INDIA IS A DEVELOPING ECONOMY

IMPOR TANT VERY SHORT ANSWER QUESTIONS(2 MARKS)

1. ECONOMIC GROWTH :- Economic Growth is a phenomina. The increase in the realoutput of goods and services is called economic growth. It is related to developed countries.It is quantitative.

2. ECONOMIC DEVELOPMENT :- Economic Development is a process where by nationalincome of a country increases over a long period of time. The overall progress of economythrough institutional & technical changes is known as economic development. It is relatedto developing countries. It is both quantitative and qualitative.

3. PER CAPITA GNP :- Per capita GNP is the best index of development, it can be derivedby dividing the GNP of a country with its population higher the level of per capita income,higher is the economic development.

Percapita GNP= PopulationGNP

4. WORLD BANK CLASSIFICA TION COUNTRIES OF THE WORLD :- T h eworld bank in its world development report 1998 classified the countries in the world onthe bases of per capita GNP. They are :

1) Low income countries with GNP per capita of 735 $ and below

2) Middle income Countries :- With per capita GNP range between 736 $ to $ 9075 (lower,upper)

3) High income countries with per capita GNP more than 9076 $.

5. PLANNING COMMISSION DEFINITION OF UNDER DEVELOPED COUNTRIES:- An under developed countries is one which is characterised by the co-existence ofunutilised or under utilised man power. On one hand and unexploited natural resources onother hand.

6. HUMAN CAPIT AL :- Capital which is concerned with investiment in human beings isHuman Capital. Human Capital depends upon the quantity of population, education, health,nutrition, age group incomes and wealth disparities in the country.

7. PRIMAR Y SECTOR :- Agriculture, animal husbandary, fisheries and forests comes underprimary sector. In the early stages of development most of the people in the country dependson primary sector. When development takes place the dependence on this sector graduallydecreases. In 2001 the dependence of population on primary sector is 56.7%.

8. INDEGENEOUS HEAL TH CARE :- Ayurveda, siddha, unani, tibbi and homeopathyand unregistered medical practitioners comes under this sector. Bulk of the medicalcare in rural areas is provided by indegeneous sector.

9. HUMAN DEVELOPMENT INDEX: - HDI is a term coined by UNO in 1990. It is acomposite index covering the level of per capita income, educational attainment and

ECONOMICS - II

survival rate. It is a summary measure of human development. According to Mahabub-Ul-Haq, HDI is a process of widening people's choice as well as rising the level of wellbeing the achieve. According to him HDI measured the following 3 basic dimensions ofhuman development index.

10. AGRO BASED INDUSTRIES :- The industries which depends on agriculture for thesupply of their raw material are called as Agro based industries. Jute, sugar cane, coffee,edible oil etc., are the agro based industries.

11. AGRICUL TURE ALLIED ACTIVITIES :- Activities which linked with agricultureare called agriculture allied activities. Processing, Marketing, Package, Storage are calledas agriculture allied activities. These activities provides indirect employment to labour.

12. LAND HUNGER :- Most of the villages aims to have a peace of land as they feel land isthe symbol of prestige and honour in the society. So most of them are deeply attached toland, this is known as land hunger. As a result no family member will accept money inexchange of land. Consequently the land size goes on decreasing.

13. ECONOMIC HOLDING :- An economic holding is one which provides decent standardof living and full employment in the members of agriculture family in the place ofeconomic holding the Indian planning commission introduced family holding.

14. CONSOLIDATION OF LAND HOLDINGS :- Consolidation means pooling bringingtogether all this scattered land holdings at one place is called as consolidation of landholdings under this system the owners of the scattered land holding is given land at oneplace equalent to price of land.

15.. CO-OPERATIVE FARMING :- Cooperative farming can define as the type of farmingdone by the farmers of the village on cooperative lines after integrating their fragmentedland holdings. Under this farming the farmers will form a cooperative society and pooltheir land, cattles, and other agriculture implements cultivate the land jointly.

16. FRAGMENT ATION OF LAND HOLDINGS :- The land holdings of the farmer is notfound as one compact block at one place there are divided and sub divided into smallplots which are scattered all over the village this situation is called as fragmentation ofland holdings.

17. GREEN REVOLUTION :- The govt. introduced new agriculture strategy in 1965 toincrease an agriculture production. Consequently the production and productivityincreases significantly. The revolutionary growth in the agriculture sector between 1965to 1970 was termed as Green Revolution. "Whilliam S.Gand" is the first economist whoused the term green revolution.

18. AGMARK :- It is the mark given by the govt. to the quality agricultural products.Agriculture goods will be separated as per there quality. The high quality product willbe given Agmark. The commodity which is base. Agmark will get highest price.

19. PROCESSING : All the goods should be made for direct consumption is calledProcessing. Ex: Pulses are to be processed for direct use.

20. GRADING :- The separation of agriculture goods according to their quality is called asgrading. Grading facilitates to the consumers to get quality product and to their farmersto get better prices.

21. CONTRACT FARMING :- One of the solution to solve the problem of agriculture

marketing is the contract farming. It may be defined as

' Sale contract of farm goods done between the farmers and uses of such product'.

Farming done between sugar growing farmer and sugar factories is called as contractfarming, this system eliminates all the middlemen.

22. RYTHU BAZAR :- The A.P. govt introduced an innovative programme for marketingagriculture goods by establishing Rythu Bazar. In this markets the farmers will selltheir products directly to the consumers without the intervention of middlemen everyrupee paid by the consumer will directly go to the farmers both farmers and consumerswill be benefited.

23. DWACRA SCHEME : - It means development of women and children in Rural Area.This programme started by A.P. Govt. recently for the upliftment of women and childrenin rural area. Government provides funds for self sustainable programmes for womengroups.

24. LAND REFORMS :- The institutional reforms which the govt. introduced, proposed tointroduce to develop agriculture are called as land reforms. "The redistribution of landwith a view to safeguard the interest of small marginal farmers & farm labour", may becalled as land reforms.

25. ABSOLUTE POVERTY & RELA TIVE POVER TY:- It refers to that section of peoplewho fails to attain basic necessities to maintain minimum standard of living. It meansthose people who fails to satisfy their basic minimum requirements like food, clothing& shelter are regarded as absolute poor.

RELATIVE POVER TY :- It refers to inequalities of income, wealth & standard of livingacross different sections of people in the society. It means people with lesser income arerelatively poorer than higher income group people.

26. POVERTY LINE :- The measurement of absolute poverty is made by estimating povertyline. Poverty line refers to the cut off level of annual income of the households which isneeded for subsistence. The households whose annual income is lower than cut off levelof incomes are said to be below the poverty line.

27. SELF HELP GROUPS :- Self help group is an instrument for delivery of micro creditto the poor people and helps in developing the habit of small savings among poor people.The main aim of SHG are social welfare, mutual aid etc. SHG have Regional, Nationaland International Network.

28. GLOBAL MARKET OR WORLD MARKET :- Globalisation forces receivedtremendous boost to its settling up of WTO. In the globalisation world has become aglobal village or the world with out boarders. As world has become globalised, globalmarket is an important institution. Global market is one where buyers and sellers of theglobe are in contact with one another. Prices are determined by the combined actions ofglobal buyers and sellers. In global market opportunities and challenges are mere diversethan ever before.

29. GLOBAL VILLAGE :- Due to rapid increase of globalisation, the world has become aglobal village. In global village electronic marketing like Internet facilities will have itsimpact on global market. Hence highly sophisticated information network is essential.

30. TRIMS & TRIPS:- Trade Related Intellectual Property Rights refer to the legalownership of a person or business of an invention or discover attached to a particularproduct or process. It protects the owner against un-authorised copying. The USA hasbeen since a long time insisting upon the proper safe guard to the intellectual propertyrights of the researchers or business. Agreements on TRIPS is comprehensive and setsout the minimum standards of protection to be adopted by parties in respect of copyrights, trade marks, trade secrets, patents etc.

TRIMS : Trade Related Investment Measures refer to certain conditions or restrictionsimposed by a government in respect of foreign investment in the country. TRIMS werewidely employed by developing countries. The agreement on Trade Related InvestmentMeasures calls for introducing national treatment of foreign investment and removal ofqualitative restrictions and opens the gates of financial services sector.

31. INDUSTRIALISA TION :- Industrialisation should be help for economic development.It is a process in which there is a sharp increase in the industrial share of GDP and of thelabour force.

32. INDUSTRIAL ESTATES :- Industrial Estates are instruments in the development ofmodern Small Scale sector. Industrial Estates save time and investment expenditure ofsmall scale unit owners. An Industrial Estate is an attempt to provide, on a rental basis,good accommodation and basic common facilities to groups of small entrepreneurs whowould find it difficult to secure these facilities at a reasonable price. These are mainlyuseful for developing the ancillary units of the large scale industries. Decentralisation ofthe industrial sector is also made possible.

33. IIBI : Industrial Investment Bank of India which was formally known as IndustrialReconstruction Bank of India(1985) was established in 1997 for the rehabilitation of sickindustrial units.

34. SIDBI : - It means small scale Industrial Development Bank of India. It is a subsidiary ofIDBI. The SIDBI act was passed by the Parliament in October 1989 and the Bankcommenced its operations from April 2 1990.

35. INDUSTRIAL LABOUR:- Labour working in the small-scale, medium scale and large-scale industries are called “Industrial labour”. But in India, the term industrial labour isused only to the labour working in the organised industrial units under the preview ofFactories Act.

36. TRADE UNIONS :- It is a voluntary association of occurs formed to promote and protectthe interest of workers through their activities. Trade Unions are providing awarenessamong the workers regarding the working environment and increasing the bargaining powerof labourers.

37. ICICI :- ICICI was sponsored by a mission from the world Bank for the purpose ofdeveloping small and medium term industries in the Private Sector. It was registered inJanuary 1955 under the companies act. ICICI Capital has been subscribed by Indian Banks,Insurance Companies & Individuals and Corporations of the United States.

38. SCIENCE AND TECHNOLOGY : - Accumulation of knowledge is considered as scienceand refinement of Machines and tools can be called as technology. Science and technologyplays a crucial role in economic development and improving the quality of human life.Though India stands in top rank in science and technology in the world, the main weakness

of India is that India is not in a position to utilise the science and technology to the maximumlevel. And also it is to be noted that science and technology did not reach the ordinary manbut was mostly limited to rich classes.

39. I NFRASTRUCTURE FACILITIES :- Economic development of any country dependsupon Infrastructural facilities. Infranstructural Facilities can be divided into a) EconomicInfrastructure and b) Social Infrastructure. Economic Infrastructure Facilities compriseof "Energy, Transport, Communications, Banking, Finance & Insurance, Science &Technology". Social Infrastructure comprises of "Education, Health and Hygienic etc".

40. LIFE INSURANCE :- Insurance is classified into two 1. Life insurance 2. Non-lifeinsurance. Life insurance provides protection to a house hold against the risk of prematuredeath of its income earning member.

41. AGRICUL TURAL WASTES : Agricultural wastes presently used as roofing material,organic matter for compost making and as fuel for cooking purpose.

42. ECONOMIC PLAN : An economic plan may be defined as an outline or broad statement

of scheme or programmes designed and implemented to achieve certain predetermined

objectives within a specific period of time. The technique that the state follows to achieve

economic development through plans is called as economic planning.

43. PERSPECTIVE PLANNING : Perspective plan is a macro plan formulated for a period

of 20 to 25 years. Keeping in view the long term needs and objectives. This perspective

plan which is implemented through 5 year plans.

44. ROLLING PLAN : The concept of rolling plan was introduced by Gunner Myrdal. This

type of plan does not have any fixed period of time. Under this plan the beginning and

ending of the plan period goes on rolling. After 1 year the completed year will be detected

and one more year will be added. It is like a moving machine. In 1977 Murarji Desai

introduced this planning in India. It was implemented between 1978 to 1980.

45. PLAN HOLIDA Y : Giving rest to the implementation of 5 year plans and implementing

annual plan is called a plan holiday. The govt. may not in a position to implement 5 year

plans due to political uncertanities, wars, insufficient funds at the central and state level.

It will declare plan holiday. The plan holiday is of two types.1. Official plan holiday 2.

Unofficial plan holiday. In our planning system there was plan holiday between 1966 to

1969, and between 1990-92.

46. BALANCED REGIONAL DEVELOPMENT : Balanced regional development does not

mean equal development of all the areas. it means fullest development of an area according

to their potentialities. So that the benefits of economic development can be shared by all

the people in all the regions. It is possible only with the establishment of industries in

backward areas. Balanced regional development is an important objective of Indian

Planning Commission.

47. REGIONAL IMBALANCES: The coexistance of relatively developed and under

developed states in a country or region with in a state may be described as regional

imbalances. Regional imbalances may be natural due to unequal natural endowments or

manmade in the sense of neglect of some regions and preference of other regions in matters

of investments and implementation of development programmes, Regional imbalances may

be inter-state or intrastate. They may be total or sectoral.

48. PLANNING COMMISSION : The government of India constituted the Planning

Commission in March, 1950. Prime Minister is the Chairman of the Planning Commission.

It has a Vice-Chairman as the executive head. The States prepare their plans in accordance

with their priorities. Based on these State plans, the Planning Commission formulates a

plan for the whole economy keeping the national priorities and the availability of resources

in view.

49 SUSTAINABLE DEVELOPMENT :- The term sustainable development was broughtinto common use by world commission on environment and development in seminar reports'Common Features'. Developement that meets the needs of the present generation withoutcompromising the ability of future generation. - Brud land comm 1987.

50. ACID RAINS :- Acidification the increasing amount of sulpher dioxide and nitrogen oxideare released in the air thereby forming sulpheric acid and nitric acid which causes acidrains. As a result the surface of the earth becomes acidified. Acidification of soils changeschemical properties, destroys plants and surface of the soil.

51. OZONE LA YER :- Ozone layer is a protecting band filtering ultraviolet rays comingfrom sun radiation and thereby allows only the sun's energy needed for the life on earth.Any depletion of the ozone layer would result at a larges amount of ultraviolet rays directlyfalls on the earth causes damages to the man kind.

52. BIO-DIVERSITY :- Bio-diversity refers to the variety of plant and animal life on theplanet. Animals and plants depends on each other and causes a balance in nature. In therecent years there was heavy loss in the bio-diversity due to deforestization forest firesand developmental projects undertaken in forest areas.

53. Deforestration : - Forests are renewable resource and contribute substantially to theeconomic development and employment generation. Forest also enhance the quality ofenvironment by checking soil erosion, conserving water, controlling floods, balancingcarbondioxide and Oxygen contain in atmosphere etc.

54.. ECOLOGY & ECO SYSTEM : - The various components in environment bear closerelationship with one another, the study of these relationship is called as ecology. Soecology may be defined as the study of relationship or interdependence between livingorganism and environment. It explains relation between man and nature. It means ecologyis the science of study 'eco system'. The term eco-system was first proposed by Tamsleyin 1953. In eco system is an ecological unit consisting of both living (biotics) and nonliving(abiotic) factors of environment. It is the fundamental unit of ecology which includesboth living and non-living organism each influencing the properties of the other and eachis necessary for the maintainance of lives.

55 Gr een house Effect :- Green house is the construction of wood or steel frame with paneof glass to let the heat and light of the sun through, for the growth of plants kept inside theglass house. The green house holds the energy, it receives through glass pannel consevesthe heat without allowing it to escape. These type of glass houses are constructed forexperimental purpose. The glass of the green houses trap and holds the heat of the sunmaking the heat of the earth still formal which is called green house effect.

56. HYVP :- The High Yielding Variety Programme was given top priority. This programmewas introduced in the year 1966. This programme was adopted as a package programmedas the every success of this programme depends upon adequate irrigation facilities,application of fertilisers, high yielding varieties of seeds, pesticides, insecticides etc.

57 SOIL EROSION :- It means Land Degradation i.e. washing away of surface soil whichcontains fertility. It occurs due to indiscriminate cutting of trees, conversion of forestlands into cultivable lands, wrong methods of cultivation mining activities etc.

IMPOR TANT ESSAY QUESTIONS

(10 MARKS)

1. Expla in the theory of DemographicTransition?

2. Descr ibe the v iews of Amartyasen oncapabi l i t ies re lated to human resourcedevelopment?

3. Define Poverty? What are the causes forpoverty and Anti poverty programmes?

4. Explain the causes and remedial measures ofinequalities of income and wealth?

5. Explain the causes of unemployment andsuggest Remedial Measures?

6. What are the causes for low productivity inIndian Agriculture and suggest measures toimporve it?

7. Explain the causes for small size of LandHoldings? Suggest Remedial Measures?

8. What are the causes and remedial measuresof Rural indebtedness?

9. Explain the importance of Small Scale &Cottage Industries in Indian economy?

10. What are the problems faced by Small Scale& Cottage Industries and suggest remedialmeasures?

11. Expla in the 1991 Indust r ia l Pol icyResolution?

IMPOR TANT SHORT ANSWERS QUESTIONS

(5 MARKS)

1. Explain the characteristics of a Developingeconomy?

2. What are the features of Developed countries?3. What are the determinants of Economic

development?4. Mention the uses of women education and

write about the women education in India?5. Explain the features of Market Economy?6. Expla in the object ives and features of

W.T.O.?7. Explain the objectives and features of GATT?8. Explain poverty Allivation Programmes?9. Contribution of Public Sector to National

Income?10. Explain the role of Industrialisation?11. Write about IDBI?12. Write a short note on 10th Five Year Plan?13. Explain the causes of Regional Imbalances ?14. What is Ter t iary Sector? Expla in the

importance of Tertiary Sector?15. What are the advantages of road transport?16. Write about the need for preservation of

environment?17. Explain the concepts of Environment?

K. Janardhan ReddyM.A., B.Ed.

Chairman, Royal Educational InstitutionsHyderabad

IMPOR TANT SHORT ANSWER QUESTIONS(5 MARKS)

1. Explain the characteristics of a Developing economy?

A. Intr oduction : On the basis of achieved development and percapita income world countriesare divided into developed and underdeveloped countries. These countries are called "ThirdWorld Countries". In under developed countries people are caught in the vicious circle ofpoverty.

Ex : India, Pakistan, Bangladesh etc.

Definitions : "According to United Nations experts "An under developed economy is onein which percapita real income is low when compared with the percapita real income ofU.S.A., Canada, Australia and Western Europe".

According to the Indian Planning Commission, "An underdeveloped economy ischaracterised by the existence of lesser degree of utilised or under utilised manpower onone hand and of unexploited natural resources on the other".

Characteristics of Developing Economies : Developing economies have certain commoncharacteristics, inspite of the wide variation in their history, geography and socio-economicstructure.

1) Low Percapita Income : The average percapita GNP of the low-income countries isas meagre as $ 430 in the year 2002. The percapita income of India is just above at $ 480(2002), than the average of low income group. There are countries like Mozambique andCango with percapita incomes as low as $ 100 and $ 90 respectively. It is distressing toknow that the gap between the average percapita income of developed and under developedcountries is increasing.

Country Per capita GNP

India 480 $

Bangladesh 360 $

China 940 $

Congo 90 $

2) Mass Poverty : The most important feature of under developed countries is theprevalence of mass poverty. According to World Bank survey over a billion people arepoor at subsistance level of consumption. About 33% of population in under developedcountries is below poverty line and about 18% of this population is extremely poor with apercapita yearly consumption of $ 275.

3) Unemployment : Widespread unemployment is one of the serious problems faced bythe under developed countries. There is a open urban unemployment in these countrieswhich is several times higher than that of developed countries. The increasing level ofunemployment in rural areas leads to rural urban migration. There will be disguisedunemployment in their Agricultural Sector.

4) Predominance of Agricultur e : One of the striking features of most of the underdeveloped economies, is that they are predominantly agricultural countries. This is obvious

ECONOMICS - II

from the two basic facts.

1) Large proportion of working population nearly 65% to 70% is engaged in agriculture.

2) The share of agriculture in the domestic product ranges from 20% to 30% which is highcompared to developed countries.

5) Heavy Population Pressure : Another important features of these countries is notonly the existing population even the growth rate of population is also more. It is about2% per annum. Due to the expansion of medical facilities, there is a rapid decline inmortality rates and slow fall in the birth rates. Consequently many developing countriesare experiencing population explosion. Due to high population, the proportion ofunproductive labour increases.

6) Capital Deficiency : Developing economies suffer from deficiency of capital. Therate of capital formation which determines economic development is very low, i.e. 15 to20 percent of GDP. The saving capacity of the people in under developed economies isvery low because of low percapita incomes. The incentives for investment are not adequateand the institutional arrangement are not effective to convert all savings into investment.

7) Poor Quality of Life : The physical quality of life of the people in these countries isnot satisfactory. In developing countries infant mortality rate is very high at 115. Lifeexpectancy at birth is low i.e. 59.7 years. The literaces rate 62. Basic minimum facilitiessuch as drinking water, health and medical facilities are inadequate.

8) Under Utilisation of Natural Resources : Even though the developing countries haveabundant natural resources. They are either under utilised or unutilised. Many resourcesare not being put to use due to lack of capital and technology. Even the land, mineralresources are not being properly used. Lack of scientific surveys with regard to the potentialbenefits of vital resources like water, forests etc. is the important feature of theseeconomies.

9) Poor Economic Organisation : It is necessary to mobilise savings, promote capitalformation and ensure credit flow to all sectors in order to achieve economic development.But many developing countries have not created and expanded financial institutionsadequately.

10) Dual Economy : According to Benjamin Higgins, there are two sectors in an underdeveloped economy, i.e. the traditional unorganised sector and the modern organised sector.The production and productivity in unorganised sector is much less than those of theorganised sector.

There is is co-existence of institutional and non-institutional agencies in credit marketsincluding factor markets. These markets are characterised by imperfect competition, oftendominated by monopoly.

11) Foreign Trade : The exports of these countries generally depend upon primary goods.These consist of minerals and agricultural products. Nearly 50% of foreign export earningscome from these goods.

Under developed countries import mainly manufactured goods. Excessive dependence onexports of primary commodities retards economic development. It leads to unfavourableconditions by the international trade.

Conclusion : If a country exhibits the above features it can be treated as an underdevelopedcountry or a developing economy.

2. What are the features of Developed countries?

A. Intr oduction : On the basis of percapita income and achieved progress, world countriesare divided into developed counties and under developed countries these countries arealso called industrial economies. In these countries the percapita income, percapitaconsumption of electricity, nutrition food will be high. Ex : U.S.A., England, France,Switzerland, Germany etc.

The special characteristics of these countries are :

1) High Percapita Income : Percapita GNP is very high in developed countries. Hence,they are called high income economies. Because of high percapita income the standard ofliving also more.

Name of the GNP per capita No. of times larger toCountry income $ that of India (India $ 480)

Switzerland 37,930 $ 79

Japan 33,550 $ 70

Germany 22,670 $ 47

U.S.A. 35,060 $ 73

England 25,250 $ 53

The percapita income of Switzerland, Japan and America are 79, 70, 73 times higher thanthat of the GNP of India($ 480)

2) Predominance of Non-agricultural Sector : Developed economies are non-agricultural in the sense that the proportion of workers and production in agricultural sectoris negligible. They are primarily industrial and service sector oriented.

Developed countries adopt intensive technology. The proportion of labour force in non-agricultural sector is more predominant in developed countries. The productivity of labourin the non-agricultural sector is higher than in the agricultural sector. This is the drivingforce of development in advanced countries.

3) Abundance of capital and Technology : Developed countries are endowed withabundant capital and modern technology. Because of high level of income in developedcountries, the level of saving is also high. Banks and other financial institutions are welldeveloped to mobilize the savings of the people. The rate of investment is also highAbundance of capital may be defined in terms of quantity of capital per capita. High capitallabour ratio leads to their technical progress.

4) Low Level of Unemployment : The unemployment in developed countries is openand frictional and the magnitude is limited to 5 to 10%. The higher mobility of labourtends to reduce unemployment in developed countries. But in the developing countrieslike India it is disguised in the agricultural sector and open in the urban sector.

5) Better quality of life : The quality of life in these countries is better. A minimumstandard of living is ensured by the wider coverage of social security systems. People willenjoy with the following facilities :

a) Better health Care System b) Education is Universal

c) Lengthy life expectency d) Good Environment

e) No Child Labour f) Safe Drinking Water

g) Adequate Sanitation h) Better Standard of Living

i) The length of working period is less3. What are the determinants of Economic development?

A. Intr oduction : Economic development is a long term process where by the national incomeof a country increases over a long period of time.

Overall progress of a country through institutional and technical changes is known aseconomic development. It is related to developing countries and treated as multidimensional concept in terms of increase in real national income.

Determinants of Economic Development :- Economic development is determined byseveral factors. Broadly the factors which determine economic development are classifiedinto economic and non-economic factors.

I. Economical Factors :

a) Natural Resources : Leading economists like William J. Baumol and W.A. Lewisattached great importance to natural endowments of a country for its development.Availability of fertile land with abundant supply of water for irrigation purposes providesfavourable conditions for agricultural development. Availability of coal, petroleum,minerals like iron ore copper etc. induce for industrialisation. Many countries which arepresently under developed are poor in terms of natural resources.

b) Human Resources : Population is an important factor in economic development. Manprovides labour for production and if a country possesses efficient. Labour with appropriateskills, its capacity to grow will be high. If a country can manage to use its manpowerproperly, it will certainly add to the real economic development. But in case, humanresources remain either unutilized or under utilized, the same people who would havemade a positive contribution to growth activity prove to be a burden on the economy.

c) Institutional Factors : Economic development is influenced by variety of institutionalfactors - political, economic, social, cultural and religious factors in the society. The roleof institutions is important in economic development. Freedom of individual, right toproperty, role of govt. determine the pace of development.

d) Capital and Technical Progress : Capital accumulation enlarges a country's capacityto produce goods. Investment on capital goods is a crucial factor in economic development.Capital accumulation helps the formation of sound infrastructure like transport,communication, power, irrigation etc. Capital accumulation is the main vehicle for theintroduction of technical progress in the productive system. Technical progress increasesthe production tremendously and brings a change in social atmosphere too.

e) Managerial Skills : Enterprise is the bedrock on which the structure of developmentis raised schumpeter has emphasised the role of entrepreneussing in economic development.Organisational abilities and managerial skills of a nation decide the developmental process.Education and technical progress increase the entrepreneurial ability.

f) Foreign Trade and Investment : Foreign trade enlarges the market for goods andservices and provides greater scope for division of labour and international specialisation.So trade is described as an engine of growth. The gains of trade may be static and dynamic.The static gains will come from international specialisation. The dynamic gains will occurfrom international investment and technical knowledge.

Foreign investment supplements domestic investment and contributes to higher rate ofeconomic growth.

II. Non-Economic Factors : Social and physiological and determine economic development.

Conclusion : Non-economic factors provide the requisite social climate in which the processof economic development can germinate to full bloom and can reach the take off stage within ashortest period of time.4. Mention the uses of women education and write about the women education in India?

A. INTRODUCTION :- Nearly half of the population of the world are women. Women arethe primary care givers in almost all the societies. Thus, their education contributes moreto the health and education of next generation. Educating girl will soon lead to womeneducation. Female education plays multi - dimentional role for the progress of the economy.Nearly 48.8% population are women, but most of the women are illiterates and uneducated.Govt. of India wanted to achieve complete female education as the concept of universaleducation can be achieved only though female education. The following points proves theimpact of women education on households and society.

Educated Girls Leads Different Lives

Educated Girls

effects on Households

Women education has strong impact on both households and society. If women are educatedthe following benefits will take place in the society.

1. If one women is educated entire family members will be educated. It helps to achieveuniversal education.

have fewer, moreevenly spaced

children

reduces overa l lf e r t i l i t y ,d e m o g r a p h i ctransition

seeks medical carefor self & children

provides better careand evenly nutritionfor self & children

increases probabi l i ty ofch i ldren surv iva l & heal thtransition

improves childrenlearning &education

Effects on Society

2. Educated women takes care of her health, consumes nutritious food and gives birth tohealthy babies.

3. Educated women adopts family planning which reduces the birth rates.

4. Educated girls are likely to marry late as their schooling extends to junior and secondarylevels.

5. Educated women can participate in economic activities which improves their family'spercapita income and standard of living.

6. The death rates among the children by infant mortality rate will decrease.

7. If women is educated the productivity will increase. In turn it increases N.I.

Women Education in India : Even after the completion of 55 yrs. of independence, still 60%of the women are uneducated and illiterates. Most of the girls are not going to schools. Thenational policy on education has given top priority to women education in its charter titled"Education for women's equality". It states education will be used as an agent of basic changein the states of women. Between (1986 - 91) the govt. launched 6 new programmes for womeneducation. As a result of different measures taken by govt.

1. The womens literacy rate increased from 7.93% to 54.16% between 1956 - 2001.

2. Girls enrolment in primary education increased from 28% to 43.5% between (1951 -1991)

3. Girls drop out rate in 1st to 5th classes decreased from 70% to 42%.

4. Special programmes, separate schools, colleges were started by govt. to provideeducation to women.

Conclusion : Even though the govt. introduced several programmes still most of the girls arenot going to schools as most of the people in rural areas believes in traditions and customs. So,the govt. has to take necessary steps for the 100% enrolment of girls in the elementary education.

4. Explain the role of education and health in economic Development ?

A. The economic development of a country largely depends on the efficiency of human resourceand efficiency of human resources depends on the quality of population. Education &health are considered as most important determinants of quality of population..

Education, health, nutrition, water, sanitation are complementary to each other. Investmentin any one contributes to better outcome in the others. Education contributes and improveshealth. Education and health increases productivity and leads to economic development.Education plays an, important role in the society, and is having a positive impact on humanhealth, which in turn leads to social and economic transformation. The need for educationand health are :

1. Education improves skills through which the productive capacity of the labour willincrease.

2. Rapid industrial progress, computerisation, technological development are the result ofeducation.

3. Inventions and innovations are possible through education only.

Green Revolution, White Revolution, Blue Revolution etc. are the fruits of education inagriculture sector.

4. The most advanced information technology, latest development in service sector are theresults of educations.

5. Education is highly essential for optimum utilisation of natural resources.

6. Education not only a source of knowledge but also increases the use of health services. Byimproving education, childrens nutritional status and learning ability can be improved.

7. Education will decrease the birth rates and ultimately reduces the population growth rate.

8. Educated people will restrict the no. of family members. As they take more health careinfant and child death rates will decrease.

9. Education will transform the society into an intellectual society.

Conclusion : In keeping various advantages of education. India has been giving importance toit in the budget as well as planning. Huge amounts have been allocated to research and trainingto increase quality and quantity of our products on par with developed countries.

5. Explain the features of Market Economy?

A. Intr oduction: Economies in 20th century are divided into two systems. They are

1) Commend economies or socialist economies

2) Market economies or capitalist economies

Meaning of market economy: In the market economy, the production decisions are guidedby the prices, which are determined by the demand supply. Capitalist economy are basedon market mechanism, they can be called market economies.

The socialist countries such as China and Vietnam are command economies which rely onplanning. Government plays a dominant role in socialist economies. At the end of 20th

century, through out the world it was realised that command economy model has notsucceeded to achieve economic growth and even to provide economic security to its citizens.

Market plays crucial role in capitalist economies. As capitalist economies are based onmarket mechanism, they can be called market economies.

Features of Market Economies:

1) Private Property : All factors of production are privately owned and managed byindividuals. Every person has a right to aquire property, keep it and pass it as to his heirs.It gives intensive to work.

2) Invisible Hand : The guiding principle of market economy is invisible hand i.e. pricemechanism. This determines what and how much is to be produced. The price mechanismis the main organising force in this economy.

3) Competition : Competition plays a key role in market economy. Firms will compete witheach other this leads to the consumers be benefits. They produce better quality product forlower price. There will be competition among the labourers to secure better employment.This will be competition among the consumers to purchase goods.

4) Prices of Goods and Services : Prices of goods and services are determined by marketconditions i.e., demand and supply conditions.

5) Individual Fr eedom : Market economy is based on fundamental principle of individualfreedom, as a consumer to choose every competing product, as a producer to start or expand,as a worker to choose a job or career, join a labour union or changeable.

6) Flexible : Market economies by their very nature or decentralised, flexible, practical andchangeable.

7) The Role of Govt. : It is expected to play a neutral role in economic matters. It willprovide social security measures.

Conclusion: In recent years capitalist economies are gaining more importance in the world.

2. Explain how market and state are interdependent?

A: Meaning of market: Market is an organisation that co-ordinates the production andconsumption of goods and services. It co-ordinates peoples activities by increasing socialwelfare.

Meaning of state: State is an organisation for monopolizing, justified and forceful power.By using power, the state co-ordinates people’s activities accordingly to set rules andregulations. The state mobilises resources through taxation provides public goods such asnational defence, courts, police and roads which cannot be supplied by the market.

In the modern world no economy is operating without the state and the market. So it isnecessary that the combination of these two organisations optimise the growth of theeconomies.

The following points show the inter dependence of the market and the state.

1. Price Determination : The guiding principle of the market economy is invisible hand.Free market has the power to establish a single price. Price determination is based onmand-supply forces in the market.

2. Distribution of Income : The market mechanism is used to improve efficiency but not toimprovement in income distribution. It becomes necessary for the government to attemptredistribution by use of coercive power.

3. Existence of Monopoly : Market equilibrium diverges significantly from social optimalitydue to private monopoly. So government has to regulate prices.

4. Public Goods : Public goods, which are supplied by state are determined through a politicalprocess. Some times, the government has to spend huge amounts towards different kindsof activities.

5. Social Welfare : State activities are determined through a political process. Therefore,there is no guarantee that all the activities of the state are socially optimum. In addition,huge amounts are allocated by the Government to provide different kinds of activities forpoliticians and beaurocrats. As a result, the inefficient allocation of budgets result inreduction in net social welfare which is due to state failure.

Conclusion: In view of the failures of market for the government, it is a major task in choosingeconomic system for proper combination of market and state. In general, developing economieshave more imperfect information and less organised institutions. In such economies to eradicatemarket failures a strong government is required to check them.

6. Explain the objectives and features of W.T.O.?

A. The WTO agreement came into force from January 1, 1995 and India has became a foundermember of the WTO by ratifying the WTO agreement on December 30,1994. The formerGATT was not really an organisation. It was merely a legal agreement. On the other handthe WTO is a new international organisation setup as a permanent body and is designed toplay in the spheres of trade in goods, trade in services, foreign investment, intellectualproperty rights etc. It is considered as the third Economic Pillar of the world next to IMFand IBRD.

Objectives of WT O

1) Progressive liberalisation and elimination f tariff barriers.

2) Reduction of all forms of protectionism and elimination of discriminatory treatment intrade relations.

3) Removal of quantitative restrictions.

4) Setting up of an impartial means for settling disputes.

Features of WT O :

1) WTO is legal entity

2) It is not an agent of the UN.

3) All the members of WTO have equal rights.

4) The agreements under the WTO are permanent.

5) WTO approach is rule based and time bound.

6) WTO has a wider coverage. It covers trade in goods as well as services and trade relatedaspects of IPR’s.

7) WTO is a huge organisation and a powerful body.

Conclusion: Thus, W.T.O. played an important role in the production of World Trade andEconomic Development. It has been clarified so many issues in International Trade. It has beenconsidered as third Economic pillar of World nest to I.M.F. and I.B.R.D.

7. Explain the objectives and features of GATT?

A: Intr oduction: GATT was established in 1948 at Geneva by 23 countries including India.General Agreement on Trade and Tariff popularly known as GATT is an internationalforum started to promote the world trade by reducing barriers like custom duties and tariffsetc. however GATT continues to operate as an agreement of trade is an amended formunder WTO. By 1994 number of membering Countries increased upto118.

Objectives of GATT : The main aim of GATT is to expand international trade byeliminating various tariffs on trade and other restrictions, doing away with discriminatorypractices among trading parties.

The following are the important objectives of GATT :

1) Maximum utilisation of world resources.

2) Ensuring full employment and increasing real income and effective demand.

3) Expansion of world production and international trade

4) Raising standards of living of the people.

Salient features of GATT :

1) GATT was neither an organisation nor a court of justice, but a multilaterally agreedtreaty related to tariffs.

2) It was a decision making body with a set of rules for the conduct of international trade.

3) It was a forum where contracting parties meet from time to time to discuss and solvetrade problems and also to negotiate and enlarge their trade volumes.

The GATT rules provided for the settlement of trade disputes called for consultations.

Conclusion: Thus GATT continued upto formation of W.T.O. in 1995. It is neither anorganisation nor a court of justice.

8. Explain poverty Allivation Programmes?

A. INTRODUCTION : Poverty is one of the socio-economic problem. It refers to thatsection of people who are unable to satisfy their basic needs like food, shelter and clothing.More than 1/4 of the people in India are living below the poverty line.

DEFINITION : Poverty refers to that section of people in the society who fails to attaintheir basic necessaries like food, shelter and clothing.

MEASURES TAKEN BY THE GOVT TO REDUCE POVERTY : As the causes ofpoverty are many, the government has taken several measures to benefit individuals andgroup of people as a whole.

During 1950 and 1960's community development approach became the main tool fordevelopment of poor. During 70's Area Development approach was applied to benefit poorpeople. To achieve the ultimate objective of human development, the poverty will have tobe fought at two levels.

1) Local community Development : Development and maintenance of basic services suchas education, health, drinking water, housing etc. which are essential for the quality ofpoor. Local governments should provide these services to the poor in terms of quality andthe quantity.

2) Target Group Development : For the development of poor the income and employmentgenerating programmes must be provided to individuals and group of people. But the poorpeople are not in a position to develop due to illiteracy, lack of skills, land, marketingabilities etc. To provide micro credit to the poor people banks or institutions like BangladeshGrameena Bank should be established. In this regard the self-help groups made a significantprogress to supply micro credit to the people.

The govt. implemented following special programmes to benefit the poor people.

1. Public Distribution System : The govt. has been supplying food grains to the poorpeople at a lower prices through fair price shops.

2. Land Reforms: Govt. implemented land reforms and imposed ceiling limit onindividual land holdings and distributed the surplus land to the poor people.

3. Social Security Measures : Govt. is providing social security services like medicalcare, education, electricity, drinking water, employment etc. to the poor people.

4. Cottage & Small Scale Industries : As small scale and cottage industries generatemore employment opportunities and also help in eliminating poverty govt. isencouraging these industries in several ways.

5. Control of Population : Through population policy govt. is controlling the populationto increase percapita income and ultimately to eradicate poverty.

6. Rural Public Works : To provide employment for the rural people, rural public workslike construction of roads, canals etc. are undertaken by the govt. Under this schemeemployment is created which helps in solving poverty also.

7. Acceleration of Economic growth : Govt. started many long term strategies to achievequick development and also to solve poverty problem in the country.

8. Availability of cr edit : Adequate credit facilities should be provided to the poor atlowest interest rates for all kinds of purposes through public institutions with simpleprocedure. (RRB's, Self-Help groups, Commercial Banks, RBI).

9. Schemes to Provide Self-Help employment : Poverty can be eliminated by creatingSelf employment opportunities through the programmes like PMRY, CMRY, JRY etc.

Conclusion : Though the government has taken several measures the poverty remain as samein the country unless and until the poor or educated and social factors changed. Infact"Acceleration of economic growth, control population, creation of employment, micro creditfacilities" can reduce poverty in the country. The rate of poverty was 48.8% in 1949 which wasreduced to 26% in 2001. The govt. aimed to reduce it upto 19% by 2007.

9. Contribution of Various Sectors to National Income?

A. Intr oduction : National Income is the single measure of all the final value of goods andservices produced in a country during a given period of time National Income estimatesare helpful to measure the stages and level of economic development. The study of sectorialcontribution to NNP will explain the structure of the economy and changes emerged duringthe process of devt. National Income is contributed by three sectors they are

1. Primary Sector 2. Secondary Sector 3. Tertiary Sector.

The following table shows the contribution of 3 sectors to NNP during the planning period.

Sector 1950-51 1980-81 2000-01 2001-02

Primary Sector 57.7 39.7 24.7 23.9

Secondary Sector 14.8 23.7 26.4 26.6

Tertiary Sector 28.4 36.4 48.8 49.5

From the above table it is clear that the share of primary sector to NNP is declining whereas the share of secondary & tertiary sectors is increasing

Primar y Sector : Primary sector which includes Agri, Fisheries, Forestry has gone downform 57.7% in 1950-51 to 23.9% in 2001-02. Agriculture is the major contributer to thePrimary Sector . There is a considerable decrease in the contributions of Agriculture andForestry to National Income. The share of fishing, live stock in GDP has almost remainedstable and the share of forestry in GDP is declining.

Secondary Sector : The share of the Secondary Sector which includes mining,Manufacturing, Construction, Electricity, Gas and Water Supply has a steady increase form14.8% in 1950-51 to 26.6% in 2001-02.

Two major components of the Secondary sector are manufacturing industries andconstruction. The share of manufacturing industries increased considerably when comparedto construction.

Tertiar y Sector : The share of tertiary sector which includes transport, storage,communication Banking, Insurance, Real Estate, Personal Services in GDP has gone upfrom 28.4% in 1950-51 to 49.5 in 2001-02 . This increasing trend in the share of services,matched by corresponding decline in the share of agriculture

Indian economy is passing through the process of transition form an agricultural economyto industrial one. In this process a structural change in inevitable. Though the structuralchange is taking place it is at a slow pace due to slow growth rate of secondary sector.

Conclusion : The process of changing structure needs to be further strengthened by rapidindustrialization. Then only the process of transition of Indian economy from an underdeveloped to developed economy is possible.

10. Explain the role of Industrialisation?

A. Intr oduction: Industrialisation broadly means the Establishment and development ofindustrial units producing both consumer goods and capital goods. The process ofindustrialisation implies the transition from an agricultural economy to an industrialeconomy associated with a movement towards higher percapita incomes. Industrialisationand economic development are inter-related. So the process of industrialisation is essentialin order to utilise the productive resources and to achieve economic development.

Need for Industrialisation:

1. To Increase the Incomes: Industrialisation alone can provide a base for the rapid growthof income. Industries produce goods which are not restricted by nature. Volume ofproduction and productivity can be increased. This is the reason why the GNP per percapitaof developed countries is as high as $24,930, where as it is less than $430 in under developedcountries.

2. To create Productive Employment : Indian economy is characterised by the surplus labourand rapid growth of population. To absorb surplus labour and to reduce pressure on landIndustrialisation is essential. Industrial sector alone can generate employment opportunityat fastest rate.

3. Str engthening the Economy : Industrialisation helps in strengthening the Indian economy.The development of Industries, producing capital goods enables the country to producelarge variety of goods at a cheaper rate. It also helps in technological progress. It bringsindustrial civilization. It helps in the development of infrastructure and agriculture.

4. Achievement of Self-reliance : Industrialisation is needed to protect country’s security.It is very much essential whenever the international crises arises. Dependence on foreigncountries for defence equipment is very risky. So India must develop all types of industrieswhich can meet all the needs. The national objective of self reliance can be achieved throughindustrialisation.

5. Impr ovement of Foreign Trade : Industrialisation gradually transforms a country from

an exporter of primary goods to an exporter of manufactured goods. As a result foreignexchange earnings can be increased.

6. Changes in Social Outlook : Industrialisation will change the social outlook of the people.People will change the traditional and social outlook. Mobility of labour will increase.They may not believe in ‘Karma’ policy. Technical innovation will takes place. Capitalformation will increase.

CONCLUSION : Industrialisation will bring above changes in the economy. As a result rapideconomic development can be achieved. According to Hansinger "Economic Development meansTransforming 80% Agrarian Economy into 15% only".

11. Write about IDBI?

A. Intr oduction : IDBI was setup in 1964 as a subsidiary bank to RBI to coordinate theactivities of other financial institutions and to increase the flow of credit to the industrialgrowth. In 1976 this bank was delinked from RBI and was made autonomous corporation.It was now in govt. of India control. It is the apex bank in the field of industrial banking.It also serves as a developed agency. Its authorised capital is 50 crores which can beincreased to 100 crores and paid up capital is 20 crores only subscribed by RBI.

Functions of IDBI:

1. Coordination functions: IDBI acts as a coordinator at all India level. It conductsmeetings of the heads of various institutions regularly in the country. It occupies thesame place in the field of banking as is occupied by RBI in the field of commercialbanking.

2. Dir ect financial assistance : This bank provides finance in the form of loans or byproviding guarantee to the shares and debentures. But it does not compute with otherfinancial institution. It acts as the lender of last resort.

3. Refinancing agency : IDBI extends financial assistance indirectly through otherfinancial institutions like SFC’s, Commercial banks etc. it provides financial assistanceto the state industrial development bank.

4. Promotional functions : IDBI provides training in project expansion and developmentof entrepreneur abilities. It also conducts surveys to study industrial potential in numberof industrial districts. This bank also provides technical assistance to the industrialconcerns.

5. Foreign Currency requirements : IDBI raises foreign funds from international moneymarkets and international funding organisations and makes them available to Indianindustrial units.

6. Assistance to backward areas : The IDBI has also initiated certain financial and non-financial measures to encourage industries in backward areas.

Being the apex bank it takes special interest in the development of industries in thebackward areas. It started soft loan and project finance scheme to help small-scale industries. Ithas been maintaining modernisation fund to grant loans to the modernisation of various units.It provides foreign currency to the industries.

Criticism : It has been criticised that only four states, Maharastra, Tamilnadu, West Bengal,and Gujarat gained maximum benefit in utilising loans given by IDBI. Financial assistance andDevelopment funds allotted to other states is not encouraging. Another criticism is that IDBI isneglecting the promotional and consultancy functions.

Conclusion : The total resources of IDBI increased to above 50,000 crores by 1997. Other thanone or two criticisms the bank has been playing a crucial role for the industrial development of

India. The present govt. on November 6th, 2002 announced 8000 crores financial assistance toIDBI to help the banks to serve in better manner for industrial development.

12. Write a short note on 10th Five Year Plan?

A. Intr oduction : Tenth five year plan aims at achieving an average growth rate of 9% in theGDP over the period of 2002-07. The slow down of growth rate during the Ninth five YearPlan is described mainly to some extraneous factors which are not expected to persist overalong period. These factors include adverse weather conditions, Asian Crisis of 1997 withits adverse impact on the growth of exports, cylone in Orissa, earthquake in Gujarat, Kargilwar etc., All these factors resulted in diversion of resources and consequent decline ingrowth rate.

Developmental Objectives:

Improvement in the quality of life is the prime objective of growth and developmentplanning. The Tenth Five Year Plan lists out a set of developmental objectives for the planperiod. These are as follows.

1) Reduction of poverty-ratio by 5 % points by 2007 and by 1.5 % points by 2012.

2) Providing gainful and high quality employment to the additional labour force over theTenth Plan period.

3) Universal primary education by 2007.

4) Reduction in the growth rate of population between 2001 and 2011 to 16.2%.

5) Increase in literacy rate to 75% within the plan period.

6) Reduction of Infant Mortality Rate (IMR) to 2% per 1000 live births by 2007 and 1%by 2012.

7) Reduction of Maternal mortality Rate (MMR) to 2% per 1000 live births by 2007.

8) Increase in forest and tree coverage to 25% by 2007.

9) All villages to have sustained access to potable drinking water within the plan period.

10) Cleaning of all major polluted rivers by 2007.

Review :

The Tenth Plan allocation of funds for agriculture sector was stepped down to 20 per centwhich is below the allocation of IX plan at 21.4 per cent. This underlines the relativelylow priority given to agriculture. This happened even though the agriculture showed amiserably low growth of 2.1 per cent on the average in IX plan period. The sector which isgiven the maximum boost is evergy with its allocation jacked up from 23 per cent of thetotal outlay in IX Five Year Plan to 26.5 per cent to total public sector outlay in X FiveYear Plan. The other big increase is the allocation for social services from 20.7 per cent inIX plan to 22.8 per cent in X plan period.

13. Explain the causes of Regional Imbalances ?

A. Intr oduction : The co-existence of relatively developed and under developed states inthe country and regions with in a state may be described as regional imbalances. Regionalimbalances may arise due to the negligence of some regions with reference to other regionsin respect of investment and implementation of developmental programmes. Developmentof all the regions is essential to maintain harmonious development of the country. Balancedregional development is one of the basic objectives of economic planning in India.

Causes of Regional Imbalances : Regional imbalances are the outcome of the process ofeconomic development. In the process of development the region which are havingfavourable endowment factors will attract investment from other areas causing for thedevelopment of that regions and the other regions remains backward.

The following are some of the causes for regional imbalances.

1. Natural Resources : The distribution of natural resources throughout the country is noteven. Natural resources like fertility of soil, water, climate, mineral wealth, forest differsfrom one area to another area. The areas which are having more natural resources will bedeveloped and other areas remains backward.

2. Infrastructur e : Infrastructure faci l i t ies l ike t ransport , i r r igat ion, banking,communications are essential for the establishment, development and growth of industriesand markets. The social services like education and health are also essential for thedevelopment of human resources. These facilities are not equally developed in all theregions. The places where these facilities were developed, those areas developed and otherareas remained backward.

3. Economic plans : All the regions in the country may not receive equal attention fromplanning commission and there may be variation in the formation of schemes and allocationof resources to different regions.

4. Investment : All the regions in the country may not receive equal investment for thedevelopment of various sector. This is because of the negligence of govt. and politicalleaders.

5. Entr epreneur Ship : Lack of entrepreneur ship is also one of the cause for thebackwardness of certain regions in the country.

6. Historical r easons : The historical British rule is also responsible for regional imbalances.The Britishers developed only those areas which are highly potential for them. The otherareas were neglected.

7. Geographical Reason : Geographical conditions like climate, markets and land alsoinfluences the development of industries. States like Kashmir, Himachal Pradesh and NorthEastern States were not developed as geographical conditions are not favourable in thesestates.

14. What is Tertiary Secto? Explain the importance of Tertiary Sector?

A. INTRODUCTION : Every economy is divided in to three sectors. They are 1. Primarysector 2. Secondary sector 3. Tertiary sector. Tertiary sector is also known as service sector,which comprises banking, insurance, transportation, power distribution etc.

Development of any country is depending on the development of tertiary sector. Dependenceon tertiary sector increases percapita income. Advancement of tertiary sector causes linkageeffect and develops primary and secondary sector. Importance of tertiary sector in India isas follows.

1. Incr easing percentage of labour force : Before independence in 1901, 15.7% of labourforce was depended on tertiary sector. After independence and after adoption of neweconomic policy the percentage of labour force depending on tertiary sector increased to25.8% by 1990. As per World Bank report 2000-2001, the percentage of labour forcedepended on Tertiary Sector in U.S.A. - 69, U.K. - 69, Japan - 59, where as an India - 20%

only. So we can understand that the dependence on tertiary sector is increasing but still weneed further development in tertiary sector.

2. Share in GDP : As we know that with every development of economy, the role of tertiarysector also increases. As explained above the percentage of labour force increases in tertiarysector as the same increases in tertiary sector. At the low time its share in GDP alsoincreases. At the time of independence its share in GDP was approximately 28%. Buttowards 2001, its share is increased to 48.8%. Thus the tertiary sector is becoming as amajor contributor of GDP.

3. Causing development in Primary and Secondary Sector : Tertiary sector causes linkageeffect i.e., if tertiary sector is developing, then it acts as link between primary and secondarysector and leads to industrialisation and a rapid development of agriculture.

4. Expenditur e on tertiar y sector : In tenth five year plan expenditure on tertiary sector iscontinuously increasing. Its share is increased to 72% in 9th five year plan.

CONCLUSION : Thus it is clear to us that tertiary sector plays a dominant role in thedevelopment of economy. The development of primary and secondary sector is dependingon tertiary sector. So it is essential to the development of economy.

15. What are the advantages of road transport?

A: Intr oduction : Road ways is another component of tertiary sector. Road ways are playinga significant role in connecting rural economy of India. Maximum agriculture output istransported through road ways only. Road ways are classified into various types. They areas follows.

1. National High Ways : National high ways are the road ways which are connecting thecapital cities, industrial centers, construction and maintenance of these road ways is theresponsibility of Central Government.

2. State High ways : High ways which are connecting the major trade centers of the state.Construction and maintenance of state high ways is the responsibility of state government.

3. Village roads : These roads are constructed to connect the neighboring villages. Theseroads play a significant role in transporting agriculture product from crop fields to nearesttrading centers. The responsibility of these roads is in the hands of village panchayats.

4. Border roads : These roads provide a good network in border. Their construction andmaintenance rest with border organisation.

As we know that road transport plays a significant role in connecting rural economy ofIndia. The other advantages of Road transport is as follows:

1. It is easy to connect the most remote parts of the country with road way.

2. Road transport is more flexible than railways.

3. Road ways cause decentralisation of industry.

4. Road ways provide a large employment.

5. Road ways is useful in transporting military and police forces in emergency.

Road ways development under various plans.

After independence due to the scarcity of capital development of road ways very slow butafter adoption of plan economy, there is a significant improvement in road ways. There

are 1,60,000 km of Bitamin coated roads and 2,40,000 non Bitamin roads.

Vehicle Traf fic : Total registered vehicles in India are 48 millions. No. of buses is 5,59,000.40% of road transport organisation was nationalised. These road transport organisationsare carrying 45 million passengers every day and providing employment opportunities to1.5 million people.

Conclusion : From the above explanation it is clear to us that road transport is playing amajor role in connecting rural economy and in providing employment.

16. Write about the need for preservation of environment?

A. Intr oduction :- Environmental pollution or deterioration of environmental quality affectsagriculture, industry, human health, labour efficiency etc. It leads to depletion of ozonelayer, greenhouse effect etc., which are challenges for the survival of human beings. Asthe environmental degradation can endanger the very survival of human beings.

Need for preservation of Environment : There is a need to preserve the environment.Broadly there are four general methods to control the activities that damage the environmentor to preserve the environment. They are :

1. Moral persuasions, which is an appeal to reduce pollution in the broader interests ofthe society.

2. Regulations requiring polluters to sent back their emissions to maintain certain levelenvironmental quality or to install a specific treatment of pollutants.

3. Market processes or pricing or fiscal techniques which include:

a) Leying of an effluent charge or pollution charge.

b) Giving subsidies on pollution control equipment.

c) Refundable deposit, which is collected from the polluters and refunded after hisactivities cease: Environmental authorities may use these funds for environmentalprotection activities.

d) Pollution permits and

e) Allocation of property rights.

4. Government investment programmes such as waste treatment plants, slum clearanceand managements of wildlife refugees, reforestation and afforestation are some policyinstruments available to control pollution and preserve environmental quality.

17. Explain the concepts of Environment?

A. Environment is derived from the English Word "Environ" which means to 'Surround' orto encircle. It menas the surrondens to us like air, water, climate, forests, land etc., can becalled as environment. It is our basic life support system. It provides air we breathe, thewater we drink, the food we eat and the land where we live.

Environement is a complex mechanism having two way relationship. In one way it indicatesnature influence on man and on the other man's on nature. Environment is a broad conceptconcerning the whole range of diverse surroundings in which we perceive, experience andreact to events and changes.

Concepts of Environment

1. Physical Environmnt :- It covers physical, chemical and bilogical elements.They are

a) Land and climate b) Vegetation, wild life and natural areas

c) Surronding land uses and physical characters of the area

d) In frastructure e) air polution levels

f) Noise pollution level

2. Social Environment :- If it include no of factors such as population and its density,community composition, religious, education, schools, park, hospitals recreation andcultural facilities etc.

3. Economic Environment :- All economic factors like employment, unemploymntlevels, income sources availability of factors of production, demand etc comes underthis catagery. These factor have close links with social and cultural factors.

4. Aesthetic Environment :- This category comprises all historical, archeological objectsor sites scenic areas views and land scopes. People derive pleasure by seeing suchobjects.

Conclusion :- Environment implies only physical environment. Hence environemnt canbe defined as physical, chemical sorroundings in which organisms live. It constists of allkinds of living and non living things.

K. Janardhan ReddyM.A., B.Ed.

Chairman, Royal Educational InstitutionsHyderabad

1. Explain the theory of Demographic Transition?

A. INTRODUCTION :- Demographic theory of transition explains the relationship betweenbirth and death rates and economic development. It explains how birth and death ratechanges, as a result of economic development. According to this theory the populationincreases in 3 stages.

I STAGE : In the early stages of economic development both birth rates and death ratesare very high. The birth rates are high because of early marriages, social customs, religiousattitude etc. The death rates are high because of absence of medical facilities, lack ofnutritions food, lack of sanitary conditions, deadly diseases, famines etc, as a result thepopulation growth rate will be very low and India represented this stage between 1901 -21 as birth and death rates were 45 to 46 for 1000.

II STAGE : When economic development takes place some changes will occur in theeconomy. As national income increases, the percapita income and standard of living ofthe people will be improved. So the death rate will fall fastly but birth rates decreasesvery slowly. So the growth of population remains high. As a result of high birth and lowdeath rate population will increase at a rapid rate which is called as "Population explosion"."India represented this stage between 1951 - 1981".

III ST AGE : When economic development reaches advanced stage many changes willoccur in the economy. In order to improve their standard of living and per capita incomepeople deliberately restrict the number of family members by adopting family planning.As a result the birth rates will fall. And the death rates are already fallen in second stageand continues to fall even in third stage So the population growth rate will be very low.Advanced countries in the world are in this stage at present. This theory can be explainedwith the following diagram.

Conclusion : As a result of economic development the values and attitudes of the people willchange but population is not controlled automatically. Transition from Stage II to Stage IIItakes a long period of time. So necessary steps have to be taken by both the govt. and the peopleto keep the growth of population under control.

ECONOMICS- II

IMPOR TANT ESSAY QUESTIONS(10 MARKS)

Birth ratePopulation

explosionDeath rate

Demographic Transition

High

Middle

Low

I II IIIstage stage stage

Birth &Death Rate

2. Describe the views of Amartyasen on capabil i t ies related to human resourcedevelopment?

A. INTRODUCTION :- Prof.Amartya Sen is the 1st economist from Asian Countries whoreceived Noble Prize in economics in 1998. The famous Bengal famine turned AmartyaSen into a welfare economist. Amartya Sen brought out 225 research papers and 20 bookson human welfare. For his immense work in welfare economics the Royal Swedish Academyof sciences awarded him with Noble Prize.

According to Amartya Sen capability is a broad concept. It is not only associated withstandard of living but goes beyond it. Sen used the word "Capabilities" in two senses.

One is the actual attainment of various components of standard of living, health, educationand so on. The other is the potential of a person to attain these capabilities. He used thisconcept of capabilities to emphasise the purpose of social action combating hunger. Hisviews are

1. Basic education, good health and other human attainments are valuable elements of ourbasic capabilities. These capabilities increases the quality of human life. Education, health,freedom are important to increase productivity and incomes.

2. He says the pattern of distribution of literacy education, resources between men and women,rich and poor, determine the survival and consumption patterns.

3. He criticised Indian planning for neglecting primary education. He criticised the KothariCommission report for its concentration on the needs of higher education and its blindnessto the raising public expenditure on primary education.

4. According to him in the field of elementary education India is not only behind China,South Korea and Sri Lanka, but also worst than low income countries. Illiteracy andeducational backwardness in India results.

a) Limiting the freedom and well - being of people.

b) Leading to deprivation of women.

c) Sustaining high level of mortality and fertility rates

d) Fails to make any changes in the society

e) It reduces the demand for change in Politics and Public attention in health care.

5. The basic education is not only important for well - being of people in India, but also forthe success of India's economic reforms.

6. Amartya Sen states that achievements of people of Kerala are the result of major socialeconomic and political transformations. These changes are due to high literacy rate. Keralais an example of giving importance to literacy and for social and economic progress.Kerala's major health and demographic achievements is due to wide spread literacy.

7. Female literacy and female labour participation have significant effect on mortality andfertility.

8. Most of the Indian children suffers due to lack of nutritious food. Nutritious food forchildren and medical facilities for all people should be provided.

9. In India education should be within the reach of each and everyone. It causes people to getgood opportunities.

10. Expenditure on defence should be reduced and it should be utilized for development ofeducation, medicine and other facilities.

Conclusion : According to Amartya Sen education, health, employment, land ownership,equitable distribution of food for all backward classes will bring social and economictransformations. According to him development is the quality of life in terms of capabilityexpansion. So, govts. must be capable to provide education and health and on other side peoplemust be capable to receive them, then, only human resources can be improved in developingcountries like India.

3. Define Poverty? What are the causes for poverty ?

A. INTRODUCTION :- Poverty is one of the important problem faced by under developedcountries. It is very easy to identify poverty but it is very difficult to define poverty.

DEFINITION :- "The inability to attain a minimum standard of living is called poverty."

World Bank 1990 report

So those people who fails to reach minimum consumption levels or those who fails tosatisfy there basic minimum needs such as food clothing and shelter are regarded as poor.

POVERTY IS OF TWO TYPES

1. Absolute Poverty :- It refers to that section of people who failed to attain the basicnecessities to maintain minimum standards i.e., food, clothing, shelter

2. Relative Poverty :- It refers to the inequalities of income and wealth and standard ofliving across society that measures people with lesser income or relatively poor than peoplewith higher incomes.

Trends in Poverty in India

Years Head Count Ratio

Urban Rural Combined

1973-74 56.4 49.0 54.9

1999-2000 27.1 23.6 26.1

2007 (Estimated) 21.1 15.1 19.3

CAUSES OF POVERTY :

1. Population Growth :- Population explosion is the main cause for the poverty. As thepopulation increases the number of poor people also increases. For the last 50 years thenumber of poor increases from 17 crores to 34 crores. "The poor people use children like acurrent account in a bank rather than a fixed capital". They give birth to number of childrento increase their family income and to get support from them at their old age. It leads tolow percapita income and low standard of living income.

2. Lack of Health and Education :- As population increases the govt. may not be in a position

to provide better facilities to the people. The available health facilities are not availableto the poor. Poor sanitary condition, lack of education facilities further increases povertyin the country. Illiteracy and high birth rate go side by side in developing economies.

3. Excessive Dependence on Agricultur e :- Agriculture is the primary occupation to millionsof people in India. More than 57% of people depends on agriculture in India. As populationincreases more number of people are forced to depend on agriculture due to lack ofalternative employment opportunities. It causes fragmentation of land holdings so someof the people may not get any land. Poverty and land lessness are correlated. Further itcreates "Disguised unemployment" in agriculture.

4. Under Development :- The root cause for poverty is the under development of the economy.The under development of agriculture and industrial sector shows the under developmentof the economy. As a result number of poor people may increase. Indian economy registeredannual growth rate of just 3.5% till 1981. The fruits of developmental activities is notreaching the poor.

5. Unemployment :- Poverty and unemployment go hand to hand. Poverty is caused byunemployment coupled with low wages. As number of unemployed people increases thenumber of poor also increases. According to Indian development report 0.484 million jobswere created in organised sector during 1979-80 to 1990-91. Whereas 1.763 million jobswere created between 1991-92 to 1997-98.

6. Social Factors :- In India the "Caste System, joint family system and the laws ofinheritance" are the main problem for the development of the economy. So the socialfactors are the main cause for the poverty in India.

7. Institutional Factors :- There are some institutional factors both in rural and in urbanareas having a strong impact "on ownership, management and on work" of the "semifeudalism" is the important institutional factors for the rural poverty. The social andpolitical institution are not allowing the implementation of land reforms. So most of thepeople remain in poverty. Because of institutional factors poor farmers are not getting"Subsidised credit, Fertilisers and Food grains". Further poor are not allowed to have equalshare of public utility services like the education and health etc. in urban areas.

8. Concentration of Economic Power : If more wealth and income is concentrated in fewhands is called as "Concentration of Economic Power". It causing the wide gap betweenrich and poor. It results "Relative poverty" in the economy.

9. Lack of Capital and Technology : The low level of capital formation due to low level ofper capita income leads to low level of production and national income. It leads to lowpercapita income which causes poverty in the capital. This is called "Vicious Circle ofPoverty".

Conclusion:- Poverty is one of the important problems in developing economies like India.Government has to play vital role by implementing antipoverty programmes in removal ofpoverty. "Accelaration of economic growth, control of population, creation of employment andanti poverty programmes" should be implemented to reduce the poverty.

4. Explain the causes and remedial measures of inequalities income and wealth?

A . Intr oduction : Poverty and inequalities of income are closely related to each other, Indianeconomy aims at establishing a socialistic pattern of society. But in India even after 50

years of completion of planning still we find glaring in equalities in income and wealth.The rich people are becoming still rich and poor still poorer.

In the case of personal income distribution bottom 20% of the poor are receiving only 1%of the income the top 5% are receiving 17% of the income in rural areas. In the case ofhouse distribution also 1% of the rich people are having 4% of the houses and bottom 10%of the people are having only 4% of the houses.

Causes for Inequalities in Income :

1. Distribution of Income : During the process of economic development inequalities willarise as the incomes of upper sections of the people are higher than lower sections of thepeople Labour exploitation, setting of industries increases income of some of the people.There will be shortages in each and every sector. Taking this as advantage the businesspeople will get huge profits. As a result in equalities in income arises.

2. Shortage of Employment Opportunities : As population increases the demand foremployment also increases but employment opportunities cannot be increased. Taking theadvantage of excess labour, the labour will be exploited. It causes inequalities in incomeand wealth.

3. Regional Disparities : Natural resources and climatic conditions are not available properlyto all the sections, So the areas which have more natural resources will be developed andthe incomes of the people in those regions will increase. In other areas which remainsunder developed their income remains very less which causes inequalities in income.

4. Tax Evasion & Inflationar y Conditions : In India most of the people will try to avoidpaying taxes. So they accumulate huge money because of heavy investment. The govt’s.planned and unplanned expenditure will increase. It causes cost push and demand pullinflation so the prices will increase. It lead to income inequalities.

5. Govt. Policy : Most of the govt. policies are suitable only to rich people. Taking advantageof the loopholes in the laws the rich people increases their incomes which further increasesthe inequalities in income.

Measures taken by Govt. :

a. Land Reforms : The govt. introduced land reforms, after imposing land ceiling the excessland which is collected from rich people has to be distributed to landless poor it increasesthe assets and incomes to the poor people. But the land reforms are successful only inPunjab, Haryana and West Bengal. Along with providing land crop credit must be providedto poor people.

b. Rural Infrastructur e : Infrastructure facilities like rural roads, electricity and irrigationmust be developed in the rural areas. Supply of water to the small and marginal farmerscan help them to produce two or more crops which increases their income to the govt.Which can be used to improve the conditions of the poor.

c) Fiscal Policy : Broad based Fiscal Policy encouraged taxpayers to come into the tax net,reduced tax evasion and black money and improved the revenue position of the govt. Sothe govt. can spend the amount for the welfare of the poor, which can reduce inequalities.

d. Social Security : In developing economics to raise the living standards of the labour twosocial security measures advocated. They are (1) Growth oriented security and (2) Support

led security. The former approach is to promote economic growth in order to improveprivate & public incomes. The later approach is to increase public support in employment,income reduce, health care, education etc.

Conclusion : Through the govt. has taken no. of measures still income and wealth inequalitiesexist in the country. The policies of the govt. are not properly implemented. Privatisation,liberalizations may further increases the inequalities of income and wealth in the country.

5. Explain the causes for unemployment and suggest Remedial Measures?

A. Intr oduction : Unemployment is a situation in which those are willing and able to workat the prevailing wage rate are unable to get employment. It is the involuntaryunemployment of a person willing to work at the existing wages rate and unable to getemployment . Unemployment problem is the most important problem faced by underdeveloped countries like India.

CAUSES OF UNEMPLOYMENT

1. Excess Population : As population increases the proportion of labour force to the totalpopulation also increases. When population increases the economy is not in a position toprovide employment to all the population. So number of unemployed people will increase.The average employment elasticity is 0.160 where as average rate of growth ofunemployments 6.99.

2. Urban Oriented Industrialization : Indian planning is urban based planing. Almost allthe industries were established in urban areas. As the basic and key industries are capitalintensive unable to provide more employment opportunities to the people, On the otherhand the small cottage industries in the rural areas unable to compete with large scaleindustries. So they were closed and the labour in those industries became unemployed.

3. Land Holdings : In India there exists great inequalities in the land distribution The bottom20% of the people are not having any land where as top 25% of the people are having morethan 75% of the land. Another 30% are having marginal, or small holdings, hence seasonaland disguised unemployments are existing. So poor people lacks both assets and incomes,Coincidentally poverty and unemployment go hand to hand.

4. Slow Growth Rate of Economy : The size of employment in any country dependsconsiderably on the level of devt. Till 1980 the average annual growth rate of economywas around 3.5% as the population growth rate is 2.2% the economy failed to provideemployment to all the unemployed youth. Slow growth rate leads to low level of savings,low capital formation. Lack of infrastructure facilities & low capital failed to providemore employment opportunities.

5. No Man Power Planning : Man power planning is very poor in India, On one hand,literate and illiterate, skilled and unskilled, trained and untrained, unemployed labour forceincreases. But on other hand importance was given to capital intensive industries. Sosufficient employment opportunity are not able to create to provide employment to all thepeople. According to Gunnar Myrdal, after 1990, with the introduction of globalisation,liberalisation in our economy, industrial sector hardly got investment proposal fromFDI(Foreign Direct Investment) but could not provide more employment opportunities.

6. Defective Educational System : India’s educational policy does not aim at developmentof human resources.

The present educational policy in practise has produced millions of literate, unskilled youthwithout professional and technical skills. The education policy is no relevant to the presentday needs. Hence the number of unemployed people are increasing.

Remedial Measures : The problem of unemployment is because of multiple reasons. Hence itis not possible to adopt a single measure to cradicate unemployment. So govt. has takenthe following measures to reduce unemployment.

1. Population Policy : All the govts. right from the 3rd plan onwards emphasises thepopulation control. At present the population growth rate was decreased to 1.83%, If thegrowing population decreases to 1%. It is possible to reduce the problem of unemploymentin the long run.

2. Accelerating Economic Growth : The process of economic growth must be acceleratedto increase employment opportunities. Industrial policy has to be modified & labourintensive industries must started. The globalization and liberalization further reduces theemployment opportunities. Hence self employment scheme should be promoted.

Employment Programs : The govt. implemented different employment programmes to bothrural and urban unemployed youth.

1. Integrated Rural Development Programmes : The I.R.D.P. programmes was designedto generate employment and to remove poverty by providing opportunities for selfemployment to the rural unemployed people, During 1985, 4800 crores were allotted forthis programmes.

2. Swarnajayanthi Gram Swarozgar Yojana (SGSY) : This scheme was launched in April1999 and is the only self employment Programmes currently being implemented. It aimsat promoting micro enterprises to bring the poor families above the poverty line byorganising them into self help groups. The finance which is required to implement thescheme is shared by both centre and state of the ratio of 75:25. By December 2002 is4,335.70 crores was made available by the centre.

3. Sampoorna Grameena Rozgar Yojana (SGRY) : This scheme was started in September2001. The former EAS (Employment Assurance Scheme) was fully integrated with thisscheme. The major objectives of the scheme is to provide additional employment alongwith food security. Rural people are given employment in creations of durable commodities,social & economic assets and infrastructure development done in rural areas. The cost ofthe Programmes is shared by centre and state on cost sharing ratio of 87.5 : 12.5.

4. Pradhana Mantri Gramodaya Yojana (PMGY) : The PMGY was launched in 2000-01in all the states and Union Territories to achieve human devt. at the village level. It aimsat providing basic infrastructure like education, health rural electricity etc. On 15th August2003, Prime Ministries announced a new model i.e. Provision of Urban amenities in RuralAreas (PURA) to promote rural development.

Conclusion : The problems of poverty and unemployment are mainly caused because of excesspopulation, lack of proper manpower planning etc. Hence long term multi dimensionalplans and strong political will to implement the policies can pave the way for findingsolutions to the problems of poverty & unemployment.

6. What are the causes for low productivity in Indian Agriculture and suggest measuresto imporve it?

A. INTRODUCTION :- Though agriculture occupied a prominent place in the Indianeconomy, it is noteworthy to observe that there is no desirable progress in agriculturalsector. When compared with the other countries of the world, the level of production andproductivity in Indian Agriculture are low.

S.No. Particulars Yield of ind. World highest Countries with(quintals) production (q) highest production

1. Paddy 19.13 88.80 Egypt

2. Wheat 27.43 80.50 Britan

3. Ground Nut (pods) 9.20 30.40 USA

4. Jute 20.00 25.20 China

CAUSES FOR LOW PRODUCTIVITY :- The causes for low productivity in the Indianagriculture is classified into 3 types

1. Technical causes 2) Institutional causes 3) General causes

1. TECHNICAL CAUSES :

a) Traditional Techniques and Older Equipment :- Most of the Indian farmersuses old and outdated methods of production. All the agriculture operation will becarried with the help of animals and labour. So, the production remains very low.Many of the Indian farmers are ignorant of the latest farm technology like modernmachines, high yielding seeds, fertilisers etc. which leads to low productivity. In therecent years there has been a lot of improvement in this situation due to the spread ofeducational and the govt. efforts.

b) Lack of Irrigation Facilities :- Most of the cultivable land depends on monsoonsfor irrigation, the monsoon are irregular and uncertain only 39% of the land is havingartificial irrigation. So, multiple cropping is not possible. It causes low productivity.

c) Scarcity of Modern Farm Inputs :- The supply of modern farm inputs like pesticides,fertilizers, Hybrid seeds farm machinery is not sufficient in our country. More overthe prices of these inputs are beyond the reach of the small farmers which leads to lowproductivity.

2. INSTITUTIONAL CAUSES :

a) Inequalities in the distribution of the land: There are more inequalities in thedistribution of the land in our country. Even though more land is possessed by the fewrich people, they do not concentrate on land and the poor are unable to raise productivityinspite of their best efforts.

b) Small Size of Land Holdings :- The size of holding in India which is 1.35hectares is one of the lowest in the world. Besides small size of holdings fragmentationwill take place. 51% of the farmers are either small or marginal farmers who possesvery small size of holding. Small and fragmented holdings do not give scope for theuse of modern methods of production. Hence, production remains very low.

c) Detects in Land Tenure System :- The existence of middleman system (Zamindari,Jagirdari, Mahalwari, Royatwari) systems causes agriculture to remain backward duringBritish rule. Most of the farmers in India are tenant farmers. These is no security oftenancy and fixation of rents. Hence, the tenant farmers never takes interest inimproving the quality of land. The production remains low.

3. GENERAL CAUSES :-

a) Impact of the British Regime : During British period the policies like landtenure system collection of land cess etc. gave a delay blow to the Indian AgriculturalBritishers leave not shown any interest in development the agricultural sector and madeour economy as a colonial one.

b) Pressure of population on Agricultur e :- Due to the high population growth rateand slow growth rate of other sectors still 58% of the population depends on agriculture.This causes a high pressure of population on farm sector which ultimately leads todisguised unemployment and fragmentation of land holdings. As a result theproductivity in agricultural sector is low.

c) Discouraging Rural Atmosphere :- The rural atmosphere in India is now conflictingand discouraging in nature causing a low level of productivity in the farm sector.Fractions, court litigations, conflicts are polluting the rural atmosphere. Rural peopleare becoming narrower due to decay of joint family system, hunger, poverty, oldtraditions etc. leading to low productivity.

d) Lack of Infrastructural Facilities :- Various infrastructural facilities like transport,storage , credit and marketing are inadequate to the growing population in rural areas.Moreover commercial banks and co-operatives are not properly covering all the villageshence, lack of adequate infrastructure facilities are responsible for low productivity inagriculture.

Measures to increase Agricultural Pr oductivity :

1. Land r eforms :- The farm average size can be increased with the help of tenancy reforms,consolidation of land holdings co-operative farming etc. This helps in introducing technicalchanges effectively in our agricultural sector.

2. Provision of infrastructural facilities :- Government should providetransportation, marketing, storage and credit facilities to the farmers to increase theproductivity.

3. Agricultural extension services :- By appointing the agricultural extension officer toprovide agricultural extension services and to convince the farmers to use new techniqueswill increase the productivity.

4. Provision of Irrigation Facilities :- More number of minor and major irrigation productsshould be started by the govt. to provide irrigation facilities to the farmers.

5. Farm mechanisation : State and Central Govt. should encourage the farmers to usetractors, pumpsets, harvesters etc. to increase the productivity.

6. Controlling Population growth rate : Population should be controlled to reduce thepressure on land and to avoid small size of holdings and on the other hand non-farm sectorsshould be developed to reduce the pressure on land and to increase the productivity.

7. Literacy Pr ogrammes : More number of adult education centers and voluntaryorganisations should be started to educate the farmers. The farmers will be able to introducethe modern farm technology only when they are educated.

Conclusion : After Independence the govt. has taken several steps to increase the agriculturalproduction. Credit facilities, irrigation facilities were provided. Regulated markets areestablished. Hybrid seeds were invented and land reforms were introduced. As a result of themeasures taken by the govt. the agriculture output increased to 209 million tons by 2001.

7. Explain the causes for small size of Land Holdings? Suggest Remedial Measures?

A. INTRODUCTION :- The area of cultivable land held by a farmer is called as land holding.The land holding process an important bearing on the productivity of the land. The size ofland holding in India is very small. The average size of holding is only 1.35 hectares.Which is one of the smallest in the world. 35% of farmers are having less than 5 acres ofland and are called as marginal farmers. 51% of the farmers are small farmers who arehaving less than 1 acre land.

The problem of land holding in India are two fold not only the size of holding is small butalso the holding are not found in one compact block at one place. They are divided andsubdivided into small and tin plots which are scattered all over the village. It is called asfragmentation of land holdings.

CAUSES FOR SMALL FRAGMENT ATION OF LAND HOLDINGS :

1. Division and Fragmentation of Lands :- Fragmentation land holdings is the mainreason for the small size of land holding in our country. When land is divided into tinyparts and scattered at different places, it is called fragmentation of land holdings.

2. Gr owth of Population :- The population has been increasing very rapidly in India.When the population increases the pressure on land also increases. So the existing limitedland will have to be shared by the growing population. Consequently the size of the holdinggoes on decreasing.

3. Laws of Inheritance :- The existing law of inheritance is also one of the man causefor the small and fragmentation of land holdings. According to these laws all childrenwill get share in parental property. As a result the size of land holding is graduallydecreasing.

4. Br eak Down of Joint Family System :-Under jo int fami ly system al l the fami lymembers lives together and this kept the land holding intact. But in the recent years thejoint family system has broken down due to western education under raising spirit ofindividuals. When one family member is separated he will be given his share, as a resultthe land size goes on decreasing.

5. Decline of Handicrafts :- In the olden days some of the family members use to dependon cottage and handicrafts which provides alternative employment to them. But in therecent years because of competition from the large scale industries most of the cottageand small scale industries were closed. So those people who lost the employment in thisunits are forced to depend on agriculture. As a result the land size goes on decreasing.

6. Rural Indebtedness :- Due to lack of proper institutional credit facilities, most ofthe farmers in rural areas often borrow from money lenders and are unable to clear theirdebts. So they have to sell some part of the land to the money lenders. As a result holdingsize goes on decreasing.

7. Land Hunger :- Most of the villages aims to have a peace of land as they feel land isthe symbol of prestige and honour in the society. So most of them are deeply attached toland, this is known as land hunger. As a result no family member will accept money inexchange of land. Consequently the land size goes on decreasing.

Consequences of Fragmentation of Land Holdings

1. Wastage of Farm Land :- Due to the small and fragmented land holdings most of thecultivable land will be wasted in the form of boundaries fencing and path ways. As aresult productivity will decrease.

2. Less Scope for Mechanisation :- Because of the small size of holdings it is not possibleto introduced modern techniques of production in the field of agriculture due to thefragmentation of land holdings it becomes impossible to the farmer to make properarrangements of irrigation to all the plots so the productivity remains low.

3. Supervisory Problems :- Because of sub division and fragmentation of land holdings itbecomes difficult to the farmers to manage all the plots of land efficiently. Personalsupervision is not possible.

4. Transportation of Factors of Production :- Because of small and fragmented landholding there is considerable wastage of time and money in transporting seeds, fertilizers,labour and other agriculture inputs from one plot to another.

5. Disputes and Court Litigations :- Existing of small size of holding causes frequentdisputes among the farmers with regard to the boundaries and lead to court litigations.This results in waste of valuable time and money. Moreover the rural atmosphere gettingspoiled and peaceful village life is disturbed.

6. Under Utilisation of Capital and Labour :- The services of capital and labour are underutilised on small lands. As a result cost of production increases and there by the returnsfrom agriculture decrease considerably.

7. Other Problems :- The following problems will also emerge along with the above, due tothe smaller size of farms:

a. Small farmers cannot take up the permanent land development activities like soilconservation and land reclamation.

b. Some farm activities like crop rotation, crop holiday, and modern techniques are notpossible due to the small size of the farms.

c. Small farmers cannot get credit and marketing facilities adequately.

Conclusion:- Unless the problems that arise due to small sized land holdings are solved,it is not possible to increase the agricultural production of productivity.

8. What are the causes and remedial measures of Rural indebtedness?

A. INTRODUCTION :- Rural indebtedness is one of the obstacles of agriculturaldevelopment in India.A majority of te rural folk borrow funds to meet their credit needs.As, a higher proportion of these borrowed funds is used for unproductive purposes, theycannot repay their loans fully. As a result, they become debtors. This can be termed asrural idebtedness.

ESTIMA TES OF RURAL INDEBTEDNESS :- All India Rural Credit EnquiryCommittee estimated that the debt burden of the rural folk in India was about Rs.913crores in 1951. Among this 83 per cent of the loans were spent for unproductive purposes.It is now estimated that this rural indebtedness has increased to Rs.23,618 crores by 2002.The following important points here. They are :

1. A majority of ruralfarm households in India are in debts.

2. Rural people are spending a higher proportion of borrowed amounts on unproductiveactivities.

CAUSES FOR RURAL INDEBTEDNESS :-

1. Ancestal Debt :-Farmers in India inherit their parent's property along with debts. Manyof the rural people in our country feel that it is their sacredduty to repay the ancestralloans. But the villagers are cleaning the entire ancestral debt due to their ignorance andilliteracy and becoming debtors. Ascommented by Royal Commission "the Indian farmeris born in debt. lives in debt and dies in debt".

2. Poverty :- Most of the people in rural areas are caught in the vicious circle of poverty andtheir incomes are low and uncertain. Poverty forces the people to borrow funds and also isprevents them to clear off the debts. In this way poverty seems to be a major factorresponsible for rural indebtedness in India.

3. Social and Religious Functions :- Rural people in India respect social customs likefestivals, marriages, births, and deaths. They spend huge amout of money on these functions.As the funds borrowed for these unproductive purposes cannot be repaid by the farmerseasily, they arebecoming debtors.

4. Court litigations :- People in rural areas some times indulge in disputes on simple issueslike boundaries, pathways, fencing etc. and go to court of law. So, they borrow funds tomeet the court expenses. Consequently, their valuable time and money is being wasted andthis adversely effects farm production and productivity.

5. Higher Farm Costs :- Recently agriculture became a risky venture in India due tosubstantial increase in the cost of production. This is mainly due to the hike in the pricesof inputs and the scarcity of some facilities like credit, irrigation, storage, marketing etc.As a result, many farmers, who invested their borrowed funds onagriculture, are becomingdebtors.

6. Money Lenders :- Many people in ruralareas depend on money lendersto meet their creditrequirements. After some time they lose their valuable ornaments and lands due to theunfair practices of the money lenders. Later, they become tenants or farm labour.

7. Small Farms :- The average size of farms in India is very small due to the sub divisionand fragmentation of land holdings. Because of the small size of the farms, farmers arenot able to introduce the modern technology in farm sector. Many small and marginalfarmers are still following the old methods of cultivation and getting lower returns fromagriculture.

8. Other Causes:- In addition to the above causes, purchase of household luxuries, spendingonbad habits and medicines are also forcing the rural people into debts.

II. REMEDIAL MEASURES :- The following measures are suggested to solve the problemof rural indebtedness.

a) Expansion of Institutional Credit Facilities :- The government should provide adequatecredit to the farmers and other rural people through commercial banks, RRBs, Co-operativeCredit Societies etc. so that the debt burden can be reduced in rural areas.

b) Regulation of Money Lenders :- Government is not trying to regulate the unfairpracticesof money lenders. Similarly the importance of tradersand commission agentsinfarm creditshouldalso be minimized.

c) Debt Moratorium :- Government should take initiative in reducing ruraldebt burdenthrough a moratorium as introduced in the period of emergency. Gvernment of India hasannounceda moratorium on the recovery of debtsfrom landless labour and marginal farmers.Similarly, the government should now evolve a proper to reduce the debt burden of ruralpeople.

d) Educating the Farmers : All the farmers in rural areas should be educated onvariousissued like ancestorl debt, Irtigations, social and religious customs etc. More adult educationcenters should be started in rural areas to educate the farmers.

e) Other Measures : In addition to the above measures, the government should evolve properpolicies to solve the existing social and economic problems like poverty, unemploymentetc. So that the incomes of the rural people increase and thereby the problem of ruralindebtedness can be solved permanently.

9. Explain the importance of Small Scale & Cottage Industries in Indian economy?

A. INTRODUCTION: Cottage and small-scale industries together are called small-scaleindustries. These industries are having lot of significance in the Indian Economy.

Definition of Small Scale Industries :

Small Industries are classified into (a) Cottage or Tradial Industries (b) Modern orSmall Scale Industries (c) Anciallary Industries (d) Tiny Units

a. Cottage or Traditional Industries : “All those house hold production units with orwithout using hire labour producing traditional goods by using traditional raw materialsare called Cottage or Traditional Industries”.

Ex : Pot making, Weaving, Dairy firms etc.

b. Small Scale Industries : These Industries are defined differently time to time on thebasis of Investment. Intially these were defined with Investment of Rs. 5 Lakhs in 1948and extended to Rs. 60 Lakhs in 1991. Further it has been increasedto Rs. 3 Crores asper the recommendation of Abid Hussain in 1997, finally by 2000 it is fixed as Rs. 1Crore.

Ex : TV Sets, Electronic Equipment, Engineering Goods etc.

c. Ancillaries : The Industries which manufacture spare parts required by Large ScaleIndustries having with the investment of Rs. 5 Crores are called as Ancillaries.

d. Tiny Units : These are very small units which the investment of Rs.25 Lakhs only.

Impor tance of Small-Scale Industries : India is a labour rich and capital poor country. So thedevelopment of small-scale industries is very essential to increase employmentopportunities. The number of units which were 16000 in 1950 raised to 30.14 lakhs by1997.

1. Employment generation : These industries will generate large employment in our country.As no. of unemployed people are more it is essential to develop these industries as theyadopts labour intensive measures. In 1997, 1.69 crores people where employed in theseunits.

2. Low Capital : As the capital equipment and machinery used in these industries are notexpensive, the capital requirement is very less. Production can be increased by setting ofmore no. of units by using less capital. The capital output ratio is low.

3. Controls inflation : The gestation period in these industries is very less. Output can beincreased at a faster rate to meet the demand. Hence the inflation that arises due to thegrowth of large scale industries can be controlled by establishing small scale industrialunits.

4. To achieve balanced regional development : These industries are suitable fordecentralisation of economic activities. These industries can be established with low costand do not require huge infrastructure facilities. So by establishing these industries inbackward areas the regional desparties can be reduced.

5. Impor t light : The tools and equipments used in these industries are available in ourcountry. They need not to be imported. So the import burden on govt. can be reduced.

6. Skill light : To run these industries technical and trained persons are not needed. Theseindustries can be ruled with unskilled persons. So the existing skilled person are availableto large scale industries.

7. Equitable distribution of income : Small and cottage industries are suitable to achievethe objective of social economic justice. The growth of large scale industries causesequalities in incomes. On the other hand small scale industries create equitable distributionof income. Vast majority of people will get incomes.

8. Contribution of exports : By exporting the goods produced in these industries the govt.can get foreign exchange. 35% of the exports in India are goods producing in small scaleindustries.

CONCLUSION: These are the industries which can help in mobilisation of capital whichincreases capital formation. Rural talents both in terms of men and material can be utilised. Sothe development of these industries is essential in India to achieve rapid economic development.

10. What are the problems faced by Small Scale & Cottage Industries and suggest remedialmeasures?

A. INTRODUCTION : Cottage and small-scale industries together are called small-scaleindustries. These industries are having lot of significance in the Indian economy.

Small Scale Industries: These Industries are defined differently time to time on the basisof Investment. Intially these were defined with Investment of Rs. 5 Lakhs in 1948 andextended to Rs. 60 Lakhs in 1991. Further it has been increasedto Rs. 3 Crores as per therecommendation of Abid Hussain in 1997, finally by 2000 it is fixed as Rs. 1 Crore.

Eg: Handloom, Khadi, Handicrafts, Printing and painting etc. are the examples oftraditional small-scale industries. Engineering products, electronic control systems arethe modern small-scale units which are ancillary units to large scale units.

Problems of Small Scale Industries : The cottage and small scale industries are facingno. of problems which often forces them to close down. A large number of units are sick.These units are facing the following problems.

1. Scarcity of Capital : Shortage of capital is the main problem faced by these industries.These units are not credit worthy. The profits of these units are not sufficient to financethe investment needs of these units. They cannot avail capital from money market andcapital market. Some of the units are taking loans from money lenders at high interestrate.

2. Availability of Raw Materials : Most of these units are not able to get sufficient rawmaterial. Most of them are depending on traders and local sources. These traders willsupply low quality raw material at high prices. So the cost of production increases qualitywill decrease and profit will fall.

3. Poor marketing facilities : Most of the small-scale units are not having proper marketingorganisation. So, they have to depend again on middle men who offers lower prices. Theydo not have market information.

4. Old and Out-Moded Machinery : Most of the small-scale units are still using old andout dated machinery. They don’t want to change these measures of production as a resultthey are not in a position to produce quality goods to meet the demand of the changingneeds.

5. Competition fr om Large-Scale Industries : Small-scale industries are facing cut throatcompetition from large scale units. The large scale industries enjoys all types of economiesof large scale. They produce quality products at low cost. They attract the consumers byspending lot of amount on advertisement. So, the demand for the goods of small scaleunits has been falling.

6. Inadequate Infrastructural Facilities : Even though the labour is abundant, there isscarcity of skilled labour for small scale industries. Some services like water, electricity,transport and communications are not available in all the places.

Measures taken by Government : After independence the govt. has taken several measures tosolve the problems of small-scale industries. In 1947 cottage industries board was set up. In1955 karve committee and ford foundation committee was set up to suggest remedial measuresto be taken by the govt. The govt. accepted and implimented all the recommendation made bythis committee. They are

1. Product Reservation & Purchase Preference : The govt. reserved some of the productexclusively to produce only in small scale industries. At present 812 products are reservedfor small-scale industries. The Government is giving top priority for Small Scale Industrialproducts in their purchases.

2. Supply of Raw Materials : Arrangements were made to ensure the supply of raw materialsto these units. Import policy was relaxed in favour of small-scale industries to import rawmaterial. STC has been arranging the supply of raw materials to these units.

3. Financial Assistance : Under the directions of govt. commercial banks SFC, IDBI, ICICIand other financial institutions are supplying credit to these units. Commercial banks atpresent supply 40% of their credit to these units. SBI and IDBI introduced soft loan schemeand project finance scheme to provide adequate supply at a lower interest rate to theseunits.

4. Marketing Suppor t : The govt. has been making arrangement to market the products ofthese industries. The mass media is also utilised for the purpose of consumer educationand sales promotions. Industrial co-operatives were established to market the products ofsmall-scale industries.

5. Industrial Estates : The govt. Established Industrial Estates throughout the country todevelop these units. In this estate good accommodation and other facilities will be givenat a cheaper rate. This is very essential for the Ancilliary Industries. All kinds ofInfrastructural Facilities are provided.

6. Establishment of Boards : The govt. of India established no. of institutions for fulfillingthe requirements of the small-scale industries

1. National Small Industries Corporation (1955) has been setup. It helps all the small scaleindustries in Production, Marketing, Purchase of Machinery on hire purchase basis.

2. All India Boards like All India Handloom Board, All India Handicrafts Board etc. havebeen established for the process of production, marketing, transport, quality etc. Theyhave also opened sales emporiums.

3. In 1954 Small Industries Development Organisation was started to provide technicalassistance to all the small scale industries. It has started service institutions and industrialextension centers and workshops for providing common service facilities and guidelines.

CONCLUSION : As the result of the above steps taken by the govt. some of the problems ofthese industries were reduced. But due to the globalisation and liberalisation these industries

are again facing competition from imported goods and multinational companies. The centreshould make a policy to rise the efficiency and competitive strength of small scale industries.This alone can make these sectors as a dynamic sectors.

11. Explain the 1991 Industrial Policy Resolution?

A. Intr oduction : The congress govt., headed by P.V.Narasimha Rao announced newindustrial policy in 1991 in two parts. The first part which is related to medium andlarge-scale industries was announced on 24th July 1991. The second part was announcedon 6th August 1991 which is related to small scale industries. The policy involves strugglefor social and economic justice to end poverty and unemployment and to build a modernstrong democratic forward looking area.

Objective of 1991 policy :

1. To correct the weakness and to attain international competitiveness.

2. To provide gainful employment in the private sector.

3. To increase the productive capacity of industries.

4. To reduce the economic inequalities and to achieve economic development.

Salient features of 1991 policy :

1. Abolition of Industrial Licensing : In a major move to liberalise the economy and tostrengthen the private sector the existing licensing policy was abolished. At present only18 industries which are of strategic importance for which licensing is compulsory.

2. Public sector role diluted : As most of the public sector under takings are incurringheavy losses, the policy brought down the number of industries reserved for public sectorto eight in 1991. Now only 6 industries like atomic energy, defence products, mineraloils, railway transport and other mineral were reserved for public sector.

3. Impor tant r ole for Foreign Investment and Technology : The new policy prepared alist of high technology and high investment in private industries. Automatic permissionwill be available for direct foreign investment of 51% foreign equity.

4. Controlling Monopolies : The new policy relaxed the M.R.T.P. act. Now the big firmsneed not take permission from the govt. to invest decentralised sector. The amended actgave more importance to the consumers.

5. Industrial location, Policy of decentralisation : The new industrial policy providesthat industrial permission from central govt., is not required to establish units in cities ofless than one million population. If the population exceeds more than one million, theindustries will have to be established 25 kms away from cities.

6. Impor t of Capital goods : According to 1991 Industrial Policy the import of Capitalgoods has been liberalised.

7. It is decided to remove mandatory convertability taken through the financial institutions.

Critical Appr oach :

1. The main aim of Industrial Policy Resolution of 1991, is to remove the bottle necks andto increase the industrial production. But the industrial production came down from 7.8%to 7.2% between 1981-91 to 1994-2001.

2. with regard to the performance of central public enterprises, out of 107 public sector

enterprises, 49 were rated as excellent, 25 as very good and 12 as good in performanceindex.

3. The overall growth rate of employment was only to the order of 1.0% from 1990-91 to1997-98.

4. The proportion of casual labour to total employment has increased. This is a negativefactor in view of labour welfare and employment security.

Conclusion : 1991 Industrial Policy can be considered as landmark in the economic history ofIndia. It created a new era in the industrial field of economy.

K. Janardhan ReddyM.A., B.Ed.

Chairman, Royal Educational InstitutionsHyderabad

ECONOMICS - II

IMPORTANT QUESTIONS & ANSWERS FOR 2 MARKS

1. ECONOMIC GROWTH :- Economic Growth is a phenomina. The increase in the real output of goods and services is called economic growth. It is related to developed countries. It is quantitative.

2. ECONOMIC DEVELOPMENT :- Economic Development is a process where by national income of a country increases over a long period of time. The overall progress of economy through institutional & technical changes is known as economic development. It is related to developing countries. It is both quantitative and qualitative.

3. PER CAPITA GNP :- Per capita GNP is the best index of development, it can be derived by dividing the GNP of a country with its population higher the level of per capita income, higher is the economic development.

Percapita GNP= 4. WORLD BANK CLASSIFICATION COUNTRIES OF THE WORLD

:- The world bank in its world development report 1998 classified the countries in the world on the bases of per capita GNP. They are :

1) Low income countries with GNP per capita of 735 $ and below

2) Middle income Countries :- With per capita GNP range between 736 $ to $ 9075 (lower, upper)

3) High income countries with per capita GNP more than 9076 $.

5. PLANNING COMMISSION DEFINITION OF UNDER DEVELOPED COUNTRIES :- An under developed countries is one which is characterised by the co-existence of unutilised or under utilised man power. On one hand and unexploited natural resources on other hand.

6. HUMAN CAPITAL :- Population is also called as human resources. The quality of population is the human resources. Human resources depends upon the quantity of population, education, health, nutrition, age group incomes and wealth disparities in the country.

7. PRIMARY SECTOR :- Agriculture, animal husbandary, fisheries and forests comes under primary sector. In the early stages of development most of the people in the country depends on primary sector. When development takes place the dependence on this sector gradually decreases. In 2001 the dependence of population on primary sector is 56.7%.

8. INDEGENEOUS HEALTH CARE :- Ayurveda, siddha, unani, tibbi and homeopathy and unregistered medical practitioners comes under this sector. Bulk of the medical care in rural areas is provided by indegeneous sector.

9. HUMAN DEVELOPMENT INDEX: - HDI is a term coined by UNO in 1990. It is a composite index covering the level of per capita income, educational attainment and survival rate. It is a summary measure of human development. According to Mahabub-Ul-Haq, HDI is a process of widening people's choice as well as rising the level of well being the achieve. According to him HDI measured the following 3 basic dimensions of human dev.

10. AGRO BASED INDUSTRIES :- The industries which depends on agriculture for the supply of their raw material are called as Agro based industries. Jute, sugar cane, coffee, edible oil etc., are the agro based industries.

11. AGRICULTURE ALLIED ACTIVITIES :- Activities which linked with agriculture are called agriculture allied activities. Processing, Marketing, Package, Storage are called as agriculture allied activities. These activities provides indirect employment to labour.

12. LAND HUNGER :- Most of the villages aims to have a peace of land as they feel land is the symbol of prestige and honour in the society. So most of them are deeply attached to land, this is known as land hunger. As a result no family member will accept money in exchange of land. Consequently the land size goes on decreasing.

13. ECONOMIC HOLDING :- An economic holding is one which provides decent standard of living and full employment in the members of agriculture family in the place of economic holding the Indian planning commission introduced family holding.

14. CONSOLIDATION OF LAND HOLDINGS :- Consolidation means pooling bringing together all this scattered land holdings at one place is called as consolidation of land holdings under this system the owners of the scattered land holding is given land at one place equalent to price of land.

15.. CO-OPERATIVE FARMING :- Cooperative farming can define as the type of farming done by the farmers of the village on cooperative lines after integrating their fragmented land holdings. Under this farming the farmers will form a cooperative society and pool their land, cattles, and other agriculture implements cultivate the land jointly.

16. FRAGMENTATION OF LAND HOLDINGS :- The land holdings of the farmer is not found as one compact block at one place there are divided and sub divided into small and they plots which are scattered all over the village this situation is called as fragmentation of land holdings.

17. GREEN REVOLUTION :- The productivity and overall production is very low. So the govt. introduced new agriculture strategy in 1965 to increase an agriculture production. Consequently the production and productivity increases significantly. The revolutionary growth in the agriculture sector between 1965 to 1970 was termed as Green Revolution.

"Whilliam S.Gand" is the first economist who used the term green revolution.

18. AGMARK :- It is the mark given by the govt. to the quality agricultural products. Agriculture goods will be separated as per there quality. The high quality product will be given Agmark. The commodity which is base. Agmark will get highest price.

19. PROCESSING : All the goods should be made for direct consumption is called Processing. Ex: Pulses are to be processed for direct use.

20. GRADING :- The separation of agriculture goods according to their quality is called as grading. Grading facilitates to the consumers to get quality product and to their farmers to get better prices.

21. CONTRACT FARMING :- One of the solution to solve the problem of agriculture marketing is the contract farming. It may be defined as

' Sale contract of farm goods done between the farmers and uses of such product'.

Farming done between sugar growing farmer and sugar factories is called as contract farming, this system eliminates all the middlemen.

22. RYTHU BAZAR :- The A.P. govt introduced an innovative programme for marketing agriculture goods by establishing Rythu Bazar. In this markets the farmers will sell there products directly to the consumers without the intervention of middlemen every rupee paid by the consumer will directly go to the farmers both farmers and consumers will be benefited.

23. DWACRA SCHEME : - It means development of women and children in Rural Area. This programme started by A.P. Govt. recently for the upliftment of women and children in rural area. Government provides funds for self sustainable programmes for women groups.

24. LAND REFORMS :- The institutional reforms which the govt. introduced, proposed to introduce to develop agriculture are called as land reforms. "The redistribution of land with a view to safeguard the interest of small marginal farmers & farm labour", may be called as land reforms.

25. ABSOLUTE POVERTY & RELATIVE POVERTY:- It refers to that section of people who fails to attain basic necessities to maintain minimum standard of living. It means those people who fails to satisfy their basic minimum requirements like food, clothing & shelter are regarded as absolute poor.

RELATIVE POVERTY :- It refers to inequalities of income, wealth & standard of living across different sections of people in the society. It means people with lesser income are relatively poorer than higher income group people.

26. POVERTY LINE :- The measurement of absolute poverty is made by estimating poverty line. Poverty line refers to the cut off level of annual income of the households which is needed for subsistence. The households whose annual income is lower than cut off level of incomes are said to be below the poverty line.

27. SELF HELP GROUPS :- Self help group is an instrument for delivery of micro credit to the poor people and helps in developing the habit of small savings among poor people. The main aim of SHG are social welfare, mutual aid etc. SHG have Regional, National and International Network.

28. GLOBAL MARKET OR WORLD MARKET:- Globalisation forces received tremendous boost to its settling up of WTO. In the globalisation world has become a global village or the world with out boarders. As world has become globalised, global market is an important institution. Global market is one where buyers and sellers of the globe are in contact with one another. Prices are determined by the combined actions of global buyers and sellers. In global market opportunities and challenges are mere diverse than ever before.

29. GLOBAL VILLAGE :- Due to rapid increase of globalisation, the world has become a global village. In global village electronic marketing like Internet facilities will have its impact on global market. Hence highly sophisticated information network is essential.

30. TRIMS & TRIPS:- Trade Related Intellectual Property Rights refer to the legal ownership of a person or business of an invention or discover attached to a particular product or process. It protects the owner against un-authorised copying. The USA has been since a long time insisting upon the proper safe guard to the intellectual property rights of the researchers or business. Agreements on TRIPS is comprehensive and sets out the minimum standards of protection to be adopted by parties in respect of copy rights, trade marks, trade secrets, patents etc.

TRIMS : Trade Related Investment Measures refer to certain conditions or restrictions imposed by a government in respect of foreign investment in the country. TRIMS were widely employed by developing countries. The agreement on Trade Related Investment Measures calls for introducing national treatment of foreign investment and removal of qualitative restrictions and opens the gates of financial services sector.

31. INDUSTRIALISATION :- Industrialisation should be help for economic development. It is a process in which there is a sharp increase in the industrial share of GDP and of the labour force.

32. INDUSTRIAL ESTATES :- Industrial Estates are instruments in the development of modern Small Scale sector. Industrial Estates save time and investment expenditure of small scale unit owners. An Industrial Estate is an attempt to provide, on a rental basis, good accommodation and basic common facilities to groups of small entrepreneurs who would find it

difficult to secure these facilities at a reasonable price. These are mainly useful for developing the ancillary units of the large scale industries. Decentralisation of the industrial sector is also made possible.

33. IIBI : Industrial Investment Bank of India which was formally known as Industrial Reconstruction Bank of India(1985) was established in 1997 for the rehabilitation of sick industrial units.

34. SIDBI : - It means small scale Industrial Development Bank of India. It is a subsidiary of IDBI. The SIDBI act was passed by the Parliament in October 1989 and the Bank commenced its operations from April 2 1990.

35. INDUSTRIAL LABOUR:- Labour working in the small-scale, medium scale and large-scale industries are called “Industrial labour”. But in India, the term industrial labour is used only to the labour working in the organised industrial units under the preview of Factories Act.

36. TRADE UNIONS :- It is a voluntary association of occurs formed to promote and protect the interest of workers threw their activities. Trade Unions are providing awareness among the workers regarding the working environment and increasing the bargaining power of labourers.

37. Advantages of Units (Unions) : Trade Units or Unions are voluntary organisations of workers formulated to promote and protect the interests of workers through collective action. Strong trade unions are prerequisites for protecting the labour and to strengthen their bargaining power and to solve their problems.

38. ICICI :- ICICI was sponsored by a machine from the world Bank for the purpose of developing small and medium term industries in the Private Sector. It was registered in January 1955 under the companies act. ICICI Capital has been subscribed by Indian Banks, Insurance Companies & Individuals and Corporations of the United States.

39. SCIENCE AND TECHNOLOGY : - Accumulation of knowledge is considered as science and refinement of Machines and tools can be called as technology. Science and technology plays a crucial role in economic development and improving the quality of human life. Though India stands in top rank in science and technology in the world, the main weakness of India is that India is not in a position to utilise the science and technology to the maximum level. And also it is to be noted that science and technology did not reach the ordinary man but was mostly limited to rich classes.

40. INFRASTRUCTURE FACILITIES :- Economic development of any country depends upon a varialability of Infrastructural facilities. Infranstructural Facilities can be divided into a) Economic Infrastructure and b) Social Infrastructure. Economic Infrastructure Facilities comprise of "Energy, Transport, Communications, Banking, Finance & Insurance, Science & Technology". Social Infrastructure comprises of "Education, Health and Hygienic etc".

41. LIFE INSURANCE :- Insurance is classified into two 1. Life insurance 2. Non-life insurance. Life insurance provides protection to a house hold against the risk of premature death of its income earning member.

42. AGRICULTURAL WASTES : Agricultural wastes presently used as roofing material, organic matter for compost making and as fuel for cooking purpose.

43. ECONOMIC PLAN : An economic plan may be defined as an outline or broad statement of scheme or programmes designed and implemented to achieve certain predetermined objectives within a specific period of time. The technique that the state follows to achieve economic development through plans is called as economic planning.

44. PERSPECTIVE PLANNING : Perspective plan is a macro plan formulated for a period of 20 to 25 years. Keeping in view the long term needs and objectives. This perspective plan which is implemented through 5 year plans.

45. ROLLING PLAN : The concept of rolling plan was introduced by Gunner Myrdal. This type of plan does not have any fixed period of time. Under this plan the beginning and ending of the plan period goes on rolling. After 1 year the completed year will be detected and one more year will be added. It is like a moving machine. In 1977 Murarji Desai introduced this planning in India. It was implemented between 1978 to 1980.

46. PLAN HOLIDAY : Giving rest to the implementation of 5 year plans and implementing annual plan is called a plan holiday. The govt. may not in a position to implement 5 year plans due to political uncertalities, wars, insufficient funds at the central and state level. It will declare plan holiday. The plan holiday is of two types.1. Official plan holiday 2. Unofficial plan holiday. In our planning system there was plan holiday between 1966 to 1969, and between 1990-92.

47. BALANCED REGIONAL DEVELOPMENT : Balanced regional development does not mean equal development of all the areas. it means fullest development of an area according to their potentialities. So that the benefits of economic development can be shared by all the people in all the regions. It is possible only with the establishment of industries in backward areas. Balanced regional development is an important objective of Indian Planning Commission.

48. REGIONAL IMBALANCES: The coexistance of relatively developed and under developed states in a country or region with in a state may be described as regional imbalances. Regional imbalances may be natural due to unequal natural endowments or manmade in the sense of neglect of some regions and preference of other regions in matters of investments and implementation of development programmes, Regional imbalances may be inter-state or intrastate. They may be total or sectoral.

49. PLANNING COMMISSION : The government of India constituted the Planning Commission in March, 1950. Prime Minister is the Chairman of the Planning Commission. It has a Vice-Chairman as the executive head. The

States prepare their plans in accordance with their priorities. Based on these State plans, the Planning Commission formulates a plan for the whole economy keeping the national priorities and the availability of resources in view.

50. SUSTAINABLE DEVELOPMENT :- The term sustainable development was brought into common use by world commission on environment and development in seminar reports 'Common Features'. Developement that meets the needs of the present generation without compromising the ability of future generation. - Brud land comm 1987.

51. ACID RAINS :- Acidification the increasing amount of sulpher dioxide and nitrogen oxide are released in the air thereby forming sulpheric acid and nitric acid which causes acid rains. As a result the surface of the earth becomes acidified. Acidification of soils changes chemical properties, destroys plants and surface of the soil.

52. OZONE LAYER :- Ozone layer is a protecting band filtering ultraviolet rays coming from sun radiation and thereby allows only the sun's energy needed for the life on earth. Any depletion of the ozone layer would result at a larges amount of ultraviolet rays directly falls on the earth causes damages to the man kind.

53. BIO-DIVERSITY :- Bio-diversity refers to the variety of plant and animal life on the planet. Animals and plants depends on each other and causes a balance in nature. In the recent years there was heavy loss in the bio-diversity due to deforestization forest fires and developmental projects undertaken in forest areas.

54.. Deforestration : - Forests are renewable resource and contribute substantially to the economic development and employment generation. Forest also enhance the quality of environment by checking soil erosion, conserving water, controlling floods, balancing carbondioxide and Oxygen contain in atmosphere etc.

55.. ECOLOGY (OR) ECO SYSTEM : - The various components in environment bear close relationship with one another, the study of these relationship is called as ecology. So ecology may be defined as the study of relationship or interdependence between living organism and environment. It explains relation between man and nature. It means ecology is the science of study 'eco system'. The term eco-system was first proposed by Tamsley in 1953. In eco system is an ecological unit consisting of both living (biotics) and nonliving (abiotic) factors of environment. It is the fundamental unit of ecology which includes both living and non-living organism each influencing the properties of the other and each is necessary for the maintainance of lives.

56 Green house Effect :- Green house is the construction of wood or steel frame with pane of glass to let the heat and light of the sun through, for the growth of plants kept inside the glass house. The green house holds the energy, it receives through glass pannel conseves the heat without allowing it

to escape. These type of glass houses are constructed for experimental purpose. The glass of the green houses trap and holds the heat of the sun making the heat of the earth still formal which is called green house effect.

57 HYVP :- The High Yielding Variety Programme was given top priority. This programme was introduced in the year 1966. This programme was adopted as a package programmed as the every success of this programme depends upon adequate irrigation facilities, application of fertilisers, high yielding varieties of seeds, pesticides, insecticides etc.

58 SOIL EROSION :- It means Land Degradation i.e. washing away of surface soil which contains fertility. It occurs due to indiscriminate cutting of trees, conversion of forest lands into cultivable lands, wrong methods of cultivation mining activities etc.