Chapter 2 Indian Economy (1950 – 1990) Case Study Questions

Please see Chapter 2 Indian Economy (1950 – 1990) Case Study Questions and answers below. We have provided Case Study Questions for Class 11 Economics with answers for all chapters. Students should read the case study for Chapter 2 Indian Economy (1950 – 1990) which is an important chapter in Class 11 Economics and then attempt the questions provided below. Our teachers have provided answers too so that students can check their solutions.

CASE STUDY-1

Criticism on the effects of the green revolution include the cost for many small farmers using HYV seeds, with their associated demands of increased irrigation systems and pesticides. A case  study is found in India, where farmers are buyingMonsanto BT cotton seeds—sold on the idea that these seeds produced ‘non natural insecticides’. In reality, they need to stillpay  for expensive pesticides and irrigation systems, which might lead to increased borrowing to finance the change fromtraditional seed varieties. Many farmers have difficulty in paying for the expensive technologies ,especially if they have a badharvest. These high costs of cultivation push rural farmers to take out loans—typically at high interest rates. Over-borrowing commonly entraps farmers into a cycle of debt.On top of this, India’s liberalized economy further exacerbates the farmers’s economic conditions. Indian environmentalist Vandana Shiva writes that this is the “second Green Revolution”. The first Green Revolution, she suggests, was mostlypublicly funded (by the Indian Government).Farmer’s financial issues have become especially apparent in Punjab, where its rural areas have witnessed an alarming rise insuicide rates. Excluding the countless unreported cases, there has been estimated to be a 51.97% increase in the number ofsuicides in Punjab in 1992–93, compared to the recorded 5.11% increase in the country as a whole. According to a 2019 Indian news report, indebtedness continues to be a grave issue affecting Punjabi people today, demonstrated by the more than900 recorded farmer committed suicide in Punjab in the last two years.

Questions:

Question. The green revolution include the cost for many small farmers using ________ seeds, with their associated demands of increased irrigation systems and pesticides.  

Question. There has been estimated to be a 51.97% increase in the number of suicides in Punjab in 1992–93. (True or False).  

Question. This new Green Revolution, she says, is driven by private (and foreign) interest—notably MNCs like Monsanto—as encouraged by the:
(a) Communism context
(b) Liberal context
(c) Neoliberal context
(d) None of these   

Question. According to a 2019 Indian news report, indebtedness continues to be a grave issue affecting Punjabi people today, demonstrated by the more than ____ recorded farmer committed suicide in Punjab in the last two years.  

CASE STUDY-2

A plan spells out how the resources of a nation should be put to use. It should have some general goals as well as specific objectives which are to be achieved within a specified period of time; in India plans were of five years duration and were called five year plans (we borrowed this from the former Soviet Union, the pioneer in national planning). Our plan documents upto the year 2017 not only specify the objectives to be attained in the five years of a plan but also what is to beachieved over a period of twenty years. This long-term plan is called ‘perspective plan’. The five year plans were supposed to provide the basis for the perspective plan.

Questions:

Question. When did India give its first five year plan?

Answer. 1951

Question. Planning commission, the erstwhile central planning authority in the country, has been replaced by____________    

Question. ‘Government decides what goods are to be produced in accordance with the needs of society’. Under what type of economic system does this take place?

Answer. Socialist economy.

Question. When was Indian planning commission constituted?
(a) 6th August 1952
(b) 15th March 1950
(c) 15th August 1947
(d) 1st April 1997 

CASE STUDY-3

The Green Revolution, or the Third Agricultural Revolution, is the set of research technology transfer initiatives occurring  between 1950 and the late 1960s, that increased agricultural production worldwide, beginning most markedly in the late 1960s. The initiatives resulted in the adoption of new technologies, including High-Yielding Varieties (HYVs) of cereals, especially dwarf wheat and rice. It was associated with chemical fertilizers, agrochemicals, and controlled water-supply (usually involving irrigation) and newer methods of cultivation, including mechanization. National Bank for Agriculture and Rural Development is an apex development finance institution fully owned by  Government of India. The bank has been entrusted with “matters concerning policy, planning, and operations in the field of credit for agriculture and other economic activities in rural areas in India”

Questions:

Question. _____________ is Known as Father of Green Revolution in India. (MS Swaminathan/Vikram Sarabhai).  

Question. NABARD was established in _________________ . (1982/1985)  

Question. The rural banking structure in India consists of a set of multi-agency institutions. __________ (RRB / SIDBI) is expected to dispense credit at cheaper rates for agricultural purposes to farmers  

Question. Which were the areas benefitted from Green Revolution   

Answer. Wheat and Rice

CASE STUDY-4

The Indian national highway system was introduced and many roads were widened to accommodate the increasing traffic. Tourism also expanded. The twenty-point programme was launched on 14 January 1982. It was followed from 1974 to 1979. The Minimum Needs Programme (MNP) was introduced in the first year of the Fifth Five-Year Plan (1974–78). The objective of the programme is to provide certain basic minimum needs and thereby improve the living standards of the people. It is prepared and launched by D.P.Dhar

Questions:

Question. When was fifth five year plan started?

Answer. 1974

Question. What were the main objectives of the plan?

Answer. Employment and poverty alleviation

Question. When did Twenty point programme launched?

Answer. 1975

Question. What was the difference between targeted growth and actual growth rate?

Answer. 0.6%

CASE STUDY-5

India which appears to have been pushed back to being the world’s 6th biggest economy in 2020, will again overtake the UK to become the fifth largest in 2025 and ace to the third spot by 2030, a think tank said on Saturday. India had overtaken the UK in 2019 to become 5th largest economy in the world but has been relegated to 6th spot in 2020.

Questions:

Question. Which of the following is referred as the Think Tank of India?
(a) Niti Ayog of India
(b) National Development Council
(c) NABARD
(d) IDBI 

Question. The idea of Five Year Plans was borrowed from __________.
(a) The USA
(b) Australia
(c) Soviet Union
(d) Denmark 

Question. The one of the reasons for Indian Economy to be relegated in 2020 :
(a) Health Infrastructure
(b) COVID 19 Pandemic
(c) Framework of Planning
(d) All of the Above 

Question. _____________ finally approves the draft of Indian Plans.
(a) RBI
(b) National Development Council
(c) AYUSH Ministry
(d) IDBI 

CASE STUDY-6

The land ceiling legislation also faced hurdles. The big landlords challenged the legislation in the courts, delaying its implementation. They used this delay to register their lands in the name of close relatives, thereby escaping from the legislation. The legislation also had a lot of loopholes which were exploited by the big landholders to retain their land. Land reforms were successful in Kerala and West Bengal because these states had governments committed to the policy of land to the tiller. Unfortunately other states did not have the same level of commitment and vast inequality in landholding continues to this day.

Questions:

Question. Change in the ownership of landholdings, is known as ______________ (land ceiling/land reforms).   

Question. Mention any one challenge faced by land ceiling legislation.

Answer.(a) The big landlords challenged the legislation in the courts, delaying is implementation. 
 (b) The landlords used the delay to register their lands in the name of close relatives, thereby escaping from the legislation.

Question. Name the policy the two state governments adopted to make Land reforms successful. 

Answer. Land to the tiller.

Question. What is land ceiling? 

Answer. Land ceiling means fixing the maximum size of land which could be owned by an individual.

CASE STUDY-7

In a country, all the means of production are owned by top industrialists of the private sector, they are free to take all kinds of economic decisions. The government does not interfere with the movement of goods and services in the country. The GDP is rapidly accelerating though only the rich people are happy.

Questions:

Question. The type of economy defined in this scenario is _________ economy.  

Question. There is _____________ ownership of the means of production.  

Question. In this economy, _____________ are maximised.  

Question. With reference to the passage, state one principal demerit of this type of economy.

Answer. Growth without social justice

CASE STUDY-8

Usually the economy of the country is based on who shall answer the questions like what to produce? How to produce? How to distribute what is produced? These questions when answered by the market forces mean a capitalist economy, when answered by government then a socialist economy and a mixed economy is where jointly these questions are answered. India opted for socialism as Indian leaders were motivated by the success of Soviet Union’s planning. Indian planners were well aware of the shortage of private capital and lack of incentive for the private sector to function in the social sector. Comprehensive planning for the country was made by the government with specific objectives of five-year plans. Hence, planning was initiated to make the public sector to work within the basic economic framework, and private sector firms were encouraged towards economic growth.

Questions:

Question. Indian planners after independence were attracted to which Economy System ?
(a). Socialist
(b). Capitalist
(c). Market
(d). None 

Question. India’s First Five Year Plan was launched in the year 1951 (True/ False)   

Question. India has a mixed economy with a _____________ .
(a). Small public sector
(b). Large public sector
(c). Large private sector
(d). None of these 

CASE STUDY-9

Some economists are of view that subsidies do not allow prices to indicate the supply of a good.when electricity and water are provided at a subsidized rate or free , they will be used wastefully without any concern for their scarcity. Farmers will cultivate water intensive crops if water is supplied free, although the water resources in that region may be scarce and such crops further deplete , if water is priced to reflect scarcity, farmers will cultivate crops according to region . Fertilizer and pesticide subsidies can be harmful to environment. subsidies provide an incentive for wasteful use of resources.

Questions:

Question. Define term Subsidy.

Answer. It is an economic benefit, direct or indirect, granted by the government.

Question. Highlight the basic objective of providing subsidies.

Answer. Incentive for adoption of new HYV technology .

Question. The government should continue with providing subsidies to farmers because ____________.   

Question. How subsidies can be linked as threat to environment?

Answer. If these are provided for fertilizers and pesticides then farmers will use them in abundance which will be dangerous for environment

CASE STUDY-10

The Green Revolution started in 1965 with the first introduction of HYV seeds in Indian agriculture. This was coupled with better and efficient irrigation and the correct use of fertilizers to boost the crop. The end result of the Green Revolution was to make India self-sufficient when it came to food grains. After 1947 India had to rebuild its economy. Over three-quarters  of the population depended on agriculture in some way. But agriculture in India was faced with several problems. Firstly, the productivity of grains was very low. And India was still monsoon dependent because of lack of irrigation and other infrastructure. There was also an absence of modern technology. And India had previously faced severe famines during the British Raj, who had only promoted cash crops instead of food crops. The idea was to never depend on any other country for food sufficiency. So in 1965, the government with the help of Indian geneticists M.S. Swaminathan, known as the father of Green Revolution, launched the Green Revolution. The movement lasted from 1967 to 1978 and was a great success.

Questions:

Question.Green revolution is related with _____________ .
(a). modern technology
(b). better irrigation facilities
(c). HYV seeds
(d). all of the above 

Question. _____________ known as the father of green revolution.    

Question. Britishers encouraged Indian farmers to grow food crops. (true/false)Give reason.  

Question. What was the need of green revolution?

Answer. To make India self-sufficient 

CASE STUDY-11
The industrial sector became well diversified by 1990, largely due to public sector. It was no longer restricted to cotton textiles and jute. It also included engineering goods and a wide range of consumer goods . The industrial sector increased in the period from 11.8 % in 1950- 51 to 24.6 in 1990 – 91. This rise in industry’s share of GDP is an important indicator of development. It gave opportunities to people with small capital to get into business. New investment opportunities helped in generating more employment. It promoted growth with equity.

Questions:

Question. After independence the number of industrial policies declared till now are:
(a) 8
(b) 10
(c) 6
(d) 5   

Question. “Small capital to get into business “ in the above case refers to an investment in the fixed capital upto Rs. _________.
(a) Rs 5 Crore
(b) Rs 15 Crore
(c) Rs 1 Crore
(d) Rs 10 Lakh 

Question. Growth with equity is ___________________
(a) To ensure Social Justice
(b) To ensure equality
(c) Rural Development
(d) Urban Development 

Question. The industrial sector got well diversified by 1990, due to ________________
(a) Private Sector
(b) Public Sector
(c) FDI
(d) All of the Above 

CASE STUDY-12

In order to improve efficiency, infuse professionalism and enable them to compete more effectively in the liberalised global environment, the government identifies PSEs and declare them as maharatnas, navratnas and miniratnas. They were given greater managerial and operational autonomy, in taking various decisions to run the company efficiently and thus increase their profits. Greater operational, financial and managerial autonomy has also been granted to profit-making enterprises referred to as miniratnas. The Central Public Sector Enterprises are designated with different status. A few examples of public enterprises with their status are as follows:
(i) Maharatnas – (a) Indian Oil Corporation Limited, and (b) Steel Authority of India Limited,
(ii) Navratnas – (a) Hindustan Aeronautics Limited, and (b) Mahanagar Telephone Nigam Limited;
(iii) Miniratnas – (a) Bharat Sanchar Nigam Limited, and (b) Airport Authority of India.
Many of these profitable PSEs were originally formed during the 1950s and 1960s when self-reliance was an important  element of public policy. They were set up with the intention of providing infrastructure and direct employment to the public so that quality end-product reaches the masses at a nominal cost and the companies themselves were made accountable to all stakeholders. The granting of status resulted in better performance of these companies. Scholars allege that instead of facilitating public enterprises in their expansion and enabling them to become global players, the government partly privatised them through disinvesment. Of late, the government has decided to retain them in the public sector and enablethem to expand themselves in the global markets and raise resources by themselves from financial markets.

Questions:

Question. How has government made attempts to improve the efficiency of PSUs? 

Answer. By giving them autonomy in taking managerial decisions.

Question. What are the special status granted to PSUs?

Answer. PSUs have been granted special status as maharatnas, navratnas and miniratnas.

Question. Indian Railway Catering and Tourism Corporation Limited is categorized under Maharatna or miniratna? 

Answer. Miniratna

Question. Indian Oil Corporation Limited is categorized under Maharatna or miniratna? 

Answer. Maharatna

CASE STUDY- 13

In July 1991, a package of economic reforms was announced,which marked the beginning of process of ‘Liberalisation’ in India.Liberalisation involves deregulation and reduction of government controls and greater autonomy of private investment, to make economy more competitive. The purpose of liberalisation was to unlock the economic potential of the country by encouraging private sector and multilateral corporations to invest and expand.

Questions:

Question. Which of the following is a policy initiated under New Economic Policy?
(a) Globalisation
(b) Privatisation
(c) Disinvestment
(d) Liberalisation  

Question. Liberalisation means _____________ of entry and growth restrictions on the private sector.   

Question. Match the following:

Question. Liberalisation is a process of opening a larger part of the economy for non-government sector. (True/ False)  

CASE STUDY-14

Outsourcing was first recognized as a business strategy in 1989 and became an integral part of business economics  throughout the 1990s. The practice of outsourcing is subject to considerable controversy in many countries. Those opposed argue that it has caused the loss of domestic jobs, particularly in the manufacturing sector. Supporters say it creates an incentive for businesses and companies to allocate resources where they are most effective, and that outsourcing helps maintain the nature of free-market economies on a global scale.

Questions:

Question. What is meant by outsourcing?

Answer. Outsourcing refers to contracting out some of its activities to a third party which were earlier performed by the organisation.

Question. Name some services outsourced from India.

Answer. Voice-based business processes, Record keeping, Accountancy, Music recording e.t.c

Question. Why outsourcing is good for India?

Answer. Provides employment to large number of unemployed Indians, enables the exchange of ideas and technical know-how, improves the standard of living of people, enhances India’s international worthiness credibility.

Question. Why are developed countries opposing outsourcing to India?

Answer. Outsourcing reduces the employment generation and creates job insecurity in the developed countries.

CASE STUDY-15

Import substitution policy is a set of measures aimed at stimulating production and competitiveness of domestic goods, increasing of domestic demand optimization of demand for imports. It is determined by the need to reduce the dependence of transitive economy on economic leaders. The main objective of the policy of import substitution is to encourage national production, to development the new products to stimulate demand and import restrictions. Actual directions: industrial restructuring, the balance of foreign trade, protection of the domestic market during the transition period. In the Commonwealth of Independent states import substitution is a complementary mechanism for diversification of production.

Questions:

Question. The main objective of the policy of import substitution is _____________ . 

Question. Import substitution policy aimed at stimulating production. (True /false)  

Question.What is the meaning of import substitution strategy?

Answer. It means producing in domestic economy itself those goods which the country has to import.

Question. Give any one way how to protect import substitution in domestic industry.

Answer. By putting high tariffs on industrial goods. 

CASE STUDY-16

Developed countries have been trying to pursue developing countries to liberalize the trade and allow more flexibility in business policies to provide equal opportunities to multinational firms in their domestic market. International Monetary Fund(IMF) and World Bank helped them in this endeavour. Liberalization began to hold its foot on barren lands of developing countries like India by means of reduction in excise duties on electronic goods in a fixed time frame. Indian government did the same and liberalized the trade and investment due to the pressure from World Trade Organization. Import duties were cut down phase-wise to allow MNC’s operate in India on equality basis. As a result globalization has brought to India new technologies, new products and also the economic opportunities.

Questions:

Question. ____________facilitates International Trade through removal of tariffs as well as non tariff barriers  

Question. India had compulsion to introduce reforms as dictated by
(a). World Bank
(b). IMF
(c). both a and b
(d). None of the above 

Question. Why was Indian economy liberalized in 1991?  

Answer BOP crisis

Question. Trade liberalization benefits developed countries more than developing economies. (True / False)  

CASE STUDY-17

Owing to globalisation, you might find many Indian companies have expanded their wings to many other countries. For example, ONGC Videsh, a subsidiary of the Indian public sector enterprise, Oil and Natural Gas Corporation engaged in oil and gas exploration and production has projects in 16 countries. Tata Steel, a private company established in 1907, is one of the top ten global steel companies in the world which have operations in 26 countries and sell its products in 50 countries. It employs nearly 50,000 persons in other countries. HCL Technologies, one of the top five IT companies in India has offices in 31 countries and employs about 15,000 persons abroad. Dr Reddy’s Laboratories, initially was a small company supplying pharmaceutical goods to big Indian companies, today has manufacturing plants and research centres across the world. 

Questions:

Question. Define Globalization ?

Answer. It is an outcome of the set of various policies that are aimed at transforming the world towards greater interdependence and integration. It involves creation of networks and  activities transcending economic, social and geographical boundaries.

Question. Which is the most important outcome of the process of Globalization ?

Answer. Outsourcing

Question. What type of services are generally outsourced ?

Answer. In outsourcing, a company hires regular service from external sources, mostly from other countries, which was previously provided internally or from within the country (like legal advice, computer service, advertisement, security — each provided by respective departments of the company). 

Question. In the modern (recent) times , which services are being outsourced ?

Answer. In recent times, because of the growth of fast modes of communication, particularly the growth of Information Technology (IT). Many of the services such as voice-based business processes (popularly known as BPO or call centres), record keeping, accountancy, banking services, music recording, film editing, book transcription, clinical advice or even teaching are being outsourced by companies in developed countries to India

CASE STUDY-18 

Read the following table carefully and answer the questions

Questions:

Question. While the service sector continued to witness a high level of growth – higher than the overall GDP growth in 2014-15, this sector witnessed the high growth rate of_________ percent.    

Question. During the reform period, the growth of agriculture has__________ (increased/decreased)  

Question. The opening of the economy has led to a rapid increase in foreign direct investment and foreign exchange reserves. The foreign investment, which includes foreign direct investment (FDI) and foreign institutional investment(FII), has increased from about US $100 million in 1990-91 to ___________ in 2017-18. There has been an increase in the foreign exchange reserves from about US $6 billion in 1990-91 to about __________ in 2018-19.   

Question. The reform process has been able to address the basic problems facing our economy especially in areas of employment, agriculture, industry, infrastructure development and fiscal management.(True/ False)  

CASE STUDY-19

The global trade organisation to administer all multilateral trade agreements by providing equal opportunities to all countries in the international market for trading purposes. WTO aims at enlarging production and trade of services to ensure optimum utilisation of world resources. India has kept in commitments towards liberalisation of trade made in the WTO by removing quantitative restrictions on imports and reduced tariff rates. 

Questions:

Question. The World Trade Organisation was founded in___________ .  

Question. ‘The objective of WTO is to establish rule based regime. ‘ True/false with Reason.  

Question. _____ implies free interaction among all the countries in various fields like trade, technology, outsourcing etc.  

Question. From the set of information in column A and corresponding relevant fact in column B.

CASE STUDY-20

In his July 1991 Budget speech, marked by remarkable clarity, Dr Manmohan Singh laid out his analysis of what was ailing the Indian economy at the time, and his strategy to revive it. His argument was that protection and state-supported industrialisation had outlived their utility. The protection granted to industry had made it uncompetitive in the global market. This had hurt export growth, contributing to the Balance of Payments crisis of 1991. The way out, as Dr Singh saw it, was to open up the Indian economy so that Indian manufacturers could compete with global players in local conditions. Once they succeeded in the domestic market they would be able to find a place in the global market as well. India would then move from being, primarily, an exporter of agricultural products to one that had a global presence in industrial products as well.

Questions:

Question. Three main policies of New Economic Policy are Liberalization __________ And ___________ .   

Question. Economic reforms have (Increased /reduced) the role of public sector.

Answer. Reduced

Question. Name any one industry, for which license is needed.

Answer. Atomic Energy Generation, Defence Equipments or any other correct option.

Question. Which of the following is not a tax reform.
(a) Reduction in taxes
(b) Reforms in Indirect Taxes
(c) Simplification of Tax Process
(d) Devaluation of Rupee