Chapter – 2

Indian Economy 1950-1990

In this post, we have given the Important Questions of Class 12 Economics Chapter 2 (Indian Economy 1950-1990) in English. These Important Questions are useful for the students who are going to appear in class 12 board exams.

Board	CBSE Board, UP Board, JAC Board, Bihar Board, HBSE Board, UBSE Board, PSEB Board, RBSE Board
Textbook	NCERT
Class	Class 12
Subject	Economics
Chapter no.	Chapter 2
Chapter Name	(Indian Economy 1950-1990)
Category	Class 12 Economics Important Questions in English
Medium	English

Chapter-2 Indian Economy 1950–1990

Three Marks Questions

Q-1What were the main shortcomings of IPR 1956?

Ans: There were many shortcomings of IPR 1956.

• Many industries which code easily be handed over to private sector work kept under public sector control.
• Too many industries were covered under licence policy which create huddle in industrial development
• Too many regulations led to low level of industrial development.

Q2 What is subsidy ? what is its objective.

Ans: Subsidy is a benefit given by the government to the producers as an incentive to produce to farmers a subsidy is given to lower the cost of import it is given on electricity to the producers to lower cost of production and it is given to consumers especially those living below poverty line on necessities to make basic needs affordable for them.

Q3 How private sector was regulated under IPR 1956.

Ans: Industrial policy resolution classified industries into two three categories.

• In the first category those industries were included which were exclusively owned by the state and in which private sector was not allowed to participate it had 17 industries.
• In the second category those industries were included in which private sector could supplement the role of public sector.
• Third category consisted of the remaining industries in which private sector could enter.

Q-4 Mention the development of Agriculture sector between 1950-1990.

Ans :

• Land reforms : Land reforms were initiated in order to bring equity in ownership of lanthe improvement and growth of the organization. Therefore, Navaratna Policy do improve the performance of the public sector organizations greatly. It improves the cost efficieny,generates more employement, more profits, increases in size over time and various other enhancements. Then, the government decides to retain them in the public sector undertakings and allow them to expand in the holdings. It was decided to establish intermediaries and to make the tillers of the owners of land. It gives the tillers the incentives to invest in making improvements in land provided sufficient capital was made available to them.
• Land Ceiling : If refers to 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 and to promote equality in the agricultural sector.
• Green Revolution: It refers to large increase in production of food grains resulting form the use of High yielding variety (HYV) seeds. The use of fertilizers, pesticides, irrigation facilities is important along with HYV seeds in order to increase agricultural productivity & production. The farmers should be provided adequate financial resources in order to purchase agricultural inputs.

Q5 Mention the development of foreign trade between 1950-1990?

Ans : – Inward looking trade strategy was adopted as foreign trade policy . This strategy is called import substitution. It aims at replacing or substituting imports with domestic production. Domestic industry is offered protection from foreign competition through import duties. Its main objective was to save foreign exchange by encouraging domestic production of such goods which could be imported from rest of the world.

The Government protected the domestic industries from competition through tariffs and quotas. Through imposition of tariffs and quotas, the government restricted the imports of goods and thereby protecting the domestic firms from foreign competition.

4 Marks Questions

Q6 Mention the objectives or goals of planning in India. Briefly explain it.

Ans : The goals or objectives of planning in India are as follows:

• Growth: – It refers to increase in the country’s capacity to produce the output of goods and services within the country. It implies either a large stock of productive capital or an increase in the efficiency of productive capital and services like transport, banking & communication etc. In other words, it means steady increase in the gross domestic product (GDP). It is necessary to produce more goods and services if the country need to achieve higher growth level.
• Modernization:- It is necessary to adopt new technology in order to increase production of goods & services. Adoption of new technology is called modernization. However, modernization does not refer only to the use of new technology but also to change in social outlook such as women empowerment . A modern society makes use of the talents of women in the work place so that the society will be more civilized and prosperous.
• Self reliance:- It refers to utilization of country’s resources in order to promote economic growth and modernization without using the resources imported from other countries. It means avoiding imports of those goods which could be produced in India itself. It is necessary in order to reduce our dependence on foreign countries in order to safeguard the sovereignty of our country and unnecessary foreign interference in our polices.
• Equity:- It means equal distribution of income and wealth among the societies. It is important to ensure that the benefits of economic development should reach the poor sections of the society as well instead of being enjoyed by the rich. It is necessary that every people of a country should be able to meet their basic needs such as food, education, health facilities in order to reduce the inequality

Q-7 The public sector undertaking that are making profits should be privatized”. Do you agree with the statement.

Ans: The public sector undertakings that are unable to make profits or are going under huge losses, which are unable to make the best use of all the resources they have, or have more expenses than the total revenues, these should be privatized because they can revive the resources more feasibly and convert them into economic profits development. On the other hand, the public sector undertakings, which are making huge profits, should not be privatized. Privatization may result in the exploitation of the employees in the organization. They might also focus only on the profits, which can also result in a huge deadweight loss in the economy. The public sector undertaking should only be privatized when there is a possibility of earning better revenues and growth in the economy. The profits from these public sector undertakings must be used for the betterment of the societies and the people living in those societies.

Q-8 Discuss briefly the improvement in the performance of public sector undertakings because of Navaratna Policy

Ans: The Navaratna Policy focuses on identifying public sector undertakings and declare them as Navaratnas to improve their efficiency and the competitiveness in the outside world. The Navaratna organizations are those who are given greater operational autonomies and managerial decision authorities while making various decisions. This gives the firms greater flexibility to take the decisions which focuses on global markets and grow financially and economically.

Q-9 Mention the development of Industrial sector between 1950-1990?

Ans :

• Public enterprises were played a central role in the process of Industrialization
• Private enterprises were to play only a secondary role in the process of industrialization. It means private sector were to obtain a license for their industrial establishments and to produce goods within the prescribed limits of production capacity.
• Major thrust was given to import substitution. It means production of such goods were to be accorded high priority which were imported from abroad. It was necessary to achieve the objective of growth with self reliance.
• Domestic industries were given protection from foreign competition and it was done through
  • Heavy duty in imports
  • Large – scale industry was to be developed with a view to build an infrastructural base in country.

Q-10 Why was public sector given a leading role in industrial development during the planning period?

Ans: public sector has been playing a very important role in the development of industries in the following ways:

• For creating a strong industrial base
• For developing infrastructure .
• Fordeveloping backward areas .
• To mobilize savings and on earn foreign exchange
• To prevent concentration of economic power.
• To promote equality of income and wealth distribution
• To provide employment to promote import substitution

Q.11 What is Green Revolution. Write its advantage and disadvantage.

Ans: The Green Revolution is referred to as the process of increasing agricultural production by incorporating modern tools and techniques. Green Revolution is associated with agricultural production. It is the period when agriculture of the country was converted into an industrial system due to the adoption of modern methods and techniques like the use of high yielding variety seeds, tractors, irrigation facilities, pesticides, and fertilizers. Until 1967, the government majorly concentrated on expanding the farming areas. But the rapidly increasing population than the food production called for a drastic and immediate action to increase yield which came in the form of the Green Revolution.

Advantages of green revolution

• It transformed the economy of of scarcity into to an economy of plenty
• green revolution led to ryzen production and productivity
• green revolution helped in removing continuing food shortages

Disadvantages of green revolution.

• HYV was restricted to only five crops namely wheat rice, jawar, Bajra and maize. Commercial crops for excluded from the Ambit of the strategy. Substantial increase in in wheat production was noticed
• HYV crops were more prone to to attack by pets.
• It increase the gap between rich and poor farmers on the one hand and agriculturally developed and agriculturally less developed States on the other

Q.12 What are the the main problems of Indian agriculture?

Ans- Agriculture in India suffers from variety of problems that contribute towards to its backwardness some of these problems are:

• Excessive population pressure.
• Stagnation and low productivity
• Uneconomic landholdings.
• Subdivision and fragmentation of land
• Inadequate irregation facilities
• Inadequate credit supply
• Traditional and outdated production method

Q13 What are the major land reform measures adopted in India?

Ans:

• Land reforms cover all such policies and measures that she to change the pattern of land ownership and provide security e to the farmers.
• The main objective of of land reforms is to remove institutional obstacles in the way of modernising agriculture and also promote equity and social justice in rural areas.
• Zamindari System has been abolished and the actual cultivators have been given the ownership of land.
• Ceilings have been placed on the maximum size of land area that an individual can own.The surplus land above this ceiling has been taken away and distributed among landless workers and small farmers.
• Small scattered pieces of land owned by different persons have been put together and consolidated into bigger fields.

Q14 What has been the impact of agricultural reforms.

Ans:

• Increase in agricultural productivity.
• Increase in agricultural production.
• Modernisation of agriculture
• Green revolution.
• Increase in Marketable surplus.

Q15 What are the objectives of Land reforms.

Ans:

• Abolition of intermediaries i.e end of Zamindari System.
• Reorganisation of agriculture
  • Ceiling of landholdings and redistribution of surplus land
  • Consolidation of holding
• Tenancy reforms:
  • fixation of rent at reasonable levels.
  • security of tenure
  • Ownership rights to the tenants.

Q 16 Explain the govt.policy and various Measures introduced for agricultural development.

Ans.

• Institutional reforms were implemented to change the structure of agriculture. Such reforms comprised of land reforms, reforms in the agricultural credit structure, reforms in agricultural marketing etc.
• Technological reforms comprised of development and introduction of new kind of seeds called HYV seeds, use of chemical fertilizers, pesticides, insecticides etc. to protect crop from damage, use of mechanized farm equipment and adoption of scientific farm management practice.
• Genral reforms: Includes expansion of irrigation facilities ensuring availability of power supply, supply of seeds and fertilizers at subsidizedrate. And many concession are given to the agricultural sector.
• Minimum Support Price assures farmers of reasonable prices and guaranteed minimum income in return for their produce.

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