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Economics, Textbook is with, Reduced portion, highlighted in, yellow colour... by, SELF STUDY
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The Coordination Committee formed by GR No. Abhyas - 2116/(Pra.Kra.43/16) SD - 4, Dated 25.4.2016 has given approval to prescribe this textbook in its meeting held on, 20.06.2019 and it has been decided to implement it from academic year 2019-20., , ECONOMICS, STANDARD ELEVEN, , 2019, , Maharashtra State Bureau of Textbook Production and, Curriculum Research, Pune., , Download DIKSHA App on your smartphone. If you scan the Q.R.Code on, this page of your textbook, you will be able to access full text. If you scan, the Q.R.Code provided, you will be able to access audio-visual study, material relevant to each lesson, provided as teaching and learning aids.
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The Constitution of India, , Preamble, WE, THE PEOPLE OF INDIA, having, solemnly resolved to constitute India into a, SOVEREIGN, SOCIALIST, SECULAR, DEMOCRATIC REPUBLIC and to secure to, all its citizens:, JUSTICE, social, economic and political;, LIBERTY of thought, expression, belief, faith, and worship;, EQUALITY of status and of opportunity;, and to promote among them all, FRATERNITY assuring the dignity of, the individual and the unity and integrity of the, Nation;, IN OUR CONSTITUENT ASSEMBLY this, twenty-sixth day of November, 1949, do HEREBY, ADOPT, ENACT AND GIVE TO OURSELVES, THIS CONSTITUTION.
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NATIONAL ANTHEM
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Preface, Dear Students,, We welcome you all to Std. XI. For the first time, you are being introduced to the subject of, Economics as a separate discipline. You have already been acquainted with some of the concepts of, Economics from Std. V onwards, especially in the subjects of Geography and Mathematics., This textbook aims to create awareness about the dynamic changes taking place in Indian, economy. The National Curriculum Framework (NCF) was formulated in 2005, followed by the, State Curriculum Framework (SCF) in 2010. Based on the given two frameworks, restructuring of, the curriculum and preparation of a revised syllabus has been undertaken which will be introduced, from the academic year 2019-20. The textbook incorporating the revised syllabus has been prepared, and designed by the Maharashtra State Bureau of Textbook Production and Curriculum Research,, (Balbharati), Pune., The textbook introduces ‘Economics’ as an independent subject for the students of Std. XI., This will enable the students to understand various economic concepts thoroughly and correlate, them with their practical life. The new syllabus focusses on realistic approaches to solve real world, problems. Economic concepts such as money, economic growth, economic development, economic, reforms, economic planning, statistics etc, have been discussed in detail. Besides this, the textbook, also throws light upon various challenges before Indian economy. General teaching-learning, objectives of the revised syllabus are determined on the basis of the ‘principle of constructivism’., The curriculum and syllabus conforms to the maxims of teaching such as moving from, concrete to abstract, known to unknown and from part to whole. For the first time, in the syllabus, of Economics various activities have been introduced. These activities will not only help to develop, the content knowledge but also provide scope for gaining relevant and additional knowledge., QR Code has also been introduced to facilitate e-learning. Besides this, ample scope has been, provided for activity based learning, group learning, group discussions and self- learning processes., No compromise is made in any manner over the use of language in the economic context,, but at the same time, the textbook is presented in a very simple and lucid language too. Relevant, diagrams, graphs, tables used in the textbook will bring about more clarity in the understanding, of various terminologies and economic concepts. Glossary of economic terms and difficult words, are also provided towards the end of the textbook. The efforts taken to prepare the textbook will, not only enrich the learning experiences of the students, but also benefit other stakeholders such as, teachers, parents as well as candidates appearing for the competitive examinations., We look forward to a positive response from the teachers and students., Our best wishes to all!, , Pune, Date : 20 June 2019, Indian Solar Date : 30 Jyestha 1941, , (Dr. Sunil Magar), Director, Maharashtra State Bureau of, Textbook Production and, Curriculum Research, Pune
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CLASS 11 ECONOMICS, Competence Statement, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, •, , Differentiate between Natural Sciences and Social Sciences, Recognize and appreciate the diversity of views of various Economists, Analyze the various definitions of Economics, Differentiate between micro economics and macro economics, Explain the basic concepts of micro economics and macro economics with realistic examples, Explain the difficulties of barter system and justify the introduction of money, Explain the various definitions of money, Explain the different stages in the evolution of money, Describe the qualities of money, Explain the primary, secondary and contingent functions of money, Review measures to counter the problem of black money, Explain the meaning of Median, Quartiles, Deciles and Percentiles, Explain the need for partition values and assess its superiority over averages, Explain the use of partition values in economic data analysis, Apply their quantitative skills to derive quartiles, deciles and percentiles for individual series,, ungrouped and grouped data, Explain the structure of the economy of Maharashtra, Compare the features of Maharashtra economy with that of other states, Assess the performances of various sectors and their contribution to the state’s economic development, Explain the problems of agricultural, industrial and service sectors in the State, Review recent policy measures undertaken by the Government of Maharashtra, Explain the meaning, definition and significance of rural development, Explain the classification of agricultural credit on the basis of purpose and tenure, Differentiate between institutional and non-institutional sources of credit, Assess the role of various agricultural finance institutions, Explain the stages of population growth based on various census data, Explain the factors responsible for population explosion in India, Assess various policy measures to check population explosion, Explain the importance of human development, Define the concept of unemployment, Explain the types of rural and urban unemployment, Explain the major causes of unemployment in India, Assess the various employment generation programmes, Explain multi-dimensional poverty, Differentiate between Absolute and Relative poverty, Explain Poverty line and its objectives, Explain rural poverty and urban poverty, Review the estimates of poverty, Explain the major causes of poverty, Assess the various poverty alleviation measures, Explain the objectives of the economic policy of 1991, Explain the terms liberalization, privatization and globalization, Explain the measures undertaken for liberalization, privatization and globalization, Evaluate the economic policy of 1991, Explain the meaning and definitions of economic planning, Explain the features of economic planning, Assess the targets and achievements of various five year plans, Analyze the targets of the twelfth plan, Explain the functions of NITI Aayog, Compare the framework of the Planning Commission with that of NITI Aayog
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- For Teachers Dear Teachers,, We are happy to introduce the revised, textbook of Economics for Std. XI. This book, is a sincere attempt to follow the maxims of, teaching as well as develop a ‘constructivist’, approach to enhance the quality of learning., Demand for more activity based, experiential, and innovative learning opportunities is the, need of the hour. The present curriculum has, been restructured so as to bridge the credibility, gap that exists between what is taught and, what students learn from direct experience in, the outside world. Guidelines provided below, will help to enrich the teaching-learning, process and achieve the desired learning, outcomes., To begin with, get familiar with the textbook, yourself., The present book has been prepared for, constructivist and activity-based teaching., Teachers must skillfully plan and organize the, activities provided in each chapter to develop, interest as well as to stimulate the thought, process among the students., Always teach with proper planning., Use teaching aids as required for the proper, understanding of the subject., Follow the tentative number of periods, mentioned in the page of 'Contents' to give due, justice to the topic., Follow the order of the chapters strictly as, listed in the contents because the units are, introduced in a graded manner to facilitate, knowledge building., Statistics is placed as the third unit to facilitate, integrative learning through interdisciplinary, approach. Application of statistical knowledge, will help students to understand the complex, nature of various problems faced by Indian, economy in the latter chapters., Ask questions on statistical information, , related to trends and patterns. Efforts have, been made to provide the latest data available., Teachers must explain to the students the, importance of data collection and data, analysis., Major concepts of economics have a scientific, base and they deal with abstractions. Encourage, group work, learning through each other’s, help etc. Facilitate peer learning as much as, possible by reorganizing the class structure, frequently., Teaching-learning interactions, processes and, participation of all students are very necessary, and so is your active guidance., Do not use the boxes titled ‘Do you know?’, for evaluation. However, teachers must ensure, that students read this extra information., Information provided in boxes with the title, ‘You Should Know’ should be considered for, evaluation., Exercises provided after each unit are prepared, using different parameters such as observation,, co-relation, critical thinking, analytical, reasoning etc. Evaluation pattern should be, based on the given parameters. Equal, weightage should be assigned to all the topics., Use different combinations of questions., Stereotype questions should be avoided., Use QR Code given in the textbook. Keep, checking the QR Code for updated information., Certain important links, websites have been, given for references. Teachers as well as the, students can use these references for extra, reading and in-depth understanding of the, subject., Economic terms included in the Glossary are, highlighted in blue colour in each chapter., List of abbreviations is provided towards the, end of the textbook for further clarification., Best wishes for a wonderful teaching, experience!
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Contents, Sr. No., , Name of the Chapter, , Page No., , Tentative number, of periods, , 1., , BASIC CONCEPTS IN ECONOMICS, , 1-8, , 14, , 2., , MONEY, , 9 - 13, , 10, , 3., , PARTITION VALUES, , 14 - 23, , 16, , 4., , THE ECONOMY OF MAHARASHTRA, , 24 - 30, , 14, , 5., , RURAL DEVELOPMENT IN INDIA, , 31 - 35, , 10, , 6., , POPULATION IN INDIA, , 36 - 42, , 14, , 7., , UNEMPLOYMENT IN INDIA, , 43 - 49, , 14, , 8., , POVERTY IN INDIA, , 50 - 56, , 14, , 9., , ECONOMIC POLICY OF INDIA SINCE 1991, , 57 - 63, , 14, , 10., , ECONOMIC PLANNING IN INDIA, , 64 - 69, , 10, , 70 - 80, , 130, , --, , • GLOSSARY OF ECONOMIC TERMS, • LIST OF ABBREVIATIONS, • REFERENCES, IMPORTANT WEBSITES/LINKS, , S.O.I. Note : The following foot notes are applicable : (1) © Government of India, Copyright : 2019. (2) The responsibility, for the correctness of internal details rests with the publisher. (3) The territorial waters of India extend into the sea to, a distance of twelve nautical miles measured from the appropriate base line. (4) The administrative headquarters of, Chandigarh, Haryana and Punjab are at Chandigarh. (5) The interstate boundaries amongst Arunachal Pradesh, Assam, and Meghalaya shown on this map are as interpreted from the “North-Eastern Areas (Reorganisation) Act. 1971,” but, have yet to be verified. (6) The external boundaries and coastlines of India agree with the Record/Master Copy certified by, Survey of India. (7) The state boundaries between Uttarakhand & Uttar Pradesh, Bihar & Jharkhand and Chattisgarh &, Madhya Pradesh have not been verified by the Governments concerned. (8) The spellings of names in this map, have been, taken from various sources., DISCLAIMER Note : All attempts have been made to contact copy right/s (©) but we have not heard from them. We will, be pleased to acknowledge the copy right holder (s) in our next edition if we learn from them., , Front Page : Students of standard ten have now come to standard eleven. They are going to study 'Economics' as, an independent subject. The front cover is a visual presentation on the importance of Economics across all age, groups. Visual images in this, represent the hierarchy of economic needs as per the age groups., Back Page : Various economic activities.
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CHAPTER - 1 : BASIC CONCEPTS IN ECONOMICS, Introduction :, Today’s world is marked by scientific, inventions and discoveries. This remarkable, scientific progress enables to probe into the, question, What is a science? Science is the, systematic body of knowledge. There are two, main types of sciences., • Natural sciences, • Social sciences, • Natural science is one whose laws are, universally acceptable and their validity can be, tested in a laboratory under controlled conditions., Natural sciences are also called exact sciences, because of their empirical approach to the, study. e.g. Mathematics, Physics, Chemistry., • Social Science is called abstract or, behavioural science because it is related to, the study of some or the other aspect of human, behaviour. e.g. Psychology is related to ‘mental’, aspect of human behaviour. Sociology is related, to the study of ‘social’ aspect of man as a, member of society. Human behaviour can neither, be empirically tested nor can be studied in the, laboratory. Hence, the laws of social sciences, are not universal but they are only statements of, general human tendencies., , Types of Economic Systems - Capitalism,, Socialism and Mixed Economy., Kautilya's Views on Economics :, Artha means 'Wealth' and, Shastra means 'Science'., Arthashastra implies the, science of acquiring and, managing wealth. Essentially,, Arthashastra is a treatise, on Political Economy in its, Fig 1.1, Kautilya, broadest sense., Key-points based on Kautilya's views :, 1) Crucial role of the state or government., 2) Focus on creation of wealth as the means to, ensure welfare of the state., 3) Need for efficient administrative machinery, for good governance., 4) Compilation of political ideas into, Arthashastra., Do you know?, Kautilya was a great statesman,, philosopher, economist and royal advisor, during the Mourya period. He is also known, by the name Chanakya or Vishnugupta., Kautilya authored the ancient Indian, political treatise, the 'Arthashastra'., , Meaning of Economics :, Economics is a social science. The origin, of the term 'Economics' lies in the Greek word,, 'Oikonomia' which means management of the, household., Economics is referred to as 'Queen of, Social Sciences' by Paul Samuelson. Economics, deals with the economic aspect of human, behaviour. It deals with how human beings, satisfy unlimited wants with limited means., Let us understand the nature of Economics, with respect to some popular definitions., , Definitions of Economics :, 1) Adam Smith's Wealth-Oriented Definition, of Economics :, , Refresh your memory :, Have you studied the following concepts, in the previous textbooks?, , Fig 1.2, Adam Smith, , 1, , Classical economist Adam, Smith, also regarded as the, "Father of Economics", has, given the wealth-oriented, definition of Economics., Out of his many literary, contributions to Economics, he
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3) Lionel Robbins', Definition of Economics :, , is most famous for his 1776 piece of work, "An, Inquiry into the Nature and Causes of Wealth of, Nations". Adam Smith defines Economics as "a, science of wealth"., , This is the most popular, definition of Economics., Robbins,, in, his, book, entitled, "An Essay on the, Nature and Significance, of, Economic, Science", Fig 1.4, Lionel Robbins published in 1932 mentions, about the scarcity-oriented definition of, Economics., "Economics is a science which studies, human behaviour as a relationship between ends, and scarce means which have alternative uses"., , Key-points of Adam Smith's definition :, 1) Laissez faire i.e. non-intervention of the, government., 2) Capital and wealth accumulation, 3) Nature's law in economic affairs., 4) Division of labour as an aspect of growth, theory., Do you know?, Paul Romer and William Nordhaus have, won Nobel Memorial Prize in Economics, for 2018. Paul Romer tends to be described, as a growth theorist whereas Mr. Nordhaus, has remarkably contributed to the field of, Environmental Economics., , Key-points of Robbins' definition :, 1) Wants (ends) are unlimited., 2) Means are comparatively limited., 3) Wants are gradable on the basis of priority., 4) Means have alternative uses., Do you know?, , Find out :, Other Nobel Prize winners in Economics., , Names of the, Economists, Classical School Adam Smith,, of Thought of 18th David Ricardo,, century, J. S. Mill,, T. R. Malthus etc., Alfred Marshall,, Neo-classical, School of Thought A. C. Pigou,, Irving Fisher etc., of 19th and 1st half, of 20th century, Modern School of J. M. Keynes,, Thought from 20th Lionel Robbins,, century till date., Paul Samuelson etc., Thought, , 2) Prof. Alfred Marshall's Welfare-Oriented, Definition of Economics :, , Fig 1.3, Alfred Marshall, , Scarcity-Oriented, , Neo-classical economist, Prof. Alfred Marshall has, given the welfare-oriented, definition of Economics, in, the book entitled "Principles, of Economics" which was, published in 1890. His, definition states :, , "Economics is a study of mankind in the, ordinary business of life. It examines that part, of individual and social action, which is closely, connected with the attainment and use of, material requisites of well-being"., , Branches of Economics :, In 1933, Sir Ragnar Frisch coined the terms, Micro Economics and Macro Economics. These, terms are derived from the Greek words 'Mikros', and 'Makros' respectively., , Key-points of Marshall's definition :, 1) Study of an ordinary man., 2) Economics is a behavioural science., , A) Micro Economics :, Micro means small. Micro Economics deals, with the behaviour of the individual variables, such as a household, worker, firm, industry etc., , 3) Study of material welfare., 4) Economics is not simply a study of wealth., , 2
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Kenneth Boulding's Definition of Micro, Economics :, , a), , b), , "Micro Economics is the study of particular, firms, particular households, individual prices,, wages, incomes, individual industries, particular, commodities"., Basic Concepts of Micro Economics, 1) Want : It is difficult to define 'want' in few, words. In common language, want can be referred, to as a need. In economics, want denotes a feeling, of 'lack of satisfaction'. This feeling enables the, individual to satisfy his want., Human wants have grown in number for, two basic reasons :, • Desire for better living due to inventions and, innovations., • Rise in population., , c), , Fig. 1.5 : Age and Wants - a, b, c, iii) Wants differ with age : Wants and their, satisfaction differ as per the chronological, age. (Fig. 1.5 a, b, c)., , Characteristics of wants :, i) Wants are unlimited : Wants not only arise, again and again but they are also unending., If one want gets satisfied, another arises., Wants go on multiplying in number., ii) Wants are recurring in nature : Several, human wants occur again and again, while, some might be only occasional., , iv) Wants differ with gender : Men and, women want different goods according to, their needs., v) Wants differ due to preferences : Individual, habits, tastes and preferences matter a lot, while deciding wants of the people., , Fig. 1.6 : Seasons and Wants, , 3
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vi) Wants differ with seasons : Wants keep on, changing with seasons (Fig .1.6)., , human wants or want satisfying power of a, commodity is called utility., , vii) Wants differ due to culture : Differences, in culture influence wants that are related to, food, dressing styles etc., , 4) Value : Value has two approaches in, economics, i.e. 'value-in-use' and 'value in, exchange'., , Classification of Wants :, Wants can be classified in the following ways., i) Economic and Non-economic wants :, • Economic wants are those where monetary, transaction is involved. An individual has, to pay the price for them, e.g. food,, medicines etc., • Non-economic wants are those which can, be satisfied without making monetary, payment for them, e.g. air, sun shine etc., , • Value-in-use : It refers to the worth of a, commodity. In simple words, it is usefulness, of a commodity, e.g. no one has to pay, price for sunshine but its immense worth, for life can never be doubted. In economic, language, sunshine has a high value-in-use., It is an example of 'free good'., • Value-in-exchange : It refers to the worth, of a commodity or a service expressed in, terms of another commodity. When this, value is expressed in terms of money, it is, called price of a commodity. A good which, commands a price is termed as an 'economic, good', e.g. TV, car etc., , ii) Individual Wants and Collective wants :, • Personal or individual wants refer to those, wants which are satisfied at the individual, level, e.g. a doctor using a stethoscope, a, judge wearing his coat., • Collective wants are social wants where, there is collective satisfaction of wants, e.g., travelling by train., , • Water-Diamond Paradox of values : Some, commodities have a high value-in-use, but low exchange value, e.g. water whereas, some commodities have low value-in-use, but high exchange value due to its scarcity,, e.g. diamond (Fig 1.7)., , iii) Necessities, Comforts and Luxuries :, • Necessities are the very basic needs of, life, e.g. food, clothing, shelter, health and, education., • Comforts are those wants which make our, life comfortable, e.g. washing machine,, mixer, pressure cooker etc., • Luxuries are those wants which are meant, for pleasure and enjoyment, e.g. AC-car,, well-furnished house etc., , Fig. 1.7 : Water-Diamond Paradox, , 2) Goods and Services : These are popular terms, of economics., • Anything that satisfies human wants is, termed as a 'good'. It has material existence,, e.g. chalk used by a teacher., • Services also satisfy human wants but do not, have any material existence, e.g. 'Teaching', offered by the teacher., , Find out :, Which of the following is 'free good' or, 'economic good'?, • Water in river, • Oxygen cylinder, • Sunshine, • Water processed for drinking, • Air, , 3) Utility : Capacity of a commodity to satisfy, , 4
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6) Personal Income : Earnings received by a, person from all sources is called his personal, income., , 5) Wealth : Wealth refers to “anything which has, market value and can be exchanged for money.”, To be regarded as 'wealth', a commodity, must possess the following characteristics :, i) Utility, , 7) Personal Disposable Income (PDI) : It is, that part of personal income which is left over, after payment of direct taxes such as income, tax, wealth tax etc., , ii) Scarcity, iii) Transferability, iv) Externality, , You should know :, , i) Utility : A commodity must have the capacity, to satisfy human wants, e.g. furniture,, refrigerator etc., , Following are the various types of income., A) Fixed income : Income which remains, stable over a period of time, e.g. rent,, wages., , ii) Scarcity : A commodity must be scarce in, supply in relation to its demand if it is to, be included in the term ‘Wealth’, e.g. all, economic goods for which price is paid., , B) Fluctuating income : Income which, is not fixed but keeps on changing, e.g., profit. It can be positive, negative or zero., , iii) Transferability : A commodity should be, transferable from person to person as well, as place to place. If the good is material or, tangible then only it is possible to transfer, it from place to place, e.g. vehicle, jewellery, etc., , C) Money income : It is the income received, in actual currency of the country. In other, words, it is the income in cash, e.g. ` 5,000, D) Real income : It is the purchasing power, of money income, e.g. commodities, purchased out of money income., , iv) Externality : A good can be transferred, only if it is external to human body, e.g. bag,, chair etc., , E) Contractual income : This income is, paid as per the terms and conditions of, contract, e.g. rent, wages., , Do you know?, Physical transferability - This is actual, transfer of goods from one person to another, and from one place to another, e.g. vehicle., Notional Transferability - It is not possible, to transfer the good physically but there can, be only transfer of ownership rights, e.g. land, , F) Residual income : Income which is left, over after making payments to all factors, of production is called residual income,, e.g. profit, G) Earned income : Income obtained after, participating in the productive activity,, e.g. rent, wages, interest, profit., , Try this :, Prepare a list of commodities which satisfy, the condition of physical transferability and, notional transferability., , H) Unearned income : Income received, from all sources without indulging in any, productive activity, e.g. windfall gains,, lottery prizes., , Do you know?, Inborn qualities like beauty, melodious, voice, efficiency etc. are not ‘wealth’ in the, strict sense of economics. They are neither, external nor transferable., , 8) Economic activity : Economic activities, can be classified into four types which, include production, distribution, exchange and, consumption., , 5
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of production which earns the reward, in the form of ‘interest’, e.g. machinery,, technology, factory building etc., iv) Entrepreneur : Entrepreneur is the, organizer who is a real captain of the, industry. He is a special kind of labour who, gets the work done to earn the reward of, ‘profit’ in the process of production., b) Distribution : It is division of factor, rewards among different segments of the, society. Factors of production claim their, rewards of rent, wages, interest and profit, through the process of distribution., , Fig. 1.8 : Economic Activities, a) Production : Production is creation of utility., There are four factors of production such as, land, labour, capital and entrepreneur., , c) Exchange : It is give and take between, various units in the economy. ‘Exchange’, refers to sale and purchase of goods, and services. In economics, exchange is, necessarily a monetary transaction., , Always remember :, The activities which are carried out just, for the sake of charity, hobby or in general,, where there is no monetary exchange are, considered ‘unproductive’ in the sense of, Economics, though they may be adding, immense value to life., , d) Consumption : It is making use of goods, and services to satisfy human wants., B) Macro-Economics :, Macro means large or aggregate or total., Macro-Economics is therefore the study of, aggregates covering the entire economy such, as total employment, national income, national, output, total investment, total savings, total, consumption, aggregate supply, aggregate, demand, general price level etc., , Factors of production :, i) Land : ‘Land’ in Economics is a wide, term. It is a natural factor of production., Any natural resource that is available on,, above and below the surface of the earth is, called ‘land’ in Economics, e.g. minerals, which are found below the surface of the, earth; soil, water on the surface of the earth;, air, sunshine, wind are above the surface of, the earth. Land earns ‘rent’ in productive, activity., , Kenneth Boulding's definition of Macro, Economics :, "Macro Economics deals not with, individual quantities as such, but with the, aggregates of these quantities, not with the, individual incomes but with the national income,, not with individual prices but with the general, price level, not with individual output but with, the national output"., , ii) Labour : Labour is a human factor of, production. Any physical or mental effort, undergone during the process of production, to earn the reward of 'wages' is called, ‘labour’, e.g. carpenter, accountant,, engineer etc., , Basic Concepts of Macro Economics :, 1) National Income : This reveals the total, economic performance of a nation. It is, referred to as the total income of a country., , iii) Capital : Capital is a produced means for, further production. It is a man-made factor, , 6
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In the economic sense, national income is the, aggregate monetary value of all final goods and, services produced in an economy during a year., , Find out :, Which of the following terms is a part of, micro economics or macro economics?, • Global poverty, • Price of a commodity, • Balance of payments, • Profits of a firm, • National income, , Definition by National Income Committee :, “A national estimate measures the volume, of commodities and services turned out during a, given period counted without duplication”., 2) Saving : It is that part of the income which is, set aside to satisfy the future needs by foregoing, current consumption. In other words, saving is, that part of income which is not spent currently, on consumption., , Always Remember, Economic, Economic, Growth, Development, 1) Economic, 1) Economic, growth means, development indicates, an increase in, economic growth plus, the real national, progressive changes, income of the, in certain important, country., variables which, determine well-being, of the people., , 3) Investment : It refers to creation of capital, assets through mobilisation of savings, e.g., machinery, equipment etc., 4) Trade Cycles : Trade cycles are fluctuations, in business. They are ups and downs in the, overall economic activities. Ups and downs, means fluctuations caused by inflation and, depression respectively., , 2) This concept, 2) This concept, is narrow and, is broader and, quantitative., qualitative., 3) Economic, 3) Economic, growth is, development is not, possible without, possible without, economic, economic growth., development., 4) Economic, 4) Economic, growth is a, development is a, unidimensional, multi-dimensional, concept., concept., , • Inflation is a continuous rise in general, price level., • Depression is a continuous fall in overall, prices and lowering down of economic, activity in general., Do you know ?, Unemployment created due to impact, of cyclical fluctuations is called ‘Cyclical, Unemployment’., , 5) Economic, 5) Economic, growth is, development is, spontaneous and, deliberate and, reversible., irreversible., , 5) Economic Growth : The term economic, growth has a 'quantitative' dimension. In simple, words, economic growth means an increase in, the real national income of the country, over a, long period of time., , 6) Economic, 6) Economic, growth is, development is, measured, measured in terms, in terms of, of agricultural, national income, productivity, industrial, and per capita, productivity quality of, income., human life etc., , 6) Economic Development : This is a wider, concept which has a 'qualitative' dimension., Economic development implies economic, growth plus progressive changes in certain, important variables which determine well-being, of the people, e.g. education, health etc., , Table : 1.1, , 7
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EXERCISE, Q. 2. Complete the correlation :, , Q. 1. Choose the correct option :, 1) Statements related to Economics :, a) Economics is a social science., b) Concept of economics is derived from Greek, word ‘Oikonomia’., c) Economics is related to the study of human, economic behavior., d) Economics is related to management of the, household., Options : 1) a, b and c, 3) b and c, , 1) Natural sciences : Exact sciences : : Social, sciences :, 2) Physics :, , 3) Arthshastra : Kautilya : : Wealth of Nations :, 4) Necessity :, machine, , Q. 3. Identify and explain the concepts from the given, illustrations :, 1) My father purchased a two wheeler vehicle. This, helps to fulfil my travel needs., 2) A study of the annual income of the family of, Ramesh, , 2) a, b and c, 4) c and d, , 3) As per the data for financial year 2018-19,, the country's production of goods and services, increased by 20%., , 3) Key points in Lionel Robbins' definition :, a) Wants are unlimited, b) Means are limited, c) Wants are not gradable, d) Means have alternative uses., Options : 1) a and b, 3) a, b and d, , 4) Karuna's mother saves ` 1000/- every month out of, her given salary., 5) Ram's father utilized his provident fund amount to, set up grocery store., , 2) b and c, 4) a, b, c and d, , Q. 4. Answer the following :, 1) Explain the features of wealth., , 4) Statements related to wealth :, a) Wealth means anything which has market value, and can be exchanged for money., b) It is external to human being., c) Wealth has no utility., d) Wealth is scarce and exchangeable., Options : 1) a, b and d, 3) b, c and d, , 2) Explain the characteristics of human wants., Q. 5. State with reasons whether you agree or disagree, with the following statements :, 1) All wants can be satisfied at a time., 2) Human wants change as per the seasons and, preferences., , 2) a, c and d, 4) None of the above, , 3) Value-in-use and Value-in-exchange are, same., , 5) Aspects considered in National Income :, a) Final goods and services are included in, national income., b) Produced goods and services in a financial year, are included in national income., c) Double counting is avoided., d) Value is considered as per market price., Options : 1) a and c, 3) a, b and d, , : : Comforts : Washing, , 5) Free goods : Value-in-use : : Economic goods :, , 2) a and b, 4) a, b, c and d, , 2) Statements incorrect with reference to Adam, Smith's definition :, a) Adam Smith is a classical economist., b) Wealth of Nations is authored by Adam Smith., c) Economics is the science of wealth., d) Economics studies common man., Options : 1) d, 3) a and d, , : : Psychology : Social science, , the, , Q. 6. Answer in detail :, 1) Explain the basic concepts of macro economics., , , , 2) b and c, 4) a, b, c and d, , 8
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CHAPTER - 2 : MONEY, Introduction :, Man is an intellectual animal. The, invention of money is one of the important, and fundamental inventions out of various, inventions in the world. According to Crowther,, there is a basic invention in each branch of, knowledge, e.g. invention of fire in science,, invention of wheels in mechanical science., The concept of money is an important concept, which has brought about a revolutionary change, in the economic life of human beings. Various, goods and services are bought and sold with the, help of money, to satisfy human wants. Modern, economy is dependent on money. Money which, is in circulation today was created to reduce the, difficulties in Barter System., , Barter system : It refers to exchange of goods, for goods., Difficulties in Barter System :, 1) Problem of double coincidence of wants :, Lack of double co-incidence of wants, was one of the major limitations of barter, system. For instance, person ‘A’ has cloth, and he wants rice in exchange and person, ‘B’ has rice but he does not want cloth in, exchange. In this case exchange between, ‘A’ and ‘B’ would not take place as their, wants do not coincide with each other., 2) Lack of common measure of value : While, exchanging goods for goods, there was no, standard unit of account to determine the, value of a commodity. e.g., it was difficult, to compare two litres of milk with two, kilograms of rice., 3) Difficulties in storage of goods : It, is necessary to store goods for future, consumption. Sometimes due to perishable, nature of certain goods it was difficult, to store them for future. Perishable, commodities like milk, eggs, fish, vegetable, etc. were difficult to store. Difficulties, were also experienced due to lack of space, required to store heavy and bulky goods., 4) Indivisibility of certain goods : In barter, system it was inconvenient to divide, animals, house etc. into small parts, so it was, difficult to fix proportion of one commodity, in exchange for another commodity, e.g., Individual 'A' has a sack of wheat and he, wants a goat in exchange. Individual 'B' has a, goat and he wants only half a sack of wheat., In this situation exchange between the two, commodities is impossible due to indivisible, nature of goat, for it being a live stock., , Fig. 2.1 : Barter system, Problem of double, coincidence of wants, Lack of common, measure of value, , Difficulties in, Barter System, , Difficulties in, storage of goods, Indivisibility of, certain goods, , 5) Problem of making deferred payments :, Deferred payment means payments to be, made in future. Repayment of loan was, difficult due to exchange of commodities,, , Problem of making, deferred payments, , 9
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e.g. it was difficult to repay the perishable goods in the same condition, in future., Definitions of Money :, 1) Prof Crowther : "Money is anything that is generally acceptable as a, means of exchange and at the same time acts as a measure and a store, of value"., 2) Prof Walker : "Money is what money does"., , Till Date, , Evolution of money : Money has come into existence by evolution and, not by revolution. With passage, 8) Electronic Money, of time, the commodities which, were used as money have changed, 7) Plastic Money, depending upon the need of time, 6) Credit Money, and development of civilization., 5) Paper Money, Money used in modern times is, a result of many evolutionary, 4) Metallic coins, changes that took place over a, 3) Metallic Money, long period of time., Following are the types of, 2) Commodity Money, money which very well explain the, 1) Animal Money, evolution of money (Fig. 2.2)., Types of Money :, 1) Animal money : In protohistoric period, ‘animal money’ was used as, a means of exchange, e.g. cow, sheep, goat etc. However, due to their, indivisible nature, commodity money came into existence., 2) Commodity money : In olden days, the commodities to be used as, money were dependent upon climatic conditions and culture, e.g., animal skin, grains, shells, feathers, tusk, salt, rare articles and stones, were used as a medium of exchange. Due to the problem of storage of, such commodities, metallic money came into existence., 3) Metallic money : Metallic money used durable metals such as gold,, silver, copper, aluminum, nickel etc. However, scarcity of precious, metals and lack of uniformity in metallic pieces gave rise to the use of, metallic coins., 4) Metallic coins : In ancient times, rulers of various kingdoms used small, pieces of metals and affixed their seals on them. With the passage, of time, the monetary system was taken over by the government, authorities with a view to give uniformity and legal status to metallic, coins. Coins can be classified as under :, a) Standard or full bodied coins : Full bodied coins are those whose, face value is equal to their intrinsic value. Face value indicates the, exchange value fixed by issuing authority. These coins are made out of, precious metals like gold, silver etc. Standard coins were used for some, days during the British period., b) Token coins : Token coins are those whose face value is higher, , 10, , protohistoric, period, , Fig. 2.2 : Evolution, of Money
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than their intrinsic value. These coins are, made of cheaper metals like aluminum,, nickel etc. These coins are of lower, denominations and are generally used for, settling smaller transactions. In India, all, coins in circulation today are token coins., Difficulties in transportation of token coins, gave rise to paper money., , smart cards, computer etc. It is backed by, the Central Bank. Electronic money is used, for purchases and transactions globally., Digital wallets are also a form of stored, electronic money., Find out :, List of various, transactions., , 5) Paper Money : Paper Money was a substitute, for metallic money. In course of time, issue, of currency notes was monopolized by the, Central Bank. Paper money consists of, paper currency issued by Government and, Central Bank of the country., In India, one rupee note and all coins are, issued by the Government of India. Currency, notes of higher denominations are issued by, the Central Bank (Reserve Bank of India)., Inconvenience in handling and risk of storing, paper money gave rise to bank money., , modes, , of, , digital, , You should know :, a) Legal Tender Money : It is the money, which is backed by law and cannot be, refused in transaction by anybody on any, ground. In India, all coins and currency, notes are legal tender money., b) Non-Legal tender Money : It is the money, which is generally used by people in final, payments but there is no legal compulsion of, acceptance. It can be refused. Cheques, bills, of exchange are examples of this money. It, is also known as optional money., , 6) Bank Money or Credit Money : Bank, money refers to deposits which are in the, form of cash saved by the people. It is, used to create credit money. This can be, withdrawable and transferable on demand,, by means of cheque, demand draft etc., Cheque, demand draft are not actual money, but credit instruments through which deposits, are transferable. Credit money plays an, important role in economic development. On, the background of global economy, cashless, transaction gained importance thereby, giving rise to plastic money., , Qualities of Money :, The qualities of money are as follows :, 1) General Acceptability : Anything which is, used as money must be easily accepted by, all for exchange purpose., 2) Divisibility : Money should be easily, divisible into smaller denominations to, facilitate small transactions., 3) Durability : Money should also possess the, characteristic of durability. Currency notes, and coins are being used repeatedly and, shall continue to do so for years together on, account of durability., , 7) Plastic Money : Plastic Money is easy, to use in transaction due to advanced, technology. Debit cards and credit cards are, used as plastic money. Further innovation, in smart transactions led to the introduction, of electronic money., , 4) Cognizability : Money must be easily, recognised. It should have certain distinct, marks so as to avoid confusion by the, receiving person., , Find out : Recent changes introduced by, banks for safe use of plastic money., , 5) Portability : It should be easy to carry from, one place to another without any difficulty,, expense and inconvenience, e.g. currency, notes are easily portable., , 8) Electronic Money : E-money or Electronic, money is a monetary value that is stored, and transferred electronically through a, variety of means i.e. a mobile phone, tablet,, , 11
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6) Homogeneity : Money of a particular, denomination must be homogeneous or, identical in its features., , building, plot, shop, agricultural land etc. can, be sold at one place and can be purchased at, another place with the help of money., , 7) Stability : Money should have a stable, monetary value. It serves as a measure, of value to exchange goods and services., These goods can be sold and purchased in, future as per requirements., , C) Contingent Functions :, According to Prof. Kinley, in the modern, period money plays an important role almost in, all economic transactions., 1) Measurement of National Income :, National Income is expressed in money, terms. Distribution of national income, among the four factors of production is, in terms of monetary rewards. e.g. rent,, wages, interest, profits etc., , Functions of Money, A) Primary Functions :, 1) Medium of Exchange : The most important, function of money is to serve as a medium, of exchange. Any commodity can be, purchased or sold for money., , 2) Basis of Credit : Commercial Banks, create credit money on the basis of primary, deposits. Money provides a liquid base for, creation of credit money., , 2) Measure of Value or Unit of account : Price, is the value of a commodity or a service, expressed in terms of money. Money enables, to compare the prices of commodities., Different currencies are used to express the, value of commodity in different countries,, e.g. Rupee in India. Dollar in U.S.A.,, Pound in U.K., Yen in Japan etc. Income, and expenditures of all kinds, assets and, liabilities are stated in terms of money as a, unit of account., , 3) Imparts liquidity to wealth : Money is, called the most liquid asset. Money can, be easily converted into any asset and any, asset can be converted into money. e.g. a, person can purchase gold and if he wants, he can sell it and purchase government, bonds, securities etc., 4) Estimation of macro economic variables :, Macro Economic variables like Gross, National Product (GNP), total savings,, total investment etc. can be easily estimated, in monetary terms. It also facilitates, government tax collection, preparation of, budget etc., , B) Secondary Functions :, 1) Standard of deferred payments : Under, barter system taking loans was easy, but, its repayment was difficult because loan, was in the form of grains, cattle etc. Money, has overcome this difficulty. Payments to, be made at a future date is called deferred, payments. By serving as a standard measure, of payment over a time, money makes, borrowing and lending easy., , Concept of Black Money :, Black Money is any money which is received, in cash but not accounted for and on which tax, is not paid to the government. Black Money is, tax evaded income. It can be earned through, both legal and illegal means. Black money, encourages illegal activities such as corruption,, bribery, black marketing, hoarding etc. This, creates obstacles in economic development., Economic, political and social instability are, created in the economy due to black money. To, control black money, demonetization is one of, the tools, which many countries have adopted., , 2) Store of value : Money acts as a store, of value. Money not only satisfies wants, in the present but also makes provision, for satisfaction of wants in future. This is, possible due to savings. According to Lord, J. M. Keynes, 'money is a link between the, present and future'., 3) Transfer of Value : Money enables transfer, of value from one person to another and, from one place to another. Real assets like, , 12
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EXERCISE, Q. 1. Complete the correlation :, , Q. 4. Identify and explain the concepts from the given, illustrations :, , 1) Primary function of money : Medium of exchange, : Transfer of value, ::, 2), , 1) Vasantsheth provides coal from his shop to farmers, in exchange for foodgrains., , : Basis of credit : Secondary functions of, money : standard of deferred payments., , 3) Commodity money : Shells : :, card, , 2) Babanrao deposits his money in a nationalized, bank., , : Credit, , 4) Divisibility : Smaller denomination;, Easy to carry from one place to another., , 3) Charu used her debit card to purchase a shirt for her, younger brother., , ::, , 4) Malathi purchased a house through an agent. The, agent accepted the commission amount in cash but, did not issue a receipt to her., , 5) Barter system : Goods : : Modern economy, , 5) To prevent misuse/fraudulent use of the national, currency, a note ban is imposed on its use at certain, times., , Q. 2. Suggest an economic term for the given statements:, 1) The act of exchanging goods for goods - ..............., ......................, , Q. 5. State with reasons whether you agree or, disagree with the following statements :, , 2) Provision for making payments in future - ............., ........................, 3) System that makes use of currency for facilitating, payments - ................................., , 1) There are no difficulties in barter system., 2) There are many good qualities found in modern, currency., , 4) Credit instrument through which bank deposits are, transferable - .............................., , 3) Many tasks are accomplished by money., , 5) Monetary value stored and transferred, electronically by means of computer hard drive or, servers - ..........................................., , 4) Money can be sent anywhere through elecrtonic, means., , 6) Money not accounted for in the bank and not, disclosed to the government - ......................., , Q. 6. Answer the following questions on the basis of the, following information :, Ganesh travelled to the mall by bus. He gave the, conductor ` 10 coin for the ticket. He purchased many, commodities from the mall., , Q. 3. Choose the correct option :, 1) Arrange in the order of evolution of money., a) Metallic money, , At the billing counter, he gave his credit card for, payment but the billing clerk informed him that only, debit cards were accepted. Since Ganesh had forgotten his, debit card at home, he offered to make payment by cash., , b) Animal money, c) Metallic coins, d) Commodity money, Option : 1) a, b, c, d, , 2) b, d, a, c, , 1) Identify the types of money used in the information, , 3) d, c, a, b, , 4) c, a, b, d, , 2) Explain any two of them., , , , 2) Arrange in the order of evolution of money., a) Plastic money, b) Paper money, c) Electronic money, d) Credit money, Option : 1) b, d, a, c, , 2) a, b, c, d, , 3) d, c, b, a, , 4) c, b, a, d, , 13
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CHAPTER - 3 : PARTITION VALUES, , LET'S RECALL, • Are you familiar with the word ‘averages’?, • Can you tell the meaning of individual series, discrete data and continuous data., • Name the positional averages that you have previously studied., Types of, Average, , Individual, Data, , 1) Arithmetic, Mean, , x= x, n, , x=, , 2) Mode, , Value repeated maximum, number of times, , 3) Median, , n+1, M = size of, 2, , (, , Discrete, Data, , ), , th observation, , Continuous, Data, , fi xi, n, , Direct method x =, , [, , fi xi, n, , ], , f1 – f0, The value which has maximum, Mode, =, l, +, 2f1 – f0 – f2 × h, frequency, , (, , n+1, M = size of, 2, , Introduction :, The procedure of dividing the data into equal, parts is called 'partitioning'. Values dividing the, data into a required number of equal parts are, called 'Partition Values'., , ), , th observation, , M=l+, , (, , ), , n – cf, 2, ×h, f, , Do you know?, Statistics Day : Prof. Prasanta Chandra, Mahalanobis, an Indian Statistician was, instrumental in formulating India's strategy, for industrialization in the Second Five, Year Plan (1956-61) which later came to be, known as Mahalanobis Model., Mahalanobis devised a measure of, comparison between two data sets that is, known as the Mahalanobis distance. He, also devised a statistical method called, 'fractile graphical analysis' which could be, used to compare the socio-economic, conditions of different groups of pepole. In, recognition of the notable contributions, made by P. C. Mahalanobis in the field of, economic, planning, and, statistical, development, the Government of India has, designated 29th of June every year,, coinciding with his birth anniversary as, 'Statistics Day', in the category of Special, day to be celebrated at the national level., , In Class X, you have already studied, about the measures of central tendency i.e., averages such as Arithmetic Mean, Median and, Mode. Median is the value of the middlemost, observation in the data when the observations, are arranged in increasing or decreasing, order of values. 'Median', is a special type of, partition value because there are equal number, of observations above as well as below it. Like, Median, Quartiles, Deciles and Percentiles are, also partition values, since they divide the given, set of observations into equal number of parts., In general, they are referred to as 'fractiles'., Partition values form a part of descriptive, statistics., In the forthcoming chapters such as, Population, Unemployment and Poverty,, students will get acquainted with the use of, partition values in economic data analysis., , 14
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divide the data into 4 equal parts, when data is, arranged in ascending or descending order. They, are known as Q1, Q2 and Q3 respectively.Second, quartile is nothing but the median., , Need for Partition Values :, The data consists of extreme values on the, lower side and also on the higher side in, magnitude. Such values are known as 'outliers'., The average used for such data often, misinterprets its representative value. To, overcome this misinterpretation, generally, partition values like median, quartiles, deciles, and percentiles are used., , It is explained in the following example :, (1), , Q1, , (2), , Q2, , (3) Q, 3, , (4), , a) In general, for individual and ungrouped, data we get the formula for Q1, Q2 and Q3, as given below :, n + 1 th Observation., Qi = size of i, i = 1, 2, 3, 4, , Always remember :, , (, , Q2 = D5 = P50 = Median, , ), , b) For grouped data or continuous data,, You should know :, Application of Quartiles, Deciles and, Percentiles in Economics :, • Quartiles are used in the study of all types, of financial information concerning, economic data, income data, stock data,, sales and survey data etc., • Income quartiles is the most objective, method of comparing changes among, individual income groups caused by, economic changes such as wage, fluctuations and inflation., • Deciles too have wide application in, finance and economics. Government uses, deciles to study the level of economic, inequality, measurement of poverty line,, drought conditions etc., • Deciles are used in investments, particularly, to assess the performance of a portfolio, investment such as a group of mutual, funds., • Percentiles are used in the measurement of, test scores, health indicators, household, income, household wealth, percentile wages., • Percentiles can be used for benchmarking, and baseline purposes., , Qi = l +, , (, , ), , in – cf, 4, ×h, f, , i = 1, 2, 3, , Where, l = Lower limit of quartile class., f = Frequency of the quartile class, cf = Cumulative frequency of the class preceding, the quartile class., n = Total of frequency., h = Upper limit - lower limit of the quartile class., Calculation of Quartiles, Solved Examples, A) Individual Data :, 1) Calculate Q1 and Q3 of the first semester, examination marks scored by the students as, given : 40, 85, 84, 83, 82, 69, 68, 65, 64, 55, 45, Solution :Arrange the series in ascending order, i.e. 40, 45, 55, 64, 65, 68, 69, 82, 83, 84, 85, n = Total number of observations, n = 11, n + 1 th Observation., Q1 = size of, 4, 11 + 1 th Observation, Q1 = size of, 4, 12 th Observation, Q1 = size of, 4, rd Observation., Q1 = size of 3, Q1 = size of 3rd Observation. is 55, Q1 = 55, , (, (, , ( ), , LET’S LEARN :, Quartiles :, Meaning : 'Quartiles' are values of data which, divide the whole set of observations into four, equal parts. There are three Quartiles which, , 15, , ), , )
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Third Quartile, , (, (, , Q3 = size of 3, Q3 = size of 3, , n+1, 4, , ), , 11 + 1, 4, , ( 124 ), , Solution : Arrange the data in ascending order, and find out the cumulative frequency., , th Observation, , ), , Income (lakh `) No. of Person Cumulative, (f), frequency (cf), (x), , th Observation, , 4, 5, 6, 9, 10, 12, 15, , th Observation, , Q3 = size of 3, , Q3 = size of (3 × 3) th Observation, Q3 = size of 9th Observation is 83, Q3 = 83, , 6, 8, 9, 12, 10, 8, 6, n = 59, , Ans : Q1 = 55, Q3 = 83, 2) Calculate Q3 for the given distribution., , Q1 = size of, , 20, 28, 31, 18, 19, 17, 32, 33, 22, 21, Solution : Arrange the data in ascending order., , Q1 = size of, , 17, 18, 19, 20, 21, 22, 28, 31, 32, 33, n = 10, , (, (, , n+1, 4, , ), , 59 + 1, 4, , th Observation, , ), , th Observation, , ( ), , 60, Q1 = size of, 4, , ( ), ( ), ( ), , n + 1 th Observation, Q3 = size of 3 4, 10 + 1 th Observation, Q3 = size of 3, 4, 11 th Observation, Q3 = size of 3 × 4, 33 th Observation, Q3 = size of 4, Q3 = size of 8.25th Observation, , th Observation, , Q1 = size of 15th Observation, Size of 15th observation lies in cf 23, hence, quartile value = ` 6 lakhs, Q1 = ` 6 lakhs, , (, (, , ( ), , Q3 = size of 8th observation + 0.25 (9th observation – 8th observation), , ), , Q3 = size of 3, , n+1, 4, , Q3 = size of 3, , 59 + 1, 4, , th Observation, , ), , th Observation, , ( 604 ), , th Observation, , Q3 = 31 + 0.25 (32 – 31), , Q3 = size of 3, , Q3 = 31 + 0.25 × 1, , Q3 = size of (3 × 15)th Observation, , Q3 = 31.25, , Q3 = size of 45th Observation, Size of 45th observation lies in cf 45, hence, quartile value = ` 10 lakhs, , Ans : Q3 = 31.25, B) Discrete Data : By arranging the observations, in the data in ascending or descending order, we, derive :, n + 1 th Observation, Qi = size of i, where i = 1, 2, 3, 4, , (, , 6, 14, 23, 35, 45, 53, 59, , Q3 = ` 10 lakhs, Ans : Q1 = ` 6 lakhs, Q3 = ` 10 lakhs, , ), , C) Continuous data : Q1 and Q3 for continuous, frequency distribution are calculated by applying, the following steps., 1) Arrange the data in ascending or descending, order., , 1) Find out Q1 and Q3 from the following data., Income (lakh `), , 5, , 4, , 9, , 12 15, , 6, , 10, , No. of Person, , 8, , 6, , 12, , 8, , 9, , 10, , 6, , 16
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2) Write respective frequencies of the class., 3) Find out cumulative frequency (cf), 4) Determine the quartile class., , Q1 = l +, , Formula :, Step - I : First find the value of quartile, n th Observation, Q1 = size of 4, 3n th Observation, Q3 = size of 4, , Q1 = 30 +, , ( ), ( ), , Qi = l +, , (, , ), , ), , (, , ×h, , ), , 50 – 7, 4, × 10, 20, , (, ( ), ( ), , ), , 12.5 – 7, 20, 5.5, Q1 = 30 +, × 10, 20, 55, Q1 = 30 +, 20, , Q1 = 30 +, , Step - II :, in – cf, 4, ×h, f, , (, , n – cf, 4, f, , × 10, , Q1 = 30 + 2.75, , i = 1, 2, 3, , Q1 = 32.75, , Where, , Q1 = 32.75, , l = Lower limit of quartile class., f = Frequency of the quartile class, , ( 3n4 ), , th Observation, , cf = Cumulative frequency of the class preceding, the quartile class., , Q3 = size of, , n = Total of frequency., , Q3 = size of, , h = Upper limit - lower limit of the quartile class., , 150 th Observation, Q3 = size of, 4, Q3 = size of 37.5th Observation, , data., No. of years, Rainfall, (in cms), 20-30, 30-40, 40-50, 50-60, , 30-40, , 40-50, , 50-60, , 20, , 17, , 6, , 7, No. of, years (f), 7, 20, 17, 6, n = 50, , ( ), ( ), , n, Q1 = size of 4, 50, Q1 = size of 4, , ), , th Observation, , ( ), , 1) Find out Q1 and Q3 quartile for the following, Rainfall (in cms) 20-30, , (, , 3 × 50, 4, , 37.5 lies in cf 44 hence third quartile class is, 40 - 50, l = 40 f = 17 cf = 27 n = 50 h = 10, 3n – cf, 4, Q3 = l +, ×h, f, , (, , Cumulative, frequency (cf), 7, 27, 44, 50, , Q3 = 40 +, Q3 = 40 +, , th Observation, , Q3 = 40 +, , th Observation, , Q3 = 40 +, , Q1 = size of (12.5)th Observation, , (, , ), , ), , 3 × 50 – 27, 4, × 10, 17, , (, ), ( ), ( ), , 37.5 – 27, × 10, 17, , 10.5, 17 × 10, 105, 17, , Q3 = 40 + 6.18, , 12.5 lies in cf 27, therefore first quartile class is, 30 - 40, l = 30 f = 20 cf = 7 n = 50 h = 10, , Q3 = 46.18, Ans : Q1 = 32.75, Q3 = 46.18, , 17
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Deciles :, Meaning : 'Deciles' are values of data which, divide the whole set of observations into, ten equal parts. There are nine points i.e. D1,, D2 to D9 which divide the data into 10 equal, parts when the data is arranged in ascending or, descending order., , Calculation of D8, , (, (, , (, , n+1, 10, , ), , D8 = size of (8 × 1)th Observation, D8 = size of 8th Observation, , th Observation, , D8 = 14, , where j = 1, 2 ...9, , Ans : D4 = 10, D8 = 14, , b) For grouped data or continuous data,, jn, – cf, 10, × h,, j = 1, 2...9, Dj = l +, f, , (, , ), , ( ), , a) For calculating D1 to D9 for individual and, discrete data, use the following formula., Dj = j, , ), , n + 1 th Observation, 10, 9 + 1 th Observation, D8 = size of 8 10, 10 th Observation, D8 = size of 8 10, D8 = size of 8, , ), , 2) Calculate D8 from the given data, 14, 13, 12, 11, 15, 16, 18, 17, 19, 20, , Where, , Solution : First arrange the data in ascending, order., 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, , D=, l =, f =, cf =, , Decile, Lower limit of decile class, Frequency of decile class, Cumulative frequency of class preceding, decile class, h = Upper limit of the class - lower limit of the, decile class., , n = 10, , ( ), ( ), ( ), , Calculation of Deciles, Solved Examples, , n + 1 th Observation, 10, 10 + 1 th Observation, D8 = size of 8 10, 11 th Observation, D8 = size of 8 10, , A) Individual Data :, , D8 = size of (8 × 1.1)th Observation, , 1) Calculate D4 and D8 for the following data., , D8 = size of (8.8)th Observation, , 10, 15, 7, 8, 12, 13, 14, 11, 9, , D8 = size of 8th observation + 0.8 (9th observation – 8th observation), , Solution : Arrange the data in ascending order., 7, 8, 9, 10, 11, 12, 13, 14, 15, , D8 = 18 + 0.8 (19 – 18), , (, (, , D4 = size of 4, , n+1, 10, , D4 = size of 4, , 9+1, 10, , ( ), , 10, D4 = size of 4 10, , ), , D8 = size of 8, , D8 = 18 + (0.8 × 1), D8 = 18 + 0.8, , th Observation, , D8 = 18.8, , ), , th Observation, , Ans : D8 = 18.8, , th Observation, , B) Discrete data :, 1) Find out D2 and D4 for the following data., , D4 = size of (4 × 1)th Observation, D4 = size of 4th Observation, D4 = 10, , 18, , Marks, , 10, , 20, , 30 40 50 60, , No. of Students, , 5, , 6, , 4, , 5, , 10, , 9
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Solution : Marks, 10, 20, 30, 40, 50, 60, , (, (, , No. of students (f), 5, 6, 4, 5, 10, 9, n = 39, , ), , D2 = size of 2, , n+1, 10, , D2 = size of 2, , 39 + 1, 10, , Marks No. of students (f), 0-10, 10, 10-20, 10, 20-30, 40, 30-40, 20, 40-50, 20, n = 100, , cf, 5, 11, 15, 20, 30, 39, , Calculation of D5, 5n th Observation, D5 = size of 10, , ( ), , th Observation, , ), , ( ), , (, , D5 = size of, , ( 500, 10 ), , lies in cf 11, , D2 = 20, , (, (, , n+1, 10, , ), , 39 + 1, D4 = size of 4 10, , D5 = l +, , D5 = 20 +, , th Observation, , D5 = 20 +, , ( ), , 40, D4 = size of 4 10, , (, , th Observation, , ), , th Observation, , Size of 50th Observation lies in cf 60, Hence Decile class = 20-30, l = 20 f = 40 cf = 20 n = 100, , Hence D2 = 20 marks, , D4 = size of 4, , ), , D5 = size of 50th Observation, , D2 = size of (8), , Calculation of D4, , 5 × 100, 10, , th Observation, , th Observation, , Size of 8, , D5 = size of, , th Observation, , 40 th Observation, D2 = size of 2 10, D2 = size of (2 × 4)th Observation, th Observation, , cf, 10, 20, 60, 80, 100, , th Observation, , D5 = 20 +, , D4 = size of (4 × 4)th Observation, D4 = size of 16th Observation, Size of 16th Observation lies in cf 20, Hence D4 = 40 marks, , D5 = 20 +, , (, (, , ), , 5n – cf, 10, ×h, f, 5 × 100 – 20, 10, × 10, 40, 500 – 20, 10, × 10, 40, 50 – 20, × 10, 40, 30, 40 × 10, , ( ), ( ), , ), , ), , 300, D5 = 20 + 40, D5 = 20 + 7.5, , D4 = 40, Ans : D2 = 20, D4 = 40, , D5 = 27.5 marks, D5 = 27.5, , C) Continuous Data :, 1) Find out D5 and D7 for the following data of, marks of 100 students in a class test., , Calculation of D7, D7 = size of, , Marks, 0-10 10-20 20-30 30-40 40-50, No. of, 10, 10, 40, 20, 20, Students, , D7 = size of, , 19, , ( ), ( ), 7n, 10, , th Observation, , 7 ×100, 10, , th Observation, , h = 10
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( ), , 700, D7 = size of 10, , Where, P = Percentile, l = Lower limit of percentile class, f = Frequency of percentile class, cf = Cumulative frequency of class preceding, percentile class, h = Upper limit of the class - lower limit of the, percentile class., , th Observation, , D7 = size of 70th Observation, D7 = size of 70th Observation lies in cf 80, Hence Decile class = 30-40, l = 30 f = 20 cf = 60, , (, , ), , n = 100, , h = 10, , 7n – cf, D7 = l + 10, ×h, f, 7 × 100 – 60, 10, × 10, D7 = 30 +, 20, 700 – 60, × 10, D7 = 30 + 10, 20, 70 – 60, D7 = 30 +, × 10, 20, 10, D7 = 30 + 20 × 10, 100, D7 = 30 + 20, D7 = 30 + 5, D7 = 35 marks, D7 = 35, , (, (, , ( ), ( ), ( ), , ), , Calculation of Percentiles, Solved Examples, A) Individual Data :, 1) Find P40 for the following data., , ), , 10, 15, 8, 16, 19, 11, 12, 14, 9, Solution : Arrange the data in ascending order, i.e. 8, 9, 10, 11, 12, 14, 15, 16, 19, n=9, n + 1 th Observation, P40 = size of 40 100, , ( ), ( ), ( ), ( ), ( ), , P40 = size of 40, , 9 +1, 100, , 10, P40 = size of 40 × 100, 40 ×10, P40 = size of, 100, , Ans : D5 = 27.5, D7 = 35, , 400, 100, , th Observation, , th Observation, , th Observation, , th Observation, , Percentiles :, Meaning : 'Percentiles' are values of data, which divide the whole set of observations, into 100 equal parts. There are 99 percentiles, giving ninety nine dividing points, when data, is arranged in ascending or descending order., Symbolically, value of percentiles are denoted, by P1, P2, .... P99., , P40 = size of, , a) For calculating P1 to P99 for individual and, discrete data we use following formula., n + 1 th Observation, k = 1, 2,... 99, Pk = size of k 100, , 79, 82, 36, 38, 51, 72, 68, 70, 64, 63, , P40 = size of 4th Observation, P40 = size of 4th Observation is 11, P40 = 11, Ans : P40 = 11, 2) Calculate P85 from the following data., Solution : Arrange the data in ascending order, i.e. 36, 38, 51, 63, 64, 68, 70 72, 79, 82, , ( ), , n = 10, n+1, P85 = size of 85 100, , ( ), ( ), , b) For grouped data or continuous data,, kn – cf, 100, Pk = l +, ×h, k = 1, 2,... 99, f, , (, , ), , th Observation, , 10 + 1, P85 = size of 85 100, , 20, , th Observation
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( ), , 11, P85 = size of 85 100, , P60 = size of 8.2th Observation, , th Observation, , P60 = size of 8.2th Observation lies in cf 9, , P85 = size of (85 × 0.11), , th Observation, , Hence P20 = 59, , P85 = size of (9.35)th Observation, P85 = size of 9, , th observation, , P20 = 59, th observation, , + 0.35 (10, , th observation, , –9, , ), , Calculation of P60, , P85 = 79 + 0.35 (82 – 79), , ( ), ( ), , n+1, P60 = size of 60 100, , P85 = 79 + 0.35 × 3, P85 = 79 + 1.05, , 40 + 1, 100, , P85 = 80.05, , P60 = size of 60, , Ans : P85 = 80.05, , 41, P60 = size of 60 100, , th Observation, , ( ), , B) Discrete Data :, 1) Find out P20 and P60 for the following data :, 4, , 5, , 6 10 12 2, , th Observation, , P60 = size of, , × 41, ( 60100, ), , P60 = size of, , ( 2460, ), 100, , th Observation, , th Observation, , Height (in inches) 58 59 60 61 62 63 64, No. of persons, , th Observation, , 1, , P60 = size of (24.6) th Observation, , Solution : Arrange the data in ascending order., , P60 = size of 24.6th Observation lies in cf 25, , Height (in inches), , No. of persons (f), , cf, , 58, , 4, , 4, , 59, , 5, , 9, , 60, , 6, , 15, , 61, , 10, , 25, , C) Continuous data :, , 62, , 12, , 37, , 63, , 2, , 39, , 1) Find P65 from the following data, , 64, , 1, , 40, , Hence P60 = 61, P60 = 61, Ans : P20 = 59, P60 = 61, , Marks, No. of, Students, , n = 40, , ( ), ( ), , n+1, P20 = size of 20 100, , th Observation, , 40 + 1, P20 = size of 20 100, , P20 = size of, , th Observation, , th Observation, , ( 20100×41 ), ( ), , 820, P20 = size of 100, , 3, , 5-10 10-15 15-20 20-25, 7, , 20, , 12, , 8, , Solution :, , ( ), , 41, P20 = size of 20 100, , 0-5, , th Observation, , th Observation, , Marks, , No. of students (f), , cf, , 0-5, , 3, , 3, , 5-10, , 7, , 10, , 10-15, , 20, , 30, , 15-20, , 12, , 42, , 20-25, , 8, , 50, , n = 50, , 21
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( ), 65 × 50, = size of ( 100 ), 3250, = size of ( 100 ), 65n, 100, , P65 = size of, P65, , P65 = size of 32.5, , th Observation, , P65 = size of 32.5th Observation lies in cf 42, Hence percentile class = 15-20, l =15, , f = 12, , P65 = l +, , (, , P65 = 15 +, , cf = 30, , 65n – cf, 100, f, , (, , (, , P65 = 15 +, , (, , 32.5 – 30, ×5, 12, , P65 = 15 +, , ( 2.5, 12 ) × 5, , P65 = 15 +, , (, , P65 = 15 +, , ( 12.5, 12 ), , th Observation, , th Observation, , P65, , P65 = 15 +, , 3250 – 30, 100, 12, , th Observation, , ), , n = 50, , h=5, , ×5, , ), , 2.5 × 5, 12, , ), , P65 = 15 + 1.04, , ×h, , 65 × 50 – 30, 100, 12, , ), , ), , P65 = 16.04, ×5, , Ans : P65 = 16.04, , EXERCISE, Q. 2. Choose the correct pair :, , Q. 1. Give the correct option :, 1) Statments that do not apply to Quartiles., , Group A, , a) First arrange the values in ascending or descending, order., b) Observation can be divided into 4 parts., c) They are represented as Q1, Q2 and Q3., , 1) Quartiles, , 2) Deciles, , Group B, , b) Pk = l +, , d) Q2 is also known as median., Options : 1) a, 3) a, b and c, , 2) b and c, 4) None of these, , 3) Percentiles, , 2) D7 from the given data., Data – 4, 5, 6, 7, 8, 9, 10, 11, 12, Options : 1) 7, , 2) 9, , 3) 10, , 4) 12, , c) Qi = l +, , (, (, , n+1, 10, , kn – cf, 100, f, in – cf, 4, f, , ), , th Observation, , ), ), , ×h, , ×h, , Options : 1) 1-b, 2-c, 3-a, , 2) 1- c, 2-a, 3-b, , 3) 1- c, 2-b, 3-a, , 4) 1- a, 2-b, 3-c, , Q. 3. Give economic terms :, , 3) Statements related to partition values that are, correct., a) Exact divisions of percentiles into 100 parts gives, 99 points, b) Deciles have total 9 parts, c) Quartiles are shown by Q1, Q2 and Q3, , 1) Procedure for dividing the data into equal parts., 2) Value that divides the series into ten equal parts., 3) Value that divides the whole set of observations in, to four equal parts., Q. 4. Solve the following :, , d) Symbolically, Percentiles and Deciles are shown, by P and D, Options : 1) a and c, 3) a, b and c, , (, , a) Dj = size of j, , 1) Calculate Q1, D4 and P26 for the following data., 2) a and b, 4) a, c and d, , 18, 24, 45, 29, 4, 7, 28, 49, 16, 26, 25, 12, 10, 9, 8, , 22
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2) Calculate of Q3, D5, and P35 for the given data., , 6) Calculate P15 for the following data., , Income (in lakhs `), , 1, , 2, , 3, , 4, , 5, , 6, , No. of family, , 2, , 5, , 20, , 25, , 15, , 12, , Investment, 0-10 10-20 20-30 30-40 40-50 50-60, (` in lakhs), No. of firms, 5, 10, 25, 30, 20, 10, , 3) Find out P50 for the following data., Wages (in `) (x), , Number of workers, , 0-20, , 4, , 20-40, , 6, , 40-60, , 10, , 60-80, , 25, , 80-100, , 15, , Q. 5. State with reasons whether you agree or, disagree with the following statements :, 1) Partition values have application only in theory but, not in practice., 2) Average can misinterpret the representative value., 3) Median is also known as second quartile., Q. 6. Answer the following questions on the basis of the, given data :, Marks, , 4) Calculate Q3 for the following data., , 30 10 20 40 50, , No. of Students 13, , Sales (in, 10-20 20-30 30-40 40-50 50-60 60-70, lakhs `), No. of firms 20, 30, 70, 48, 32, 50, , 4, , 7, , 8, , 6, , 1) Write the formula of Q1 and Q3., 2) Find out the median of the above data?, 3) Find out the cumulative frequency of the last value, in the above data., , 5) Calculate D7 for the following data., Profit, 10-20 20-30 30-40 40-50 50-60 60-70, (in crores `), No. of firms 20, 30, 70, 48, 32, 50, , 4) Find out the value of 'n' in the above data., , , , 23
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CHAPTER - 4 : THE ECONOMY OF MAHARASHTRA, Introduction :, The state of Maharashtra came into existance on 1st May 1960. The state economy has achieved, a distinguished status as a result of the collective efforts of its people., P, , A, , Y, , H, , D, , A, , M, , R, , S, , E, , D, , A, , Nandurb, , G U JARAT, , Gondia, , Jalgaon, , H, A, , Wardha, , Akola, , Buldhana, , C, H, , ar a, , Dhule, Dadra, And, Nagar, Haveli, , Daman, (Daman and Diu), , Nagpur, , Amravati, , Bhand, , ar, , H, , T, Washim, , Nashik, , Yavatmal, , T, , Chandrapur, , I, Aurangabad, , Palghar, , Hin, , Jalna, , Thane, , Gadchiroli, , gol, , i, , S, G, A, , Ahmadnagar, , Mumbai Suburban, District, , Parbhani, , Beed, , Nanded, , R, , T E LAN GANA, , H, , Mumbai City, District, , Latur, , gad, , AR, , Rai, , Pune, , MAHARASHTRA, , AB, , Osmanabad, Solapur, , Satara, , IA, , A, , Administrative Divisions, , K, T, , Sangli, , A, , i, , gir, , SE, , tna, , Ra, , N, , N, , A, , A, , Kolhapur, , N, , Si, , R, A, , nd, , hu, , du, , rg, , K, , 0, , 60, , 120, , Kilometres, GOA, , Administrative Divisions of Maharashtra :, As per Economic Survey of Maharashtra, 2017-18, the state has been divided into 36 districts, under 6 revenue divisions viz, Mumbai, Pune,, Nasik, Aurangabad, Amaravati and Nagpur, for, administrative reasons., , 3) It is the most urbanized state with 45.20%, of its population living in towns and cities., 4) According to 2011 census, the sex ratio of, Maharashtra was 929 females per 1000, males., 5) The state literacy rate was 82.3% as per, 2011 census., , Important features of the economy of, Maharashtra :, 1) Maharashtra is the second largest populated, state in the country, the population of the, state was 11.24 crores during 2011., , 6) According to the Economic Survey of, Maharashtra for 2016-17, the State had, the highest growth of GSDP (Gross State, Domestic Product) and State Per Capita, Income (SPCI) in comparison with other, states., , 2) Maharashtra is the third largest state in, the country in terms of geographical area, measuring about 3.08 lac sq. kms., , 7) The state economy is characterised by, , 24
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i) abundant natural resources, ii) availability of skilled manpower, iii) technological advancement, iv) developed infrastructure., 8) Maharashtra is the most favoured destination, for creativity, skill development, investment, and tourism., , General problems in the agricultural sector :, i) Decrease in the average size of land, holdings leads to low farm productivity., ii) Increase in the number of small and, marginal farmers., iii) Excessive use of chemical fertilizers and, pesticides, leading to soil degradation., iv) Agricultural indebtedness., v) Poor implementation of land reforms and, adverse crop pattern., vi) Dry land and inadeqate irrigation facilities., vii) Lack of capital, viii) Improper, implementation, of, rural, development plans., ix) Lack of marketing facilities, x) Impact of climatic changes, , Economic development of Maharashtra :, , Think about it :, What will happen if the farmers sell their, farm produce without the middlemen?, Measures undertaken by the Government for, agricultural development (Economic Survey, of Maharashtra 2017-18) :, 1) Distribution of quality seeds at reasonable, rates., 2) Increased number of outlets for fertilizer, and pesticide distribution., 3) Development of irrigation facilities., 4) Electrification of agricultural pumps and, efforts to provide 'electricity on demand'., 5) Financial assistance as per requirements., 6) Setting up of Agriculture Produce Marketing, Committees (APMC), establishment of agro, export zones, horticultural training centres,, grading and packing facilities for effective, distribution., 7) Creating awareness about agricultural, information through the use of mass media, for making agriculture a profit making, business., , Fig. 4.1 : Economy of Maharashtra, A) Agricultural sector : Agriculture and, allied activities play an important role in, the economic developmant of the state., As per Economic Survey of Maharashtra, 2017-18, the share of agriculture and allied, activities in the total Gross State Value, Added (GSVA) was 12.2% during 201617 as against 15.3% during 2001-02 which, shows a declining trend over the period., , B) Industry : Maharashtra is an industrially, advanced state. Industrial sector plays a, , Fig. 4.2 : Agriculture, , 25
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major role in the economic development of, Maharashtra. It has the potential to absorb, excess labour from the farming sector,. It, leads to diversification of markets, generates, higher incomes and higher productivity. As, per Annual Survey of Industries (ASI) 201617, the industrial sector of Maharashtra is, at the top position. The share of industry, in the Net Value Added (NVA) is about, 18%. Maharashtra has also been the first, choice of domestic and foreign investors., , 4), 5), 6), 7), , Lack of infrastructural facilities., Lack of motivation to new enterpreneurs., Lack of development programmes., Regional imbalance, , Measures undertaken by the Government for, industrial development (Economic Survey of, Maharashtra 2017-18) :, 1) Single window cell was initiated to provide, all clearances to the existing and prospective, investors., 2) Maharashtra Industry, Trade and Investment, Facilitation Cell (MAITRI) was introduced, to provide online consolidated information, about the investment process., 3) Awards for export performance, space, rent subsidies are provided to small scale, industries to encourage participation in, international exhibitions., 4) Creation of Special Economic Zones (SEZ), to boost industrial growth., , Fig. 4.3 : Industry, , 5) Maharashtra State Industrial Cluster, Development Programme (MSICDP) is being, implemented all over the state to develop, small, medium and micro enterprises., , Find out :, Names of any five enterprises from, each category producing the following, goods in Maharashtra : chemicals, food, processing, textiles, automobile, I.T. and, pharmaceuticals., , C) Service Sector : Service sector consists of, insurance, tourism, retail banking, education, and social services. Service sector includes, provision of services to business as well as, final consumers., , Foreign Direct Investment (FDI) :, In the early 1990s, the Government of, India started amending the norms capping, foregin direct investment in certain sectors. The, liberalisation act of 1991 cleared the path of, FDI. Maharashtra has been consistently ranked, as the number one investment destination in, India. The State has remained in the forefront, in terms of FDI inflow in the country. The FDI, inflows in Maharashtra since April, 2000 till, September 2017 was ` 6,11,760 Crore which is, 31% of the total FDI inflow at all India Level., , Service sector is the largest employment, generating and fastest growing sector of, the economy. The contribution of service, sector to the Gross State Domestic Product, (GSDP) has been the highest compared to, the other sectors in the economy. It was, 54.5% during 2017-18., The core areas for development of, service sector include Fintech, IT/ITES,, start ups, cloud computing, electric vehicles,, defence, tourism and private universities., Government has also tried to expand, the service sector by various activities in, Tier II cities., , General problems in the industrial sector :, 1) Delays in government procedure, 2) Lack of opportunities for skill development., 3) Lack of updated technology., , 26
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7) Internet subscriber base was 5.45 crore in, Maharashtra as on 30th September 2017,, which is the highest among all the states., , Try this :, Classify the services mentioned in, the previous paragraph into services for, business and services for final consumers., , b) Social infrastructure : Social infrastructure, is also one of the important components of the, economy because it improves the quality of, human life as well as stimulates the economic, development. It not only improves the quality, but also gives the power to produce knowledge., Social, infrastructure, includes, literacy, programme, education, public health, housing,, drinking water and sanitation., , Core Areas of Service Sector :, • Infrastructure :, Infrastructure is the basic requirement for, economic development. A sound infrastructural, foundation is the key to overall socio-economic, development of the state. This acts as a magnet, for attracting additional investment into the state, and thus provides a competitive edge to it over, other states. Adequate infrastructural facilities, are an absolute necessity for rapid achievement, of sustainable economic growth., Classification of Infrastructure, Economic Infrastructure, , Measures undertaken to develop Social, Infratructure :, i) Education :, Education is considered as one of the, basic human needs. It forms the backbone of, socio-economic development of any country., Education is significant aspect of human resource, development (HRD). In the present scenario, India, is getting the advantage of highest demographic, dividend due to maximum percentage of young, population in the country. Education, therefore, becomes 'a priority' at the national as well as state, level. The state of Maharashtra has implemented, various educational schemes to achieve the goal, of education. There are four levels of education in, our country., 1) Primary, 2) Secondary, 3) Higher Secondary 4) Higher education, a) Primary education : The state of, Maharashtra has implemented the Right to, Education (RTE) of children in the age group, 6-14 years to provide free and compulsory, education under the Sarva Shiksha Abhiyan, (SSA). The expenditure of the State government, on primary education was `19,486 crores during, 2016-17., Primary (Std. I to VIII) Educational, Institutions and Enrolment, , Social Infrastructure, , Energy Transport Communication Health, , Education, , a) Economic Infrastructure : It facilitates, production and distribution of goods and services, for economic development., Measures for development of economic, infrastructure :, 1) Increasing installed capacity of electricity, generation., 2) Rural electricification, network improvement, and programmes for energy conservation., 3) Modified direct benefit transfer scheme to, LPG consumers in the state., 4) Road development plan (2001-2021) is, being implemented in the state with a target, to develop 3.37 lakh kms of road., 5) Metro Railway has started at Mumbai and, Nagpur., 6) Maharashtra Port Development Policy, was constituted for integrated development, of ports. State government is promoting, Sagarmala programme launched by the, central government for port led development., , Year, , Number, Total, No. of, Pupilof, Enrolment Teachers Teacher, Schools (in lakhs) (in lakhs) Ratio, 2016-17 1,04,971, 159.86, 5.30, 30.1, , Source : Economic Survey of Maharashtra 2017-18, , 27
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b) Secondary and Higher Secondary, Education : Rashtriya Madhyamik Shiksha, Abhiyan (RMSA) was launched in 2009, with the objective to improve the access as, well as the quality of secondary education., During 2016-17, the State government’s, expenditure on secondary and higher, secondory education was `16,089 crores., Secondary and Higher Secondary (Std., IX to XII) Educational Institutions and their, Enrolment, , d) Others :, 1) Inclusive education : This is for, differently abled children with special needs., 2) Girls' Education : Various schemes, to promote girls' education such as free, education till the higher secondary level,, free of cost S.T. bus service for school, going girls in rural areas, bicycles to needy, girls living within 5 kms from schools have, been introduced by the Government of, Maharashtra., 3) Adult Literacy : To increase adult, literacy in the state, innovative schemes, like ‘Each one Teach one’, ‘Sakshar Bharat, Abhiyan’ are implemented with community, participation., 4) Tribal Education : Government of, Maharashtra has introduced residential, Ashram Schools in the tribal areas of, the state. Tribal students are provided, accommodation, food, uniforms, educational, materials and other concessions free of cost., There are 556 aided Ashram Schools in the, state. Government hostel facility is provided, at division, district and taluka levels to, encourage tribal students to pursue higher, studies., , Year, , Number, Total, No. of, Pupilof, Enrolment Teachers Teacher, Schools (in lakhs) (in lakhs) Ratio, 2016-17 25,737, 66.15, 2.13, 31.1, , Source : Economic Survey of Maharashtra 2017-18, , c) Higher education : Apart from, universalization of primary education, the, Government of Maharashtra is taking efforts, to expand opportunities in higher education, also. Higher education helps in creating, technical and skilled human resources which, is an important input necessary for overall, economic development. There are 22 state, universities, out of which 4 universities are for, agriculture, one university for health science, courses, one university for veterinary science,, one for technology and 15 other universities, for general courses. In addition to these, there, are 21 autonomous universities, one central, university, 4 private universities and 5, institutes of national importance in the state., To meet the challenges of liberalization,, privatization and globalization, the state, enacted the new Maharashtra Public, Universities Act, 2016. Key focus of this, Act is to promote academic autonomy and, excellence, skill based education through, democratic process in higher education., Maharashtra is also the first state in the, country to receive RUSA grant of ` 20 crore, under Research and Innovation and Quality, Improvement for setting up innovation, and technology transfer hubs. Rashtriya, Uchchatar Shiksha Abhiyaan (RUSA) is a, centrally sponsored scheme launched by the, Government of India in 2013., , Find out :, Symbols of the following :, • Sarva Shiksha Abhiyan (SSA), • Rashtriya Madhyamik Shiksha Abhiyan, (RMSA), • Adult Literacy Mission (ALM), ii) Health Services :, There were 1814 primary health centres, and 360 community health centres in the state as, on 31st March 2017. Government of Maharashtra, also emphasizes on programmes to strengthen, health system in rural and urban areas through, National Rural Health Mission (NRHM) and, National Urban Health Mission (NUHM)., These programmes include health determinants, like sanitation and hygiene, nutrition and safe, drinking water. The Government of Maharashtra, , 28
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has created a three tier health infrastructure to, provide comprehensive health services., Primary tier includes Primary Health Centres, and Community Health Centres. The Secondary, tier includes sub district hospitals and district, hospitals., The tertiary tier includes well equipped, medical colleges and super speciality hospitals, located in major cities., , tourism and event management are also a part, of this sector., • Entertainment Industry :, India produces the largest number of, films in the world. Maharshtra has played a, remarkable role in this. Entertainment sector of, Maharshtra generates employment opportunities, to large number of people. Kolhapur has been, a worth mentioning city for regional films., Mumbai, popularly known as 'Bollywood' has, a great impact on the global film industry., , • Tourism :, Maharashtra attracts many tourists from, different states and abroad too. To promote, the state as a leading tourist destination, the, government has formulated Maharashtra, Tourism Policy, 2016., , D) Co-operative Movement in Maharshtra :, Co-operative movement is the greatest, contribution given by the state of Maharashtra, to the country., , Objectives of tourism policy include :, To make Maharashtra a leading tourist, destination by 2025., To attract investments to the tune of, ` 30,000 crore., To create one million additional jobs in the, industry., Maharashtra, Tourism, Development, Corporation (MTDC) is the nodal agency, for implementation of this policy in the state., MTDC organises different events such as Ellora, festival, Elephanta festival etc., Fig. 4.4 : Co-operative Movement, Co-operative Movement is an effective, instrument in the economic development of rural, areas and improving socio-economic conditions, of the under- privileged in Maharshtra. The basic, nature of co-operative societies is to encourage, the values of self help, democracy, equality, and solidarity., Co-operative movement in Maharashtra, was confined mainly to the field of agricultural, credit but subsequently extended to other, sectors such as :, agro processing, agro marketing, sugar co-operatives, fisheries co-operative societies, co-operative dairy societies, , MTDC has also launched the scheme of, ‘Mahabhraman’ to bring different experimental, projects such as agro tourism, village tourism,, food tourism, safaris, tribal lifestyles etc. under, one roof., • Hospitality :, Hospitality is a much broader industry, than other industries. It has grown manifold in, Maharashtra due to flourishing tourism. One, of the most defining aspects of this industry is, that it focusses on customers' satisfaction. Hotel, industry is one of the sectors of the hospitality, industry. Many forms of transportation that, cater to the tourists are also part of this business,, e.g. Airlines, Mumbai-Goa cruiseship, fancier, trains (Deccan Odyssey), restaurants, general, , 29
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As on 31st March 2017, there were about, 1.95 lakh co-operative societies in the state with, about 5.25 lakh members., , textiles, housing societies, consumer stores, , EXERCISE, Q. 1. Give economic terms :, , 2) Agriculture sector and Service sector, , 1) Investments done by foreign companies in our, country, , 3) Tourism and Hospitality, 4) Education and Health services, , 2) Programme for development of small, medium and, micro industries., , Q. 5. Answer the following :, 1) Explain the role of Co-opearative movement in, Maharashtra., , 3) Basic requirement for facilitating production and, distribution of goods and services for economic, development., , 2) Explain in detail measures taken by the government, for agricultural development of Maharashtra., , 4) Movement that promotes values of self-help, democracy and equality., , 3) Explain the major problems in the industrial sector, of Maharashtra., , Q. 2. Find the odd word out :, , 4) Explain the measures taken to develop social, infrastructure in Maharashtra., , 1) Agricultural Indebtedness, dry farming, lack of, capital, engineering, 2) Tourism, Banking, Automobile Production,, Insurance, , Q. 6. Read the following passage and answer the, questions given below :, , 3) Pune, Hyderabad, Nasik, Nagpur, , Government of India has launched an ambitious, programme of 'Bharatnet' for rural India by keeping in, mind today's modern era. More than one lakh rural, (Grampanchayat) areas have been connected under, Bharatnet high speed broadbrand scheme. Maharashtra, , 4) MTDC, MAITRI, SEZ, MIDC, 5) Primary education, Hospitality, Higher education,, Skill based education., Q. 3. Identify and explain the concepts from the given, illustrations :, , has become the best performing state. East Uttar Pradesh,, Chattisgarh, Rajasthan and Jharkhand have also been, placed among the best performing states in the first phase, of Bharatnet broad band connection scheme., , 1) To facilitate research in robotic technology, Japan, has invested ` 1000 crores in India, 2) Prajakta and her family visited the beaches during, her eight-day Diwali vacation., , 1) Why did the Government of India, Bharatnet project?, , launch the, , 3) Pravin from Latur works as a technician in the, films division at Mumbai city., , 2) How many Grampanchayats have received the, Internet service?, , 4) Rani Gond from Chandrapur works as a hostess, with the Mumbai-Goa cruise ship., , 3) Which states have been placed as the best, performing states in the first phase of Bharatnet?, 4) 'Internet has brought the world closer' - Express, your views on it., , Q. 4. Distinguish between :, 1) Economic Infrastructure and Social infrastructure, , , , 30
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CHAPTER - 5 : RURAL DEVELOPMENT IN INDIA, Introduction :, Indian economy is predominantly a rural, economy. Economic growth of the country is, driven by its rural development. It is true that India, lives in villages. The term ‘rural development’, is a subset of the broader term development., The term 'rural development' connotes overall, development of rural areas with a view to, improve the quality of life. According to 2011, census, the country’s rural population is 83.25, crores (68.8% of total population). There has, been a wide consensus that rural development, should be inclusive and sustainable in order to, alleviate the poverty., , a) Agricultural sector : The rural population, in India is classified into agricultural sector, which has been subdivided as agriculture, and allied activities. Agriculture consists of, small, marginal and large farmers. Allied, sector consists of plantation, forestry,, fisheries, dairy and horticulture., , Rural Development :, The concept of ‘Rural development’ was, born in the context of agriculture, and it remained, for a long time with agricultural development, in India., A) Agriculture, , c) Service Sector : The service sector termed as, 'tertiary sector' involves provision of services, to businesses as well as final consumers such, as accounting services, tradesman-ship (like, mechanic or plumber services), computer, services, restaurants, tourism etc. The, service sector has been further classified into, traders (wholesaler and retailer), transport, operators, professional and technical., , b) Industrial Sector : Industrial sector is, defined as an economic activity concerned, with the processing of raw materials and, manufacture of goods in factories. This, sector has been classified into the small, scale, cottage and rural industries., , 1) Mechanisation, 2) High yielding seeds, 3) Credit and Transport, 4) Marketing, C) Education, 1) Technical, 2) Skill, 3) Agricultural, , Rural, Development, , B) Village Industries, 1) Modernization, 2) Technical training, 3) Marketing, , Rural Development in India :, Rural development in India has witnessed, various plans and policies initiated by the, government as well as at the non-government, levels. Appropriate strategies for rural, development will lead to economic growth and, development of the country., , D) Services, 1) Health, 2) Family welfare, 3) Banking, 4) Communication, , World Bank defines :, “Rural development is a strategy designed, to improve the economic and social life of a, specific group of people - the rural poor. Rural, development involves extending the benefits of, development to the poorest among those who seek, livelihood in the rural areas. The group includes, small-scale farmers, tenants and the landless.”, , Significance of Rural Development in India :, 1) Public health and sanitation : Rural, development helps to improve sanitation, and hygiene, providing safe drinking water, and affordable health facilities. This would, lead to an improvement in the quality of life, of the rural people., , Rural occupational structure in general, a) Agricultural, Sector, , b) Industrial, Sector, , 2) Literacy rate in rural area : Literacy is, a powerful instrument of socio-economic, change. However there is a considerable, , c) Service, Sector, , 31
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gap between the rural and urban literacy, rates. Rural development helps to bridge this, gap by making provisions for educational, facilities at all levels., 3) Empowerment of women : Rural, development helps to reduce gender, disparity, meet the diverse needs of, rural women as well as encourage their, participation in community development, programmes., , Fig. 5.1 : Transformation of Agriculture, , 4) Enforcement of law and order : Rural, development helps to safeguard the rights of, the socially disadvantaged groups through, proper enforcement of law and order., , Agricultural Credit in India :, Agricultural credit is an important prerequisite for agricultural growth. Agricultural, policies have been reviewed from time to time, to provide adequate and timely finance to this, sector. Rural credit system assumes importance, because for most of the Indian rural families,, savings are inadequate to finance farming and, other economic activities., , 5) Land reforms : Rural development ensures, effective implementation of land reforms, such as ceiling on land holdings, regulation, of rent, protection of tenancy rights etc., This leads to reduction in rural inequality., , Classification of, Agricultural Credit, , 6) Infrastructure development : Rural, development leads to further progress, in basic facilities such as generation of, electricity, road connectivity, irrigation etc., 7) Availability, of, credit, :, Rural, development, also, facilitates, the, growth of financial institutions such, as primary agricultural co-operative, credit societies, regional rural banks, cooperative banks. This is vital for providing, subsidised credit facilities to the farmers., , On the basis of, Tenure, , On the basis of, Purpose, , Short term, , Productive, , Medium term, , Unproductive, , Long term, , Types of Agricultural Credit :, , 8) Eradication of poverty : Rural, development leads to an increase in rural, incomes and standard of living. This helps, in the eradication of poverty., , Agricultural credit can be classified on the, basis of :, 1) Tenure : It is credit requirement based on, the time-period of loans. It is of three types:, a) Short-Term Credit : It refers to loans, not exceeding two years. It is required, for meeting the short-term requirements, of the cultivators, e.g. loans required for, the purchase of fertilizers, High Yielding, Variety (HYV) seeds, for meeting expenses, on religious or social ceremonies etc., , 32
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2) Institutional Sources : The general, policy on agricultural credit has been one, of progressive institutionalization aimed, at providing timely and adequate credit, to farmers for increasing agricultural, production and productivity. Providing better, access to institutional credit for the small and, marginal farmers and other weaker sections, to enable them to adopt modern technology, and improved agricultural practices has, been a major part of the policy., Following are some of the institutional, sources of agricultural credit in India., , b) Medium-Term Credit : These loans, are for a period upto 5 years. These, are the financial requirements to make, improvements on land, buying cattle or, agricultural equipments, digging up of, canals etc., c) Long-Term Credit : These loans are, for a period of more than 5 years and are, generally required to buy tractor, making, permanent improvements on land etc., 2) Purpose : The agricultural credit on the, basis of purpose for which the credit is used, can be of two types:, , i) National Bank for Agriculture and Rural, Development (NABARD) : It is the apex, banking institution to provide finance, for agriculture and rural development., National Bank for Agriculture and Rural, Development (NABARD) was established, on July 12, 1982 with a paid up capital, of ` 100 crores by 50:50 contribution of, Government of India and Reserve bank of, India. NABARD is an apex institution in, rural credit structure for providing credit, for promotion of agriculture, small scale, industries, cottage and village industries,, handicrafts etc., The paid up capital stood at ` 10,580, crores as on 31st March 2018. Consequent, to the revision in the composition of share, capital between Government of India and, RBI, NABARD today is fully owned by, Government of India., , a) Productive : Productive loans are the loans, that are related to agricultural production, and economically justified, e.g. purchase of, tractor, land, seeds etc., b) Unproductive : Unproductive credit, is used for personal consumption and, unrelated to productive activity, e.g. loans, for expenditure on marriages, religious, ceremonies etc., Source of Agricultural Credit in India :, 1) Non-Institutional Sources, 2) Institutional Sources, 1) Non-Institutional Sources : The noninstitutional finance forms an important, source of rural credit in India, constituting, around 40 percent of total credit in India., The interest charged by the non-institutional, lenders is usually very high. The land or, other assets are kept as collateral security., The important sources of non-institutional, credit are as follows :, , ii) Rural Co-operative Credit Institutions :, The rural credit co-operatives may be further, divided into short-term credit co-operatives, and long-term credit co-operatives., A) Short-term credit co-operatives : It, provides short-term rural credit and are, based on a three-tier structure as follows, • Primary Agricultural Credit Societies, (PACS), • District Central Co-operative Banks, (DCCB), • State Co-Operative Banks (SCB), , i) Money-Lenders : Money-lending has been, a widely prevalent profession in the rural, areas. The money-lenders charge huge rate, of interest and mortgage the property of the, cultivators., ii) Other Private Sources :, a) Traders, landlords, Commission agents,, etc., b) Credit from relatives, friends, etc., , 33
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cater to the needs of the rural poor. RRBs are, set-up as rural-oriented commercial banks, with the low cost profile of co-operatives, but with the professional discipline and, modern outlook of commercial banks., , B) Long-term credit Co-operatives : These, co-operatives meet long-term credit, requirements of the farmers and are, organized at two levels:, • Primary, Co-operative, Agriculture, and Rural Development Banks : These, banks operate at the village level as an, independent unit., • State Co-operative Agriculture and, Rural Development Banks : These banks, operate at state level through their branches, in different villages., , v) Micro Finance Institutions (MFIs) :, Banks offer concessional interest rates for, the rural credit. However, small farmers are, unable to access them because of borrowerunfriendly products and procedures,, inflexibility and delay, and high transaction, costs, both legitimate and illegal. Thus,, Non-Government Organisations (NGOs), are providing alternative means to enhance, access to credit by the poor since mid-70’s., , iii) Commercial Banks : Commercial Banks, (CBs) provide rural credit by establishing, their branches in the rural areas., , Find out :, Information about the latest achievements, of NABARD., , iv) Regional Rural Banks (RRBs) : Regional, Rural Banks (RRBs) are the specialised, banks established under RRB Act, 1976, to, , EXERCISE, Q. 1. Complete the following statements :, 1) Rural credit system assumes importance, because .............., a) It leads to an increase in the rural income., b) Savings are inadequate to finance farming and, other economic activities., c) It leads to overall development of the rural, areas., d) It leads to reduction in rural inequality., , b) proper enforcement of law and order., c) infrastructural development, d) improvement in quality of life., 5) The quality of life of the rural people can be, improved by .........................., a) Providing safe drinking water, health and hygiene, facilities., b) Effective implementation of land reforms, c) Providing subsidized credit facilities, d) Reducing rural inequality., , 2) Productive loans are economically justified, because ..................., a) They are related to agricultural production., b) They are used for personal consumption., c) They help in eradication of poverty, d) They improve the quality of life of the people, , Q. 2. Choose the wrong pair :, i), , 3) Small farmers are unable to access rural credit, provided by banks due to ................, a)Presence of money lenders., b)No branches in rural areas, c) High transaction costs, d)Preference given to large farmers., , 'A', Agricultural Credit, 1) Short-term, 2) Medium-term, 3) Long-term, , ii), , 4) The rights of socially disadvantaged groups can, be safe guarded through ..................., a) empowerment of women, , 34, , 'A', Rural occupational, structure, 1) Agricultural sector, 2) Industrial sector, 3) Service sector, , 'B', Requirement, Purchase of fertilizers, to meet expenditure on, marriages, to buy tractor, 'B', Activity, Banking and Insurance, Processing of raw materials, Computer related service
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Q. 3. Assertion and Reasoning – choose the correct, answer from the following :, 1) Assertion (A) : Indian economy is pre-dominantly, rural economy, , Q. 4. Identify and explain the concepts from the given, illustrations :, 1) Kusumtai knowingly set up her business enterprise, in the rural area so that people living there could be, gainfully employed., , Reasoning (R) : As per 2011 census, the country’s, rural population is almost 83.25 crore (68.8% of, total population), , 2) Raoji purchased a new tractor for his farm by, taking a loan., 3) Subsidized credit is provided by banks to small, farmers for purchase of high yielding variety, (HYV) seeds., , Options : 1) (A) is True but (R) is False, 2) (A) is False but (R) is True, 3) Both (A) and (R) are True and (R) is the correct, explanation of A., , 4) Damaji borrows loan from a credit society, established in the village this season rather than, taking it from a moneylender., , 4) Both (A) and (R) are True but (R) is not the, correct explanation of (A), 2) Assertion (A) : Literacy is a powerful instrument, of socio-economic change., , 5) Ramraoji takes a loan from the bank for a period, of ten years subject to terms and conditions for the, purpose of irrigated farming., , Reasoning (R) : Empowerment of women helps to, reduce gender disparity., , Q. 5. Read the following passage carefully and answer, the questions given below :, , Options : 1) (A) is True, but (R) is False, , Rural development is one of the thrust areas of, administration. As Mahatma Gandhi rightly said, “India, lives in villages and the development of the nation cannot, be achieved without the development of the villages”. The, need of the hour is the convergence of all development, interventions, at the grassroot level which can be possible, through effective governance at the village level. The, movement towards decentralization of the National and, State governments through the Panchayati Raj system, needs to be strengthened through lessons learned from the, successful stories of ‘Model villages’ around India., Though India is progressing in the right direction in, reducing education inequalities and increasing literacy, levels, there is still a lot that needs to be done. An, understanding of social issues is important for effective, planning and policy development. Self-governance, ensures that Indian citizens, even the previously, marginalized, can participate in decision-making., , 2) (A) is False, but (R) is True, 3) Both (A) and (R) are True and (R) is the correct, explanation of (A), 4) Both (A) and (R) are True but (R) is not the, correct explanation of (A), 3) Assertion (A) : Agricultural credit is mostly for, unproductive purposes., Reasoning (R) : Agricultural credit is an important, pre-requisite for agricultural growth., Options : 1) (A) is true, but (R) is false, 2) (A) is False, but (R) is True, 3) Both (A) and (R) are True but (R) is the correct, explanation of (A), 4) Both (A) and (R) are True but (R) is not the correct, explanation of (A), , 1) Explain in short Mahatma Gandhi’s views on rural, development., , 4) Assertion (A) : Non-institutional finance forms an, important part of rural credit., , 2) Highlight the role of the government in achieving, rural development., , Reasoning (R) : Small farmers are unable to, access bank credit because of borrower unfriendly, products., , 3) What measures have been suggested to achieve, rural development., , Options : 1) (A) is True, but (R) is False, , 4) Express your idea of a ‘Model Village’., , 2) (A) is False, but (R) is True, , , , 3) Both (A) and (R) are True and (R) is the correct, explanation of A, 4) Both (A) and (R) are True, but (R) is not the, correct explanation of A, , 35
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CHAPTER - 6 : POPULATION IN INDIA, between 1865 and 1872 in different parts, of the country. However 1872 has been, popularly labelled as the first population, census of India., • On 11th July 1987, world population crossed, 500 crores. Hence, 11th July is observed as, 'World Population Day'., Source : Censusindia.gov.in, , Stimulate your memory :, Find out the basic features of India’s, population that you have studied in Std., VIII and Std. X in the subject of Geography., (e.g. Sex Ratio, Density of Population, Age, Composition, Urbanisation etc.), , Fig. 6.1 : Population in India, Introduction :, India is a developing country. The rate of, economic development of a country depends on, its quantitative and qualitative growth which, can be measured in terms of population, national, income, per capita income etc., , Trends in Population Growth :, India’s population is very large in size. It, is growing rapidly. Information regarding the, size, structure and other characterstics of India's, population is obtained through Census Survey., , Population refers to the number of people, living in an area at a given point of time., Population of India is measured once in every, ten years through a census survey. According, to 2011 census, India’s population was 121.02, crores. India ranks second in the world next to, China., , Table 6.1 reviews the trends in population growth:, Growth of Population in India, , India has 17.5% of the world population, but it occupies only 2.4% of the world's land, area. Population stastistics are compiled and, published by the Office of the Registrar General, and Census Commissioner of India., You should know :, Population Facts, • Kautilya wrote ‘Arthashastra’ in the third, century B. C. It prescribed the collection of, population statistics as a measure of state, policy for taxation., • A systematic and modern population, census in its present form was conducted, , Year, , Population, (In Crores), , Average Annual Growth, Rate (Percent), , 1911, , 25.2, , -, , 1921, , 25.1, , -0.03, , 1931, , 27.9, , 1.0, , 1941, , 31.9, , 1.3, , 1951, , 36.1, , 1.3, , 1961, , 43.9, , 2.0, , 1971, , 54.8, , 2.2, , 1981, , 68.3, , 2.2, , 1991, , 84.6, , 2.1, , 2001, , 102.7, , 1.9, , 2011, , 121.02, , 1.4, , Table 6.1, , 36, , Source : Census of India Reports
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1) Marginal Decline in population (19111921) : There was a marginal decline in, population from 25.2 crores in 1911 to 25.1, crores in 1921. Thus, there was negative, growth rate due to spread of epidemics such, as influenza, cholera, plague, malaria etc., , Malthus states that correction of the, imbalance can be done by introducing, 'preventive checks' such as late marriage,, moral restraint etc. He also mentions about, 'positive or natural checks' such as natural, calamities. Natural checks operate and wash, out the excess population and thus balance is, maintained. However, preventive checks are, more dependable out of the two., , 2) Year of Great Divide : The decadal, growth of population was negative during, the period 1911 to 1921. After 1921, there, was a continuous increase in population., Hence, then Census Commissioner of India, had designated the year 1921 as the 'Year, of Great Divide'., , Concepts related to population growth :, 1) Birth rate : Birth rate means the number, of births occurring per thousand of the, living population during a year. It is also, known as fertility rate ., , 3) Positive growth rate (1931-1941) : India, recorded an annual growth rate around 1 to, 1.3% during this period., , 2) Death rate : The number of deaths per, thousand of the living population during, a year is called death rate. It is also called, mortality rate., , 4) Increase in population (1951 onwards) :, Between 1951 to 1971 population increased, from 36.1 crores to 54.8 crores. This, shows that after Independence, there was, tremendous rise in population., , 3) Survival rate : The difference between, the birth rate and death rate is known as, the survival rate. This shows the actual, rate of population growth., , 5) Population Explosion (1971-2001) : During, this period, India experienced 'population, explosion' because during these three, decades, annual population growth rate, was more than 2%., , Survival rate = Birth rate – Death rate., 2) Theory of Demographic Transition : The, theory of demographic transition was given, by A. J. Coale and E. M. Hoover, in the book,, "Population growth and Economic Development, in low-income countries" (1958)., According to this theory, every country, passes through three stages of demographic, transition. This theory explains the transition, from high to low birth rates and death rates., , 6) Slow down in population growth rate, (2001-2011) : There is an indication of, slow down in growth rate of population, from 1.9% in 2001 to 1.4% in 2011. This, shows that the average annual growth rate, is declining., Theories of Population Growth :, , Stages of Demographic Transition :, The theory shows a three stage relationship, between economic development and population, growth. According to this theory, as a country, advances economically, its population passes, through three stages as follows :, , 1) Malthusian theory of population growth :, Thomas Robert Malthus propounded this, theory in his book, "An Essay on the Principle, of Population" in 1798 and modified some, of its conclusions in the next edition in 1803., According to Malthus, population increases, in geometric progression (2, 4, 8, 16, 32, 64, etc.) and food supply increases in Arithmetic, progression (1, 2, 3, 4, 5, 6, 7, 8, 9 etc.), This creates, imbalance between population and food supply., , A) First stage (Low growth of population) :, It is pre-industrialised and primitive stage., The birth rate and death rate both are, very high. All underdeveloped countries, , 37
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have passed through this stage. Social and, economic conditions such as mass illiteracy,, superstitions, mass poverty, orthodoxy, lack, of medical facilities, spread of epidemics, etc. led to low growth of population., Before 1921, India was in the first stage of, demographic transition., , Birth rate and Death rate in India, , Birth rate / Death rate, , 60, 50, 40, 30, 20, , BR, , 10, , DR, , 0, , B) Second stage (High growth of population) :, Introduction of industrialisation and, beginning of the process of economic, development is the indicator of the second, stage. Due to economic development death, rate started falling rapidly, but the birth, rate continued to remain high. This led, to population explosion. All developing, countries, including India are in the second, stage of demographic transition. India is on, the verge of entering into the third stage., , 1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011, Years, Birth rate, Death rate, , Fig. 6.2 : Demographic transition, Try this :, Based on the table 6.2, explain how, demographic transition theory is applicable, to India., Population Explosion in India :, , C) Third stage (Low or Stable population) :, Rapid industrialisation and urbanisation,, result in the spread of education and, consciousness about standard of living., With economic development, both birth rate, as well as death rate tend to decline. All, developed countries are in this stage., Fig. 6.2 helps to understand the theory of, demographic transition., , 1961, , Birth rate and Death rate in India, Year, , Birth rate, , Death rate, , 1901, , 49.2, , 42.6, , 1911, , 48.1, , 47.2, , 1921, , 46.3, , 36.3, , 1931, , 45.2, , 31.2, , 1941, , 39.9, , 27.4, , 1951, , 41.7, , 22.8, , 1961, , 41.2, , 19.0, , 1971, , 37.2, , 15.0, , 1981, , 32.5, , 15.0, , 1991, , 29.5, , 9.8, , 2001, , 28.3, , 9.0, , 2011, , 20.97, , 7.48, , Table 6.2, , 2011, , Fig. 6.3 : Population Explosion, , Source : Census of India Reports, , 38
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8) Lack of awareness about family welfare, services : Most of the people are ignorant, about the availability of various means and, techniques of family planning., , Can you tell :, Observe Fig. 6.3 and draw inferences, from it., Population explosion is a situation where, the growth of population is faster than the growth, and development of the economy. Population, explosion in India is due to a high birth rate, followed by a low death rate., , Find out :, Legal age of marriage for males and, females in different countries., You should know :, , Causes of high birth rate :, , • Underpopulation : Natural resources, exceed the population growth., , 1) Illiteracy : The percentage of illiterates in, the country is reasonably high. The attitude, of illiterate people towards marriage and, child birth has remained rigid . Low level of, literacy among females is also responsible, for a high birth rate., , • Overpopulation : Population growth, exceeds availability of natural resources, • Optimum Population : There is a balance, between population growth and avilability, of natural resources., , 2) Universalization of marriage : In India,, marriage is considered as both religious, and social obligation. Even with the spread, of education, the attitude of people towards, marriage remains unchanged at large., , Causes of low death rate :, 1), , 3) Age of marriage : In India, the legal age, of marriage is relatively lower compared to, other countries. It is 18 years for females and, 21 years for males. Low age of marriage has, also resulted in a high birth rate., , Improvement in medical and health, facilities : Due to widespread increase in, medical and health facilities, epidemics, like plague, cholera, malaria, small, pox, tuberculosis etc. have almost been, eradicated., , 2) Decline in Maternal Mortality Rate :, Over a period of time, death rate of women, dying during maternity has declined due to, improvement in medical facilities., , 4) Preference for male child : Many Indian, parents are opting to continue having children, until they have a son or desired numbers of, sons. This is known as son meta-preference., , 3) Fall in infant mortality rate : Due to, better medical facilities there has been a, decline in infant mortality rate from 146, per 1000 in 1951 to 64 per 1000 in 2002, and 47 per 1000 in 2011. Improvement in, literacy among women has also resulted in, better care for infants and as such there is a, decline in infant mortality rate., , 5) Joint family system :There is no individual, financial responsibility in a joint family., Hence, existence of joint family is also, responsible for high birth rate in India., 6) Dependence on Agriculture : Indian, agriculture is driven by manpower. In India,, there is overdependence on agriculture., More number of children in the family, implies more labour force available for, field work., , 4) Increase in literacy : Better education will, help the people to take care of their life and, the needs of their children in a better way., Education has helped the people to come out, of their blind faith, beliefs and ignorance., , 7) Widespread Poverty : Poor people prefer, large families because they feel that more, children means greater economic support., , 39
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5) Use of nutritious food : Education has, created awareness about health and, nutrition. Percentage of children and women, dying due to malnutrition and ill health was, quite high.These deaths are now brought, under control by providing nutritious diet., e.g. Mid-day meal programme in schools., , B) Social Measures : Population explosion, is a socio-economic problem. It is related, to illiteracy, superstition, orthodoxy, low, status of women. The following are the, social measures :, • Spread of education, • Improving the status of women, • Raising the minimum age of marriage, , 6) Disaster management : The National, Disaster Management Authority (NDMA), was constituted in 2005. This helps to, mitigate all types of disasters thereby, reducing the loss of lives., , C) Population Policy of India : Population, policy was implemented through the, following programmes., , 7) Other factors : Education, social reforms,, rapid urbanization, improvement in standard, of living, publicity campaigns are also, responsible for creating awareness among, the people., You should know :, Effects of population explosion, • Increased pressure on land, • Increased pressure on agriculture, • Pressure on infrastructure and basic, amenities, • Imbalance between demand for and supply, of food, • Inflation, • Environmental problems, • Social problems, • Low national income, , Fig. 6.4 : Small family, 1) Family Planning Programme : It was, launched in 1952 with the objective of, reducing the birth rate. Family planning, refers to planned parenthood. It is a measure, in which birth of a child is determined by, choice and not by chance. Family planning, programme was not successful due to lack, of awareness among the people, false, religious beliefs and inconsistent policies of, the government., , Measures to check population explosion :, To control the problem of population, explosion in India, the following measures need, to be undertaken :, , 2) Family Welfare Programme : Family, Planning Programme was renamed as, Family Welfare Programme in 1979. It, attempted to integrate family planning, services with those of maternal, child health, and nutrition., , A) Economic measures : Economic measures, can raise the standard of living of the people, and help to reduce population growth. Some, of the important economic measures are as, follows :, • Expansion of industrial sector., • Creation of employment opportunities., • Removal of poverty, • Equitable distribution of income and wealth., , 3) National Population Policy, 2000 : In, the year 2000, the Government introduced, National Population Policy (NPP) to control, population and to improve its quality. Some, of the important features of NPP, 2000 are :, , 40
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1) Free and compulsory school education upto, the age of 14 years., 2) Reduce infant mortality rate to below, 30/1000 live births., 3) Reduce Maternal Mortality Rate (MMR) to, below 100 per 1,00,000 live births., 4) Universal immunization of children against, all vaccine preventable diseases., 5) Delayed marriage for girls, not earlier than, 18 and preferably after 20 years of age., 6) Prevention and control of communicable, diseases., 7) Achieve a stable population by 2045., , 4), , 5), , 6), , 7), , Population as a Human Resource, Introduction :, Population constitutes a nation’s valuable, resource. Nature’s bounty becomes significant, only when people find it useful. It is people with, their demands and abilities that turn them into, resources. Hence, human resource is the ultimate, resource. Healthy, educated and motivated people, develop resources as per their requirements., Human resources like other resources are not, equally distributed all over the world. They differ, in their educational levels, age and sex. Their, numbers and characterisitcs also keep changing., The, United, Nations, Development, Programme (UNDP) has introduced the concept, of 'Human Development' in 1990., Human Development embraces enlargement, of all human choices – economic, social, cultural, or political. It is the enrichment of human lives, which is the real wealth of the society., , 8), , – economic, social, cultural or political., Human resource development occurs through, provision of educational facilities. Increase, in literacy rate, especially among women,, tends to reduce birth rate and infant mortality, rate. This contributes to population control., Human resource development contributes to, improvement in life expectancy and literacy, rate. This further improves the quality of life., Human resource development helps to, bring about research and development. It, motivates research in various educational, institutions., Human development leads to increase, in human productivity, i.e. investment in, nutrition, health and education which results, in higher productivity., Concept of human development is universal, by nature. It applies to less developed as, well as highly developed countries. In short,, human development embraces the entire, society., , Do you know?, Population Education : It is essentially, related to human resource development. It, aims not only at creating awareness about, the population but also with developing, values and attitudes which take care of, quality and quantity of population. According, to UNESCO ‘‘Population Education is an, educational programme which provides for, a study of population situation of the family,, the community, nation and world with the, purpose of developing in the students rational, and responsible attitude and behaviour, towards the situation’’., , Role of human resources in economic, development :, 1) Human development is an end while, economic growth is a means to achieve, this end. So, human conditions should be, improved., 2) Human development can contribute to, reduction in civil disturbances in a society, and increased political stability., 3) Human development is concerned with, widening not merely income choices but, covering all aspects of human development, , You should know :, Demographic Dividend : One of India’s, competitive advantages is its demographic, dividend. Demographic dividend occurs, when the proportion of working people to, the total population is high. This indicates a, high potential of human resources which can, contribute to economic growth., , 41
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EXERCISE, Q. 3. Identify and explain the concepts from the given, illustrations :, , Q. 1. Choose the correct alternative :, 1) Stages of the theory of demographic transition., , 1) There were 40 births per 1000 in country 'A' during, a year., , a) High birth rate and high death rate, b) High birth rate and low death rate, , 2) In Mumbai city, public transport service is largely, affected due to the growing population., , c) Low birth rate and low death rate, d) Economic development, Options : 1) a and b, 2) a and c, 3) a, b and c, , 3) In country 'B', there are 15 deaths taking place per, 1000 during a year., , 4) a, b, c and d, , 4) For a certain period of time China had adopted the, policy of 'One child per family'., , 2) Incorrect reasons for population explosion in, India., a) Illiteracy, , b) Universalization of, Marriage, , c) Joint family system, , d) Upliftment in lifestyle, , Options : 1) a and b, , Q. 4. Answer the following :, 1) Explain the causes of high birth rate., 2) Explain the causes of low death rate., , 2) c and d, , 3) a, b and c, , 3) Explain the role of Human Resource in Economic, development., , 4) d, , 3) Remedies undertaken to check population, explosion., , Q. 5. State with reasons whether you agree or, disagree with the following statements :, , a) To provide employment, , 1) India is experiencing population explosion., , b) To improve women’s quality of life, , 2) Death rate is falling rapidly in India., , c) National Population Policy, , 3) Optimum population contributes, development of a country., , d) Disaster management, Options : 1) d, , 2) a and c, , 3) c and d, , 4) a, b and c, , 4) Human resources play an important role in, economic development., , Group B, , 5) Birth rate is declining due to changes in the, standard of living., , 4) Choose the correct option., Group A, , economic, , 1) Year of Great, Divide, , a) Stable population till 2045, , 2) A. J. Coale and, E. M. Hoover, , b) 1921, , 3) Social Reforms, , c) Demographic Transition, , 4) National Population, Policy, 2000, , d) Spread of education, , Q. 6. Solve the following :, 1) Find out Q3 from the given data., 2) Draw a population growth curve from the given data., , Options : 1) 1-d, 2-c, 3-a, 4-b, , 2) 1-b, 2-c, 3-d, 4-a, , 3) 1-b, 2-a, 3-c, 4-d, , 4) 1-c, 2-d, 3-a, 4-b, , Year, 1951, 1961, 1971, 1981, 1991, 2001, 2011, , Q. 2. Give economic terms :, 1) Increase in population is faster than economic, growth and development., 2) Difference between birth rate and death rate., , Population, (in Crores), 36.1, 43.9, 54.8, 68.3, 84.6, 102.7, 121.02, , (Source - Census reports), , 3) Balance between natural resources and population, growth., , , , 4) Programme introduced to reduce the birth rate in 1952., , 42
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CHAPTER - 7 : UNEMPLOYMENT IN INDIA, Unemployment, , Employment, , Fig. 7.1 : Unemployment in India, Introduction :, India is a developing economy and one, of the fastest growing economies of the world., The problem of unemployment is considered to, be the biggest challenge to the development of, India. Fig. 7.1 gives an idea about the problem, of unemployment in India. Unemployment, leads to a waste of human resources. Long term, unemployment results in mass poverty and slow, economic development. Mostly, young people, face the problem of unemployment. Young, people are a major human resource, key agents, for social change and driving force for economic, development and technological innovation., India has considerable young population, hence unemployment among youth is the most, critical challenge of the 21st century. There is an, imbalance between employment opportunities, and increase in population. This has resulted, in large scale unemployment. So generally, unemployed people are involved in unproductive, work like gambling and indulge in anti-social, and anti-national activities., , Meaning of Unemployment :, Normally anyone who is not gainfully, employed in any productive activity is said to be, unemployed. In economics, unemployment is to, be studied with respect to, a) nature, b) working age group, c) demand for and supply of labour, d) prevailing wage rate., The rate of economic growth is not fast, enough to generate adequate jobs to absorb the, expanding labour force., 'Unemployment is a situation in which, people in the age group of 15 to 59 years are able, and willing to work at the prevailing wage but, unable to get a job'., For a person to be considered employed, it, is essential that the person should be engaged, in work for a minimum number of hours per, week. According to National Sample Survey, Organization (N.S.S.O.), i) In India, a person is considered unemployed, if he works for less than fourteen hours, per week., ii) Those who work for 15 - 28 hours a week, are considered as underemployed., , 43
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A) Rural Unemployment :, The unemployment found in villages is, called rural unemployment. Following are the, types of rural unemployment :, 1) Seasonal Unemployment : A large number, of people remain unemployed during the, slack season or in the off season. Agriculture, being a seasonal occupation, farmers have, to depend upon monsoon for cultivation., Majority of the labour force in the agricultural, sector remain unemployed for nearly 5-7, months in a year. Seasonal unemployment is, also found in tourism, marriage bands, sugar, factories, ice factory, fisheries etc., , iii) Person working for eight hours per day, i.e. 273 days of the year is considered, 'employed' on a standard basis., You should know :, 1) Involuntary unemployment : It refers, to a situation in which people are willing to, work, but there is no work for them due to, excess of labour force in relation to demand, for labour., 2) Voluntary unemployment : It is a type, of self unemployment where a person is fit, to work but not willing to work., 3) Underemployment : It is a situation, where a person’s capacity to work is under, utilised., , 2) Disguised Unemployment : It is also known, as invisible unemployment. Disguised, unemployment is generally found in, villages in India. It is a situation in which, more people are doing work than actually, required. Even if some are withdrawn,, production does not suffer. In other words, it refers to a situation of employment, with surplus manpower in which some, workers have zero marginal productivity., , 4) Full employment : It is a hypothetical, situation in which all available resources, are being used in the most efficient manner., Types of Unemployment :, There are various types of unemployment., We can classify unemployment into various, categories., Unemployment, Rural unemployment, , Urban unemployment, , Seasonal, unemployment, Disguised, unemployment, , Educated, unemployment, Industrial, unemployment, , Technological, unemployment, Frictional, unemployment, , Cyclical, unemployment, Structural, unemployment, , The excessive pressure on land leads, to disguised unemployment in rural areas., It is estimated that nearly 20% of the, labour force is disguisedly unemployed, in rural areas. Joint family system, lack, of alternative job opportunities result in, overcrowding in agriculture. These are the, main reasons for disguised unemployment., , Five workers = Ten quintals of jowar, Sixteen workers = Ten quintals of jowar, Fig. 7.2 : Disguised Unemployment, , 44
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lack of proper training, e.g. computerisation,, introduction of robotic technology etc., , B) Urban Unemployment :, Urban, unemployment, refers, to, unemployment found in the urban areas i.e., towns and cities of the country. Following are the, types of urban unemployment., 1) Educated Unemployment : When people, are educated and willing to work but do not, get jobs is known as educated unemployment., This type of unemployment is found among, matriculates, undergraduates, graduates, and post graduates. Casual approach, to education, imbalance between job, opportunites and number of educated youth,, preference for white collar jobs, lack of, employable skills, lack of awareness about, available educational opportunities are the, main reasons for unemployment among, educated youth in India., , ii) Frictional Unemployment : Frictional, unemployment is caused due to breakdown, of machinery, power failure, shortage of raw, materials, strikes by workers etc. Frictional, unemployment is temporary by nature., iii) Cyclical Unemployment : Cyclical, unemployment is the result of cyclical, fluctuations in the level of business activity., The economy passes through phases of, prosperity and depression. During the, period of depression, effective demand, falls which leads to a fall in the prices, and profits earned by the producers. As a, result, there is a corresponding decline in, investment and production of commodities., A fall in production leads to a fall in, employment. As a result, workers are thrown, out of jobs during the period of depression., , 2) Industrial Unemployment : It refers to, unemployment in the industrial sector., The unemployed workers may be skilled, or unskilled. This is generally a form, of open unemployment. Slow industrial, growth, rapid growth of population, lack, of training facilities, low adaptability to, modern technology, inconvenient location of, industries, low mobility of labour etc. are the, main reasons for industrial unemployment., , iv) Structural Unemployment : This type of, unemployment arises due to drastic changes, in the economic structure of a country. These, changes may affect either the supply of or, demand for a factor of production. Structural, changes in the economy are caused by, changes in government policies, shortage of, capital, shifting of industry from one region, to another etc. Structural unemployment, is a long term phenomenon. Structural, unemployment takes place because of a, mismatch between the skills of workers, and the jobs that are actually available,, e.g. i) horse carts had been replaced by auto, rickshaws. ii) introduction of computerised, typing has caused unemployment among, manual typists., , Following are the types of Industrial, unemployment :, i) Technological Unemployment :, Technological unemployment arises, because of changes in technology. Modern, technology is capital-intensive and requires, less labourers. When new techniques are, introduced in the industrial sector, existing, workers are displaced from their jobs due to, , Extent of Unemployment in India : Employment and Unemployment (in million), Year, , Labour Force, , Employed, , Unemployed, , Unemployment rate in (%), , 1993 - 94, 1999 - 2000, 2004 - 05, 2009 - 10, 2011 - 12, , 381.94, 406.85, 468.73, 472.32, 483.75, , 374.45, 397.88, 457.56, 462.49, 472.91, , 7.49, 8.97, 11.17, 9.84, 10.84, , 2.0, 2.2, 2.4, 2.1, 2.2, , Table : 7.1, , Source : Economic and Political Weekly (June 7, 2014), , 45
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Do you know?, Ranks, , State-wise unemployment rates in India (2015-16), State, , Unemployment Ranks, (Per 1000), , State, , Unemployment, (Per 1000), , 1, , Tripura, , 197, , 16, , Manipur, , 57, , 2, , Sikkim, , 181, , 17, , Odisha, , 50, , 3, , Kerala, , 125, , 18, , West Bengal, , 49, , 4, , Himachal Pradesh, , 106, , 19, , Meghalaya, , 48, , 5, , Assam, , 96, , 20, , Haryana, , 47, , 6, , Arunachal Pradesh, , 89, , 21, , Madhya Pradesh, , 43, , 7, , Nagaland, , 85, , 22, , Tamilnadu, , 42, , 8, , Jharkhand, , 77, , 23, , Andhra Pradesh, , 39, , 9, , Uttar Pradesh, , 74, , 24, , Mizoram, , 30, , 10, , Jammu and Kashmir, , 72, , 25, , Telangana, , 28, , 11, , Rajasthan, , 71, , 26, , Maharashtra, , 21, , 12, , Uttarakhand, , 70, , 27, , Chhattisgarh, , 19, , 13, , Goa, , 61, , 28, , Karnataka, , 15, , 14, , Punjab, , 60, , 29, , Gujarat, , 09, , 15, , Bihar, , 60, , Source : Report on Fifth Annual Employment-Unemployment Survey (2015-16), GoI., , leading to unemployment., , Find out : Calculate Q2 from the above, data. Use the ranks of the States given as, numerical data. Identify the state on the, basis of the obtained partition value., , 3) Excessive use of machinery : In India,, manpower is available in large quantities., Under these circumstances, the country, would have labour-intensive technique of, production. However, not only in industries,, but also in agriculture, producers are, increasingly substituting capital for labour., Where capital is in abundant supply, use of, automatic machines and other sophisticated, equipment is both rational and justified., But in India, this policy results in large scale, unemployment., , Causes of Unemployment :, Following are the major causes of, unemployment :, 1) Jobless growth : Since independence, the, rate of growth of employment in India, has been considerably less than the rate, of economic growth. Moreover, the rate of, economic growth has not been adequate, enough to absorb the increasing labour, force. As a result, there is widespread, unemployment., , 4) Lack of skill development programmes :, Vocational skill development courses, which are compatible to Indian industry are, comparatively less in number. So, there is a, dearth of skilled man power needed by the, industry., , 2) Increase in labour force : Death rate has, rapidly declined without a corresponding, fall in birth rate, therefore the country has, registered an unprecedented population, growth. This was naturally followed by, an equally large expansion in labour force, , 5) Expectations towards employment :, Educated youth in India aspire for white, collar job. There is a lack of innovative and, , 46
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entrepreneurial spirit to organize economic, activities where they can be self-employed., Graduates prefer to remain unemployed, till they get a job which is upto their, expectations in terms of salary and nature, of work., , You should know :, General Measures to reduce, Unemployment :, 1) Development of agricultural sector, 2) Provision for alternative occupation, , 6) Seasonal nature of agriculture :, Agriculture in India is seasonal by nature., It depends on monsoon. Lack of irrigation, facilities, poor soil fertility, outdated, production techniques, non-availability of, certified seeds and fertilizers are the factors, that reduce the capacity of agriculture for, other gainful employment throughout the, year. The labourers are employed only for, a few months in a year. For the rest of the, year, the labour force remains jobless., , 3) Development of infrastructure, 4) Reforms in the educational system, 5) Development of Tourism, 6) Use of labour-intensive techniques, 7) Development of Information technology, and communication, 8) Provision for vocational training and skill, development facilities, 9) Rural industrialization, , 7) Slow rate of economic development :, The overall economic development of, India is very slow. Inadequate irrigation, facilities,, fertilizers,, unsatisfactory, growth of infrastructure are all due to, inadequate industrial expansion. As a, result, employment opportunities have, not increased enough in the rural sector to, absorb the growing labour force., , 10) Motivation for self employment, Specific Measures undertaken by the, Government to generate employment, opportunities :, 1) Employment Guarantee Scheme (EGS) :, Employment Guarantee Scheme, was, first introduced by the Government of, Maharashtra on 28th March 1972. This, scheme was intended to provide productive, employment to the rural population, and thereby solve the problem of rural, unemployment and poverty. Under this, scheme, government assures to provide, minimum employment opportunities. Due, to its success in Maharashtra, EGS was, implemented in other states as well., , 8) Migration of rural population : There has, been a continuous migration of people from, rural to urban areas in search of jobs. This, has increased the problem of unemployment, in urban areas., You should know :, Effects of Unemployment, Economic effects, 1) Waste of human, resources, , Social effects, 1) Social tension, and unrest, , 2) Difficult to implement, welfare schemes, , 2) Loss of human, dignity, , 3) Poverty and income, inequality, , 3) Helplessness, , 2) Swarnjayanti Gram Swarozgar Yojana, (SGSY) : This scheme was launched in, April, 1999 after restructuring the Integrated, Rural Development Programme (IRDP) and, allied schemes. It is the only self-employment, scheme for the rural poor in India., , 4) Growth of informal sector, , 3) Swarna Jayanti Shahari Rozgar Yojana, (SJSRY) : This scheme was launched, , 5) High dependency ratio, , 47
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8) Deen Dayal Upadhyaya Grameen, Kaushalya Yojana 2014 : It is the most, important placement linked skill training, programme under the Ministry of Rural, Development announced on September, 23, 2014. The mission of this scheme is to, reduce poverty as well as provide gainful, and sustainable employment through, regular wages. The focus of this programme, is on the rural youth from poor families, in, the age group of 15-35 years., , in December, 1997. It provides gainful, employment to the urban unemployed, and underemployed. It included selfemployment, women self-employment, programme, skill training for employment, promotion and urban wage employment, programme. For this scheme, Central, Government shares 75% of the cost and, State Government shares 25% of the cost., 4) Pradhan Mantri Rozgar Yojana (PMRY) :, This scheme is being implemented since, 1993 to create and provide sustainable selfemployment opportunities to more than one, million educated unemployed youth., , 9) National Policy for Skill Development, and Entrepreneurship - 2015 : The first, National policy on skill development was, notified in 2009 to promote private sector, participation via innovative funding models., , 5) Training Rural Youth for Self-employment, (TRYSEM) : It was initiated in 1979 with, the objective of tackling unemployment, problem among the rural youth. It aimed at, training about 2 lakh rural youth every year, to enable them to become self-employed., TRYSEM was merged into Swarnajayanti, Gram Swarozgar Yojana in April 1999., , The objective of this scheme is to, co-ordinate, and, strengthen, factors, essential for growth of entrepreneurship, across the country. This would include :, i) Promote entrepreneurship culture, ii) Encourage entrepreneurship as a viable, career option through advocacy, , 6) Jawahar Rozgar Yojana (JRY) : On 1st, April 1989, the Government announced a, new wage employment scheme, the Jawahar, Rozgar Yojana for intensive employment, creation in 120 backward districts. It was, restricted to rural area. With effect from, April 1999, it was renamed as Jawahar, Gram Samrudhi Yojana (JGSY)., , iii) Promote entrepreneurship among women, 10) Start up India Initiative : It was introduced, in January 2016 with an aspiration to impart, more "strength and inspiration to the talented, young generation of India to do something, new for India and humanity.", 11) Pradhan Mantri Kaushal Vikas Yojana(2016-20) : The objective of this scheme, is to encourage skill development among, youth by providing monetary rewards for, successful completion of approved training, programmes. The government has allocated, a budget of ` 12,000 crores till 2020 for, implementation of the scheme., , 7) Mahatma Gandhi National Rural, Employment, Guarantee, Scheme, (MGNREGS) : Since 2nd October 2009,, National Rural Employment Guarantee, Scheme has been renamed as Mahatma, Gandhi National Rural Employment, Guarantee Scheme. This scheme provides, at least 100 days of guaranteed wage, employment in a financial year to at least, one member of every rural household whose, adult member volunteers to do unskilled, manual work., , 48
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EXERCISE, Q. 4. Observe the following chart and answer the, following questions., , Q. 1. Find the odd word out :, 1) Urban unemployment Educated, unemployment,, Industrial, unemployment,, Disguised, unemployment,, Technological unemployment, , Unemployment, Rural unemployment, , 2) States with high rates of unemployment Goa, Punjab, Maharashtra, Tripura, 3) Employment Guarantee Scheme 1972,, Jawahar Rozgar Yojana 1989,, Swarnajayanti Gram Swarozgar Yojana 1999, Development of Tourism, , 1) Hussain Shaikh employed seven workers less than, the usual number of workers on his farm, in spite of, this, output remained the same., 2) Use of new technology in the printing industry has, led to unempolyment among several workers., 3) Satish has completed his post graduation and is, desperately expecting a job., , Educated, unemployment, Industrial, unemployment, , Technological, unemployment, Frictional, unemployment, , Cyclical, unemployment, Structural, unemployment, , Q. 5. Find out Q1 and Q3 using unemployment rates as, , 4) In certain agricultural areas of Maharashtra only, kharif crops are grown, therefore employment is, available till the month of October., , numerical data :, Year, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, , Q. 3. Complete the correlation :, 1) Seasonal unemployment : Tourist guides;, : Graduates, : Disguised unemployment; Urban, unemployment : Industrial unemployment, , 3) Frictional unemployment : Shortage of raw, : Fluctuations in business, materials ;, activity, , Unemployment Rate %, 3.75, 3.54, 3.53, 3.62, 3.46, 3.41, 3.49, 3.51, 3.52, , Q. 6. Answer the following in detail :, 1) Explain the types of Industrial unemployment in, India., 2) Explain the causes of unemployment in India., 3) Explain the measures taken by the government to, reduce unemployment., , 4) MGNREGS : guaranteed wage employment;, TRYSEM :, 5), , Seasonal, unemployment, Disguised, unemployment, , 1) Production does not increase if additional worker, is employed and production does not decrease if, worker is reduced from the work. Mention the type, of unemployment., 2) A worker is thrown out of job because of, computerisation. Name this type of unemployment?, 3) Sharad was forced to return back to India from, USA due to depression in IT sector., 4) In spite of being a graduate, Vasant is sitting idle, at home., 5) Give examples of structural unemployment., , Q. 2. Identify and explain the concepts from the given, illustrations :, , 2), , Urban unemployment, , : Waste of resources. Social effect : loss, of human dignity, , , , 49
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CHAPTER - 8 : POVERTY IN INDIA, Multi-dimensional Poverty :, Concept of poverty in the conventional sense, was limited only to basic needs of life. However,, in modern times, the scope of the concept of, poverty has been enlarged. Of late, the concept, of multi-dimensional poverty has emerged., Multi-dimensional poverty refers to, deprivation in terms of both material and non, material dimensions. Material dimensions relate, to deprivation in terms of food, clothing, shelter,, health, education, road connectivity, electricity,, access to safe drinking water and sanitation, facilities etc. The non material dimensions are, associated with social discrimination., , Fig. 8.1 : Poverty, Introduction :, Poverty is one of the major challenges faced, by Indian economy. It is a socio- economic, phenomenon. Poverty is perceived as ‘social, exclusion’ of a certain section of people in the, society. Deprivation of basic needs and denial of, opportunities has led to social exclusion., Fig. 8.1 gives an idea about the concept, of poverty., Poverty in India has a long history., Economic drain of resources, decline of, handicraft and cottage industries, oppressive, economic policies, recurrence of famines etc., were responsible for mass poverty among the, people during the British period., Elimination of poverty has been the, top agenda of the Indian Government since, Independence. Policy measures such as, economic planning, economic reforms and antipoverty programmes such as 'garibi hatao' have, helped in greater reduction of poverty ., , You should know :, According to Prof. Amartya Sen,, “Poverty is not just a lack of money, it is not, having the capability to realize one’s full, potential as a human being”. Capabilities, refer to economic, social and political, freedom. Lack of substantive freedom such as, freedom to satisfy hunger, lack of nutrition,, healthcare and educational facilities, denial, of political and civil liberties lead to poverty., Do you know?, Noted Indian Economist, and recipient of Bharat, Ratna, Prof. Amartya, Sen was awarded the, Nobel Memorial Prize in, Economic Science(1998), Prof. Amartya Sen for his contribution to, welfare economics and social choice theory, as well as for his interest in the problems, of the society’s poorest members. In his, book, ‘Poverty and Famines: An Essay on, Entitlement and Deprivation (1981)’, Prof. Sen, revealed that declining wage, unemployment,, , Meaning of Poverty :, In the conventional sense, poverty refers to a, situation in which a major section of the people, in the society are unable to fulfil even the basic, needs of life such as food, clothing and shelter, due to lack of sufficient income., , 50
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Find out :, Prepare a list of 5 Countries in the World, having Absolute Poverty with reference to, the latest World Bank Report., , rising food prices and poor food distribution, systems led to starvation among certain groups, in the society. His views encouraged policy, makers to pay attention not only to alleviating, immediate suffering but also finding ways, to replace the lost income of the poor. For, economic growth to be achieved, he argued, that social reforms such as improvements, in education and public health must precede, economic reforms., , b) Relative Poverty : It is difficult to define, the concept of relative poverty., It is judged on the basis of comparison, of relative standards of living of different, sections of the people. Relative poverty, is measured with respect to differences in, the levels of income, wealth, consumption,, economic inactivity (unemployment, old, age) etc. Such poverty is found in all the, countries of the world. It is an universal, phenomenon. Relative poverty cannot be, completely eradicated. However, it can be, reduced to some extent through appropriate, policy measures., , Can you tell :, Express your opinion on the following :, • There is a thick line of rural-urban, economic divide in India ., • There is an equitable distribution of income, and wealth in the country., • All the citizens have equal access to, education, health, energy and drinking, water., • There is no hunger, starvation or, malnutrition in the country., • There is lack of sanitation facilities in the, country., • Poverty ratio is uniform across all the states., , Poverty Line :, Poverty line is an imaginary line that, divides the poor and non-poor. It is determined, in terms of per capita household expenditure., Various Committees and Study Groups have, defined poverty line in different ways., As per the Task Force on Eliminating, Poverty constituted by the NITI Aayog,, Poverty line is defined as "the threshold, expenditure or the amount necessary to, purchase a basket of goods and services that, are considered necessary to satisfy basic human, needs at socially acceptable levels"., Poverty line helps to fulfil the following, objectives :, , Concepts of Poverty :, Poverty is multifaceted. The major concepts, of poverty in India include absolute poverty and, relative poverty., a) Absolute Poverty : Absolute poverty is, measured in terms of minimum calorie, intake. Earlier, Planning Commission, determined per capita daily calorie, requirement of 2400 calories for a person, living in the rural area and 2100 calories, for a person living in the urban area., On an average, the per capita daily calorie, requirement amounts to 2250 calories., Absence of minimum income to satisfy the, desired level of calorie intake of food leads, to absolute poverty. It is mostly found in the, developing countries like India. Absolute, poverty can be eradicated through effective, poverty alleviation measures., , 1) To determine the population living above, poverty line (APL) and below poverty line, (BPL)., 2) To identify the poor on the basis of the, household consumption expenditure., 3) To track poverty in a region over a period, of time and compare it across regions., 4) To provide an estimate of the required, expenditure on poverty alleviation, programmes., , 51
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Poverty line differs from country to, country. According to World Bank, "Poverty, line was defined at $1.90 per capita per day, at 2011 prices on purchasing power parity, basis (PPP)". On this basis, 21.2% of India’s, population lived below poverty line., , and informal sector as well as it creates law and, order problems in the society., Find out :, Information about the informal sector and, list a few activities related to it as per your, observation., , Can you tell :, Place the following individuals as per, their income in the pyramid as given below:, 1) Contract labourer, 2) Salesman in a shop, 3) CEO of a Multinational Company, 4) Executive in a Company, , Do you know?, Following are some of the food and nonfood items required to be on the poverty line., , High, Income, Upper Middle, Income, Middle, Income, , Food Items, , Non Food Items, , Cereals, pulses, milk, and milk products, salt, and sugar, edible oil,, egg, fish and meat,, vegetables, fruits,, spices, beverages,, processed food, , Fuel and light,, medical,, entertainment, durable, goods, rent, clothing,, bedding, footwear,, education, toilet, articles, conveyance, , Try this :, 1) Given the number of members in your, family prepare a list of food items and, non-food items purchased monthly., 2) Calculate the total monthly consumption, expenditure of your family’s consumption, basket as per the current prevailing prices., 3) What is the per capita monthly expenditure?, , Low, Income, Income Pyramid, , Types of Poverty :, 1) Rural poverty : Deprivation of basic needs, among certain section of the people living in the, villages is termed as rural poverty., It is found among small and marginal farmers,, agricultural labourers, contractual workers and, landless labourers. Low agricultural productivity,, drought, poor rural infrastructure, illiteracy,, lack of alternative jobs, rural indebtedness have, aggravated the problem of rural poverty., , Extent of Poverty in India :, Extent of poverty is measured by the, poverty ratio. It is the ratio of the number of poor, to the total population. Studies were conducted, by individual economists as well as research, institutions to ascertain the extent of poverty in, India. Since 1962, the Planning Commission had, appointed several working groups, task force, and expert committees for estimation of poverty., , 2) Urban Poverty : Absence of basic needs, among certain section of the population living, in towns and cities is termed as urban poverty., Urban poverty is largely attributed to the, spillover effects of migration among the rural, poor, lack of affordable housing, illiteracy, slow, industrial growth, lack of infrastructure etc., Urban poverty has led to the growth of slums, , Estimates of Poverty :, Earlier, poverty lines were based on calorie, intake. It did not include the non food components, such as education, health etc. Government of, India had appointed various Committees to, , 52
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Causes of poverty : Following are the major, causes of poverty in India :, 1) Population explosion : Unequal distribution, of resources among the rapidly growing, population has led to deprivation of basic, facilities causing widespread poverty., , review poverty line from time to time. In 2012,, an Expert Group, under the Chairmanship of Dr., C. Rangrajan, was constituted. This Committee, submitted its report in 2014. As per the report, approved by this Committee, a new poverty line, has been decided for rural and urban areas., Table 8.1 provides estimates of poverty by, the Rangarajan Committee., , 2) Slow Economic Growth : Due to slow, agricultural and industrial growth, the, growth rate of national income and per, capita income has been slow over the, years. This has resulted in poverty and low, standard of living among the people., , Poverty Estimates (2011-12), Poverty Line (in Rs.), (Consumption Expenditure), , Rural, Rs. 972/Per month, (Rs. 32/per day per, person), , Urban, , Poverty Ratio (%), , Rural Urban Total, , Rs. 1407/- 30.9% 26.4%, Per month, (Rs. 47/per day per, person ), , 3) Unemployment and Underemployment :, Poverty in the rural and urban areas has, also increased due to unemployment and, underemployment., , 29.5%, , 4) Economic inequalities : Wide inequalities, have been observed in the distribution of, income, assets, consumption expenditure,, credit facilities, agricultural landholdings, etc. This has also led to a high incidence of, poverty., , Table 8.1, Source : Government of India, Planning Commission, Report, (June, 2014), , State-wise Poverty Ratios (2011-12), State Ratio, , Andhra, Pradesh, Assam, Bihar, Chhatisgarh, Gujarat, Haryana, Himachal, Pradesh, Jammu and, Kashmir, Jharkhand, Karnataka, , Table 8.2, , Poverty, Ratio, (2011-12), in, Percent, , State Ratio, , 5) Inaccessibility, to, infrastructural, facilities : Due to lack of purchasing power, infrastructural facilities such as energy,, transport, communication, health and, education are inaccessible to the poor. This, perpetuates poverty., , Poverty, Ratio, (2011-12), in, Percent, , 9.20, , Kerala, , 7.1, , 31.9, , 31.7, , 33.7, 39.9, 16.6, 11.2, 8.1, , Madhya, Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, , 17.4, 32.6, 8.3, 14.7, 11.3, , 10.4, , Uttar Pradesh, , 29.4, , 36.9, 20.9, , Uttarakhand, West Bengal, , 11.3, 19.9, , 6) Inflation : Inflation refers to a continuous, rise in the price, level of essential, commodities especially the food items., Growing demand for food and its, insufficient supply causes the prices to, rise tremendously. This results in low, purchasing power making the poor still, poorer. Food crisis has led to malnutrition,, hunger and starvation among the people., 7) Regional imbalance : Regional imbalance, is also one of the causes of poverty. States, such as Orissa, Bihar, Madhya Pradesh,, Chhatisgarh, Jharkhand, Sikkim, Arunachal, Pradesh, Assam etc. lag behind in terms of, economic development and therefore have, a high poverty ratio., , Source : Economic Survey 2017-18, , Find out :, From the above data on poverty ratios, find, out Q3 and P10 and name the states as per the, derived partition values., , 8) Vicious Circle of Poverty : This concept, is given by Prof. Ragnar Nurkse. The, , 53
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operation of vicious circle of poverty has, trapped Indians into miseries which in, turn leads to low national income, low per, capita income, low capital formation, lowsavings, low production, less employment., Fig 8.2 explains the vicious circle of poverty., , • Poor people become vulnerable to diseases,, misery and economic hardships., • Poverty also leads to environmental, deterioration., You should know :, , Low, National Income, Less, employment, Low, production, Low, investments, , Low per, capita income, Low, Savings, Low capital, formation, , Fig. 8.2 : Vicious Circle of Poverty, 9) Other Factors :, • Recurrence of natural disasters, • Caste, religious, racial and gender, discrimination, • Administrative inefficiency and corruption, • Leakages in the public distribution system, , The UN Sustainable Development Goals, (SDGs) was adopted by the international, community in September 2015 to, comprehensively cover social, economic, and environmental dimensions. The SDGs, constitute a universal agreement to end, poverty in all its forms and dimensions. There, are 17 SDGs which have 169 targets to be, achieved by 2030. India played an important, role in shaping SDGs., India being one of the signatories of United, Nations Sustainable Development Goals, it is, committed towards eradication of poverty by, 2030 (SDG1)., , You should know :, Effects of Poverty :, • Poverty retards the economic progress of, a country., • It leads to low national income and low, per capita income., • It leads to low standard of living., • It results in low savings, investment and, capital formation., • It leads to concentration of economic, power and unequal opportunities., • It results in class conflicts between the rich, and poor., • Anti-social and anti- national activities, are on a rise due to poverty., • Increase in subsidies have increased, government expenditure on welfare, programmes resulting in misallocation of, resources., , General measures to eradicate poverty :, Policy measures undertaken for eradication, of poverty are as follows :, 1) Control of population : Family Welfare, Programme and population policies have, been introduced to keep a check over the, population growth., 2) Agriculture : Farmers are provided with, cheap credit facilities to purchase agricultural, inputs. The Government also announces, Minimum Support Prices for selected crops, to ensure stable agricultural income., , 54
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3) Rural Works : Employment opportunities, are provided to the poor through construction, of rural roads, irrigation projects, rural, electrification etc., , inspire people towards entrepreneurship or, self employment., Try this :, To ensure food security, the Government, of Maharashtra has introduced Tri Colour, Family Ration Card. Find out the income, criteria of each ration card on the basis of, information provided by the Food, Civil, Supplies and Consumer Protection Dept.,, GoM., WHITE, SAFFRON, YELLOW, , 4) Rural industrialization : To promote, employment in the rural areas, emphasis, has been laid on setting up of small scale, and cottage industries., 5) Minimum Wages : Minimum Wages Act, was passed in 1948 to provide fair wages to, agricultural and industrial workers. It has, been revised from time to time., 6) Public Distribution System : To ensure, food security, food-grains are made, available to the poor people at highly, subsidized rates through ration shops under, the public distribution system., 7) Nationalization of Banks : To ensure, financial inclusion, credit facilities are made, available to the poor people at low rates of, interest. For this purpose nationalization of, banks was undertaken in 1969 and 1980., , Try this :, Correlate the following Poverty Alleviation, Programmes with the given points : food, security, wage employment, self employment,, education, health, sanitation, financial, inclusion, housing., • Employment Guarantee Scheme (EGS), • Swarnajayanti Gram Swarozgaar Yojana, (SGSY), • Jan Dhan Yojana (JDY), • Swachch Bharat Mission (SBM), • Sarva Shiksha Abhiyaan (SSA), • Antyodaya Anna Yojana (AAY), • Mahatma Gandhi National Rural Employment, Guarantee Scheme (MGNREGS), • Pradhan Mantri Awaas Yojana (PMAY), • National Health Mission (NHM), , 8) Progressive Tax Measures : To reduce, inequalities in the distribution of income,, progressive income tax system has been, introduced., 9) Education : To increase the enrolment ratio,, primary education has been made free and, compulsory for all. Free education for girls,, mid-day meal programmes, sanitation and, safe drinking water etc. have also been, provided., 10) Affordable Housing : Slum rehabilitation, programmes and affordable housing, facilities are provided to the rural and, urban poor., , Do you know?, 17th October is observed as International, Day for Eradication of Poverty., , 11) Health facilities : Primary health centres,, government hospitals have been established, to provide medical treatment at subsidized, rates to the poor people., , Poverty retards the economic progress of, the country. Therefore, anti-poverty programmes, introduced by the government needs to be, monitored from time to time. Leakages and, bottlenecks need to be identified for its effective, implementation., , 12) Skill development and self employment :, Skill development is considered one of the, important aspects for job creation in India., For this purpose opportunities need to be, provided for skill based training. This will, , 55
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EXERCISE, Q. 1. Assertion and reasoning questions :, 1) Assertion (A) : Poverty level declines with a rise in, agricultural output., Reasoning (R) : Agricultural incomes have declined, due to wide fluctuations in climatic conditions., Options : 1) (A) is True, but (R) is False., 2) (A) is False, but (R) is True., 3) Both (A) and (R) are True and (R) is the correct, explanation of (A)., 4) Both (A) and (R) are True, but (R) is not the, correct explanation of (A)., , 3) Both (A) and (R) are True and (R) is the correct, explanation of (A), 4) Both (A) and (R) are True, but (R) is not the, correct explanation of (A), Q. 2. Find the odd word out :, 1) Colours of Ration card - White, Green, Saffron,, Yellow, 2) High Poverty ratio - Chhatisgarh, Jharkhand, Bihar,, Kerala, 3) Calories - 2400, 1800, 2100, 2250, , 2) Assertion (A) : Urban poverty is attributed mainly to, spillover effects of migration among the rural poor., Reasoning (R) : Poor rural infrastructure, lack of, alternative jobs results in forced migration., Options : 1) (A) is True, but (R) is False., 2) (A) is False, but (R) is True., 3) Both (A) and (R) are True and (R) is the correct, explanation of (A)., 4) Both (A) and (R) are True, but (R) is not the, correct explanation of (A)., , Q. 3. Give economic terms :, 1) Denial of opportunities to certain section of the, people in the society., 2) Concept of poverty that covers material and nonmaterial dimensions., 3) Poverty judged on the basis of relative standards of, living of the people., 4) Poverty that can be completely eradicated., 5) Threshold expenditure needed to satisfy basic, human needs at socially acceptable levels., , 3) Assertion (A) : Relative poverty is found in all the, countries of the world., Reasoning (R) : Differences in the levels of income, is the only criteria for judging relative poverty., Options : 1) (A) is True, but (R) is False., 2) (A) is False, but (R) is True., 3) Both (A) and (R) are True and (R) is the correct, explanation of (A)., 4) Both (A) and (R) are True, but (R) is not the, correct explanation of (A)., , Q. 4. Identify and explain the concepts from the given, illustrations :, 1) Baban's daughter had to be hospitalized due to, weakness caused by undernourishment or lack of, minimum calorie requirement in the intake of food., 2) Dhanajirao is a wealthy landlord, but his annual, income is relatively less in comparison to, entrepreneur Raobahadur., 3) Urmi's family live in a situation whereby they are, not able to fulfil even the basic needs of life such as, food, clothing and shelter., 4) Sanjay's family receives food grains on the basis, of yellow ration card through public distribution, system., 5) In certain parts of the State, starvation-related, deaths have been observed whereas in certain areas, gross wastage of food has been reported., , 4) Assertion (A) : Poverty is not just lack of money, but also lack of capabilities., Reasoning (R) : Lack of freedom to satisfy hunger,, lack of health care facilities, denial of political, freedom leads to poverty., Options : 1) (A) is True, but (R) is False., 2) (A) is False, but (R) is True., 3) Both (A) and (R) are True and (R) is the correct, explanation of (A)., 4) Both (A) and (R) are True, but (R) is not the, correct explanation of (A)., , Q. 5. State with reasons whether you agree or disagree, with the following statement :, 1) Population control is the only measure to eradicate, poverty., 2) Relative poverty is universal by nature., 3) Regional imbalance is the only cause of poverty., , 5) Assertion (A) : Food security, credit facilities, guarantee social protection to the poor., Reasoning (R) : Leakages in the administrative, system perpetuates poverty., Options : 1) (A) is True, but (R) is False, 2) (A) is False, but (R) is True, , Q. 6. Answer in detail :, 1) Assess various measures undertaken to eradicate, poverty., , , , 56
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CHAPTER - 9 : ECONOMIC POLICY OF INDIA SINCE 1991, Introduction :, , 8) To increase the participation of private, sector., , In the beginning of the last decade of the, 20 century, Indian economy experienced an, economic crisis. At the end of June 1991, foreign, currency assets declined to such an extent that, it was barely enough to finance two weeks of, imports. The annual rate of inflation reached to, 16.7% in August 1991., th, , Features of the Economic Policy of 1991 :, 1) Delicensing : It means abolition, of, government licence required to carry on any, business or industrial activity. All industries, except 18 specified industries of strategic, importance required licence. As per the, Dept. of Industrial Policy and Promotion,, Government of India, only the following, four industries require compulsory licensing :, 1) Electronic Aerospace and defence, equipment, 2) Industrial Explosives, 3) Hazardous chemicals, drugs and, pharmaceuticals., 4) Cigarettes, , The government expenditure was greater, than its revenue due to defence expenditure,, subsidies, interest on loans etc. The positive, effects of socialistic pattern of society was on, the verge of decline. On this ground, it was, necessary to bring new changes in the economy., Hence, Government of India adopted a New, Economic Policy (NEP) in 1991., The process of new economic policy which, started in 1985 got a momentum in 1991. The, new industrial policy introduced radical changes, to unshackle India's industrial economy from the, cobweb of unnecessary bureaucratic controls, and rigidity in the government procedures., According to the new industrial policy, the, state will no longer play the role of a controller, and regulator, but it will act as a facilitator,, co-ordinator, inspirer and supervisor., , 2) Abolition of Monopolies and Restrictive, Trade Practices (MRTP) Act : According, to MRTP Act, it was compulsory for large, industrial houses to take the approval of, Central government for establishment,, expansion, merger etc. This resulted in slow, industrial growth. Abolition of MRTP Act, has encouraged industrial growth., 3) Encouragement to small sector : The, government encouraged small sector, units to attain a higher growth rate in, output, employment and export sector. Its, investment limit was increased from 1, crore to 5 crores., , Main Objectives of the Economic Policy of, 1991 :, 1) To plunge the Indian economy into the, arena of Globalisation., 2) To bring down the rate of inflation, 3) To correct the disequilibrium in the balance, of payments., , 4) Encouraging foreign investment :, Industrial policy of 1991 approved Foreign, Direct Investment (FDI) to encourage, investment in high priority industries, requiring high investment and technology., Initially FDI was permitted upto 51% of, total invesment in selected industries. Later, this limit was raised to 74% and then 100%, for specific industries., , 4) To acquire higher economic growth rate., 5) To build sufficient foreign exchange reserves., 6) To achieve economic stabilisation and to, reduce fiscal deficit., 7) To establish international trade relations for, free flow of goods without any restrictions., , 57
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Components of new economic policy :, , 5) Reducing role of Public Sector : Many, changes were made in the public sector, policy to include following objectives :, , New Economic, Policy (NEP), , a) Ending state monopoly, b) Improving efficiency of public sector, , Liberalization, , c) Releasing capital blocked in sick public, sector enterprises, To encourage private sector, NEP, reduced the number of industries in public, sector from 17 to 8. From 2014, there are, only two industries reserved for public, sector which include railways and atomic, energy., , Privatization, , Globalization, , A) Liberalisation :, , 6) Trade Liberalisation : Import licensing, controls have been abolished. Almost all, capital goods, raw materials, intermediate, goods and other components were made, freely importable. Established exporters, are allowed to raise external credit to, finance their trade. Special Economic, Zones (SEZ) are set up to promote exports., The Government has also introduced the, concept of Agro Export Zones (AEZ) to, encourage agricultural exports., , Fig. 9.1 : Liberalisation, Meaning : Liberalisation refers to 'economic, freedom' or 'freedom for economic decision'., It means producers, consumers and owners of, factors of production, are free to take decision, to promote their self interest. Adam Smith in, his book, 'Wealth of Nations' suggested that, economic liberalisation is the best economic, policy to promote economic growth and well, being of the people., , 7) Reforms in Insurance Sector : Insurance, sector was a monopoly of the government., The new policy passed Insurance Regulatory, and Development Authority Act (IRDA) in, 1999 to introduce reforms in this sector. The, IRDA has given licence to many private, companies to enter insurance business. This, has ended the monopoly of Government in, this sector., , The economic policy which leads to, reduction if not removal, of barriers in the, working of market mechanism and free, competition is called economic liberalisation., , 8) Reforms in financial sector : Earlier only, co-operative banks and public sector banks, were permitted to do banking business in, the financial sector. The new economic, policy has also permitted the entry of new, private banks and foreign banks., , Measures taken for Liberalisation :, 1) Flexibility of Interest rate : Under the, policy of liberalisation, commercial banks, have the freedom to determine the rate of, interest depending upon the market forces, of demand and supply., , Find out :, Names of five Private Banks and Foreign, Banks., , 58
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2) Freedom for expansion of industries : In, this new liberalised era, the industries are, free to diversify their production capacity, and reduce the cost of production. Earlier,, Government used to fix the maximum, limit of production capacity. No industry, could produce beyond that limit. Now, the industries are free to decide their own, production limit on the basis of market, requirements., , in ownership of public enterprise. In simple, words, Privatisation refers to a process that, reduces the involvement of the public sector, and increases that of private sector in economic, activities., , 3) Abolition of Monopolies and Restrictive, Trade Practices : According to MRTP, Act of 1969, all those companies having, assets worth Rs. 100 crores and more were, classified as MRTP firms, and were subject, to several restrictions. Now these firms have, the freedom to take investment decisions., , Fig. 9.2 : Privatisation, Measures taken for Privatisation :, , 4) Reforms in FERA : To bring about, flexibility in the laws relating to foreign, exchange. Foreign Exchange Regulation, Act (FERA) was replaced by Foreign, Exchange Management Act (FEMA). This, would encourage international trade., , 1) Disinvestment : It is the act of selling, shares of sick public sector units to the, private sector. e.g. Disinvestment of Maruti,, ITDC hotels, IPCL, VSNL etc., 2) Dereservation policy : The Industrial, Policy of 1956 reserved 17 industries for, the public sector. NEP reduced this number, to eight, gradually to three and then two. At, present only railway transport and atomic, energy are reserved for the public sector., , 5) Investments, in, infrastructure, :, Infrastructure was opened to domestic as, well as foreign investors. They could invest, in rail, roads and power projects., 6) Encouragement to foreign technology :, Liberalisation has allowed the use of foreign, technology in high priority industries. This, helps to reduce the cost and make the, industries competitive., , 3) Establishment of BIFR (Board of, Industrial and Financial Reconstruction) :, NEP has set up Board of Industrial and, Financial Reconsrtuction to take decision, regarding sick public sector units. By the, end of 1996, 188 cases of sick public sector, units were referred to BIFR., , 7) SEBI (Securities and Exchange Board of, India) : SEBI was established on 12th April, 1992. This step was introduced to protect, the interest of investors in securities,, promote development and regulate the, securities market., , 4) Creation of National Renewal Board, (NRB) : When the loss making public sector, units are closed, the workers have to face, the problem of unemployment and poverty., To solve this problem, goverment has, created National Renewal Board (NRB)., NRB takes the responsibility of providing, compensation to the retrenched workers as, well as those seeking voluntary retirement., , B) Privatisation :, Meaning : Privatisation means transfer of, ownership from public to private sector. In the, broader sense, it means introduction of private, management and control with or without change, , 59
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5) Navratna Status : During 1997-98, nine, public sector units were selected and given, the status of 'Navratnas' on the basis of their, performance. These Navratnas were given, full financial and managerial autonomy., These Navratnas are as follows :, , Find out :, Names of companies coming under, Maharatna and Miniratna status., C) Globalisation :, , 1) IOC : Indian Oil Corporation., 2) ONGC : Oil and Natural Gas Corporation., 3) HPCL : Hindustan Peroleum Corporation, Ltd., 4) BPCL : Bharat Petroleum Corporation Ltd., 5) IPCL : Indian Petrochemicals Corporation, Ltd., 6) VSNL : Videsh Sanchar Nigam Limited, 7) BHEL : Bharat Heavy Electricals Ltd., 8) SAIL : Steel Authority of India Ltd., Fig. 9.3 : Globalisation, , 9) NTPC : National Thermal Power Corporation, , Meaning :, Globalisation has been the ultimate aim of, the new economic policy. To be more specific,, liberalisation and privatisation finally lead to, globalisation of the economy., Globalisation means the creation of global, economy. A Global economy is a borderless, economy having a free flow of goods and, services, capital, labour and technology, across the national borders. In other words, ‘Globalisation’ means integrating the economy, of a country with the world economy. It removes, all barriers in free trade and investments., , At present, public sector units (PSUs) have, been further categorised into Miniratnas and, Maharatnas., • Miniratna Companies : The concept, of 'Miniratna' was introduced by the, Government of India in 2002. Miniratnas, are furthur divided in two cotegories., Miniratna Category - I : A public sector, company should have made profit in the last, three years continuously, the pre-tax profit, should have been ` 30 crores or more in at, least one of the three years., Miniratna Category - II : A public sector, company can be called as miniratna, category II, if it has continuously made, profit for last three years as well as it has a, positive net worth., , Measures taken for Globalisation :, 1) Removal of quantitative restrictions :, All the quantitative restrictions have been, removed on imports and exports. Further, tariff rates have been brought down, considerably. The import duty on industrial, goods have been reduced., , • Maharatna Companies : The Maharatna, category for Central Public Sector, Enterprises (CPSEs) was introduced in, 2009 with the objective to empower mega, CPSEs to expand their operations and, emerge as global giants or become Indian, multinational companies (MNCs)., , 2) Encouragement to Foreign Capital :, Government has opened the economy to, foreign investments. As a result, foreign, capital is attracted towards various sectors., , 60
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3) Improvement in educational standards :, Globalisation has motivated Indian students, to go abroad and seek higher education as, an effect of flexibility in getting educational, loans, scholarships and other required, facilities., , Indian economy has become a part of, global economy., 3) Convertibility of Rupee : Exchange rate, of rupee has been made flexible. Rupee is, made fully convertible to all current account, transactions., , 4) Increase in Exports : Our exports have, increased considerably. India is not only, exporting traditional products but also, machinery, chemicals, computers etc., Consequently, our adverse balance of, payments position is improving., , 4) Foreign collaboration : Indian companies, are allowed to enter into important foreign, collaboration, e.g. Maruti-Suzuki, HeroHonda, Tata-Corus deal of iron and steel, in South Africa., 5) Long term trade Policy : To ensure longer, duration in foreign trade, changes were, made in the foreign trade policy., Main features of this policy included :, a) Liberalised policy, b) Removal of restrictions on foreign trade., c) Encouragement to Foreign Collaboration., , 5) Diversification of cropping pattern :, Earlier, Indian farmers were growing, only staple food and cash crops. But now,, as per the requirement of globalisation, they have diversified their cropping pattern, from traditional products to non-traditional, products. They are developing horticulture,, floriculture, medicinal plants etc., , 6) Encouragement to Exports : Through, EXIM policy, various incentives are given, to exporters. Special Economic Zones are, created to encourage exports., , 6) Solves the problem of scarcity : Due to, liberal imports, we can overcome scarcity, of goods and raw materials. This helps to, solve the problem of inflation., , Stimulate your memory :, 1) What is Corporate Social Responsibility, (CSR)?, 2) How does it help the society?, , Major Failures :, 1) Lack of Self Sufficiency : A country, under Globalisation cannot achieve selfsufficiency in food production because it is, forced to produce only those goods which, are demanded at global level and which are, profitable., , Evaluation of the Economic Policy of 1991:, Major Achievements :, 1) Revolution in IT Sector : Globalisation, has created a revolution in the IT Sector. It, has contributed to India's Gross Domestic, product (GDP). Indian software engineers, are in high demand in developed countries, like U.S.A, U.K., France etc., , 2) Adverse effect on domestic market : Due, to globalisation and liberalisation our, domestic markets are adversely affected., They are flooded with imported goods. Due, to liberal import policy, imported goods are, cheaper than the domestic products. They, are highly demanded., , 2) Improvement in Financial Facilities :, Due to entry of private and foreign banks,, financial sector has become highly, professional and competitive. They are, providing quick services through credit, cards, e-banking etc. to their customers., , 3) Affects poor farmers : The benefits of, globalisation are being enjoyed by the, rich farmers. They are growing exportable, , 61
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crops. But poor farmers are left unnoticed., They cannot face the competition. Hence,, they are forced to sell their land or take, extreme steps. They are facing the problem, of indebtedness and poverty., , 5) Neglects welfare aspect : Privatisation, of services like health, communication,, education has led to exhorbitant charges, and fees for maximisation of profit. Hence,, welfare aspect has taken a backseat., , 4) Unhealthy competition : The Indian, entrepreneurs cannot face competition, with multi-national companies (MNCs)., As a result, they are forced to declare their, units as a sick unit or close it down or to, sell it out., , 6) Unemployment : Many Indian industries, are compelled to close down as they cannot, face the competition with multinational, companies. Hence, large number of, workers are thrown out of jobs leading to, unemployment, poverty and inequality., , EXERCISE, Reasoning (R) Import quotas and tariffs led to an, increase in the imports., , Q. 1. Complete the following statements by choosing, the correct alternative :, 1) After Independence, India had adopted ...................., a) Socialism, b) Capitalism, c) Mixed Economy, , a) (A) is TRUE but (R) is FALSE, b) (A) is FALSE but (R) is TRUE, , d) Communism, , c) (A) and (R) both are TRUE and (R) is, the correct explanation of (A), , 2) The new economic policy approved foreign, technology in .................... ., , d) (A) and (R) both are TRUE but (R) is, not the correct explanation of (A), , a) Cottage industries, b) Small scale industries, c) Micro enterprises, d) High priority industries, , 3) Assertion (A) Post liberalization, the sale of, domestic goods has increased., Reasoning (R) The demand for imported goods, had increased due to liberal policy., , 3) At present, the number of industries reserved for, public sector has been reduced to .................... ., a) 3, b) 5, c) 7, d) 2, , a) (A) is TRUE but (R) is FALSE, b) (A) is FALSE but (R) is TRUE, c) (A) and (R) both are TRUE and (R) is the, correct explanation of (A), , Q.2. Assertion and Reasoning type questions :, 1) Assertion (A) Delicensing of industries was an, important step taken under liberalization., , d) (A) and (R) both are TRUE but (R) is, not the correct explanation of (A), , Reasoning (R) Unwanted controls and restrictions, led to economic stagnation prior to 1991., , 4) Assertion (A) Due to Globalisation, a country, cannot achieve self- sufficiency in food production., , a) (A) is TRUE but (R) is FALSE, , Reasoning (R) Globalisation has created a, revolution in IT sector., , b) (A) is FALSE but (R) is TRUE, c) (A) and (R) both are TRUE and (R) is the correct, explanation of (A), , a) (A) is TRUE but (R) is FALSE, b) (A) is FALSE but (R) is TRUE, , d) (A) and (R) both are TRUE but (R) is not the, correct explanation of (A), , c) (A) and (R) both are TRUE and (R) is the, correct explanation of (A), , 2) Assertion (A) In 1990-91, India faced an acute, shortage of foreign exchange reserves., , d) (A) and (R) both are TRUE but (R) is not the, correct explanation of (A), , 62
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Q. 7. Read the following passage and answer the, , Q. 3. Find the odd word out :, 1) New Economic Policy Liberalization, Privatization, Demonetization,, Globalisation, , questions given below :, , 2) Industries requiring compulsory licensing defence equipment, agro-based industries,, cigarettes, industrial explosives, , has a low per capita consumption of ice-cream of 400 ml, , 3) Navratna status companies SPCL, IOC, ONGC, HPCL, , India because it is a country filled with traditional sweets, , Indian ice-cream industry is one of the fastest growing, segments of the dairy and food processing sector. India, whereas in USA it is 22,000 ml and in China it is 3000 ml., The per capita consumption of ice-cream is low in, of more than 100 varieties. In developed countries, people, have either pastries or ice-creams for dessert. In the era of, , 4) Liberalization dealt with the following MRTP, FERA, SEBI, NTPC, , Globalisation, the mindset of the people is fast changing., This is because multi-national companies have set up a, , Q. 4. Identify and explain the concepts from the given, illustrations :, , number of ice-cream parlours, with a lot more varieties, and flavours that attract the younger lot. Besides this,, , 1) Vehicles manufactured by various automobile, companies are now available in India., , there are better delivery systems., , 2) Government equity in some public sector enterprises, is sold to the private sector., , the country due to improvement in the cold chain, , 3) Foreign investments are encouraged on a large, scale in the industrial sector of India., , lifestyle of the people. However, it is taxed higher with 18, , The ice-cream sector has great potential for growth in, infrastructure, increasing disposable income and changing, percent GST while other dairy products in the same basket, such as butter and cheese are taxed at 12 percent., , Q. 5. Do you agree or disagree with following, statements? Give reasons :, , The ice-cream industry has generated revenue of more, than $1.5 billion in 2016-17. With an employment of, , 1) Liberalisation has permitted the use of foreign, technology., , 15 lakh people directly or indirectly, it is also considered, one of the largest employers of the dairy and food, , 2) Government has given private enterprises free, access to public sector., , processing industry., 1) Identify the reason for low per capita consumption, , 3) Government has monopoly in insurance sector., , of ice-cream in India., , 4) The creation of National Renewal Board was done, to remove poverty., , 2) Explain the impact of Globalisation on the Indian, , 5) Indian Oil Corporation is one of the public sector, units among 'Navratnas'., , 3) Find out the factors that could lead to the growth of, , ice-cream industry., ice-cream industry in India., , Q. 6. Answer in detail :, , 4) Express your views about the implications of, , 1) Explain the features of economic policy of 1991., , higher GST on ice-cream industry in India., , 2) Explain the measures undertaken for Globalisation., , , , 63
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CHAPTER - 10 : ECONOMIC PLANNING IN INDIA, Introduction :, In the year 1950, the Government of, India established the Planning Commission., The Prime Minister has been designated, as Ex-Officio Chairman of the Planning, Commission. Planning Commission consisted, of experts from various fields such as banking,, finance, industry etc. It was responsible, for the formulation of economic plans., , 1) Central Planning Authority : Central, Planning Authority in a country undertakes, economic planning. In India, it was, known as Planning Commission. It has, been replaced by National Institution, for Transforming India i.e. NITI Aayog, since 2015., 2) A Survey : A comprehensive survey of, the economy is undertaken regarding the, availability and utilisation of human and, natural resources., 3) Objectives : Economic planning is based on, certain pre-determined objectives which are, realistic and flexible., 4) Priorities and targets : Priorities are fixed, according to the importance of each sector, for accelerating economic development., Target is the concrete step towards the, attainment of objectives., 5) Mobilisation of Resources : The resources, needed for planning are mobilised through, various sources like taxation, domestic, savings, deficit financing, public debt,, external assistance etc., 6) Plan Period : Plan period varies as per, needs. In countries like India, planning is, generally for a period of five years., 7) Evaluation : Periodic assessment such as, mid term appraisal is done to incorporate, necessary changes in priorities and targets, of the plan., 8) Continuous Process : Economic planning, is a continuous process. It aims at economic, development of the country., 9) Co-ordination : States of the country also, undertake economic planning along with, the centre. Thus, co-ordination between the, centre and states is ensured., 10) Flexibility : Central Planning Authority, maintains flexibility in its approach. This, makes it possible to incorporate necessary, changes in the plan as per requirements, during its implementation., , Collect information on :, 1) Bombay Plan, 3) Gandhian Plan, , 2) People's Plan, , Meaning and Definitions of Economic, Planning :, Economic planning is a time bound, programme to achieve certain objectives with, the help of available resources by the planning, authority., According to Dr. H. D. Dickinson :, "Economic planning is the making of major, economic decisions such as what and how much, to be produced how, when and where it is to be, produced, to whom it is to be allocated by the, conscious decision of the determinate authority,, on the basis of a comprehensive survey of the, economy as a whole"., According to Mrs. Barbara Wooten :, "Planning is a conscious and deliberate, choice of economic priorities by some public, authority.", Features of Economic Planning :, Economic planning has the following features:, , Features, of Economic, Planning, , 1) Central Planning Authority, 2) A Survey, 3) Objectives, 4) Priorities and Targets, 5) Mobilisation of Resources, 6) Plan Period, 7) Evaluation, 8) Continuous Process, 9) Co-ordination, 10) Flexibility, , 64
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You should know :, Five Year Plans (FYP) at a Glance, Plan, , Period, , Main Objective/Strategy, , Target in %, , Achievements %, , 1st, , 1951-1956, , Development of Agriculture, , 2.1, , 3.6, , 2nd, , 1956-1961, , Development of heavy industries, , 4.5, , 4.1, , 3rd, , 1961-1966, , 5.6, , 2.7, , Annual Plans 1966-1969, , Development of both agriculture, and Industry, ---, , ---, , ---, , 4th, , 1969-1974, , Growth with Stability, , 5.7, , 3.3, , 5th, , 1974-1979, , Removal of Poverty, , 4.4, , 4.8, , ---, , ---, , Rolling Plans 1978-1980, , ---, , 6th, , 1980-1985, , Improvement in Quality of Life., , 5.2, , 5.7, , 7th, , 1985-1990, , 5.0, , 6.0, , Plan Holiday 1990-1992, , Social Welfare and, eradication, ---, , ---, , ---, , 8th, , 1992-1997, , To give dynamism to economy, , 5.6, , 6.8, , 9th, , 1997-2002, , Social justice and Equality, , 7.0, , 5.6, , 10th, , 2002-2007, , Reduction of Poverty, , 8.2, , 7.8, , 11th, , 2007-2012, , Faster and more inclusive growth, , 8.1, , 7.9, , 12th, , 2012-2017, , Faster sustainable and more, inclusive growth, , 8.0, , N.A., , Table 10.1, , poverty, , Source : Various five year plan reports, Planning Commission, GoI., , • Manufacturing or Industrial growth rate at, 10% to be achieved., , Find out : Calculate D6 and D9 from the, above table using 'achievements' as the, numerical data., , • Every State must have a higher average, growth rate in the 12th plan than what was, achieved in the 11th plan., , 12th Five Year Plan (2012-2017), Twelfth five year plan which covered the, period 2012-2017, focussed on the objective, of "Sustainable Growth". The plan aimed, at encouraging the development of India's, agriculture, education, health and social welfare, through government spending. It also aimed at, creating employment through developing India's, manufacturing sector., , 2) Poverty and Employment :, • To reduce head-count ratio of poverty, by 10%., • To create 50 million new work opportunities, in the non-farm sector., 3) Education :, • Mean years of schooling to increase to seven, years by the end of the twelfth plan., , Following were the targets of 12th five, year plan :, , • Access to higher education with reference, to skill development., , 1) Economic Growth :, , • Eliminate gender and social gap in school, enrolment by the end of this plan., , • Real GDP growth rate at 8% to be achieved., • Agriculture growth rate at 4.0% to be gained., , 65
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4) Health :, , growth and development. Resolution of NITI, Aayog was sanctioned on 1st January 2015, but, its actual execution started after the completion, of 12th five year plan., , • Reduce total fertility rate to 2.1%, • Reduce undernutrition among children in, the age group of 0 to 3 years to half of the, NFHS-3 levels., , Think-Tank Functions :, As a premier policy 'Think-tank' of the, Government of India, NITI Aayog aims to, evolve a shared vision of national development, with the active involvement of states. It fosters, co-operative federalism through structural, support and policy guidance to the states on a, continuous basis., , Find out :, Information of various levels of NFHS, (National Family Health Survey)., 5) Infrastructure :, • Investment in infrastructure to be increased, to 9% of GDP., • Connect all villages with all weather roads., , Do you know?, Think-tank : Think-tank is a group of, experts who are gathered together by an, organisation, especially by a Government in, order to consider various problems, try and, work out ways to solve them., , • Increase in rural television and telephone, density to 70%, 6) Environment and sustainability :, • Increase green cover by 1 million hectare, every year during the 12th plan period., , Following are the Pillars of NITI Aayog, , 7) Service Delivery :, • Provide access to banking services to 90%, Indian households by the end of the plan., , 1) Vision Document of India, , • Major subsidies and welfare related, beneficiaries to be shifted to a direct cash, transfer by using the Aadhar platform, linked with bank accounts., , 3) Transforming India :Lecture series, , NITI Aayog (National, Transforming India), , Institution, , 2) Appraisal Document of 12th five year Plan., organised by NITI Aayog., 4) Doubling of Farmers' Income, 5) Outcome Budget and Output-Outcome, Framework., , for, , 6) Global Entrepreneurship Summit 2017, , Introduction :, , 7) Launching of Programme to transform, identified aspirational districts., , Twelfth Five Year Plan ended on 31 March,, 2017, which was extended by 6 months (4th Oct,, 2017) for enabling ministries to complete their, appraisals. NITI Aayog, introduced in 2015, aimed at expanding the role of the states, making, the state's role more positive in collaboration, with the Centre. Formation of NITI Aayog was, an innovative and remarkable step to reinforce, the principles of federalism and decentralisation, of power It also aims to accelerate economic, st, , Structure of NITI Aayog :, The Resolution dated 1st January 2015 and, its subsequent amendment dated 16 th February, 2015, provides for the structure of NITI Aayog, as follows :, 1) Governing Council : Comprising of the, Chief Ministers of all States and Governors, of Union Territories., , 66
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2) States' Best Friend at the Centre : Supports, states in addressing their own challenges,, building on strengths and comparative, advantages. This will be through various, means such as co-ordinating with, Ministries, championing their ideas at the, centre, providing consultancy support and, building capacity., , 2) Regional Councils : These would be formed, to address specific issues and contingencies, impacting more than one state or region., 3) Special Invitees : These would include, experts, specialists and practitioners with, relevant knowledge who will be nominated, by the Prime Minister., 4) Organisational Framework :, , 3) Decentralized Planning : Restructuring, the planning process into bottom-up model,, from village-level i.e. local government to, national level or central government., , • Chairperson : Prime Minister of India, • Vice Chairperson : To be appointed by, the Prime Minister., Full time members - 5, , 4) Knowledge and Innovation Hub : Be an, accumulator as well as booster of research, and best practices on good governance,, through a State-of-the-art Resource centre, which identifies, analyses, shares and, facilitates replication of the same., , Part time members - 2, • Ex-Officio Members : Maximum of, 4 members of the Union Council of, Ministers to be nominated by the Prime, Minister., • Chief Executive Officer (CEO) : To be, appointed by the Prime Minister for a, fixed tenure, in the rank of Secretary to the, Government of India., , 5) Monitoring and Evaluation : Monitor the, implementation of policies and programmes, and evaluate their impact through rigorous, tracking of performance metrics and, comprehensive programme evaluations., This will identfy weaknesses and bottlenecks, for necessary course correction, enable datedriven policy making, encouraging greater, efficiency and effectiveness., , • Secretariat- As deemed necessary., Find out :, Present structure of NITI Aayog and list, out the names of members in the respective, columns., , 6) Co-operative, and, Competitive, Federalism : Be the primary platform for, operationalizing co-operative federalism,, enabling states to have active participation, in the formulation of national policy and, achieving time-bound implementation of, quantitative and qualitative targets through, the combined authority of the Prime, Minister and Chief Ministers of the states., , NITI Aayog, Chairperson Vice -Chairperson Members, , Functions of NITI Aayog :, 1) Shared National Agenda : Evolves a shared, vision of national development priorities, and strategies with the active involvement, of states. This will provide a framework of, 'National Agenda' for the Prime Minister, and Chief Ministers to implement., , 7) Others Functions :, • Inter consultancy, • Conflict Resolution, • Technological upgradation, , 67
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Comparison between Planning Commission and NITI Aayog, Planning Commission, , NITI Aayog, , 1) Planning Commission was established on, 15th March 1950., , 1) NITI Aayog was established on 1st January, 2015., , 2) Planning Commission enjoyed the powers, to allocate funds to Ministry and State, governments., , 2) NITI Aayog is an advisory body or a, think tank which performs the function of, allocation of funds., , 3) Role of states was restricted to the National, Development Council (NDC) and annual, interaction during Plan meetings., , 3) State governments are expected to play a, more significant role., , 4) Secretaries or member secretaries were, appointed through the usual process., , 4) Secretary known as CEO, to be appointed, by the Prime Minister., , 5) Planning Commission had no provision for, part-time members., , 5) NITI Aayog has a number of part time, members, depending on the need from time, to time., 6) NITI Aayog comprises of Chairperson,, Vice-Chairperson, Full time members, Parttime members, Ex-officio members and, CEO of Secretary Rank., , 6) Planning Commission had a Chairperson, a, Member Secretary and full time members., , 7) Planning Commission framed policies for, States and tied allocation of funds with, approval of the project., , 7) NITI Aayog is only a think tank and does not, have the powers to frame policies., , EXERCISE, Q. 1. Choose the correct option :, 1) Statements that are true about the Planning, Commission :, , c) By the second five year plan, focus increased, , a) Planning Commission was established in 1950., , were the main objectives of the third five, , b) The Prime Minister is the Ex-Officio Chairman, of Planning Commission., , year plan., Options : 1) a, , c) Economic planning is a time bound programme., , 3) c, , on faster, inclusive growth., d) Development of both agriculture and industry, , d) Economic planning is based on predetermined, objectives., Options : 1) a and b, 3) a and c, , 2) a, b and d, 4) b and d, , 3) Identify the right group of pairs from the given, options :, , 2) a, b, c and d, , 'A', 1) Economic, , 4) None of these, , 2) Statements that are incorrect regarding India's, five year plans :, development of agriculture., b) Social welfare and poverty eradication were the, prime objectives of the seventh five year plan., , Prime Minister, , 2) Twelfth Five, , b) Think Tank group, of Indian Government, , 3) NITI Aayog, , c) Fast and sustainable growth, , 4) NITI Aayog, , d) Time bound programme, , Vice-Chairperson, , 68, , a) Selection by, , Planning, Year Plan, , a) The main objective of first five year plan was, , 'B'
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Options : 1) 1-c, 2-a, 3-d, 4-b, , 2) 1-d, 2-b, 3-a, 4-c, , 4) Explain the functions of NITI Ayog., , 3) 1-d, 2-c, 3-b, 4-a, , 4) 1-b, 2-d, 3-c, 4-a, , 5) Distinguish between Planning Commission and, NITI Aayog., , 4) Choose the correct statement :, Statement 1 - NITI Aayog takes note of dynamic, change in the Indian economy., , Q. 5. State with reasons whether you agree or disagree, with the following statements :, , Statement 2 - Considering the economic, social, and technological differences in underdeveloped, districts, the body plans to implement various, programmes and bring about economic changes., , 1) State, , governments, , have, , more, , significant, , role to play under NITI Aayog., 2) Functions of Planning Commission has been, transferred to NITI Ayog., , Options : a) statement 1 is correct, , 3) The objective of the12th five year plan was to, , b) statement 2 is correct, , achieve a faster, sustainable and inclusive growth., , c) statement 2 is the result of statement 1, d) there is no relation between statement 1 and, statement 2., , Q. 6. Read the following passage and answer the, questions given below :, , Q. 2. Give economic terms :, , The Finance Minister of the Central Government, , 1) Conscious and deliberate choice of economic, priorities by some public authority., , presents the Union Budget before the Parliament during, , 2) A group of people called forth by the government, to discuss various problems and also try to find, solutions to them., , referred to as the annual financial statement reflects the, , Q. 3. Identify and explain the concepts from the given, illustrations :, , and ends on 31st March. Changes in the tax structure are, , 1) Sayali's mother maintains a book of accounts, for household purpose and plans the expenditure, accordingly., , made for allocating expenditure on defence, education,, , 2) Ramabai gets a subsidy on domestic LPG directly, transferred to her bank a/c., , This enables generation of funds well in advance prior to, , the month of February every year. The budget, also, estimated receipts and expenditure of the government for, a particular financial year that begins on the 1st of April, suggested in the budget. Besides this, provisions are also, research and development etc. The date for presenting the, budget has been shifted to the 1st of February every year., the commencement of the financial year., , 3) To solve classroom related issues, the teacher, forms a group of students. This group discusses the, problems and finds solutions to it., , 1) Where is the Union Budget usually presented?, 2) What all aspects are considered while preparing, the budget?, , Q. 4. Answer the Following :, , 3) Why is the date for presenting the budget shifted to, , 1) Explain the features of Economic Planning., , the 1st of February?, , 2) Explain the targets of 12th Five Year plan., , 4) Explain the term 'budget'., , 3) Explain the structure of NITI Aayog., , , , 69
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GLOSSARY OF ECONOMIC TERMS, • Academic autonomy : Academic, autonomy refers to the ability to decide, on various academic issues, such as, student admissions, academic content,, quality assurance, introduction of, degree programmes and the language, of instruction of the institution., , • Balance of Payments : It is a financial, statement of a country showing the, flow of goods, services and funds, between its residents and those of the, rest of the world during a given period, of time. It is based on double entry, book-keeping system., , • Agricultural indebtedness : Inability, on the part of the farmers to pay off, loans borrowed for various agricultural, operations due to their lower incomes, or wasteful expenditures. This leads to, accumulation of debt as well as interest, pending on the amount borrowed., , • Baseline : It is a minimum or starting, point used for comparisons., , • Agro-tourism : The business of, providing holidays for people on farms, or in the countryside. The concept of, agro-tourism is a direct expansion of, ecotourism, which encourages visitors, to experience agricultural life at first, hand., , • Collateral security : Bank loans other, than personal loans that are normally, made against the security of stocks and, shares, property or insurance policies., , • Benchmarking : A measurement of the, quality of an organization's policies,, products, programs, strategies, etc.,, and their comparison with standard, measurements, , • Competitive federalism : It is a, concept where the Government at, the Centre competes with that of the, States and vice-versa as well as the, States compete with one another, all, of them contributing to the nation’s, development., , • Appraisal document : An official, record in written or printed form, that provides for an assessment or, estimation of the worth, value or, quality of a person or thing., •, , • Convertibility of rupee : Rupee is, said to be convertible when it may be, freely exchanged for another currency, or gold. It is a part of floating or flexible, exchange rate system where exchange, rate is market determined through the, , Aspirational districts programme :, It is a programme introduced by NITI, Aayog to transform the districts that, have shown relatively lesser progress in, key social areas., 70
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free interplay of demand and supply, forces., , that were exclusively reserved for the, government sector., , • Co-operative federalism : It is a, concept in which national, state and, local governments share responsibility, in the governance of the people. They, work collectively towards solving, problems of the nation and for its, betterment., , • Digital wallets : A digital wallet or, an electronic wallet is a softwarebased system for making e-commerce, transactions. By using a digital wallet,, online purchases can be done easily, through computers, tablets or smart, phones. Bank accounts of individual, users are linked with their digital wallet., , • Credit, instruments, :, Credit, Instruments may be an order for, payment of money to a specified, person or it may be a promise to pay, the loan. Credit instruments generally, in use are cheques, bills of exchanges,, bank overdraft etc., , • Direct benefit transfer scheme : It, is a kind of social protection measure, aimed to transfer government subsidies, directly in to the bank account of, the beneficiaries with the purpose of, removing leakages in the delivery, system and enhancing financial, inclusion., , • Current account transactions : The, current account in balance of payments, of a country includes transactions in, goods, services, investment income, and current transfers., , • Disinvestment, :, Disinvestment, is an act of selling or diluting the, government’s stake (share) in public, sector undertakings to the private, sector in which it has a majority, holding with the aim of giving more, freedom to the management, mobilizing, resources and inducting private, corporate oriented business practices in, their administration., , • Deferred payments : A loan, arrangement in which the borrower, is allowed to make payments at some, specified time in the future., • Demonetization : It refers to, withdrawal of a coin, note or precious, metal from use as legal tender., , • Diversification of cropping : It refers, to production of a variety of crops in a, given area so as to expand production, related activities on various crops, and also to lessen risk. In India, crop, diversification is viewed as a shift from, traditionally grown less remunerative, , • Dereservation : It is one of the, important policies that were followed, under the policy of privatization as, a part of new economic reforms., Dereservation implies opening up of, those industries for the private sector, 71
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earlier FERA to promote the orderly, development and maintenance of, foreign exchange market in India., , crops to more remunerative crops., • Empirical approach : It is an, evidence-based approach that relies on, real world data to study and interpret, information., , • Flexibility of interest rate : Flexibility, of interest rate is a self- adjusting, mechanism that keeps the money, market or the market for loanable, funds in equilibrium all the time and, thus prevents the real GDP (Gross, Domestic Product) from falling below, its natural level., , • Empowerment of women : It is a, process by which women gain power, and control over their own lives and, acquire the ability to make strategic, choices., • Enrolment ratio : It is the number of, students enrolled in school at several, different grade levels., , • Financial Inclusion : Financial, inclusion may be defined as the process, of ensuring access to financial services, and timely and adequate credit where, needed by vulnerable groups such, as weaker sections and low income, groups at an affordable cost., , • Environmental Economics : It is a subdiscipline of economics that applies, the values and tools of mainstream, macroeconomics and microeconomics, to allocate environmental resources, more efficiently., , • Fintech :, Fintech or financial, technology describes a business that, aims at providing financial services by, making use of software and modern, technology., , • EXIM Policy : It is a set of guidelines, and instructions established by the, Directorate General of Foreign Trade, (DGFT) in matters related to import, and export of goods in India., , • Food tourism : It refers to visit, to primary and secondary food, producers, food festivals, restaurants, and specific locations for food tasting, and experiencing the attributes of, specialist food production regions., , • FERA : Foreign Exchange Regulation, Act (FERA) of 1973 is an act to regulate, certain payments dealing in foreign, exchange, securities, the import and, export of currency and acquisition of, immovable property by foreigners., , • Foreign collaboration : It is an, important driver of growth in the, country. Foreign collaboration is an, agreement or contract between two, or more companies from different, , • FEMA, :, Foreign, Exchange, Management Act (1999) was, introduced as a replacement for the, 72
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• Hospitality : It is related to the business, of entertaining clients, conference, delegates, tourists or other official, visitors., , countries for mutual benefit., • Foreign Direct Investment :, Investment from one country into, another (normally by companies, rather than governments) that involves, establishing operations or acquiring, tangible assets, including stakes in other, businesses. FDI is not just a transfer, of ownership as it usually involves, the transfer of factors complementary, to capital, including management,, technology and organizational skills., , • Inclusive education : Inclusive, education is a new approach towards, educating the children with disability, and learning difficulties with that of, normal ones under the same roof., • Inclusive growth : Inclusive growth, is economic growth that is distributed, fairly across society and creates, opportunities for all., , • Global Entrepreneurship : It is a trait, or characteristic in which professionals, as global entrepreneurs use their, global understanding and connections, to identify transnational and crosscultural opportunities and turn them in, to new value- creating initiative., , • Infant mortality rate :, Infant, mortality rate is the number of deaths, under one year of age occurring per, 1,000 live births among the population, in a given geographical area during a, given year., , • Global poverty : Global poverty, refers to a situation of extreme poverty, (hunger, starvation and homelessness), among certain sections of the people, across countries in the world. The, World Bank is the main source of, global information and it sets the, International poverty line which has, been updated to $1.90 per person per, day since October 2015., , • Informal Sector : It is a diversified, set of economic activities, enterprises,, jobs and workers that are not regulated, or protected by the State., • Institutional Sources : It is a multiagency approach to provide credit, to the agricultural sector comprising, of co-operative banks, commercial, banks, regional rural banks (RRBs),, micro-finance institutions etc., , • Gross State Domestic Product, (GSDP) : It refers to the aggregate, monetary value of all goods and services, produced within the geographical, boundaries of a particular State in the, country during a given period of time, accounted without duplication., , • Intrinsic value : It is the inherent, worth of a company, investment, or asset based on its fundamental, characteristics and earning power., 73
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• Liquid asset : An asset is said to be, liquid if it is easy to sell or convert in, to cash without any loss in its value., , company shares, stocks or bonds., • National Disaster Management, : It refers to the organization and, management of resources and, responsibilities at the national level, for dealing with all humanitarian, aspects of emergencies, in particular, preparedness, response and recovery in, order to lessen the impact of disasters., , • LPG Consumer : They are ultimate, users of liquefied petroleum gas, cylinders for cooking purposes., • Mahabhraman : It is a scheme, introduced by Maharashtra Tourism, Development Corporation (MTDC), for marketing and promoting agritourism., , • National Family Health Survey : It is, a large scale multi-round health survey, conducted in a representative sample, of household throughout India., , • Marginal farmers : Marginal farmer, means a farmer cultivating (as owner, or tenant or share cropper) agricultural, land up to 1hectare (2.5 acres), , • Nationalization of Banks : It is a, process whereby a national government, or State takes over the ownership and, control of private banks by an Act or, ordinance or some other kind of orders., , • Maternal Mortality Rate (MMR) :, Maternal Mortality Rate (MMR) is the, ratio of the number of maternal deaths, during a given time-period per 100,000, live births during the same time-period., , • Open unemployment : It is a situation, wherein a large section of the labour, force does not get a job that may, yield them regular income. This, unemployment is clearly visible and, can be counted., , • Material welfare : It refers to the fact, or state of having enough housing,, clothing, food and possessions etc. to, live comfortably., , • Outcome Budget : Outcome based, budgeting is a practice of suggesting, and listing of estimated outcomes, (end products) of various Government, initiatives and interventions, including, those involving partnership with the, State Governments, Public Sector, Undertakings, autonomous bodies and, the community., , • Microfinance, institutions, :, Institutions, providing, financial, services such as small loans, to poor, people or new businesses that cannot, use traditional banking services,, usually in developing countries., • Mutual funds : A mutual fund is, formed when capital collected from, different investors is invested in, 74
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• Output-outcome, framework, :, Output-outcome framework is an, explicit summary of the different, levels, or chains, of results expected, from a particular intervention- project,, programme or development strategy., , refers to a trade restriction imposed on, the amount of an item or service that, can be imported into a country so as, to protect the price of domestically, produced good or to reduce the trade, deficit., , • Portfolio investment : Portfolio, investments, are, investments, undertaken in a group of assets,, including transactions in equity,, securities, debentures etc., , • Regional imbalance : It refers to, wide differences in per-capita income,, literacy rates, health and education, services, levels of industrialization ,, infrastructural facilities etc. between, different regions., , • Poverty ratio : It is the proportion of, population that exists or lives below, the poverty line., , • Rural indebtedness : Inability on, the part of rural people to repay, loans borrowed for meeting their, requirements needed for production,, consumption and other social, commitments, thus leading to passing, of debt from one generation to another., , • Progressive income tax system : A, progressive tax structure is one in, which an individual or family’s tax, liability as a fraction of income rises, with income., , • Sagarmala Programme : It is, an initiative undertaken by the, Government of India to promote portled development in the country. The, vision of the Sagarmala Programme, is to reduce logistics cost for EXIM, and domestic trade with minimal, infrastructure investment., , • Public Distribution System (PDS) : It, is a key element of the Government’s, food security system in India. It, ensures availability of certain essential, commodities as easily affordable, prices especially for the poor through, a network of fair price shops., • Purchasing Power Parity (PPP) :, Purchasing power parity is defined, as the number of units of a country’s, currency required to buy the same, amount of goods and services in the, domestic market as one dollar would, buy in the US., , • Service delivery : It is a component, of business which involves the act of, providing services to the client by the, provider., • Son-meta preference : Son-meta, preference refers to a strong preference, among parents for a male child., , • Quantitative Restrictions (QRs) : It, 75
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• Socio-Economic change : It is a, change related to or concerned with, the interaction of social and economic, factors, based on income, education,, occupation etc., , of taxes by means of not reporting, all taxable income especially through, fraud or concealment of income., • Three-tier : It refers to a system that, has three distinct levels., , • Social exclusion : It is an act of making, certain groups of people within the, society feel isolated and unimportant., , • Threshold expenditure : It is also, referred to as poverty threshold. It is a, limit fixed by economists to get a head, count of the poor people in the country., It is a monthly budget that a household, needs in order not to consider itself, poor in general., , • Special Economic Zones (SEZ) :, It refers to an area with particular, economic advantages such as lower, taxes than the rest of the country, so as to encourage investment and, development there., , • Tier II Cities : Cities that are, comparatively, smaller, than, metropolitan cities in terms of, population (50,000 – 99,999 as per, 2001 census), , • State Per Capita Income (SPCI) : It, measures the average income earned, per person in any particular State of, the country., , • Treatise : It is defined as a written work, dealing formally and systematically, with a subject., , • Sub-set : A set of numbers, objects or, people that is part of another, larger, set., , • Universal Immunization : It is a, vaccination programme undertaken, to provide recommended vaccines, against tuberculosis, polio and other, diseases for infants, children and, pregnant women., , • Sustainable economic growth :, It refers to a rate of growth which, can be maintained without creating, other significant economic problems,, especially for future generations., , • Village tourism : It is synonymous, with rural tourism that showcases, rural life, art, culture and heritage at, rural locations and in villages., , , • Tariff rates : Tariff rate in terms of, international trade is a tax imposed by, a government on goods and services, imported from other countries. It is, undertaken to reduce the imports of, specific goods and services., • Tax evaded income : Non- payment, 76