chapter 1: Indian economy on the eve of Independence
👉low level of economic developmnt under Colonial rule of the British
👉No sincere attmpt to estimate per capita and national income.
NATIONAL INCOME =total value of goods and services produced in a country plus income from abroad
PERCAPITA INCOME = Total national income of a country divided by its population in a specific period
👌Muslin cotton - Bengal origin -other name :Dhaka muslin
👌Malmal = finest muslin
Refered by foreigners as Malmal khas or malmal shahi
AGRICULTURE :85%livelihood but low productivity due to
1.Land settlemnts :Zamindari sys= main aim = rent collection
2. Revenue settlemnts
3. low technology
4.lack of irrigation
5.negligible use of fertilisers
6.commercialisation of agriculture
Industrial sector
India to be made mere exporter and market for finished goods in Britain
Consequences are
Massive unemploymnt
Import of cheap manufactured goods
TISCO estd in 1907
Foreign trade major ports in Britain ,china,ceylon and persia
Export surplus ,no gold or silver inflow
Demographic transition 1921 bench mark
Infant mortality rate
Life expectancy
Mortality rate all low
Infrastructure only for benefit of colonies .
Howerver railways,transport ,canal sys etc developed
Chapter 2
INDIAN ECONOMY 1950-1990 :
Types of economic systems based on market forces : capitalist,socialist and mixed economies .Capitalist economy =based on purchasing power of goods n services rather than wat people need
Socialist economy= goods are produced with the needs of society.
Mixed economy=govt and market forces together decide and produce essential goods and services
1950-Planning commission was set up with PM as chairperson .
GOALS OF 5 YEAR PLANS :
Growth
Modernisation
Self reliance
Equity
Prasanta chandra Mahalanobis =architect of Indian planning
Growth aimed in terms of GDP
Modernisation in terms of technology
Self reliance by avoiding imports and reduce dependence on foreign countries.
Equity of reaching the benefits to the poor sections of the society
Goal attainments
1.Agriculture
Land reforms
Land ceiling
GREEN REVOLUTION limited to affluent states upto 1970s now spread to more states in 1970 -1980s
Green revolution = use of HYV SEEDS esp for foodgrains
Regular supply of water
Risks of green revolution :
🌑Disparities between small and big farmers
🌑HYV crops prone to pests
MEASURES Taken:
Loans @low rates
Subsidised fertilisers
2. INDUSTRY:
Modernisation by capital and technology
Public private partnership
Industrial policy resolution 1956
3 categories of industries
A.industries owned by the state
B.private sector can supplement state sector
C.Remaining industries to be in pvt sector
Purpose of IPR = Regional equality
TRADE POLICY =Import substitution= inward looking trade strategy.
Effect of policies on Industrial developmnt:
🌟Rise in GDP Of industrial sector
🌟6% annual growth rate in industry
🌟protection from foreign competition
🌟More opportunities
🌟diversified throughout
Critics :
No demarcation of wat state shpuld produce and wat pvt sector should.
Misuse of license
No incentive to improve quality of goods and services
Conclusion :inward oriented policies required
Chapter 3: LIBERALISATION PRIVATISATION AND GLOBALISATION
Problems faced by India in 1991
🏓Foreign exchange reserves dropped to deficit levels evenfor a fortnight
🏓Govt was not able to make repaymnts on its borrowings from abroad
🏓Revenues too low to meet poverty,unemployment and population explosion
India approached INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELPOMENT (IBRD) =World Bank and the INTERNATIONAL MONETARY FUND (IMF)
We received US $ 7 billion to manage the crisis
NEW ECONOMIC POLICY (NEP) was announced
🔊Structural reform measures=long term,improve efficiency of economy and increasing international competitiveness
🔊stabilisation measures =short term,to ctrl inflation and balance of payments
LIBERALISATION:
1980s:
Industrial licenses
Export import policy
Technology upgradation
Fiscal policy
Foreign investment
Deregulation of industrial sector :
Licensing was abolished except for hazardous chemicals,electronics ,drugs,
aerospace and pharma
Financial sector reforms
Reduce role of RBI from regulator to facilitator
Foreign investment limit in banks was raised to around 50 % .FIIs like merchant bankers. Mutual funds and pension funds are now allowed to invest .
Tax reforms:
Fiscal policy = govt's taxation and public expenditure policies
Foreign exchg reserves :
Rupee was devalued against foreign currencies.
Trade and investment policy reforms:
🍢dismantling quantitative restrictions
🍢reducing tariff rates
🍢import licensing was abolished
🍢export duties were removed.
PRIVATISATION:
🤗withdrawal of govt from ownership and mgt of public sector companies
🤗out right sale of public sector compamies
Disinvestment =selling part of equity of PSUs.
Purpose:
improve financial discipline
Facilitate modernisation
GLOBALISATION:
Outsourcing =regular service to a company from external sources
WTO:
Founded in 1995
Successor of GATT - General Agreement on Trade and Tariff
GATT estd in 1948 with 23 countries for multilateral trade agreemnts
India member of WTO
Removal of tariff and non tariff barriers
Indian economy during reforms :
👏GDP increased from 5.6 %in 1980-91 to 6.4 %in 1992-2001
👏Rapid increase in FDI and foreign exchange reserves
👏foreign investment=FDI +FII increased from US $ 100m in 1990-91 to US $ 150b in 2003-04
India is the sixth largest foreign exchange reserve holder in the world.Increase from US $ 6 bn in 1990-91 to US $ 125bn in 2004-05
Chapter 4: POVERTY
Poor are those who are inaccessible to basic essential needs of a person .
Poor are identufied through the poverty line demarcation which ranges from absolutely poor to billionaires
Dadabhai Naoroji was first to conceptualise Poverty line.
1962 - planning commission formed study group
1979- Task force on projections of Minimum needs and effective consumption demand was formed
1989 - expert group was formed
Categorising poverty :
Always poor / usually poor
Chronic poor =have little more money
Churning poor = move in n out of poverty
Occassionally poor/ transient poor
Non poor / never poor
POVERTY LINE =Percapita consumption expenditure level which meets avg percapita daily requiremnt of 2400 calories in rural areas and 2100 calories in urban areas along with non food expenditure.
No of poor in India =proportion of people below poverty line =Head count ratio
Causes of poverty
🕹social ,economic and political inequality
🕹social exclusion
🕹unemployment
🕹indebtedness
🕹unequal distribution of wealth
Economy wide problems of poverty
💰low capital formation
💰lack of infrastructure
💰lack of demand
💰pressure of population
💰lack of social / welfare nets
POLICIES AND PROGRAMMES TOWARDS POVERTY ALLEVIATION
📋Growth oriented approach
📋GDP increase
📋Green Revolution
🚦Food for Work
🚦Rural Employment Generation Programme
🚦PM Rozgar Yojana
🚦Swarna Jayanti Shahari Rozgar Yojana etc
🆘please get updated with latest schemes related to poverty alleviation
Approach by Minimum basic amenities to the people
Critics:
No radical transformation
Unequal distribution of land and other assets
Resource allocation is not sufficient
Corruption prone,ill motivated ,inadequately trained.
CHAPTER 5
Human Capital formation in India
Investment in educaton convert human beings into human capital which enhances labour productivity
Sources of human capital formation :
Investmnt in education
On the job training
Health
Migration
Information
Education sector in India :
Expenditure by GoI on education is expressed in two ways :
1. As a % of total gvt expenditure =indicates imp of education in the govt schemes list (increased from 7.92 to 13.27 during 1952-2002)
2. As a %of GDP = how much of our income is committed to devpt of education in the country (increase from
0.64 to 4.02 )
Education for all - still a distance dream
Gender equity - better than before
Higher education - a few takers
CHAPTER 6
Rural development :
Problems in rural areas :
Inadequate infrastructure
Lack of alternate employmnt opportunties,increasing casualisation of employment .
Steps to improve agriculture market system :
🖊Regulation of markets to create transparent marketing conditions
🖊provisions of physical infrastructure facilities
🖊cooperative mktg
🖊assurance of MSP for agri pdts
🖊maintenance of buffer stock by FCI
Agriculture allied activities :
Animal husbandry
Horticulture
Fisheries
ICT
Benefits of Organic farming:
Substitute to costlier agri inputs
Generates more income
Nutritional food
More labour,more employmnt
Environmentally sustainable
Chapter 7
EMPLOYMENT :GROWTH, INFORMALISATION AND OTHER ISSUES
All persons engaged in economic activities contribute to GNP are workers
2/5th of the population are engaged in economic activities.
Men form major work force
Workers who own and operate an enterprise for livelihood =self employed .
Casual wage labourers are 33%of wrk force.
Regular salaried employees are 15 %of the work force.
Economic activities:
PRIMARY SECTOR
🎈Agriculture
🎈Mining and quarrying
SECONDARY SECTOR
🎈Manufacturing
🎈Electricity,gas and water supply
🎈Construction
TERTIARY SECTOR
🎈Trade
🎈Transport and storage
🎈Services
Primary: Rural > 75%
Urban <10%
Secondary: Rural 10%
Urban 30 %
Tertiary: Rural 13 %
Urban 60%
Sources of data on unemploymnt :
Reports on census of India
NSSO's Reports
Directorate General of employmnt and training data of registration with employmnt exchange
Types of employment :open unemployment
Disguised unemployment
Seasonal unemploymnt
Direct and indirect ways of employmnt generation by Govt .
Chapter 8:
INFRASTRUCTURE
Netwrk of physical activities and public services for economic devpt of the country.
PPP method ✅
Energy: non conventional sources support in meeting shortage of energy.
Power sector is facing no.of problems at generation,transmission and distribution levels
Health:
Human well being in rural as well as urban areas
❗️Better look into this chapter for easy understanding! ❗️
READ CHAPTER 9 AND 10 OF NCERT ECO XI ON YOUR OWN .
