NCERT Solutions Class 12, Economics, Indian Economic Development, Chapter- 2, Indian Economy 1950-1990
1. Define a plan.
Solution:
A plan is a list of actionable goals and specific objectives that a nation wants to achieve over a specific period of time.
2. Why did India opt for planning?
Solution:
After achieving independence in 1947, India was faced with the task of reviving the poor, backward state in which the colonial government had left India. Efforts were made to solve people’s problems through interventions by a democratic government. A country is said to be on the path of development when there is economic prosperity. To attain that prosperity, the Planning Commission was set up in 1950 to establish a development framework for the nation where both public and private sectors would contribute towards economic development.
3. Why should plans have goals?
Solution:
A plan without a goal is like a ship without a radar. The plan specifies ways in which resources need to be allocated in order to achieve the target defined by goals. Goals are achievements that help us visualize the successful execution of plans. Thus goals are a must-have in planning.
4. What are high Yielding Variety (HYV) seeds?
Solution:
These are the seed varieties which give a higher yield compared to others. The seeds produce more yield than the normal varieties. Seeds need proper irrigation facilities along with more fertilizers and pesticides in order to get the best yield. HYV seeds grow at a faster rate than the normal varieties and are able to generate 10-20 times more crop per hectare than normal varieties.
5. What is marketable surplus?
Solution:
The portion of the harvest that a farmer can sell in the market in order to earn a profit is known as Marketable Surplus. The profit thus earned can be reinvested into farming operations.
6. Explain the need and type of land reforms implemented in the agriculture sector.
Solution:
The needs for land reforms in India are discussed below:
1. In India, there existed three types of land tenure systems, namely Zamindari, Ryotwari and Mahalwari systems. In these systems, revenue needed to be paid for cultivating the land. This resulted in the exploitation of the farmers.
2. The land holdings were very small and fragmented, which hindered the use of modern techniques.
3. The farmers had a lack of initiative as the land was owned by landlords.
4. The basic purpose of farming was to earn for survival and not to make a profit. Hence it needed to change.
Type of land reforms undertaken by the Government are as follows:
1) Abolishing of Intermediaries: The land reforms put an emphasis on abolishing intermediaries like Jagirdar and Zamindars and making the tillers or farmers, the owners of the land.
2) Rent regulation: The farmers were charged exceptionally high rents. After independence, in the first five-year plan, it was decided that the rent for cultivating the land would be reduced to one-fourth or one-fifth.
3) Land Holding Consolidation: The land pieces being very fragmented, modern technology could not be used. Hence land consolidation was done to provide them with land pieces which was the total of the land plot they owned. It allowed for the implementation of modern technology and better production.
4) Land Ceilings: This is aimed at providing a fixed amount of land to an individual in order to promote equality of land holdings and promote development.
5) Co-operative Farming: Small-scale farming by a farmer was not at all profitable, encouraging farmers to work together on farmlands. This enhanced productivity, and profit sharing also increased.
7. What is Green Revolution? Why was it implemented and how did it benefit the farmers? Explain in brief.
Solution:
India, after Independence, was recovering from the implications of being under foreign rule. The initial years saw low productivity, coupled with wars with neighbours China and Pakistan and natural disasters such as famines for two consecutive years. India was over-reliant on the US for the import of food grains under the PL 480 law. On being denied the assistance, India devised a plan to attain self-sufficiency in crop production by importing more than 18000 tonnes of High Yield Variety or HYV from Mexico. This resulted in significant crop production the following year, which ended India’s reliance on grain imports. It is known as Green Revolution.
Benefits to Farmers:
1. Increase in income followed the green revolution as most of the areas that cultivated wheat and rice were witnessing great production, which helped in removing poverty from these areas.
2. With the increase in the production of crops, age-old customs were abolished, and the farmers began to adopt new agricultural methods, which were instrumental in bringing change in productivity.
3. It helped reduce unemployment as the lands were used for growing two varieties of the crop as per season, and therefore, it helped removed seasonal unemployment.
4. With nationalising of banks, farmers were given subsidies on loans for cultivation, which improved production as more farmers were able to take a loan.
8. Explain ‘growth with equity’ as a planning objective.
Solution:
The two most significant features of India's five-year plans are growth and equity. While growth refers to a rise in GDP over time, equity refers to an equitable distribution of GDP so that the benefits of increased economic growth are shared equally by all segments of the population. Social justice involves equity. Growth is desirable in and of itself, but it does not guarantee people's well-being. The market value of goods and services (GDP) is used to measure growth, and it is likely that the commodities and services created will not benefit the majority of the population. In other words, only a select few with a high standard of life and financial resources may be eligible for a share of GDP.
As a result, growth with equity is a sensible and desirable planning goal. This goal ensures that everyone benefits equally from strong development, which not only reduces economic disparity, promotes poverty reduction, and promotes an equitable society, but also allows everyone to be self-sufficient. To sum up, the most important goal of economic planning is to achieve growth while maintaining equity.
9. Does modernisation as a planning objective create contradiction in the light of employment generation? Explain.
Solution:
No, modernisation as a planning goal does not conflict with employment creation. Both modernisation and the creation of jobs are, in reality, positively associated. Modernisation, on the other hand, refers to the application of new and modern technologies in the manufacturing process, which may result in the loss of some employment in the early phases. But, over time, the use of modern technologies and inputs will increase productivity and, as a result, people's income, increasing demand for goods and services. More job possibilities will be created to meet this growing demand, resulting in more individuals being hired and, as a result, more employment opportunities. As a result, modernisation and job creation are not mutually exclusive, but rather complementary.
10. Why was it necessary for a developing country like India to follow self-reliance as a planning objective?
Solution:
Imports of commodities that could be produced domestically are discouraged as part of self-reliance. Self-sufficiency is critical for a developing country like India, since it would otherwise increase the country's dependency on imported goods. India's economic growth could be aided by reliance on foreign goods and services, but this would not contribute to the development of native productive resources. Dependence on foreign goods and services boosts the industries of foreign countries at the expense of indigenous startups.
11. What is sectoral composition of an economy? Is it necessary that the service sector should contribute maximum to GDP of an economy? Comment.
Solution:
The contribution of different sectors to an economy's overall GDP over the course of a year is known as its sectoral composition. That is the GDP proportion of the agriculture, industrial, and service sectors. Yes, it is vital for the service sector to contribute the most to overall GDP in later phases of development. Structural Transformation is the name given to this phenomenon. This means that the country's reliance on agriculture will progressively decline from its peak to its lowest point, while the share of the industrial and service sectors in total GDP would rise. Economic development refers to the combination of structural change and economic growth.
