consumers

• It helps the economy earn foreign currency which we use to finance our

imports

Video link

https://www.youtube.com/watch?v=z0GFM0eUxS8

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• India started her quest for industrial development after

independence. The industrial policy resolution of 1948 marked the

beginning of the evolution of Industrial policy.

• It is prescribes the respective roles of the public, private, joint, and

co - oprative sectors.

• It also indicates the role of the large medium and small secle

sector.

Industrial Policy before

1991:

video link

https://www.youtube.com/watch?v=z0GFM0eUxS8

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Evolution of Industrial

Policy

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• Rapid industrial growth has resulted in the expansion of

infrastructural facilities. The development of modern industries

has stimulated the growth of banking, insurance, commerce,

shipping, air services etc.

Growth of Infra Structure:

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• Although, the first plan stressed to increase the

agricultural production, even then, the industrial

production increased at the rate of 6.68 per cent per

annum.

Achievements of Industrial

sector:

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Role of Small Scale Industry

.

• It was believed that the small scale sector would use labour

intensive techniques in the production of consumer goods, thus

creating employment opportunities for a fast expanding labour force.

• It would add to the supply of consumer goods in the short run and

offset the inflationary tendencies by meeting the demand.

• It was an important instrument of industrial development. The small

scale sector could exploit the possibilities of rural industrialization.

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video link

Small Scale Industry

https://ww.youtube.comw/watch?v=I-9yBBlZjOs

https://ww.youtube.comw/watch?v=I-9yBBlZjOs

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• The estimated expenditure on projects both of the Central and State

Govt. amounts to Rs. 94 crores and out of it, about Rs. 83 crores were

on projects which were directly under Central Government.

• The participation of private capital, indigenous and foreign was

envisaged at” about Rs. 20 crores.

• The major industrial project in the public sector was a new iron and

steel plan estimated to cost Rs. 80 crores in all and Rs. 30 crores were

allotted in the present plan period.

Development in the Public

Sector:

video link

https://www.youtube.com/watch?v=7BX9hXiUADE





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Public Sector

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Foreign Trade

Composition of Foreign Trade

Direction of India’s Foreign Trade

Exim Policy

Unit III: syllabus

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Foreign Trade:

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video link

Introduction of Foreign

Trade

https://www.youtube.com/watch?v=V4AjcG3-z38&t=6s

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Definition:

• The total quantity of futures contracts bought and sold during a trading

day. The volume of trade numbers, reported as often as once an hour

throughout the current trading day, are estimates.

The Foreign Trade Policy of India:

• The Foreign Trade Policy of India is guided by the Export Import in

known as in short EXIM Policy of the Indian Government and is

regulated by the Foreign Trade Development and Regulation Act,

1992. DGFT (Directorate General of Foreign Trade) is the main

governing body in matters related to EXIM Policy

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CCDW4A – INDIAN ECONOMY - II 30

Foreign Trade Policy

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• It refers to the relative price of exports in terms of imports and is

defined as the ratio of export prices to import prices.

•It can be interpreted as the amount of import goods an economy can

purchase per unit of export goods.

Terms of Trade:

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Foreign Trade Performance

OF India

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• The objective of any country's trade policy must be economic growth.

• As a developing economy, India must balance protectionism with free

trade.

• India can benefit a great deal from free trade because of its unique

resources. Specifically, India's large population of educated English-

speakers is a great resource for it because it is the only place where

such people are available at comparatively low wages.

• The objective of any country's trade policy must be economic growth.

Objectives of Foreign Trade

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Direction of India’s Foreign

Trade

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Key Documents

Letter of Credit

Bill of Lading

Draft

Function

Risk of Non-completion

Foreign Exchange Rate

Risk

Financing Foreign Trade

Documentation of Foreign

Trade Transactions

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Balance of Trade and

Balance of Payment:

• Balance of Trade refers to difference in the export and

import of goods.

video link

https://www.youtube.com/watch?v=CYlVyIDsWFg

TM


• Encouragement to Small, Cottage and Handicraft Industry.

• Growth oriented.

• Incentive for Agricultural Exports.

• Setting up of Agri- Export Zones.

• Overseas Banking Units.

• Encouragement for Hardware Industry.

• Boost to jewellery industry.

• Boost to industrial growth.

video link

Merits of Exim Policy

https://www.youtube.com/watch?v=AGDNXC8pBPk

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• Foreign Trade is one of the significant macro

fundamental variable of an economy. India till recently

was predominantly a primary goods exporting and

mainly an industrial goods importing country.

Composition of India’s

Foreign Trade:

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Composition of India’s

Foreign Trade:

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Year Exports (Including

Re exports)

Imports Trade

Balan

ce

1950-51 606 608 -2

1960-61 642 1122 -480

1970-71 1535 1634 -99

1980-81 6711 12549 -5838

1990-91 32553 43198 -10645

2000-01 203571 230873 -27302

2006-07 571779 840506 -268727

2008-09 840755 1374436 -533681

2009-10 845543 1363736 -518202

2010-11 1142649 1683467 -540818

2011-12 1024707 1651240 -626533

India’s Trade Balance:

Public Finance

Fiscal Policy

Components

Fiscal Policy in Liberated Area

UNIT IV: Syllabus

CDG4A/CDW4A - INDIAN ECONOMY 41

TM


video link

Fiscal Policy

https://www.youtube.com/watch?v=eN8Z5c-8gvE

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• Public finance is the study of the role of the government in the

economy.

• It is the branch of economics which assesses the government

revenue and government expenditure of the public authorities

and the adjustment of one or the other to achieve desirable

effects and avoid undesirable ones.

• Fiscal policy is the means by which a government adjusts its

spending levels and tax rates to monitor and influence a

nation's economy. It is the sister strategy to

monetary policy through which a central bank influences a

nation's money supply.

Public Finance

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Public Finance

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• Resource Mobilization.

• Resource Allocation.

• Redistribution of Income.

• Price stability, control of Inflation, Employment generation.

• Balanced Regional Development.

• Balance of Payments.

• Capital Formation and National Income.

• Taxation Policy.

Objectives of the Fiscal

Policy of the Government

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Functions of Public Finance

• Defence

• Maintenance of Law and Order

• Economic Growth

• Reducing Inequalities

• Reducing Regional Inequalities

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video link

Components of Budget

https://www.youtube.com/watch?v=JxslgH7R_f0

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Types of Fiscal Policy:

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5 Major Instruments of Fiscal

Policy

A. Budget

B. Taxation

C. Public Expenditure

D. Public Works

E. Public Debt.

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• Government of India has now scrapped the plan and non-plan

expenditures in budget exercise and their place has been now

taken by capital and revenue spending classifications.

• The classification of plan and non-plan was a major exercise in

India during planning era. Under this, all expenditures which were

done in the name of planning were called plan expenditures while

all other expenditures were placed under non-plan expenditures.

• Further, generally (not always), the plan expenditure produced

some tangible assets related to economic development. This was

the reason that plan expenditures were also called “development

expenditures”.

Plan and Non Plan

Expenditure:

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video link

Plan Expenditure Vs.

Non-Plan Expenditure

Plan Expenditure

Plan Expenditure is

spent on current

development and

investment outlays.

It arises only when the

plans provide for such

Expenditure

Non-Plan Expenditure

It Is spent on the routine

functioning of the

Government.

It is must for every

Economy and Government

cannot escape from it.

https://www.youtube.com/watch?v=N3ykao5pFUU

TM


Information Technology(IT) Industry

Information Technology and Knowledge Economy

Growth and Present State of IT Industry in India

Future Prospects of IT Industry

Unit V :Syllabus

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video link

Information Technology

https://www.youtube.com/watch?v=Gk9dcfR7Oec

TM


Information Technology

• It is the application of computers and

telecommunications equipment to store, retrieve, transmit

and manipulate data, often in the

context of a business or other enterprise.

• The automation of all the manual work of the

pharmaceutical industry is based on the principles of IT

System.

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video link

Working of Information

Technology

https://www.youtube.com/watch?v=H2rR5ZMLXcU

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• IT includes several layers of physical equipment hardware

virtualization and management or automation tools, operating

systems and applications

• software used to perform essential functions. User devices,

peripherals and software, such as laptops, smartphones or even

recording equipment, can be included in the IT domain. IT can also

refer to the architectures, methodologies and regulations governing

the use and storage of data.

IT Software and Hardware

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• Information technology (IT) is playing a crucial role in

contemporary society.

• It has transformed the whole world into a global village

with a global economy, which is increasingly dependant

on the creative management and distribution of

information.

• Globalization of world economies has greatly enhanced

the values of information to business organizations and

has offered new business opportunities.

Role of Information

Technology in Indian

Economy

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Role of Information

Technology in Indian

Economy

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• The industry of information technology in India includes the following

services namely IT and software services,

• IT enabled services, hardware (engineering) services, and e-

businesses/e-governance associated with government services.

• IT services are outsourcing of software support/installation, processing

services, systems integration, exports of products and services, and

training/education of the information technology science.

The Services of IT Industry

in India

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India IT Export’s Share

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• The Technical Advisory Group for Unique Projects (TAGUP)

has been set up and Mr. Nandan Nilekani, one of the founders

of the outsourcing jumbo,

• Infosys has been appointed as a chairman of this project to

develop IT infrastructure in major areas inclusive of the

issuance of unique ID to Indian citizens, new pension system

and goods and services tax.

• Constitution of National Task Force on Information Technology

and Software Development to make a framework of long-term

IT policy nationally.

Current Status of Indian IT

Services

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IT sector has been in a growth rate over the past five years and is

expected to grow year by year in the future. Many sectors are

dependent on IT to develop their business and expand their revenue

using IT and ITES.

The growing rate of IT sector is notably fast and earning large

revenue to the nation in one or other terms. IT sector has created

additional jobs and thus reduces the unemployment growth rate.

IT sector shows very good future prospects and many companies

have tied up with the foreign investors to develop the business in IT

sector. This also offers wide job opportunity in India as well as in the

foreign countries. It is expected that the growth rate in IT sector will

increase by 20 percent over the next decade.

video link

Future Prospects of IT

Industry

http://www.youtube.com/watch?v=RU3Js1WEfnU



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Future IT Industry

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Information Technology and

Economic Development

• New, innovative electronic technologies are key to a

sustainable future for developed and developing nations

• The Internet accelerates the process of economic growth

by speeding up the diffusion of new technologies to

emerging economics