Please refer to Indian Economy 1950 – 1990 Class 11 Economics notes and questions with solutions below. These revision notes and important examination questions have been prepared based on the latest Economics books for Class 11. You can go through the questions and solutions below which will help you to get better marks in your examinations.
Class 11 Economics Indian Economy 1950 – 1990 Notes and Questions
- 1. Why, despite the implementation of Green Revolution, 65% of our population continued to being aged in the agriculture sector till 1990.
Answer – The reason is that the industrial sector and the service sector did not absorb the people working in the agricultural sector.
- 2. Why was it necessary for a developing Country like India to follow Self reliance as a planning objective.
Answer. Self reliance as a common goal of 5 year plans means avoiding imports of those goods which could be produced in India itself. It was necessary to follow self reliance as a planning objective during the first seven5year plans in order to reduce our dependence on foreign countries especially for food. Since we were recently freed from foreign domination it was essential to give importance to self reliance.
Further, it was feared that dependence on imported food supplies, foreign technology and foreign capital make India’s sovereignty vulnerable to foreign interference in our policies.
- 3. Explain the need and types of land reforms/Institutional reforms implemented in the agriculture sector in India.
Answer. Need for land reforms in India:
At the time of independence, the land tenure system was characterized by intermediaries called zamindars, jagirdars, etc. Who merely collected rent from the actual tillers of the soil without contributing towards improvements on farm. The low productivity of agricultural sector forced India to import food from USA. To promote equity in the agricultural sectors, land reforms were implemented.
Types of institutional reforms in the agricultural sector:
• Change in the ownership of the land Holdings- The idea behind this move was that ownership of land would give incentives to the tillers to invest in making improvements, provided sufficient capital was made available to them.
• Land ceiling – This means fixing the maximum size of land which could be owned by an individual. The purpose of land ceiling was to reduce the concentration of land ownership in a few hands.
• Abolition of intermediaries- About 200 lakh tenants were freed from being exploited by the zamindars .
- 4. What is the role of small scale industries in industrial development in India? Why and how has Government shielded small scale industries from the large firms.
Answer. Role of small scale industries.
• Small scale industries are more Labour intensive, that is they use more labour than the large scale industries and therefore generate more employment.
• Small scale industries help in promoting rural development. In 1955, the village and small Scale Industries Committee also called the Karve Committee, noted the possibility of using small scale industries for promoting rural development.
Steps taken by the government.
• The Production of a number of products was reserved for the small scale industries.
• They were also given concessions such as lower excise duty and bank loans at lower interest rates.
- 5. The goal of equity was fully served by ‘Abolition of Intermediaries’. Comment.
Answer. The given statement is incorrect. The goal of equity was not fully served by abolition of intermediaries because of the following reasons:
• In some areas, the former zamindars continued to own large areas of land by making use of some loopholes in the legislation.
• In some cases, tenants were evicted and zamindars claimed to be self cultivators.
• Even after getting the ownership of land, the poorest of the agricultural laborer’s did not benefit from land reforms.
- 6. Green revolution enabled the government to maintain buffer stock of food grains. Do you agree?
Answer. Yes, I agree with the given statement. Green revolution raised agricultural yield per acre to incredible heights. It enabled the government to procure sufficient amount of food grains to build a stock which could be used in times of food shortage.
- 7. “Subsidies put a huge burdens on government’s finances, but are necessary for poor and marginal farmers.” Do you agree that granting subsidies justify the objective of social justice?
Answer. Yes, I agree with the given statement. Subsidy means that the farmers get inputs at prices lower than the market prices. Indian government has always provided massive subsidies to farmers. Subsidies are essential because.
• Majority of the farmers are very poor and will not be able to afford the required inputs without the subsidies. Subsidies provide them the equality of opportunities to use the inputs as used by rich farmers.
• Subsidies help to reduce the income inequality gap between rich and poor farmers and help to achieve the ultimate goal of equity.
So, the government should continue the agricultural subsidies as farming in India continues to be a risky business.
- 8. How do small scale industries promote rural development?
Answer.
• These industries are labour intensive, which generate more employment.
• They reduce the dependence of people on agriculture for living.
• These industries require less capital, which is deficient in India.
- 9. What is import substitution policy? Why it was introduced in India?
Answer.
• import substitution policy aimed at replacing or substituting Imports with domestic production. For example, instead of importing vehicles from abroad, the industries were encouraged to produced them in India itself.
• It was introduced in India because the government wanted to protect the domestic industries from the foreign competition. It was assumed that if domestic industries are protected, they will learn to compete in the course of time.
- 10. Why was public sector given a leading role in industrial development during the planning period? Explain any 2 reasons.
Answer.
• At the time of independence, as the size of market was small to lure industrialist, to invest their capital. So, the government had to play an extensive role in promoting the industrial sector.
• Secondly, to develop Indian economy on socialist lines lead to the policy of the state controlling the commanding Heights of the economy.
• Private sector was to be complementary to the public sector, with the latter leading the way.
- 11. Explain ‘Growth, Equity and Self-reliance’ as long-term objectives of planning.
Answer. The long-term objectives of planning are:
• Growth- It refers to increase in the country’s capacity to produce the output of goods and services within the country. GDP is a good indicator of growth.
• Equity- It refers to the benefits of economic prosperity reaching the poor sections as well, not just being enjoyed by the few rich. Everyone should be able to meet the basis needs.
• Self-reliance- It refers to avoiding imports of those commodities which could be domestically produced, that is in India itself. In the first seven five-year plans, self-reliance was considered
a necessity in order to reduce our dependence on imported food supplies, foreign technology and foreign capital. It was presumed it may make India vulnerable to foreign interference in our policies.
- 12. How did Green Revolution benefit the farmers?
Answer.
• Timely and adequate credit facilities to farmers helped them in procuring the package of inputs required for use on the fields, resulting in increased agricultural production.
• This increased the farmers’ earnings as the agriculture now became commercial.
• It increased the productivity of land.
• India attained self-sufficiency in food grains and reduced its dependence on imports.
• The new agricultural strategy implied use of better and improved inputs of agriculture which required more capital.
• Green Revolution would have benefited only the rich farmers if the government had not played an important role in ensuring that the small farmers also gains from the new technology. The government provided loans at low rate of interest. The fertilizer’s and HYV seeds were subsidized.
- 13. Critically explain the economic policy prior to 1991, with its achievements and failures.
Answer. Silent features of the economic policy were as follow.
• Economic growth to be achieved during five-year plans.
• Public enterprises to play an important role.
• Import substitution to be the Centre of the process of industrialization.
• Domestic industries to be protected from foreign competition.
• Large scale industries to be developed along with small scale industries, etc.
Achievements:
• Economic growth, got a push due to increased agricultural production. Industrial production also increased.
• Growth of large-scale industry projected an infrastructural shift in the Indian economy.
• Growth of small-scale industries made a substantial contribution in achieving the objectives of growth with social justice.
Failures:
• Public sector industries, by incurring huge losses, caused a drain on the nations scarce resources.
• Domestic industries failed to achieve international standard of product quality.
• Foreign exchange reserves depleted to a very low level.
Briefly the growth process started showing sign of stagnation across all sectors of the economy, industry in particular. Thus, the government had to shift to new economic policy of 1991.
- 1. In which year was the Planning Commission was set up in India?
- a) 1947
- (b) 1948
- (c) 1949
- d) 1950
- Ans: D
2.Strategic Industries were under the control of ……….under IPR 1956.
a) Public sector
(b) Private sector
(c) producing sector
d) None of these
Ans: A
21.In India What type of economic system is being followed?
a) Capitalism
(b) Socialism
(c) Mixed
d) Monarchy
Ans: C
3.Who is considered to be the architect of Indian Planning?
a) William Digby
(b) P.C Mahalanobis
(c) Dada bhai Naroji
d) R.C Desai.
Ans: B
4.What is meant by GDP?
a) It refers to total value of Investment made in a year.
(b) it is sum of all final goods and services produced in an economy in a financial year.
(c) It is national Income divided by population.
d) it is foreign investment made in a year.
Ans: B
5.Which economic system is based upon the market forces of demand and supply.
a) Capitalism
(b) Socialism
(c) Mixed
d) Monarchy
Ans: A
6.When was the ,’Village and Small scale Industries Committee,’ set up.
a) 1955
(b) 1958
(c) 1949
d) 1950
Ans: A
7. In which of the following state did land reforms succeed the most?
a) Punjab
(b) Haryana
(c) Tamil Nadu
d) West Bengal
Ans: D
8.Who was the first chairperson of the Planning commission of India.
a) Jawahar Lal Nehru
(b) Rajendra Prasad
(c) Dada bhai Naroji
d) R.C Desai.
Ans: A
9.What is per capita Income.
a) It refers to total value of Investment made in a year.
(b) it is sum of all final goods and services produced in an economy in a financial year.
c) It is national Income divided by population.
d) it is foreign investment made in a year.
Ans: C
10.Schedule B of IPR 1956 includes:
a) Those industries which are reserved for public sector.
(b)Those industries which are open for both public and private sectors.
(c) Residual industries
d) Industries in which only Small Scale Industries can enter.
Ans: B
11.Schedule A of IPR 1956 includes:
a) Those industries which are reserved for public sector.
(b) Those industries which are open for both public and private sectors.
(c) Residual industries
Ans: A
12. Read the following statements – Assertion (A) and Reason (R). Choose one of the correct alternatives
given below:
Assertion (A) : India became an exporter of primary products and an importer of finished consumer and
capital goods produced in Britain.
Reason(R) :Restrictive policies of commodity production, trade and tariff pursued by the colonial government adversely affected the structure, composition and volume of India’s foreign trade.
Alternatives :
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion
(A).
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Ans A.
13.Read the following statements : Assertion (A) and Reason (R). Choose one of the correct alternatives
given below:
Assertion (A) : The major policy initiatives i.e. land reforms and green revolution helped India to become self-sufficient in food grains production.
Reason (R) : The proportion of people depending on agriculture did not decline as expected
Alternatives :
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion(A).
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Ans: B
14.Read the following statements – Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A) : Every year government fixes a target for disinvestment of Public Sector Enterprises (PSEs).
Reason (R) : Disinvestment is an excellent tool for discarding the loss incurring Public Sector Enterprises (PSEs).
Alternatives :
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion(A).
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Ans B
15.It is an economy in which means of production are used in a manner such that social welfare is maximized. (Choose the correct alternative)
(a) Capitalist economy
b) Socialist economy
(c) Mixed economy
d) Free economy
Ans. B
16.Read the following statements – Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Five year plans gave a big push to the basic and capital goods industries.
Reason (R): Indian economy is now ranked as the eleventh largest industrial economy in the world.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion
(A).
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Ans: C
17. Read the following statements – Assertion (A) and Reason (R). Choose one of the correct alternatives given
below:
Assertion (A): Economic and social equality was considered as the principal goal of planning.
Reason (R): Real income of the people decreased due to high rate of inflation.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion A).
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Ans: B
18.The main causes behind poverty are.
(a) Social inequality
(b) Indebtedness
(c) Unequal wealth distribution
(d) Both (a) and (c)
Ans D
19.Read the following statements Assertion (A) and Reason (R). Choose one of correct alternatives given below:’
Assertion (A) : India could not develop a sound industrial base under the colonial rule.
Reason (R) : The colonial government reduced India to the status of a mere exporter of important raw materials for the upcoming modern industries in Britain.
Alternatives :
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion(A)
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Ans: A
20.Read the following statements Assertion (A) and Reason(R). Choose one of correct alternatives given below:’
Assertion (A) : Under the colonial regime, basic infrastructure such as railways, ports ,water transport, posts and telegraphs did develop.
Reason(R):Roads constructed in India prior to the advent of the British rule were no fit for modern transport.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion(A)
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Ans: A
21.Refers to an increase in the country’s capacity to produce the output of goods and services within the country. (Choose the correct alternative)
(a) Modernization
(b) Production
(c) Development
(d) Growth
Ans: D
22..Means fixing the maximum size of land which could be owned by an individual.
(Choose the correct alternative)
(a) Land reforms
(b) Land ceiling
(c) Zamindari
(d) Land holdings
Ans: B
23.Which of the following is a goal of five years plan?
(a) Growth
(b) Modernization
(c) self-reliance
(d) All of these
Ans: D
Choose one of correct alternatives given below:
41 Assertion (A) : The policy of ‘land to the tiller’ is based on the idea that the cultivators will take more interest they will have more incentive in increasing output if they are the owners of the land.
Reason(R) : Ownership of land enables the tiller to make profit from the increased output.
Alternatives :
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion(A).
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
Ans A
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