## PSEB Solutions for Class 10 Social Science Economics Chapter 4 Industrial Development in India

SST Guide for Class 10 PSEB Industrial Development in India Textbook Questions and Answers

Question 1.
Give any two examples of basic industries.
Basic industries are those industries which provide necessary inputs to agriculture and industries. Iron and steel, chemical fertilizers are the examples of basic industries.

Question 2.
What is meant by Cottage industries?
Cottage industries are those industries which are completely or partially run by the members of a family either as a whole time business or as a part time business.

Question 3.
State one difficulty of small scale industry.
Problem of raw material and power.

Question 4.
What is meant by Small Scale Industry?
Smalll Scale Industry is designed on different basis but since 1977 all those factories were included in Small Scale industries which have an investment of ₹ 3 crore in fixed Capital.

Question 1.
Explain the reasons behind the need’for rapid.and balanced industrialisation in India.
The reasons behind the need for rapid and balanced industrialisation in India are the following :
1. Increase in National Income. Development of industries leads to an increase in national income. History has witnessed the fact that the development of industries has broken the chains of poverty by increasing the income of the countries.

2. Capital Formation. Due to development of industries, national income is increased and thereby savings are also increased and are necessary for capital formation. As a result, the economic development of the country is further increased.

3. Less Pressure of Population on Land. Employment opportunities are increased due to the development of industries. With this the pressure of population on land can be reduced.

4. Agricultural Development. Industrialization also helps in the development of agriculture. In fact, rapid industrialisation is must for the rapid development of agriculture.

5. Self-dependence. Less developed countries like India are dependent upon other countries for the fulfilment of most of their requirements. With the help of industrialization the country can be made self-reliant by producing these goods in the country. This helps in the saving of foreign currency. Self-reliance is also most important for the safety of the country.

6, Production of Socially Useful Goods. With rapid industrialisation Indian economy can be made more sound. Through industrialisation the production of essential goods like cloth, cycles, electric goods, paper, oil, etc. has become possible.

7. Help in Establishment of Balanced Economy. Industrialisation helped in making the economy a balanced one by reducing the dependence on agriculture.

Due to all these reasons there is great need for rapid industrialization in India.

Question 2.
What are the small scale and cottage industries in India? What are their problems?
The cottage industry is that industry which is carried by the members of a family under one roof as a part-time or full-time business. As these industries are generally carried in villages, these are also called as rural industries.

As per the new definition, all those firms which have the investment of ₹ 1 crore are included in small scale industries.

Problems of Small Scale and Cottage Industries
The various problems of small scale and cottage industries are as follows :

1. Problem of raw material and energy. The small scale and cottage industries face the problem of inadequate supply of raw-materials. Also, the available raw-material is poor in quality and highly priced. As a result, the cost of production increases. These industries also face the problem of shortage of electricity, power and coal. ,
2. Problem of Capital. In India the small scale and cottage industries are not able to receive adequate finance. These industries have to depend upon the local financers who charge a high rate of interest.
3. Old methods of production. Mostly old methods of production are adopted in these industries due to which these industries have low’ productivity and high per unit cost.
4. Problems regarding sale. The industries have to face many problems to sell their output at reasonable prices.
5. Competition with large industries. Another problem of these industries is the competition with large industries. In large industries the products are cheap, good and homogeneous. Therefore the products of small scale industries cannot compete with the products of large industries.

Question 3.
What is the importance of small scale and cottage industries in India?
The importance of small scale and cottage industries in India is clear by the following facts :
1. More Employment. In India the problem of increasing unemployment can only be solved by developing small and cottage industries. Population is increasing at a rapid rate in India but employment opportunities have not risen in accordance with the rise in population. Indian agricultural community gets employment for only 6-7 months in a year. Therefore, farmers can work in small and cottage industries in their spare time.

2. Rapid increase in production. Small and cottage industries take less time for their est ablishment and for the production of commodities. With the help of these industries the production of goods and their supply can be increased rapidly and thereby demands of growing population can be fulfilled.

3. Development of villages. In India most of the population lives in villages. With the development of domestic industries the economic condition of the villages will improve. The living standard of the villagers will go up and there will be all-round development of their lives.

4. Equal Distribution of Wealth. With the establishment of large scale industries in a country there are very rich people on one hand and very poor on the other. A large proportion of wealth gets concentrated in a few hands.
With the widening of the gap between the rich and the poor, the peace and comfort of the society gets vanished. Therefore, in order to remove this problem, household industries should be developed.

5. Decentralization. The large scale industries have the tendency of centralization and they are concentrated in a few big cities. Centralization leads to many social evils. Due to this regional economic balance gets deteriorated and this situation is also dangerous from the viewpoint of safety. Therefore decentralisation of industries is very essential. The establishment of small scale and cottage industries is the best tool of decentralisation of industries,

6. Suitable for under-developed country like India. In India capital is scarce and workers are in abundance. Such type of industries are labour-intensive. Therefore in an under-developed country like India these industries are even more important.

Besides these industries have increased the production, exports, used the local resources, reduced the pressure of population on agriculture, produced the artistic goods, produced goods according to tastes, complementary to large industries and helped in overall developmerit.

Question 4.
Distinguish between small scale and cottage industries in India and suggest remedies to solve their problems.
Difference between cottage and small scale industries.

1. Cottage industries are often situated in villages while small scale industries are mostly located in the cities.
2. Cottage industries can function with the help of family, members alone while in order to run small scale industries labourers are to be hired.
3. The use of energy and machines in cottage industries is almost negligible. But in small scale industries the use of power and machines is quite common. .
4. The cottage industries often satisfy the local needs while the small scale industries produce for urban and semi-urban areas. Therefore, the market for their produce is quite large.
5. Traditional goods like mats and shoes etc. are produced in cottage industries whereas modern goods like Radio, T.V., Electrical goods etc. are produced in small scale industries.

Suggestions for the solution of the problems of small scale and cottage industries:

• These industries should be provided with the raw materials in adequate quantity and at reasonable prices.
• These industries should get loans of adequate amounts at a reasonable interest rate.
• These industries should be provided with adequate exchange facilities so that they can get adequate price for their product.
• The methods of production used by these industries should be improved. By doing so their productivity will increase and cost per unit will be reduced.
• In order to save these industries from competition with large industries, the government should provide protection to the small and cottage industries by reserving many items only for these industries.

Besides these the problems of these industries can be solved by establishment of district industries centre. Govt, should purchase the manufactured goods from these industries. Small scale industries must be given different types of tax incentives and other financial incentives.

The major problems of these industries can be solved by all these methods and can be put to the path of development.

Question 5.
Discuss the importance of big industries.
The contribution of large scale industries in the process of industrialization in a country is obvious from the following facts :

1. Production of Capitalistic and Basic Goods. The process of industrialization in a country requires capital goods and the production of capital goods is only possible by the large scale industries.
2. Economic Infrastructure. Industrialization requires basic economic structure. The establishment and production of basic economic structure is possible only by the large scale industries.
3. Research and High Technique, The necessary funds for the research and for able researchers can be generated only by the large scale industries.
4. Increase in Productivity. Per unit productivity is very much increased with the
establishment of large scale industries. Due to the rise in productivity the prices fall and the demand rises. Small and cottage industries are also developed. Therefore, tendency towards industrialization is increased in a country.
5. Establishment of Ancillary Industries. The establishment of large scale industries further encourages the establishment of many supplementary industries. For example, with the establishment of Maruti Udyog, many supplementary industries like rubber industry, plastic industry, power industry, etc. have been encouraged. These industries produce raw material for the Maruti Udyog. In this way industrialization is encouraged.

Question 6.
What are the reasons responsible for slow progress of industrialisation in India?
In India, the rate of industrialization is slow because of the following reasons :

1. Scarcity of capital. The development of industries requires a great amount of capital. Most of the Indian population is poor. Therefore, the shortage of capital is the major cause of slow rate of industrialization in India.
2. Shortage of skilled workers. There is lack of skilled labourers in India. In fact to run the modern industries trained labour force is the foremost requirement.
3. Shortage of cheap Energy Resources. Cheap energy is required to run the industries. But in India there is lack of cheap energy resources.
4. Shortage of Efficient Management. The shortage of able managerial administrators is another cause of slow rate of industrialization in India.
5. Shortage of Raw Material. In India the raw material available for the industries is inadequate and of poor quality.
6. Poverty. India is a poor country. Due to poverty, savings are low’ and as a result investment is also low.
7. Shortage of Financial Organisations. There is lack of financial institutions in India. Therefore, industries do not get adequate finance at reasonable rate of interest. As a matter of fact, adequate finance is a pre-condition for the development of industries in any country.
8. Less Development of Transportation and Communication. Due to underdeveloped means of transportation and communication, the rate of industrialization has been low in the country. Due to all these factors the rate of growth of industrialization has been slow and low in India.

Question 7.
Write a short note on the role of government to encourage the development of industrialization in India.
The role of government for encouragement of industrial development in India has been clear from the following facts:

1. More Credit Facilities. To speed up the industrial development Government has set up many financial institutions in the country for providing loans to industries. For example : IFC in 1948, NIDC in 1954, ICICI in 1955, IDBI in 1964 etc.
2. Establishment of Basic Industries. The Government of India has given more emphasis on the establishment of basic industries in order to increase the pace of economic development.
3. Development of Means of Transport and Power Sector. The means of transport have been developed tremendously which are very important for the industrial development. Cheap electric power is very much essential for industrial development. So Government has set up multipurpose projects and thermal power houses.
4. Export Promotion and Import Substitution. For this purpose Government had set up ‘Inventions Promotion Board’ in 1960 and ‘Import Substitution Board’ in 1966.
5. Industrialisation of Backward Areas. For the development of backward areas main stress is being given by the Government on the industrialisation of these areas.
6. Removal of Sick Industrial Units. Board of Industrial Finance and Reconstruction and National Renewal Fund were set up by the government for the renewal of sick industrial units.
7. New Industrial Policy and Industrial Development. In July 1991, revolutionary changes were made in industrial policy. The concept of liberalisation and globalisation was adopted in this regard. In this way by taking up the above mentioned steps by the government, industrial development has been encouraged a lot in India.

PSEB 10th Class Social Science Guide Industrial Development in India Important Questions and Answers

Answer the following questions in one word or one line :

Question 1.
State any one important factor needed for rapid industrialization in India.
Modernisation.

Question 2.
Give any one example of basic Industries.
Chemical industry.

Question 3.
What is the investment limit in Small Scale Industry?
5 crores.

Question 4.
State one difficulty of Small Scale Industry.
Problem of finance.

Question 5.
State one advantage of Small Scale Industry.
Rapid increase,in production.

Question 6.
State one advantage of big industry.
Production of capitalistic and basic goods.

Question 7.
What is the main reason responsible for slow progress of Industrialization?
Scarcity of capital.

Question 8.
How much is the share of Industries production in GDP?

Question 9.
What is meant by Industrialization?
It means all round industrial development of a country.

Question 10.
Give one reason as to why Small Industries should be given special treatment.
Employment or equal distribution of income.

Question 11.
When was new industrial policy applied?
In 1991.

Question 12.
Name any two industrial policies.

1. Industrial policy of 1948.
2. Industrial policy of 1956.

Question 13.
In 1956 industrial policy resolution, how many industries were reserved for public sector?
17 Industries.

Question 14.
Give the name of any big industry in India.
Textile Industry.

Question 15.
Write any one problem of big industries in India.
Industrial unrest.

Question 16.
What is the main feature of industrializati0l?
Capital is widely used.

Question 17.
What is the feature of New industrial policy?
Contraction of public sector.

Question 18.
Explain the concept of increase in industrial productivity during the Five Year Plans.
There has been considerable growth of industrial production in the country under the Five Year Plans.

Question 19.
What do you mean by public enterprise, joint enterprise and private enterprise?
Public enterprises are those enterprises which are governed by the government. Joint enterprises are those which are controlled jointly by the government and private sector. Private enterprises are those enterprises which are fully controlled by the private enterprises.

Question 20.
What are the main causes of decline of cottage industries in India?

1. Inability of the cottage industries to compete with cheap and quality products of modern industries.
2. Inability to get cheap and adequate finance.

Question 21.
What has been done so far for the development of cottage industries?

1. Khadi and Gramodyog Commission has been established which takes care of the major requirements of these industries.
2. Economic aid is provided to encourage their sale.

Question 22.
Give any one argument in favour of small scale and cottage industries in India.
The small-scale and cottage industries are labour intensive. Therefore with the development of these industries there is high possibility of increasing employment opportunities.

Question 23.
What is meant by basic industries?
The basic industries are those industries which provide the required inputs’to the agricultural and manufacturing industries.

Question 24.
What is meant by capital-goods industry?
Those industries which provide the machinery and other equipments of production to the agricultural and manufacturing industries are called as capital-goods industries.

Question 25.
What is meant by intermediate goods industry?
Those industries which manufacture those goods which are further used for the production are known as intermediate goods industry.

Question 26.
What is meant by consumer goods industry?
The consumer goods industries are those industries which produce consumer goods.

Question 27.
Give the names of two big industries of India.

1. Iron and Steel Industry.
2. Textile Industry.

Question 28.
Write any two problems of big industries in India.

1. Industrial unrest
2. Under-utilization of production capacity.

Question 29.
Define cottage industries.
These industries are completely or partially run by the members of a family either as a whole time business or as a part-time business.

Question 30.
Define Small Scale Industries.
Small scale industries are those which have an investment of? 3 crores in fixed capital.

Question 31.
Define Large Scale Industries.
Large scale industries are those industries where the amount of fixed capital invested is big.

Question 32.
Define joint sector.
Joint sector undertakings are jointly owned by the Government and private sector.

Question 33.
What is industrial development?
Enhancement of the efficiency of existing industries, increase in production capacity and establishment of new industries is known as industrial development.

Question 34.
Define private sector.
Private sector undertakings are owned by private persons for profit motive.

Question 35.
What is meant by industrialisation?
By industrialisation is meant complete development of production units of a country.

Fill in the blanks :

Question 1.
__________ is the example of Basic Industries. (Iron Industry / Chemical Industry)
Chemical Industry

Question 2.
The new industry policy was established in_________year. (1956 / 1991)
1991

Question 3.
__________ sector undertakings are owned by private persons. (Private / Public)
Private

Question 4.
___________ sector undertakings are jointly owned by the govt, and private sector. (Joint / Public)
Joint

Question 5.
__________ Industries are those which have an investment of ₹ 5 crores in fixed capital. (Small scale / Cottage)
Small Scale

Question 6.
ICICI was established in___________ year. (1945 /1955)
1955.

Multiple Choice Questions :

Question 1.
_______ sector undertakings are those which are owned by the government for the welfare of the society.
(a) Public
(b) Private
(c) Joint
(d) None of these.
(a) Public

Question 2.
____________ sector undertakings are owned by private persons for-profit motive.
(a) Public
(b) Private
(c) Joint
(d) None of these.
(b) Private

Question 3.
___________ sector undertakings are jointly owned by the government and private sector.
(a) Public
(b) Private
(c) Joint
(d) None of these.
(c) Joint

Question 4.
What is the inverstment limit in Small Scale Industry?
(a) 2 Crore
(b) 5 Crore
(c) 4 Crore
(d) 10 Crore.
(b) 5 Crore

Question 5.
How much is the share of industrial production in GDP?
(a) 14.8%
(b) 27.9%
(c) 29.6%
(d) 26.1%.
(d) 26.1%.

Question 6.
When was New Industrial Policy established?
(a) 1956
(b) 1971
(c) 1991
(d) 2003.
(c) 1991

Question 7.
State the difficulties of Small Scale Industries.
(a) Problem of finance
(b) Old methods of production
(c) Problem of raw material
(d) All of these.
(d) All of these.

True / False :

Question 1.
New Industrial Policy was implemented in 1947.
False

Question 2.
The private sector is operated by Govt.
False

Question 3.
Joint sector is the co-existence of private and public sector:
True.

Question 4.
ICICI was implemented in 1955.
True.

Question 1.
What is the importance of industrialization for the economic growth?
Industrialization is important for the economic growth in following ways :

1. Industrialization makes balanced growth possible and paves the way for economic development.
2. Industrialization helps in increasing the gross national product at a faster rate in underdeveloped countries.
3. Industrialization also helps in increasing per capita output and per capita income in underdeveloped countries.
4. As a result of industrialization, more and more employment opportunities can be generated.
5. In the less developed countries, industrialization solves the problem of disguised unemployment and under employment in the agricultural sector and this increases agricultural productivity.
6. As a result of industrialization there is diversity in the economy.

Question 2.
What is the need for a balanced industrial structure in three different aspects in the case of Indian Economy?
Indian economy requires industrializaion but it needs balanced industrial structure in following three aspects:

1. For the rapid economic development, various industries should be chosen in such a way which can increase the employment opportunities significantly.
2. The industries thus chosen should be distributed properly among the various regions of a country. In other words, industrial policy should be such which is in the favour of the development of backward regions.
3. Those industries should be chosen which, instead of producing luxurious goods for a small proportion of population, produce goods of social priorities and significance.

Question 3.
What is meant by industrialization?
Industrialization means all round industrial development of a country. In narrow sense, industrialization implies establishment of manufacturing industries whereas in broader sense, industrialization signifies the process whereby the entire economy of a country is transformed.

The main features of industrialization are as follows :

• Industrialization is a synonym of economic development.
• Capital is intensively and widely used.
• Its aim is to make drastic changes in the structure of the economy.
• All the sectors are developed timely and rapidly.
• New markets are found and new sectors are explored.
• There is increase in the rate of capital formation.
• There is reduction in regional inequalities.

Question 4.
Mention the suggestions for the development of small-scale and eottage industries.

• Arrangement of raw material should be there.
• There should be adequate capital.
• Need for the improvement in methods of production.
• Arrangement of markets.
• Protection should be provided to these industries against the competition from large scale industries.
• Reduction in the burden of taxes.
• Workers should be united and organised.
• Tools and implements should be provided at cheaper rates.

Question 1.
State the importance of small-scale industries.
Significance of these industries is as under:

1. More Employment. Small-scale industries are more labour intensive. With less capital investment, more persons are employed in these industries.
2. Equity in the Distribution of Income. Due to small-scale industries, there is an equity in the distribution of income. There is no concentration of capital in a few hands. It is distributed among various hands. The profit of these industries is enjoyed by many people.
3. Decentralization. Small-scale industries are situated in villages and towns and there is no fear of ahy damage caused during wars or other hazards. They reduce the regional imbalances. As a result, the benefits of these industries are shared by the masses.
4. Less Pressure on Agriculture. Small-scale industries are of great significance in India as a large number of population is engaged in the agricultural activities. Every year their number increases by more than 30 lakhs. Therefore, it is necessary to reduce such ever-increasing pressure on land. This can happen only if we establish more small- scale industries in the rural areas.
5. Require Less Capital. A smaller capital is required in order to set up small scale industries in contrast to a large scale industry, which requires huge capital investment for the same purpose. In a country, like India where capital is scarce, small- scale industries can easily flourish.
6. Immediate Increase in Production. The gestation period of small-scale industry remains less. As a result, production immediately starts soon after the establishment of these industries. In India, nearly 40 percent of the industrial production is made in small-scale industries.

Question 2.
Explain New Industrial Policy of 1991.
The Government of India announced the New Industrial Policy on July 24, 1991 on the line of liberalisation measures taken during 1980s. This policy made a drastic change from the earlier policy initiatives. It deregulated the industrial economy to a large extent. The main objectives of this policy were to build on the gains already made, maintain a sustainable -growth in the productivity and gainful employment, correct the distortions that might have developed and attain global competitiveness.

The role of public sector was diluted in this policy. The number of public sector industries were reduced to 8 from 17 in 1991. In 1993, this number was further reduced to six and by 1999-2000, only 4 sectors were enlisted and reserved for the public sector viz.

1. Arms and ammunition
2. Atomic energy
3. Railway transport
4. The substances specified in the schedule to the notification of the Government of India in the Department of Atomic Energy.

Industrial Development in India PSEB 10th Class SST Notes

• Industrial Development. Enhancement of the efficiency of existing industries, increase in production capacity and establishment of new industries is known as industrial development.
• Need for Rapid Industrialisation. Rapid industrialization is needed for balanced economy, increase in employment, increase in national income, lowering the pressure of population on land, for national defence, self-dependence and for the production of socially useful goods.
• Present Industrial Structure in India. India’s present industrial structure includes : Public Sector, Private Sector and Joint Sector, Non-Factory Manufacturing units such as Cottage and Small industries, and Factory Manufacturing Units such as FERA companies and MRTP companies.
• Public Sector. Public Sector undertakings are those which are owned by the government in the welfare of the society.
• Private Sector. Private Sector undertakings are owned by private persons for profit motive.
• Joint Sector. Joint Sector undertakings are jointly owned by the government and private sector.
• Cottage Industries. These industries are completely or partially run by the members of a family either as a whole-time business or as a part-time business.
• Small Scale Industries. Small Scale industries are those which have an investment of? 3 crores in fixed capital.
• Large Scale Industries. Large scale industries are those industries where the amount of fixed capital invested is big.

Punjab State Board PSEB 10th Class Social Science Book Solutions Economics Chapter 4 Industrial Development in India Textbook Exercise Questions and Answers.

## PSEB Solutions for Class 10 Social Science Economics Chapter 3 Agricultural Development in India

SST Guide for Class 10 PSEB Agricultural Development in India Textbook Questions and Answers

Question 1.
“Agriculture is the main source of employment in India.” Write a short note on it.
A big part of our total labour force is engaged in agriculture. According to 2017-18, 46,2 percent of India’s working population is engaged in agriculture. In other countries like in England only 2% and in America only 2% of the working population is engaged in agriculture. It indicates their economic development.

Question 2.
What are the main lands reforms of India?
Following are the main land reforms of India:

• Abolition of zamindari system.
• Acts have been passed to improve land tenure system.
• Maximum ceiling on land holdings.
• Consolidation of holdings.
• Co-operative farming.
• Bhoodhan Movement.

Question 3.
What do you mean by Green Revolution?
The revolution that aims at raising the agricultural produce by adopting the latest and scientific methods of cultivation is called the green revolution. “Green Revolution refers to an extraordinary increase in agricultural production especially in wheat and rice which was made possible due to the adoption of new techniques of H.Y.V. seeds.”

Question 4.
How has Green Revolution helped in solving the Indian food problem?
After the year 1965-66, there has takeh place a tremendous rise in the production of foodgrains due to green revolution. In the year 1966-67, the year of green revolution, the production of foodgrains increased to 950 lakh tonnes. In 2017-18, the production of foodgrains was 2775 lakh tonnes. This resulted in increased per capita availability of food. It also helped in the reduction of imports of foodgrains. Thus green revolution helped a lot in solving the food problem in India.

Question 1.
Describe the importance of agriculture in Indian economy.
Anwer:
1. Contribution to National Income. Agriculture gives an importänt contribution to national income. During 1950-51, 59% of the total domestic production was produced in agriculture. Agriculture has been the basis of Indian economy. At present agriculture contributes about 15.3% to the national income.

2. Source of Employment. A big part of our total labour power is engaged in agriculture. According to 1991 census, 65.5% of the total working population was engaged in agriculture. In 2017-18, 46.2% people are directly engaged in this sector. In other countries, only 3% in England, 4% in America and 20% people in Russia are engaged in agricultural works. It indicates towards their economic developitient.

3. Helpful for Industrial Development. Agricultural development contributes to industrial development too. Agriculture provides raw material to many other fields. Low agricultural products have adverse effect on industrial development. If the production of cotton, sugarcane, jute etc. is low, the industries depending on them will not work properly.

4. Helpful in Internal and External Trade. Agricultural goods are used in internal and external trade. Cotton, jute, tea, foodgrains, tobacco, jaggery are the major parts of internal trade. Agricultural goods are exported too. Tobacco, tea, coffee, dry fruit etc. are exported. Half of the total foreign currency comes by exporting agriculture goods.

5. Basis of Means of Transport. Means of transport help in carrying agricultural products from one market to another, from market to the consumers or to the industries. Manufactured industrial goods like chemical fertilizers, machine-tools etc. can be carried to the agricultural field with the help of means of transport. Means of transport carry foodgrains from one state to the other. So the development of means of transport depends on agricultural development.

6. Income to the Government. Govt, earns income from different types of taxes such as land revenue, irrigation tax, market fee etc. As the agricultural sector develops, it helps in increasing the govt, income.

7. Source of Food. Food is the basis of life. Most of the people in India are vegetarian because of influence of the religious views. So they get their food from agriculture.

8. Helpful in Capital Formation. The increase in agricultural income leads to an increase in saving and if further helps in capital formation and capital is a necessary condition for economic development.

Question 2.
Describe the main problems of Indian Agriculture.
Indian agriculture is quite backward. It has so many problems. These problems can be divided into following three categories:

1. Human Problems
2. Institutional Problems
3. Technical Problems.

1. Human Problems. Heavy pressure of population on agriculture is one of the major
causes of backwardness of Indian agriculture. This pressure has resulted in the problem of subdivision, fragmentation and disguised unemployment.

Social atmosphere has been a great obstacle in the development of agriculture. Indian farmers are illiterate, fatalist, superstitious and conservative. On account of ignorance and casteism, Indian farmers are used to fight on petty issues.

2. Institutional Problems. Small size of holidings, land tenure system are the main institutional problems. Most,of the farms are very small in India. The average size of farms is 2-3 hectares. In Punjab the average holding is of 3.77 hectares.

3. Technical Problems. Inadequate irrigation facilities, old agricultural implements, traditional technique of cultivation, lack of improved seeds, lack of manure, defective agricultural marketing system, diseases of crops and attacks of pests, lack of credit facilities and weak cattle are the main technical problems in the developmental path of Indian agriculture.

Question 3.
Explain the contribution of government in the development of Indian agriculture.
The role of the govt, in agricultural development may be summarised as follows :

1. Land Reforms. Land reforms play an important role in the development of agriculture. After the independence, the following land reforms have been implemented :
(a) Abolition of Zamindari System
(b) Tenancy reforms
(c) Consolidation of land holdings.
(d) Ceiling on land holdings.
(e) Development of Co-operative farming.
2. Increase in irrigation facilities.
3. Improvements in the distribution system.
4. Special emphasis has been laid on agricultural research and development.
5. Improvement in agricultural marketing.
6. Increase in credit facilities.
7. Emphasis on mechanization of agriculture.
8. Development of high-yielding varieties.
9. New measures to conserve water and soil.

Moreover, special agricultural programmes are arranged over the radio and television for the benefit of the farmers.

Question 4.
Write the main elements of success of the Green Revolution.
There are various factors responsible for Green Revolution in India. The important among them are:
1. Wonder Seeds. Agricultural revolutipn is primarily due to the miracle of new wonder seeds which have raised agricultural yield per acre to incredible heights.

2. Chemical Fertilisers. The increasing use of chemical fertilizers has played a key role in the breakthrough. Fertilizer consumption increased from a mere 2.92 lakh tonnes in 1960-61 to 34.1 lakh tonnes in 2007-08 and more spectacularly to 255.76 lakh tonnes in 2017-18.

3. Multiple Cropping. Thanks to new seeds maturing early, it has become possible to obtain three and even four crops instead of two from the same plot in a year.

4. Modern Equipment and Machinery. Modern machinery and implements like tractors, harvesters, pumping sets, tube-wells, etc. are being increasingly used and are replacing the bullocks wherever possible.

5. Price Incentives. The Government has taken care to offer support prices to the
growers so that minimum reasonable returns for their labor and investment are assured to them. –

6. Extension of Irrigation. The irrigation system of the country is being speedily
extended to assure adequate water supply, especially in areas where new agricultural strategy is being applied. .

7. Processing, Storage and Marketing Facilities. These facilities are being improved and extended so that the increased agricultural production is put to profitable use.

PSEB 10th Class Social Science Guide Agricultural Development in India Important Questions and Answers

Answer the following questions in one word or one line :

Question 1.
What is Agriculture?
It is the art and science of production of crops.

Question 2.
State any one land reform of India.
Tenancy reforms.

Question 3.
State the full form of HYV.
High Yeilding Variety.

Question 4.
Which country is the largest producer of pulses?
India.

Question 5.
Name the input which is used in commercial farming.
Modern technology.

Question 6.
Suggest one measure to develop Indian Agriculture.
Increase in irrigation facilities.

Question 7.
Name any one .cause responsible for backwardness of Indian Agriculture.
Small size of land holding.

Question 8.
Name the persons responsible for bringing green revolution in India.
Dr. Norman Verlog and Dr. M.N. Swaminathgh.

Question 9.
Name any one factor responsible for green revolution in India.
Use of modern agricultural tools.

Question 10.
Name any one advantage of green revolution.
Increase in the production of foodgrains.

Question 11.
Name any one defect of green revolution.
Limited to a few crops only.

Question 12.
When was green revolution started?
1966-67.

Question 13.
Write down the main source of irrigation in India.
Underground water.

Question 14.
What is the present share of agriculture in national income of India?
24 %.

Question 15.
How much share of agriculture was in GDP in 2014-15?
17.4%.

Question 16.
What is Green revolution?
It is an agricultural strategy used to increase the yield of crops.

Question 17.
How much percentage of population of India depends upon agriculture for livelihood?

Question 18.
What is the place of agriculture in the national economy?
Agriculture forms the backbone of the Indian economy.

Question 19.
Highlight the contribution of agriculture in the industrial development.
Indian agriculture has been the source of supply of raw materials to our leading industries.

Question 20.
What is meant by excessive pressure of population On land?
By excessive pressure of population on land we mean that each year the new labour force unable to get employment elsewhere becomes dependent on agriculture.

Question 21.
Name any two causes responsible for the backwardness of Indian agriculture.

1. Shortage of irrigation facilities.
2. Shortage of good seeds and chemical fertilizers.

Question 22.
Suggest two measures to develop Indian agriculture.

1. Emphasis on scientific farming.
2. Land reforms.

Question 23.
Name any two land reforms in India.

1. Abolition of intermediaries.
2. Consolidation of landholdings.

Question 24.
Name any two factors responsible for green revolution in India.

1. Use of high-yielding variety of seeds.
2. Use of chemical fertilizers.

Question 25.
Name any two advantages of green revolution.

1. Increase in the production of foodgrains.
2. Improvement in the living standards of farmers.

Question 26.
Name any two defects of green revolution.

1. Increase in regional imbalances.
2. Benefits to big farmers only.

Question 27.
What is meant by land reforms?
Land reforms means deliberate change introduced into system of land and the farming structure.

Question 28.
What is meant by agriculture?
Agriculture is the art of production of crops and livestock on a farm.

Question 29.
What is green revolution?
Green revolution is an agricultural strategy used to increase the yield of crops,

Question 30.
Expand HYV seeds.
High yielding variety seeds.

Question 31.
Which country is the largest producer of pulses?
India.

Question 32.
Name the inputs in commercial farming.
Modem technology, HYV seeds, etc.

Question 33.
Why is the land productivity low in shifting agriculture?
Because the manure and fertilizers are not used.

Question 34.
On which two factors, primitive agriculture depends?
Monsoon and natural fertility of soil.

Question 35.
How much percentage of population of India depends upon agriculture for livelihood?

Question 36.
Name three activities which besides cultivation are included in agriculture.

1. Animal husbandry
2. Forestry
3. Pisciculture.

Question 37.
How many shares of agriculture was in GDP in 2011-2012?
13.9 percent.

Fill in the blanks :

Question 1.
_________ is the art and science of production of crops. (Agriculture / Mining)
Agriculture

Question 2.
Green Revolution was started in India in _________ year . (1948-49/ 1966-67)
1966-67

Question 3.
Agriculture contributed _________ percent of the national income in 1950-51. (48/59)
59

Question 4.
___________ is the largest producer of pulses. (Pakistan / India)
India

Question 5.
_________ is the main source of irrigation in India. (Underground water/Tubewell)
Underground water

Question 6.
_________ is responsible for green revolution in India. (J.L. Nehru/Dr. Norman Verlog)
Dr. Norman Verlog

Question 7.
At present agriculture contributes about _________% to the national income. (14.6 / 15.3)
15.3.

Multiple Choice Questions :

Question 1.
State any one land reform of India.
(a) Tenancy reforms
(b) Abolition of zamindari system
(c) Ceiling of landholding
(d) All of the above.
(d) All of the above.

Question 2.
How much share of agriculture Was in GPD in 2067-08?
(a) 14.6%
(b) 15.9%
(c) 17,1%
(d) None of these.
(a) 14.6%

Question 3.
Which country is the largest producer of pulses?
(a) India
(b) Pakistan
(c) Sri Lanka
(d) Nepal.
(a) India

Question 4.
When was green revolution started?
(a) 1966-67
(b) 1969-70
(c) 1985-86
(d) 1999-2000.
(a) 1966-67

Question 5.
What is the present share of agriculture in National Income of India?
(a) 12.6%
(b) 14.8%
(c) 14.2%
(d) 15.3%.
(d) 15.3%.

Question 6.
HYV stands for :
(a) Haryana Youth Variety
(b) Huge Yield Variety
(c) High Yielding Variety
(d) None of these.
(c) High Yielding Variety

True / False:

Question 1.
Green revolution in India came into existence in 1947.
False

Question 2.
Indian economy is agricultural economy.
True.

Question 3.
The father of Green Revolution in India is Dr. Norman Berlog.
True.

Question 4.
Consolidation of holdings is a type of land reform.
True.

Question 1.
“Agriculture is the backbone of Indian economy.” Discuss.
Agriculture forms the backbone of the Indian economy and despite concerted industrialisation in the last four decades, agriculture occupies a place of pride. Being the largest industry in the country, agriculture is the source of livelihood for over 46.2 per cent of population in the country. About 15.3 per cent of national income of the country is contributed by agriculture. In 2017-18, 46.2 per cent of India’s working population was engaged in agriculture. Moreover, Indian agriculture has been the source of supply of raw materials to our leading industries. It is blear, therefore, that agriculture is the backbone of the Indian economy and prosperity of agriculture can also largely stand for the prosperity of the Indian economy.

Question 2.
Name the different factors responsible for low agricultural productivity in India.
The different factors responsible for low agricultural productivity in India are :

• Heavy dependence on rainfall.
• Excessive pressure of population on land.
• Lack of improved seeds.
• Lack of manures and plant protection.
• Out-of-date implements.
• Lack of irrigation facilities.
• Lack of marketing facilities and price incentives.
• Poor implementation of land reforms.
• Neglect of agricultural research.
• Ignorance and illiteracy of farmers etc.

Question 3.
Write a short note on green revolution.
Agricultural production during five-year plans has increased tremendously. There are many causes for this rapid increase. India had experienced this increase in production in 1966-67. It is known as green revolution.

Factors responsible for Green Revolution. The different factors responsible for green revolution in India are :

• High yielding varieties of seeds.
• Chemical fertilizers.
• Irrigation.
• Multiple cropping.
• Agricultural machinery.
• Credit facilities.
• New techniques.
• Research.
• Plant protection.
• Marketing facilities.
• Institutional reforms.
• Price-incentives etc.

All these factors contributed in bringing green revolution in India.

Question 4.
Give suggestions to make green revolution successful.
Following suggestions can be offered to render Green Revolution successful:
1. Expansion of Green Revolution. Green Revolution should be expanded by bringing under its purview new crops like sugarcane, pulses, oilseeds etc.

2. Development of Means of Irrigation. Means of irrigation should be further developed in Punjab. Thein Dam Project and Ravi-Beas Project should be further expanded. Poor farmers should be given subsidies for installing pumping-sets or tubewells.

3. Help to small farmers. Small and marginal farmers should be brought within the scope of Green Revolution. They should be provided with cheap facilities to enable them to buy HYV seeds, fertilizers, machines etc. They should be enrolled in Cooperative Farming Societies.

4. Growth of Commercial Crops. Green Revolution should include in its ambit such commercial crops as oilseeds, sugarcane, cotton, pulses, potatoes etc. Special efforts should be made in this respect.

5. Integrated farm policy. To make green revolution a success integrated farm policy should be adopted. Farmers should get fertilizers, seeds, pesticides and machines at reasonable price and in reasonable quantity.

Question 5.
What is meant by irrigation? Why is it necessary?
Providing water to land by human made resources is called irrigation. Irrigation is necessary in order to increase the productivity of agriculture. Irrigational facilities have been extended. Several major and minor irrigation projects were launched in the country. In 1951 hardly 17% of total land was covered by irrigational facilities which has now extended up to 34% of land. Multiple crop system will be possible only through irrigational facilities.

Question 6.
Write down the main sources of irrigation in India.
The main sources of irrigation in India are :
1. Water above the land. It includes rain water, rivers, canals, ponds, lakes etc.

2. Underground water. This water is obtained by digging wells and tubewells. These sources of irrigation in India are divided in the following categories :

• Big Irrigation Projects. More than 10 thousand hectares of land is irrigated under these projects.
• Medium Irrigation Projects. These projects irrigate 2 thousand to 10 thousand hectares of land.
• Small Irrigation Projects. These projects irrigate less than 2 thousand hectares of land.

Question 7.
How has green revolution helped in solving the Indian food problem?
Following are the main reasons:

1. Increase in production. As a result of green revolution production of many crops has increased rapidly from 1966-67 onwards.
2. Reduction in imports of foodgrain. As a result of green revolution, imports of foodgrains have considerably fallen down in India.
3. Increase in Trade. Because of green revolution, agriculture production has increased. It has increased the market surplus of agro products, which in turn has expanded domestic and foreign trade. Now surplus agriculture products are even exported.

Question 1.
What are the problems of agriculture in India?
Even after seven decades of Independence, the agricultural sector is not completely developed. There are so many problems which are responsible for its backwardness. The problems are as follows:
1. Problem of Marketing. The marketing system of agricultural products is quite poor in India. As a result, farmers are unable to get fair prices of their crops. They sell their products in villages at lower prices and therefore, they remain poor. Urban markets are far away from the villages and transportation facilities are not developed there.

2. Problem of Credit Facilities. Credit is one of the main problems of Indian farmers. Farmers are unable to get easy loans from banks and co-operative societies. This forces them to get loans from local moneylenders at exorbitant rate of interest. Thus they are caught in debt trap.

3. Problem of Rural Indebtedness. Indebtedness is also the main problem of Indian agriculture. Indian farmers always remain in debt. They take loans for cultivation and even for the sale of their produce.
In the words of M.L. Darling, “Indian peasant is born in debt, lives in debt and dies in debt.”

4. Problem of Weak Cattle. Due to the lack of modernisation in the agricultural sector, the problem of weak cattle is responsible for the low productivity. Cattle used in Indian agriculture are not given required fodder and their death rates are also high due to overwork. As a result, farmers have to buy more cattle, which increases their expenditure along with the cost of production.

5. Problem of Illiteracy. Indian famers suffer from illiteracy on a large-scale. They have no knowledge to increase production and yield.

6. Problem of Disguised Unemployment. A larger number of Indian population is engaged in agriculture because the industrial and service sectors do not absorb them. The productivity of disguised unemployed remains low. Farmers are unable to gain surplus yield from their fields due to disguised unemployment.

Question 2.
Explain the need and type of land reforms implemented in the agriculture sector.
Land Reforms. Equity in agriculture is called land reforms. Land reforms refer to the change in the ownership of land holdings.
There were three types of land tenure systems prevailing in the country at the time of Independence:

1. Zamindari System
2. Mahalwari System
3. Ryotwari System.

The basic difference between these three was regarding the mode of payment of land revenue. The land revenue was collected from the farmers by the zamindars in Zamindari System. In the Mahalwari System, the land revenue was collected by the village head on behalf of the whole village. While in Ryotwari System, the land revenue was directly paid to the State or Government by the farmers. In all these systems, the land was cultivated by tenants. The Zamindars and Jagirdars thus collected rent from the actual tillers of the soil without contributing to making improvements on the farm. As a result of it, the productivity of Indian agriculture was low which forced India to import food from the United States.

In 1948, a year after Independence, steps were taken to abolish Zamindari (Jagirdari), Mahalwari and Ryotwari System and to make the tenants or tillers the owners of land.

Agricultural Development in India PSEB 10th Class SST Notes

• Agriculture. It is the art or science of production of crops and livestock on a farm.
• Importance of Agriculture in India. Agriculture is the backbone of Indian economy. It contributes much in national income, it is the Source of food supply to the masses. Its importance is also in employment, industry, source of livelihood, foreign trade, transport, government income and in capital formation.
• Main problems of Indian Agriculture. The main problems of Indian agriculture are :
(i) Human problems which constitute pressure of population on land and social atmosphere.
(ii) Institutional problems, such as small size of holdings, land tenure system.
(iii) Technical problems such as inadequate irrigation facilities, old agricultural implements, traditional techniques of production, lack of improved seeds, lack of manure, defective agriculture marketing system, diseases of crops and attacks of pests, lack of credit facilities and weak cattle

Punjab State Board PSEB 10th Class Social Science Book Solutions Economics Chapter 3 Agricultural Development in India Textbook Exercise Questions and Answers.

## PSEB Solutions for Class 10 Social Science Economics Chapter 2 Infrastructure of the Indian Economy

SST Guide for Class 10 PSEB Infrastructure of the Indian Economy Textbook Questions and Answers

Question 1.
What is meant by infrastructure?
Infrastructure of the economy signifies that part of the capital stock of the economy which is necessary fro in the viewpoint of providing various types of services.

Question 2.
What are the main components of economic infrastructure in India?
The main components of economic infrastructure in India are :

1. Transport and communication
2. Electric power
3. Irrigation
4. Banking and financial institutions.

Question 3.
Name the various modes of transport in India.
The following are the important means of transport in India :

• Rail transport
• Water transport
• Air transport.

Question 4.
What do you main by irrigation?
Irrigation means providing the necessary water to the cultivable land through man-made or artificial means. Due to uneven, irregular and uncertain rainfall, irrigation assumes added importance.

Question 5.
What are the major sources of irrigation in India?
Tubewells, river, tank etc. are the major sources of irrigation in India.

Question 6.
Write a short note on Reserves Bank of India.
The reserve Bank of India (RBI) is the Central Bank of India, which was established on April 1, 1935 monetary institution which supervise, regulates controls and develops the monetary and financial system of the country. The Reserve Bank of India is fully owned and operated by the Government of India.

Question 7.
Write a note on the Commercial Bank of India.
A Commercial Bank is a financial institution which performs the functions of accepting deposits from the general public and giving loans for investment with the aim of earning profit. Commercial Banks plays a singificant role in fulfilling the short term and medium term finacial requirements of Industries. Commercial Back can be described as a financial institution, that offers basic investment products like a savings account, current account, etc to the individuals and corporates.

Question 8.
What are the specific banking institutions of India?
The specific banking institutions of India are :

• Industrial Development Bank of India
• Industrial Finance Corporation of India
• Land Development Banks
• Co-operative Banks
• Regional Rural Banks
• National Bank For Agriculture and Rural Development (NABARD)
• Export-Import Bank (Exim Bank),

Question 9.
What do you mean by consumer protection? What are its main methods?
Consumers’ protection means to prevent the exploitation of the consumers from the unfair trade practices of the producers of consumer goods.

Consumer protection methods are:

• MRTP Act was passed in 1969.
• Consumer Protection Act 1986 was passed.
• Consumers’ Disputes Redressal forums have been established.

Question 10.
Write a short note on Public Distribution System.
Through Public Distribution System, Government distributes the necessities of life; like foodgrains, sugar, kerosene, coarse cloth etc. at concessional prices through Fair Price Shops at fixed quantities to the general public especially to the poor sections of the society.

Question 1.
What do you mean by infrastructure? Why- is it required?
Infrastructure is that part of the capital stock of the economy which is necessary from the viewpoint of providing various kinds of services. In other words infrastructure means those activities, facilities and services which are helpful in the operation and development of other sectors for example, Roads, Rails and Buses offering transport services. Canals and dams facilitating irrigation, etc.

It is required for the development of the country. Infrastructure like electricity, transport and communication are important for the development of every country.

Lack of infrastructure facilities will create hurdles in the development of industries and agriculture sectors. As a result of it their rate of growth will come down. Therefore, in every underdeveloped country there is a need of availability of infrastructure in a sufficient quantity which will be helpful in acceleration of their development.

Infrastructure is required to increase production and decrease cost.

Question 2.
What are the main kinds of infrastructure in India? Explain.
That part of the capital stock of the economy which provides direct services to the system of production and distribution is called the economic infrastructure of the economy.

The main constituents of economic infrastructure in India are as follows :

• Transport and Communication
• Electric Power
• Irrigation
• Banking and other Financial Institutions.

Economic infrastructure like transport, communication, power, irrigation, banking etc. have played a very important role in the economic development of our country.

Question 3.
What are main monetary institutions of India?
The main monetary institutions in India are:

• Moneylenders
• Reserve Bank of India
• Commercial Banks
• Specialised Banking Institutions :
(a) Industrial Development Bank of India
(b) Regional Rural Banks
(c) Export-Import Bank of India (Exim Bank)
(d) Land Development Banks
(e) Co-operative Banks
(f) National Bank for Agriculture and Rural Development (NABARD)
(g) Industrial Finance Corporation of India etc.
• Non-Banking Financial Institutions:
(a) Unit Trust of India
(b) Life Insurance Corporation of India
• Stock Exchanges.

Question 4.
What do you mean by consumer exploitation? What are the main methods of consumer protection?
Consumers exploitation means the exploitation of the consumers from unfair trade practices of the producers of consumer goods. Trading classes are putting their all out efforts to exploit the consumers as they are the most confused and unorganised persons in modern Indian Economy. Adulteration, substandard packed goods, use of non-standard weights or misleading and fabricated advertisements are such activities which exploit the consumers to a large extent.

Methods of Consumers’ Protection. In order to protect consumers’ interest, the govt, has enacted the following legislations:

• Essential Commodities Act, 1955.
• The Standards of Weights and Measures Act, 1976.
• The Prevention of Food Adulteration Act, 1976. ‘
• The Monopolies and Restrictive Trade Practices Act, 1969.
• The Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980.
• Consumers’ Protection Act, 1986.

In order to redress the grievances of the consumers at very low expenses and for their early disposal ‘Consumer Disputes Redressal Forums’ have been established at the district, state and national levels. Along with this, consumer protection councils have also been established to protect the interest of the consumers. They can lodge a complaint. Besides this consumer education and consumer organisations also play a vital role to protect the interests of the consumers.

Question 5.
What do you mean by Public Distribution System? Explain the present position of Public Distribution System in India.
Public distribution system signifies a system through which the govt, of a country makes provision to supply essential items like foodgrains, sugar, kerosene, etc. to its people, especially the poor people, in fixed quantity at controlled prices through fair price shops.

There are three main constituents of public distribution system in India :
1. Public Procurement System. In 1988, over 14 million tonnes of foodgrains were procured by the govt, at procurement prices. In 2006, this figure rose to 26.4 million tonnes.

2. Buffer Stock. Black-marketing in the foodgrains can be checked if the govt, has buffer stock of foodgrains and adequate storage facilities. In India, we have many warehouses in the public sector. Important among them are the warehouses of Food Corporation of India. The Corporation has got its warehouses throughout India. It stores agricultural goods and releases stock under public distribution system.

3. Fair-Price Shops. The system of public distribution in India operates fairly successfully through a network of fair-price shops selling foodgrains, sugar, kerosene and soft coke. At present, we are having around 4.37 lakh fair price shops. In 1988, 23 million tonnes of foodgrains and in 2006,26.8 million tonnes of foodgrains were distributed through these fair-price shops.

PSEB 10th Class Social Science Guide Infrastructure of the Indian Economy Important Questions and Answers

Answer the following questions in one word or one line :

Question 1.
Define Consumer.
When we buy and use any commodity we become consumer.

Question 2.
State any one component of economic infrastructure.
Irrigation.

Question 3.
Name any one mode of Transport in India.
Railway.

Question 4.
Which are the two main modes of Irrigation in India?
Rain and Rivers.

Question 5.
When was R.B.I. established?
1935.

Question 6.
When was Consumer Protection Act established?
1986.

Question 7.
State any one function of R.B.I.
It issues notes.

Question 8.
State the name of the apex bank of India.
R.B.I.

Question 9.
State any one specific banking institution in India.
NABARD.

Question 10.
State the full form of P.D.S.
Public Distribution System.

Question 11.
Name one infrastrucuture of the economy.
Transport.

Question 12.
What is stock exchange?
Where securities are bought and sold.

Question 13.
Name the non-banking financial institution in India.
L.I.C.

Question 14.
Name any one multipurpose project in India.
The Bhakra-Nangal project.

Question 15.
Name one public sector shipping company in India.
Mugal lines.

Question 16.
Name the important mean of communication.
Telephone.

Question 17.
Name the source of electric power.
Thermal Power.

Question 18.
What is a commercial bank?
It generally gives short term loans.

Question 19.
What is the objective of multipurpose river valley projects?
Production of hydro electricity.

Question 20.
State any one feature of Consumers’ Protection Act, 1986.
To seek redressal against unfair trade practices.

Question 21.
State any One cause for the need of PDS.

Question 22.
What is Irrigation?
It means providing the necessary water to the cultivable land.

Question 23.
Name some infrastructures of the economy.
Transport and communication, power, irrigation, banking and financial institutiolis, Education, Health and family welfare, housing and other civic amenities.

Question 24.
What is meant by economic infrastructure?
That part of the capital stock of the economy which is necessary for providing-the different types of direct services to the system of production and distribution is called the economic infrastructure of the economy.

Question 25.
What is meant by transport system of a given country?
All those means which help in the transportation of goods and people from one place to another constitute the transport system of a country.

Question 26.
Name the important means of communication.
Postal services, telegram, telephone, radio, television, newspapers, etc.

Question 27.
Name two public sector shipping companies in India.

1. Shipping Corporation of India and
2. Mugal Line.

Question 28.
Name any two multipurpose projects in India.

1. The Bhakra-Nangal Project and
2. The Damodar Valley Project.

Question 29.
Name any one specialised banking institution in India.
Industrial Development Bank of India.

Question 30.
Name the important non-banking financial institutions in India.

1. Unit Trust of India and
2. Life Insurance Corporation of India.

Question 31.
What is meant by Stock Exchange?
A market in which securities are bought and sold is known as stock exchange or share market.

Question 32.
Write any one main function of R.B.I.
To issue notes.

Question 33.
What is meant by Consumer Education?
By consumer education we mean the education to be imparted to the consumers which may enable them to safeguard their interest and help them to become rational consumers.

Question 34.
Name the important means of transport.
Railways, Road, Water and Air transport are the main means of transport.

Question 35.
Name the sources of electric power.
Thermal power-, Hydel power and Nuclear power are the sources of power in India.

Question 36.
What are the sources of irrigation?
Rainfall, Wells, Tubewells, Ponds are the main sources of irrigation.

Question 37.
What is the name of Central Bank of India?
Reserve Bank of India.

Question 38.
When was R.B.I established?
1935.

Question 39.
What are Commercial Banks?
Commercial Banks are those banks which generally give short term loan.

Question 40.
Name two Non-Banking institutions.
L.I.C., U.T.I.

Question 41.
When was Consumer Protection Act launched?
1986.

Question 42.
What do you mean by Public Distribution System?
Supply of essential commodities to the people through government agencies is known as Public Distribution System.

Question 43.
Which is one mode of Electric power in India?
Thermal Power.

Question 44.
What are the major sources of Power in India?
The major sources of Power in India are:

1. Thermal Power
2. Nuclear Power
3. Hydel Power.

Question 45.
How many commercial banks are nationalised?
In 1969, fourteen banks were nationalised, 6 more banks were nationalized inl980 which accounted for 20. But now its number is 19.

Question 46.
Write the name of India’s Central Bank.
Reserve Bank of India.

II. Fill in the blanks :

Question 1.
RBI was established in ___________ (1945 / 1935)
1935

Question 2.
When we use any commodity we become__________(Producer / Consumer)
Consumer

Question 3.
Consumer Protection Act was estabhshed in_________year. (1985 / 1986)
1986

Question 4.
_______ is the Apex Bank of India. (SBI / RBI)
RBI

Question 5.
________ gives short terms loans. (Central bank / Commercial bank)
Commercial bank

Question 6.
NABARD was estabhshed in_______year. (1982 / 1999)
1982

Question 7.
Irrigation is a component of __________ infrastructure. (Social / Economic)
economic

Question 8.
_______ issues notes in a country. (RBI / SBI)
RBI.

III. Multiple Choice Questions :

Question 1.
State any one function of RBI.
(a) Note issue
(b) Bank of the Govt.
(c) Banker’s Bank
(d) All of the above.
(d) All of the above.

Question 2.
When was RBI established?
(a) 1925
(b) 1935
(c) 1945
(d), 1955.
(b) 1935

Question 3.
When was Consumer Protection Act established?
(a) 1980
(b) 1982
(c) 1986
(d) 1988.
(c) 1986

Question 4.
When was NABARD established?
(a) 1982
(b) 1986
(c) 1988
(d) 1989.
(a) 1982

Question 5.
Which is the Central Bank of India?
(a) SBI
(b) PNB
(c) RBI
(d) All of the above.
(c) RBI

Question 6.
What are the main components of economic infrastructure in India?
(a) Banking
(b) Electric power
(c) Irrigation
(d) All of the above.
(d) All of the above.

Question 7.
What are the specific Banking Institutions in India?
(a) Regional Rural Bank
(b) NABARD
(c) Exim Bank
(d) All of the above.
(d) All of the above.

Question 8.
PDS stands for :
(a) Public Demand Supply
(b) Public Distribution System
(c) Private Demand and supply
(d) None of these.
(b) Public Distribution System

True / False :

Question 1.
RBI was estabhshed in 1935.
True

Question 2.
SBI is the apex bank of India.
False

Question 3.
There are three sources of electricity in India.
True

Question 4.
NABARD was estabhshed in 1992.
False

Question 5.
COPRA was implemented in 1986.
True

Question 1.
What is the need for infrastructure?
The prosperity of a country depends directly upon the development of agriculture and industry. Agricultural production, however requires power, credit transport facilities etc. Industrial production requires not only machinery and equipment but also skilled man-power, management, energy .banking facilities, marketing faclities, transport services, communication facilities etc.All these facilities and services constitute collectively the infrastructure of the economy and the development and expansion of these facilities are an essential pre-condition for increasing agricultural and industrial production in a country.

Question 2.
What is the importance of means of transport in a given economy?
Transportation is the most important constituent of economic infrastructure. It helps trade,commerce and industry. Transportation connects one place with the other. It reduces regional imbalances. It carries passengers and goods. It adds directly to our economic structure i.e. the process of production and distribution. It has been rightly said that “If agriculture and industry are regarded as the body and bones of the economy, transport constitutes its nerves.”

Question 3.
Write a short note on Railways as a means of transport in India.
In India railway services were started on April 16,1853 when the first train was run between Bombay (Muihbai) and Thane. Now Indian railways are first in Asia and fourth in the world. Indian railways have a route length of nearly 62,759 kilometres. Indian railways rim 13,000 trains everyday connecting 7056 railway stations.

Question 4.
Write a short note on air transport in India.
Air transport is the fastest and costliest means of transportation. There are two public sector companies for air transportation in India-Indian Air Lines Corporation and Air India International. Some private sector companies have also been established sincel992. There are four international aerodromes in India at Delhi, Mumbai, Chennai and Kolkata. In recent years, important policy decisions have been taken to speed up the development of civil aviation in the country.

Question 5.
Write a short note on Communication system in India.
The Communication system comprises posts and telegraphs, telecommunication system, broadcasting, television and information services. Since 1950-51, the postal network has been expanded throughout the country, and in recent years, with special emphasis on the rural, hilly and tribal areas. As far as the telecommunications are concerned, India has a network comprising over 18,000 exchanges with a capacity of 84 lakh lines and 72 lakh working telephones. The network has been expanding at an annual rate of 15 to 17 per cent. The outlay for the telecommunication in the Ninth Plan was over? 30,000 crore.

Question 6.
Highlight the main sources of power in India.
There are three main sources of power in India:

• Thermal power stations-using coal or oil.
• Hydro-electric power stations-using potential power of fast-flowing rivers or high dams.
• Nuclear power or atomic power-India is one of the few countries which have developed their nuclear capacities. At present, we are having five atomic power stations.

In our economy, we traditionally had thermal power which still accounts for the largest part of our electricity generation. With the emergence of the great multi-purpose river- valley projects, we have also developed hydroelectric power on a big scale. Finally, we also went in for nuclear power.

The priority for power distribution in our economy is shifting to the rural areas.

Question 7.
What are the objectives of multi-purpose river-valley projects?
Multi-purpose projects are so named as they aim at serving several purposes at one and the same time. The important objectives of these multi-purpose river-valley projects are :

• Production of hydroelectricity.
• To help in storing water, which can be used for irrigation at the time of need.
• To prevent erosion of soil and conserve land.
• To promote fish rearing and navigation.
• To help in checking floods.
• To promote tourism in the country, etc.

Question 8.
Highlight the various features of the Consumers’ Protection Act, 1986.
Consumers’ Protection Act, 1986 is the latest act which safeguards the interests of the consumers in the following ways :

1. Protects against the marketing of commodities hazardous to life and property.
2. Informs about the quality, purity, potency, weight and price of the commodity.
3. Ensures the availability of goods at a competitive price.
4. Seeks redressal against unfair trade practices.
5. Provides setting up of:
(a) Consumers’ forum at district level.
(b) State forum and commission at state level.
(c) National Consumers’ Grievances Redressal Cell at national level.

Question 9.
Write a short note on need for public distribution system in India.
The forces of demand and supply do not always achieve the socially desirable objectives, so it becomes necessary that the Govt, should interfere in the production and distribution of commodities.

The necessity of public distribution system in India is because of the following reasons:

• Limited resources and means of production.
• Inadequate storage and marketing facilities.
• Corrupt practices of producers and traders i.e. hoarding and black-marketing.
• Inequality of income and poverty leading to starvation.

Question 10.
Briefly describe the economic infrastructure of transport in India.
Transport. After the railways, the principal mode of transport in our economy is the roadways. In fact, over the last two decades, the heavy trucks on our highways linking the main industrial centres have become quite a match for the railways in many spheres. Passenger bus services also compete successfully with the railways in many regions. All this has come about mainly because of the improved network of well-made roads that make up a new and important part of our economic infrastructure today.

Besides railways and roads, our economy is served by coastal shipping, inland waterways and, of course, domestic airlines as the other modes of inland transportation. International shipping is handled by the major ports of the country like Mumbai, Kolkata, Haldia, Chennai, Mangalore, Marmugao and Vishakhapatnam and many minor ports. The Air India and other international airlines operate through the airports maintained by the International Airports Authority of India.

Question 11.
Describe the economic infrastructure of Power in India.
The rate at which electric power is consumed by an economy is often an index of its state of industrialisation. The power produced and consumed per head of population in our country is very low indeed, but it is rising fast. This is an indication that modern industries are growing in the economy and the country is developing.

In our economy, we traditionally had thermal power which still accounts for the largest part of our electricity generation. With the emergence of the great multi-purpose river- valley projects we also developed hydro-electric power on a big scale. Finally, we also went in for nuclear power.

The priority for power distribution in our economy is shifting to the rural areas.

Question 12.
Describe the economic infrastructure of Irrigation in India.
Irrigation provides an important input in the production of most crops, particularly in areas where rains are scarce or highly irregular. For centuries our economy has depended on fairly extensive systems of man-made irrigation besides natural irrigation for agriculture. We have dug wells, tanks and canals not only for the supply of our drinking water but also for watering our cultivated land from time immemorial. But whether natural or man-made, irrigation in most parts of our country has always been partially rain-fed. Rains, however, in India are mostly seasonal and dependent on the monsoons and the monsoons, till this day, are one of the world’s most difficult to understand weather phenomena. Thus, inspite of the introduction of modem technology and management techniques, Indian agriculture still is a gamble, though the magnitude of the uncertainty has diminished.

Question 1.
Explain the role of transport in economic development.
Role of Transport in Economic Development:
Transport, as said, is called as the lifeline of the country. It has a vast impact on the economic development of the country. The importance of transport with reference to economy is as follows :

1. Means of transport enable the maximum use of the resources because the movement of the sources is possible to the various parts of the country.
2. With the help of transport we can grow new markets and specialization as resources can be moved from different areas of the world.
3. Labour and capital become mobile. As a result the regional imbalances are removed.
4. Due to transport means the agricultural sector has been transferred.
5. Due to means of transport industries have been developed as they require cheap, best and faster means of transport for their growth.
6. Due to easy means of transport there has been a manifold increase in the encouragement to the tourism department.
7. Due to means of transport the gaps between the places have been narrowed and it has improved the social relationships.
8. Means of transport are of strategic importance as they provide internal security as well as external security.
9. Means of transport help in checking the fluctuation in prices thereby maintaining the economic stability.
Hence, we can conclude that thinking of economic activities in the absence of means of transport will be such as flowers without fragrance.

Question 2.
Explain the main functions of central bank.
The main functions of central bank are as follows :

1. Bank of note issue. In the modern time, issuing of notes is the main function of central bank of every country in the world. Central bank has the monopoly in this regard. In India, RBI issues notes as a central bank of the country except one rupee note which is issued by the ministry of finance, government of India.
2. Banker, Agent and Advisor to the Government. The central bank acts as a banker, agent and advisor to the government.
3. Bankers’ Bank. Central bank acts as a banker of all other banks in the country. Central bank keeps relation with the banks in the same way as commercial banks keep relation with their customers.
4. Lender to the Last Resort. In the time of crisis, central bank acts as a lender to the last resort. It provides loans to the commercial banks when they are in deep trouble.
5. Custodian of the Foreign Exchange Reserves. The central bank acts as a custodian of the foreign exchange reserves of the country.
6. Custodian of Cash Reserves of the commercial banks. The central bank also keeps the cash reserves of the commercial banks.
7. Bank of central clearance, settlement and transfer. Central bank is an institution where all the transactions of commercial banks are cleared, settled and transferred very easily.
8. Control of credit. The central bank has got so many instruments to control credit like bank rate, open market operation, change in cash reserve ratio, credit rationing, moral persuasion and direct actions etc.

Infrastructure of the Indian Economy PSEB 10th Class SST Notes

• Infrastructure. Infrastructure is that part of the capital stock of the economy which is necessary from the viewpoint of providing various kinds of services.
• Economic Infrastructure. It refers to that capital stock that offers various types of productive services directly to the producers.
• Means of Transport. Railways, Road transport, Water transport and Air transport are the main means of transport.
• Means of Communication. Post, telegraph, telephone, radio, television, fax, cinema, newspaper and magazines etc. are the important means of communication in India.
• Sources of Electric Power. Thermal power, Hydal power and Nuclear power are the sources of power in India.
• Sources of Irrigation. Rainfall, wells, tubewells, ponds, canals are the main sources of irrigation in India.
• Reserve Bank of India. This is the Apex of Central Bank of India which was established in 1935.
• Commercial Banks. Commercial Banks are those banks which generally give short term loan.
• Non-Banking Institutions. These are those institutions which raise money from the public and other sources and offer loans of that money. U.T.I and L.I.C. are two examples of these institutions in India.
• Consumer. When we use any commodity we become consumer.
• Consumer Exploitation. When a consumer is harassed by the business community due to lack of information about products, it is known as consumer exploitation.
• Consumer Protection, It means the protection of the buyers of consumer goods from exploitation of the unfair trade practices of the producers.
• Activities of Consume!* Exploitation. Adulteration, sub-standard packed goods, use of non-standard weights or misleading and fabricated advertisements and unfair Monopolistic and Restricted Trade Practices are such activities which exploit the consumers to a large extent.
• Consumer Protection Act, 1986. This Act is one of the most important legal measures in protecting the rights of the consumers.
• Public Distribution System. Supply of essential commodities to the people through government agencies is known as Public Distribution System.

Punjab State Board PSEB 10th Class Social Science Book Solutions Economics Chapter 2 Infrastructure of the Indian Economy Textbook Exercise Questions and Answers.

## PSEB Solutions for Class 10 Social Science Economics Chapter 1 Basic Concepts

SST Guide for Class 10 PSEB Basic Concepts Textbook Questions and Answers

Question 1.
Define national income.
According to Dernburg, “National income may be defined as the factor income in the form of rent, wages, interest and profit of the normal residents of a country in one year. It is composed of domestic factor income and net factor income from abroad.”

Question 2.
Define per capita income.
Per capita income is the average income of the people of a country in a definite period of time. In other words,
Per Capita Income = $$\frac{\text { National Income }}{\text { Population }}$$

Question 3.
What is meant by consumption?
Use of goods and services produced in order to satisfy human wants is called as consumption. In other words, consumption means expenditure made on consumption during one year in an economy.

Question 4.
What is meant by average propensity to consume?
Average propensity to consume is the ratio of consumption to income. In other words,
Average Propensity to Consume = $$\frac{\text { Consumption }}{\text { Income }}$$

Question 5.
Define Investment.
An addition to capital is called investment. During a year that part of income which is not spent on consumption but is saved for the use of capital formation is called investment.

Question 6.
What is meant by induced investment?
Induced investment is that investment which depends upon the level of income and profit. Most of the private investment is induced investment.

Question 7.
What is meant by autonomous investment?
That investment which is independent of the changes in the level of income, output and profits, is called as autonomous investment. Most of public investment or government investment is autonomous investment.

Question 8.
What is capital formation?
Net investment in fixed assets, i.e., additions to the stock of physical and human capital, is known as capital formation.

Question 9.
What is meant by disguised unemployment?
A person is said to be disguisedly unemployed if his contribution in the total product is almost zero or negligible. Thie type of unemployment is normally found in most of the agricultural dominated under-developed countries of the world.

Question 10.
Define full employment.
Full employment signifies a situation in which all those who are willing to work at the current wage rate get work.

Question 11.
What is meant by inflation?
Inflation signifies increase in the level of prices and consequent deterioration in the value of money over a period of time. In the words of Crowther, “Inflation is a state in which the value of money is falling, i.e., prices are rising.”

Question 12.
What is meant by supply of money?
Generally money supply means currency and deposits of banks available with the people of the country. Broadly speaking, there are two constituents of money supply:

1. Currency and
2. Bank deposits.

Question 13.
Write a note on the government budget.
Government Budget is an annual statement of estimated revenue and expenditure of the government. Indian Government generally present its budget in Lok Sabha on Feb 28th of every year.

The government budget can be of three types:

1. Balanced Budget
2. Surplus Budget &
3. Deficit Budget.

Question 14.
What is meant by deficit financing?
Deficit financing is the method by which government meets the budgetary deficits by taking loans from the Central Bank. Central Bank meets this deficit by printing new currency notes. In the same way when aggregate expenditure exceeds aggregate revenue then the government has to face deficit.

Question 15.
How many people are considered to be below poverty line in India?
The Planning Commission has defined the poverty line on the basis of the ‘ recommended nutritional intake of 2,400 calories per person per day for rural areas and 2,100 calories for urban areas. On this basis, in rupee terms, the poverty line works out at? 972 per head per month for rural areas and at? 1407 per head per month for urban areas, both at the 2013-14 prices. In the year 2014-15 in India 29.8 percent people were below poverty line.

Question 16.
How growth rate is determined?
Growth rate is that percentage rate from which it is known that in comparison to one year how much percentage change has taken place in national income or per capita income in any other year.

It is calculated by using following formula:
Growth Rate = Change in Per Capita Income × 100/Original Capita Income.

Question 17.
What is meant by foreign aid?
By foreign aid, we mean the inflow of external assistance in the form of foreign capital, loans, grants apd assistance by foreign countries, private individuals, business organisations, foreign banks and international organisations.

Question 18.
Define balance of payments.
Balance of payments is a statement of systematic record of all economic transactions between one country and the rest of the world (or foreign countries). Thus the account of receipts and payments of the government of one country from other countries during a period of one year is called Balance of Payments. In the words of Kindleberger, “Balance of payments is a systematic record of all economic transactions between the residents of the reporting country and residents of foreign countries during a given period of time.”

Question 19.
What is meant by fiscal policy?
The policy of the government regarding income and expenditure is known as fiscal policy. As a matter of fact, fiscal policy is the policy of any govt, regarding its expenditure, taxation, borrowing, budget to achieve the various macro-economic objectives.

Question 1.
Define National Income. What is the difference between National Income and Domestic Income?
National income is defined as the sum total of factor incomes viz. rent, wages, interest and profit accruing to the normal residents of a country for their productive services during a definite period of time i.e. one year. Income is a flow. Thus national income is the earned income by the normal residents of a country during one year. Domestic income equals national income minus net factor income from abroad. In other words,

Domestic Income = National Income – Net Factor Income From Abroad Net factor income from abroad is the difference between the income received by the residents of a country from abroad for providing factor services and the income paid for the factor services provided by the non-residents in the domestic territory of a country.

Question 2.
What is meant by Per Capita Income? How can you estimate Per Capita Income?
Per capita income is considered to be a better measure of economic progress as compared to that of national income.

Per capita income is the average income of the people of a country in a definite period. Obviously per capita income is the average income. Thus, per capita income does not mean that each and every individual of the country is having income equal to it. Some people might be having income greater than it and some less than it. For example, the per capita income of India at current prices in 2013-14 was ₹ 74380 and that of Punjab was ₹ 74606.

Per capita income can be calculated by dividing national income by the population.
In other words,
Per Capita Income = $$\frac{\text { National Income }}{\text { Population }}$$

Question 3.
What do you mean by Consumption? Define Average Propensity to Consume and Marginal Propensity to Consume.
The word consumption is used in two senses viz. a process and an expenditure. Thus consumption is that process which satisfies human wants directly like the use of food for the satisfaction of hunger. In the expenditure sense consumption means that total expenditure which is incurred on the consumption goods.

Average propensity to consume is defined as the ratio of consumption to income.
According to Prof. Peterson, “A.P.C. is the proportion of a given income that is spent for consumption purposes.” In other words,
A.P.C = $$\frac{\text { Consumption }}{\text { Income }}$$

Marginal Propensity to Consume (M.P.C.) is defined as the ratio of change in consumption to change in income.
According to Prof. Kurihara, “M.P.C. is the ratio of change in consumption to change in income.” In other words,

Question 4.
What do you mean by Savings? Define Average Propensity to Save and Marginal Propensity to Save.
Saving is the difference between income and consumption. In the words of Keynes, “Saving is the excess of income overconsumption.” In other words,

Saving = Income – Consumption
Average Propensity to Save (A.P.S.): A.P.S. is the ratio of saving to income. In other words,
A.P.C = $$\frac{\text { Saving }}{\text { Income }}$$

Marginal Propensity to Save (M.P.S.): M.P.S. is defined as the ratio of change in saving to change in income. In other words,
M.P.S = $$\frac{\text { Change in Saving }}{\text { Change in Income }}$$ or $$\frac{\Delta \mathrm{S}}{\Delta \mathrm{Y}}$$

Question 5.
Define investment. What are the elements of determining the Investment?
Investment, in economics, signifies nothing but addition to capital. It is defined as the surplus of total production over total consumption. Investment is necessary for increasing the production capacity in the economy. According to Mrs. Joan Robinson, “By investment is meant an addition to capital, such as occurs when a new house is built or a new factory is built. Investment means making an addition to the stock of goods in existence.”

Determinants of Investment: Investment primarily depends upon two factors :

1. Expected rate of profitability or Marginal Efficiency of Capital (M.E.C.),
2. Rate of Interest or Cost of Investment.

A rational businessman will invest only if M.E.C. is more than the rate of interest. On the contrary, if the rate of interest seems to be greater than M.E.C., then there will be no inducement to invest.

Question 6.
What is meant by Capital Formation? What is the difference between Gross Capital Formation and Net Capital Formation?
In economic term that part of income by which more production is possible than before, is called capit’al formation. In other words, an addition to capital stock is called capital formation.

Gross capital formation: Gross capital formation signifies gross investment which includes within itself net investment and depreciation.
Net capital formation. Net capital formation signifies nothing but net investment.
Net capital formation = Gross capital formation – Depreciation
As a matter of fact, capital formation means increase in net investment.

Question 7.
Define disguised unemployment. Explain it with the help of an example.
Disguised employment is that situation when more number of labourers are engaged in a work than actually required for it. It means there are some extra or excess workers engaged in that work. This can be explained with the help of an example. Suppose any family has a farm of 3 acres. Three members of that family can work efficiently in this farm with the existing methods of cultivation. But if that family has 6 “members and due to the shortage of employment opportunities in other fields, all of the 6 workers are employed in that farm, then it will be said that out of these 6 the 3 workers are actually disguisedly unemployed.

Question 8.
What is meant by full employment? What is the meaning of Structural Unemployment and Technical Unemployment?
Full employment signifies” a situation in which all those who are willing to work at the current wage rate are able to get work. In other words, full employment means absence of involuntary unemployment.

Structural unemployment. Unemployment which arises due to structural changes in the economy is called as structural unemployment.

Technical unemployment: Unemployment which arises due to changes in the techniques of production is known as technical unemployment.

Question 9.
What is meant by inflation? Explain it.
In Economics, the constant rise in prices is called inflation. In the words of Shapiro, “Inflation is a continuous and extreme rise in general price level.”

According to Crowther, “Inflation is a state in which the value of money is falling, i.e., prices are rising.”
From the above definitions, it is clear that inflation is a process of continuous rise in prices and hence fall in the value of money.

There are various causes of inflation. But the main cause of inflation is the excess of demand over supply. When the demand for goods exceeds the supply of goods, prices start rising and hence the problem of inflation arises.

Question 10.
What is Budget? What are the main components of income and expenditure in the budget of Indian Govt.?
Budget is a statement of expected income and expected expenditure of the govt, for the given financial year. When the govt, levies taxes and incurs public expenditure, it comes under the purview of budget. Thus govt, budget is a sort of financial plan which includes within itself both income and expenditure. Traditionally, the budget is presented once in a year by the govt. The Govt, of India normally presents the budget in the Lok- Sabha on Feb. 28 or 29.

The main items of budget of the Govt, of India are as follows :
Items of Revenue. “Corporate tax, Income tax, Import and Export duties, Central Excise, Central Sales Tax, Gift tax, etc. are the main sources of income.
Main items of Expenditure. Security, Police, Administration, Education, Health, Social welfare, Industry, Agriculture, Planning, Rural development etc. are the main heads of expenditure.

Question 11.
Define deficit financing. What methods are included in it?
Deficit financing is the method by which government meets the budgetary deficits by taking loans from the Central Bank. Dr. V.K.R.V. Rao has defined deficit financing as “the financing of a deliberate created gap between public revenue and public expenditure, the method of financing resorted to being borrowing of a type that results in a net addition to national outlay or aggregate expenditure.”

There are three important techniques through which the govt, may finance its budgetary deficits.

They are as follows:

• Borrowing from Central Bank i.e., creation of new money.
• The running down of accumulated cash balances.
• The govt, may issue new currency.

It is, thus, obvious that all these methods lead to an increase in the supply of money. The increase in money supply normally causes prices to rise. In India, a major part of the budgetary deficit is financed through borrowing from the Central Bank.

Question 12.
What is meant by Public Finance? Explain direct and indirect taxes, with examples.
Public finance deals with the income and expenditure of public authorities. Public authorities include all sorts of governments. Hence it can be said that it deals with the finances of the Govt. Central, State, and Local that are studied in the science of public finance. Prof. Dalton defined public finance as: “It is concerned with the income and expenditure of public authorities and with the adjustment of one to another.” In short, public finance is a study of the nature and principles of state expenditure and state revenue.

Direct Tax: A direct tax is one that cannot be shifted or passed on. It implies that in the case of direct taxes the impact or immediate money burden and the incidence or the ultimate money burden are on the one and the same person. According to Dalton, “A direct tax is really paid by a person on whom it is legally imposed.”

In the group of direct taxes, thus, income tax, wealth tax, property tax, estate duties, capital gains tax may be included.

Indirect Tax: An indirect tax is one that can be shifted or passed on. In case of indirect taxes, the immediate money burden and the ultimate money burden of taxes are on different persons. According to Dalton, “An indirect tax is imposed on one person, but paid partly or wholly by another.” Commodity taxes or sales tax, excise duties, etc. may be grouped as indirect taxes.

Question 13.
What is meant by Public Expenditure? How many types of public expenditure are possible?
Public Expenditure: The expenditures incurred by the government are called Public Expenditures.

These can be of four types :

1. Public Works. The expenditure incurred on the roads, dams and bridges etc.
2. Public Welfare Works. The expenditure incurred on education, public health etc.
3. The expenditures on the security and law and order of the country like on Police, Prisons etc.
4. The expenditure on subsidies given to the producers to increase production, exports and transfer payments.

Question 14.
Explain the concept of‘Poverty Line’. What are the limits of poverty line in India?
The concept of poverty line is used to measure poverty in a country. The people who are living below the poverty line are called as poor.

Poverty line signifies a sum that is needed by a person to meet his minimum consumption needs per month. In other words, by poverty line we mean that sum which is required by a person monthly to meet his minimum needs (food, clothing, housing, education and health, etc.).

Limits of Poverty line in India—In their book “Poverty in India”, V.M. Dandekar and Nilkanth Rath are of the opinion that all those who do not get food worth 2,250 calories are to be considered as poor. In order to get food worth 2,250 calories, the per capita monthly income in the rural areas and the urban areas must be ₹ 15 and ₹ 22.5 respectively at 1960-61 prices.

The Planning Commission has defined the poverty line on the basis of the recommended nutritional intake of 2,400 calories per person per day for rural areas and 2,100 calories per person per day for urban areas. On this basis, in rupee terms, the poverty line works out at ₹ 1407 per head per month for rural areas and ₹ 972 per head per month for urban areas both at the 2013-14 prices. 21.9 per cent of population was below poverty line in India during 2011-12.

Question 15.
Define Growth Rate. How it can be calculated?
Growth rate is that percentage rate from which it is known that in comparison to one year how much percentage change has taken place in national income or per capita income in any other year.

Growth rate is calculated by using the following formula:
Per Capita Income Growth Rate = $$\frac{\text { Change in Per Capita Income }}{\text { Original Per Capita Income }}$$ × 100

The calculation of growth rate may be made clear with the help of an example. Suppose in 2001 the per capita income of India was ₹ 10,000 and it increased to ₹ 12,000 in 2002. Clearly, the change in per capita income = 12,000 – 10,000 = ₹ 2000.
Initial Per Capita Income = ₹ 10,000
Growth Rate of Per Capita Income = $$\frac{2000}{10,000}$$ × 100 = 20%
Thus Growth Rate of Per Capita Income = 20%.

Question 16.
What is meant by foreign aid? What are its main forms?
In economics, the term ‘foreign aid’ is interpreted in a wider sense. By foreign aid, we mean foreign capital, foreign loans and foreign grants. In other words, the inflow of external assistance in the form of foreign capital, loans and grants by the foreign governments, private individuals, business organizations, foreign banks, international institutions, is termed as foreign aid.

Types of Foreign Aid-The main kinds of foreign aid are as follows :

1. Foreign Capital
2. Foreign Loans
3. Foreign Grants.

Question 17.
Define balance of payments. What are the main items of the balance of payments?
The account of receipts and payments of the government of one country from other countries during a period of one year is called balance of payments.

According to Kindleberger, “Balance of payments is a systematic record of all economic transactions between the residents of the reporting country and residents of foreign countries during a given period of time.”

Main Items of Balance of Payments. The main items of balance of payments can be divided into two categories :

1. Items of current account. The main items of current account are :
(a) The import and export of visible items like machinery, tea, tobacco, etc. The difference between such exports and imports is known as trade balance.
(b) The import and export of invisible items like services of insurance companies, banks, doctors, engineers, government transactions, donations, tourism and shipping, etc.
2. Items of capital account. The capital account is made up of such terms as the inward and outward flow of money for investment and international grants and loans.

Question 18.
Define monetary policy. What are its main methods?
By monetary policy we mean a conscious action undertaken by the Central Bank of the country to change the quality, availability or cost (rate of interest) of money to achieve the various specified economic objectives.

Methods of Monetary Policy. The different methods of monetary policy, also known as instruments of credit control, are as follows :

• Bank Rate
• Open Market Operations
• Changes in Minimum Cash Reserve Ratio
• Change in Liquidity Ratio
• Change in the Margin Requirements of Loan.

The govt, can control the problems of inflation and depression through making suitable changes in these instruments of monetary policy.

PSEB 10th Class Social Science Guide Basic Concepts Important Questions and Answers

Answer the following questions in one word or one line :

Question 1.
What are basic concepts?
Those words which have special meaning in economics.

Question 2.
How can per capita income be measured?
Per Capita Income = $$\frac{\text { National Income }}{\text { Population }}$$

Question 3.
What is capital formation?
It is an addition to capital stock.

Question 4.
What is meant by inflation?
Inflation means constant rise in prices.

Question 5.
What is meant by public debt?
It means all types of loans taken by the government.

Question 6.
What is meant by poverty line?
It is the method of measuring the poverty of any country.

Question 7.
Which policy is related to the government income and expenditure?
Fiscal policy.

Question 8.
Define marginal propensity to consume.
It is the ratio of change in consumption to change in income.

Question 9.
What is meant by average propensity to consume?
It is the ratio of consumption to income.

Question 10.
What is marginal propensity to save?
It is the ratio of change in savings to the change in income.

Question 11.
Define investment.
An addition to capital is called Investment.

Question 12.
What is meant by induced investment,?
Induced investment is that which depends upon the level of income and profit.

Question 13.
What is meant by autonomous investment?
Autonomous investment is independent of the change in level of income and profit.

Question 14.
State any one component of money supply.
Bank deposits.

Question 15.
How is growth rate determined?
Growth rate of per capita income = $$\frac{\text { Change in Per Capita Income }}{\text { Initial Per Capita Income }}$$ × 100

Question 16.
State any one determinant of investment.
Rate of Interest.

Question 17.
What is the basic cause of inflation?
Excess of demand over the supply.

Question 18.
What is balanced budget?
When income is equal to expenditure.

Question 19.
What is deficit budget?
When Expenditure of the government > Income of the government.

Question 20.
What is surplus budget?
When Income of the government > Expenditure of the government.

Question 21.
Give one example of direct tax.
Income Tax.

Question 22.
Give one example of indirect tax.
Sales Tax.

Question 23.
Give one example of foreign aid.
Foreign loans.

Question 24.
What is soft loan?
It is a long term foreign loan with low rate of interest.

Question 25.
What is hard loan?
It is a short term foreign loan with high rate of interest.

Question 26.
State any one objective of monetary policy.
Price stability.

Question 27.
State any one objective of fiscal policy.
Economic Development.

Question 28.
State any one instrument of fiscal policy.
Taxation.

Question 29.
What is meant by domestic factor income?
Domestic factor income is the sum of factor income within the domestic territory of a country.

Question 30.
What is meant by ‘normal resident of a country’?
A normal resident of a country is defined as a person or institution who normally resides in a country and whose centre of interest lies in that country.

Question 31.
What is meant by ‘net factor income from abroad’?
It is the difference between the income received by the residents of a country from abroad and the income paid for the factor services provided by the non-residents in the domestic territory of a country.

Question 32.
What is meant by factor income?
Factor income is the income received by the different factors of production for their services in the production process.

Question 33.
What is ‘national income at current prices’?
National income calculated by using the current year prices is called national income at current prices.

Question 34.
Define ‘national income at constant prices’.
When national income is calculated by using base year prices, it is called national income at constant prices.

Question 35.
What is the relationship between national income at current prices and national income at constant prices?
National income at constant prices = $$\frac{\text { National income at current prices }}{\text { Price Index }}$$ × 100

Question 36.
What is the ‘consumption function’ or ‘propensity to consume’?
Consumption function signifies the functional relationship between income and consumption. In other words,
C = f(Y)
where C = Consumption and Y – Income.

Question 37.
What type of relationship exists between income and consumption?
There is positive relationship between income and consumption.

Question 38.
What are the limits of mar ginal propensity to consume?
Marginal propensity to consume lies in between zero and one.

Question 39.
Define saving.
According to Keynes, “Saving is the excess of income over consumption.” In other words,
Saving = Income – Consumption.

Question 40.
Define average propensity to save.
Average propensity to save is the ratio of saving to income. In other words,
A.P.S = $$\frac{\text { Saving }}{\text { Income }}$$

Question 41.
What is meant by net investment?
Net Investment = Gross Investment – Depreciation.

Question 42.
What is meant by replacement investment?
Replacement investment is that portion of gross investment that serves to replace the used up or worn out capital investment.

Question 43.
What is voluntary unemployment?
A person is said to be voluntarily unemployed if he is not willing to work at the current wage rate.

Question 44.
What is meant by frictional unemployment?
Unemployment resulting from the time lags involved in the redeployment of labour is known as frictional unemployment.

Question 45.
What is meant by seasonal unemployment?
Seasonal unemployment is the unemployment due to the seasonal nature of activity in some industries.

Question 46.
What is meant by Price Index Number?
Price index number signifies a single value with the help of which change is measured in the price/prices of a single commodity or a group of related commodities over a period of time.

Question 47.
What is the basic cause of inflation?
When demand exceeds supply, prices start rising and hence inflation arises.

Question 48.
What are the main constituents of money supply?
The main constituents of money supply are :

• Currency which includes notes and coins
• Demand deposits.

Question 49.
What is balanced budget?
Balanced budget is that budget in which the income of the govt, equals its expenditure.

Question 50.
What is deficit budget?
Deficit budget is that budget in which the expenditure of the govt, exceeds its income.

Question 51.
What is the surplus budget?
A budget in which the income of the govt, exceeds its expenditure is known as surplus budget.

Question 52.
Give two examples each of direct and indirect taxes.

1. Direct Taxes: Income tax and Wealth tax.
2. Indirect Taxes: Sales tax and Excise duty.

Question 53.
What is foreign collaboration?
Foreign collaboration is one of the forms of foreign capital. Under foreign collaboration, joint ventures are set up by the foreign and the domestic entrepreneurs.

Question 54.
Give two examples of foreign aid.

1. Foreign loans and
2. Foreign grants.

Question 55.
Distinguish between hard-loans and soft-loans.
The long-term foreign loans with low rate of interest are called as soft-loans. On the other hand, the short-term foreign loans with’ high rate of interest are called as hard- loans.

Question 56.
What is meant by trade balance?
Trade balance signifies the difference between the value of imports and exports of goods, that is, visible items only.

Question 57.
What is meant by unfavourable balance of payments?
Unfavourable balance of payments means that the total value of imports of visible as well as invisible items is greater than the total value of exports of visible as well as invisible items.

Question 58.
What are the main objectives of monetary policy?

1. Price stability
2. Full employment
3. Economic development
4. Exchange rate stability
5. Reduction in economic inequalities.

Question 59.
What is meant by bank rate?
Bank rate is that minimum rate at which the Central Bank lends money to other commercial banks.

Question 60.
What is meant by open market operations?
The sale and purchase of securities in the open market by the Central Bank.

Question 61.
What is meant by liquidity ratio?
Each bank has to keep a certain fixed proportion of its total deposits with itself. This ratio is called as liquidity ratio.

Question 62.
Name the main objectives of fiscal policy.

1. Economic development
2. Price stability
3. Exchange rate stability
4. Full employment
5. Economic equality.

Question 63.
What are the main instruments of fiscal policy?

1. Taxation
2. Public debt
3. Deficit financing
4. Public expenditure.

Fill in the blanks :

Question 1.
_______ income may be defined as the factor income of the normal residents of a country in one year. (Per Capita / National)
National

Question 2.
Use of goods and services produced in order to satisfy human wants is called as __________ (Consumption / Production)
Consumption

Question 3.
An addition to ______ is called investment. (Consumption / Capital)
Capital

Question 4.
_________ = $$\frac{\text { Consumption }}{\text { Income }}$$ (MPC/APS)
APC

Question 5.
__________ is defined as the ratio df change in savings to change in income. (MPC / MPS)
MPS

Question 6.
The policy of the government regarding income and expenditure is known as ___________ policy. (Fiscal / Monetary)
Fiscal

Question 7.
Creation of utility is called ______________ (Consumption / Production)
Production.

III. Multiple Choice Questions :

Question 1.
Destruction of utility is called
(a) Consumption
(b) Production
(c) Exchange
(d) Distribution.
(a) Consumption

Question 2.
Give the formula to calculate Per Capita Income. National Income Population
(a) $$\frac{\text { National Income }}{\text { Per Capita Income }}$$
(b) $$\frac{\text { Population }}{\text { National Income }}$$
(c) $$\frac{\text { National Income }}{\text { Population }}$$
(d) None of these
(c) $$\frac{\text { National Income }}{\text { Population }}$$

Question 3.
What is the other name of Per Capita Income?
(a) National
(b) Private
(c) Personal
(d) Average.
(d) Average.

Question 4.
The policy of the government regarding income and expenditure is known as________policy.
(a) Monetary
(b) Government
(c) Planning
(d) Fiscal.
(d) Fiscal.

Question 5.
Public Income has main aspects.
(a) Two
(b) Three
(c) Four
(d) Five.
(b) Three

Question 6.
____________ is the ratio of consumption to income.
(a) APS
(b) APC
(c) MPS
(d) MPC.
(b) APC

True / False :

Question 1.
Consumption = Income – Savings.
True

Question 2.
Expenditure for further production is known as savings.
False

Question 3.
Income tax is direct tax.
True

Question 4.
The policy related with income and expenditure of the govt., is known as fiscal policy.
True

Question 5.
Per capita income is also known as Average income..
True.

Question 1.
Explain the concept of ‘domestic territory of country’.
The domestic territory of the country does not necessarily mean the political limit but we include the following in it:

1. The area and water which come within the national limit.
2. Country’s embassies, military stations, consultancy offices in other countries.
3. The airplanes and ships working in other countries.
4. Fishing vessels, oil and natural gas rigs, and floating platforms operated by the residents of the country in the international waters.

Question 2.
Distinguish between gross national product and net national product.
Gross National Product is the total market value of all the final goods and services produced in a nation in one year.
Net National Product means total of market value of net final goods and services produced in a nation in one year.
Net National Product = Gross National Product – Depreciation of Capital.

Question 3.
Explain the concepts of average propensity to consume and marginal propensity to consume with the help of examples.
Average propensity to consume is the ratio of consumption to income. In other words,
A.P.C. = $$\frac{\text { Consumption }}{\text { Income }}$$

Example:

 Income (₹) Consumption (₹) A.P.C 200 180 0.90 300 260 0.87

When income is 200, Consumption is 180, A.P.C. = $$\frac{180}{200}$$ = 0.90. When income increases to ₹ 300, Consumption rises to ₹ 260.

In other words, A.P.C. = $$\frac{260}{300}$$ = 0.87.

Marginal propensity to consume is the ratio of change in consumption of the change in income. In other words,
M.P.C = $$\frac{\text { Change in Consumption }}{\text { Change in Income }}$$

Examples:

Obviously, when income rises from ₹ 300 to ₹ 400, consumption increases from ₹ 230 to ₹ 280. Therefore, M.P.C. = $$\frac{40}{100}$$ = 0.5. Similarly, when income rises from ₹ 400 to ₹ 500, Consumption rises from ₹ 280 to ₹ 320 and hence,

Question 4.
Distinguish between gross investment and net investment.
Gross investment is the total production of capital goods in a year. This includes

1. Net investment and
2. Replacement investment. Replacement investment is that portion of gross investment that serves to replace the used up or worn out capital investment. It refers to the expenditure by the producers on account of depreciation of the fixed capital assets. Thus,

Gross Investment = Net Investment + Replacement Investment.
Net investment is the investment that results in an increase in capital stock. In other words, it is the investment over and above the replacement investment during a given period of time. Thus,
Net Investment = Gross Investment – Replacement Investment.

Question 5.
Distinguish between voluntary and involuntary unemployment.
When a worker is not willing to work at the current wage rate, then he is said to be voluntarily unemployed. On the other hand, a worker is said to be involuntarily unemployed when he is willing to work at the current wage rate but does not get work.

Question 6.
In a state of full employment, what types of unemployment may exist?
According to the classical economists, the following types of unemployment may exist even at the stage of full employment:

• Voluntary unemployment
• Frictional unemployment
• Seasonal unemployment
• Structural unemployment
• Technical unemployment.

As a matter of fact, absence of involuntary unemployment signifies full employment in the economy.

Question 7.
Which are the constituents of money supply in India?

1. Currency, which includes within itself notes and coins.
2. Bank deposits.

Question 8.
What is meant by government budget? What are the different types of budget?
Govt, budget is a statement of its expected receipts and expected expenditure for the given financial year.
Govt, budget can be of three types:

1. Deficit budget. Deficit budget is that budget in which the govt, expenditure exceeds its income. In case of deficit demand, deficit budget is thought to be suitable.
2. Surplus budget. That budget in case of which the income of govt, exceeds its expenditure is called as surplus budget. This type of budget is suitable to control excess demand.
3. Balanced budget. Balanced budget is that budget in case of which the income of the govt, equals its expenditure.

Question 9.
Give any two merits of direct taxes.
(0 Direct taxes like income tax, wealth tax, etc. are based on the principle of ability to pay, so equity or justice in the allocation of tax burden is well secured by these taxes.
(ii) Direct taxes satisfy the canon of certainty.
The State as well as tax-payers are certain about the amount of tax.

Question 10.
Give any two merits of indirect taxes.

1. Since indirect taxes are collected in small amounts at intervals of time, they are more convenient and less pinching in effect. They are convenient from the point of view of the govt, also, since the tax amount is generally collected from manufacturers or the importers.
2. Indirect taxes are generally difficult to be evaded as they are included in the price of the commodity. A person can evade an indirect tax only when he decides not to purchase the taxed commodity.

Question 11.
Discuss about the bank rate and open market operations as instruments of credit control.
Bank Rate. The rate at which the central bank lends money to commercial banks is known as the bank rate. By changing the bank rate, the credit and thus the money supply can be affected. With an increase or decrease in the bank rate, the market rate of interest also increases or decreases. Thus with the increase in bank rate, credit becomes dearer and vice-versa. Obviously, when it becomes necessary to control the credit, then the bank rate is increased and when credit is to be expanded, the bank rate is decreased.

Open Market Operation. By open market operations, we mean the sale and purchase of securities in the open market by the Central Bank of the country. If the Central Bank of the country wants to control credit, then it will start selling the securities lying with it. And when it is necessary to expand the credit, then the Central Bank starts purchasing securities from the open market.

Question 12.
Discuss about minimum cash reserve ratio and liquidity ratio as instruments of credit control.
Minimum Cash Reserve Ratio. The commercial banks have to keep some percent of their total reserves with the Central Bank in the form of reserve fund. The changes in cash reserve ratio affect the lending capacity of the commercial banks. If credit is to be controlled, then this ratio is increased and if credit is to be expanded, then this ratio is decreased.

Liquidity Ratio. The commercial banks have to keep- a certain fixed proportion of their total reserves with themselves in the form of cash. This is known as liquidity ratio. This amount cannot be lent by commercial banks. If the credit.is to be expanded then the Central Bank lowers this ratio. On the other hand, the liquidity ratio is increased if it becomes necessary to control the credit.

Question 1.
Explain common types of unemployment.
Following are the common types of unemployment:
1. Voluntary Unemployment. Voluntary unemployment is a situation where workers are not willing to work on prevailing wage rates. In the words of Prof. Dillard, “Voluntary unemployment exists when potential workers are unwilling to accept the going wages or slightly less than going wages.”

2. Involuntary Unemployment. Involuntary unemployment is contrary to the voluntary unemployment. It is a situation in which the workers are ready to work at prevailing wage rates or even less than prevailing wage rates, but they do not get work. In this way involuntary unemployment is forced on the worker. According to Prof. J.M. Keynes, “Involuntary unemployment is a condition in which a person is willing to work at lower real wages than the current real wages whether or not he is willing to accept the lower money wages.”

3. Open Unemployment. In this type of unemployment labourers have not any work to do. He can get even less work. In the lack of work labourers completely remain unemployed. This type of unemployment exists in urban sectors like industrial unemployment and educated unemployment.

4. Seasonal Unemployment. Seasonal unemployment exists due to the seasonal nature of some occupations. For example, agricultural workers get work for few months in a year. Labourers in sugar mills get work from November to April and for other months they remain seasonal unemployed.

5. Structural Unemployment. Structural unemployment exists due to the change in the industrial structure. If we replace old machine for new machine, so during this replacement period worker remain unemployed. This type of unemployment is called structural unemployment.

6. Frictional Unemployment. Frictional unemployment comes into existence due to the mobility of the economy and imperfections in the labour market. In the words of Prof. Dillard, “Frictional unemployment exists when men are temporarily out of work because of imperfections in the labour market.”
Thus frictional unemployment exists in the economy due to immobility of labour in different industries, seasonal nature of some occupations, breakdown of the machinery and ignorance of job opportunities etc.

Question 2.
Explain the self-employment and wage generation approach of the government for poverty alleviation.
Self-employment and Wage Generation Approach. This approach has been initiated from Third Five Year Plan (1961-66) and enlarged successfully since then.

The following programmes are initiated by the government from time to time under the approach:
1. Food for Work Programme. This programme was launched in the 19706 for the upliftment of the poor. Under this programme, foodgrains are distributed against the wage work.

2. Prime Minister’s Rozgar Yojana (PMRY). This programme has been implemented by the Khadi and Village Industries Commission, which aims at creating self-employment opportunities in rural areas and small towns. One can get financial assistance with bank loans to set up small enterprises under this programme. Under PMRY, the educated unemployed from low-income families in both rural and urban areas can get financial help to set up any type of industry which generates employment.

3. Swarna Jayanti Shahari Rozgar Yojana (SJSRY): This program mainly aims at creating employment opportunities, both self-employment and wage employment in urban areas. Individuals were given financial assistance under the self-employment programme. Now, the PMRY and SJSRY in the 1990s have been changed. Those who wish to benefit from these programmes are encouraged to form Self Help Groups (SHGs) and then the government will provide partial financial assistance through banks.

4. Swarnajayanthi Gram Swarozgar Yojana. Sawamajayanthi Gram Swarbzgar Yojana was launched in April 1999 and is the only self-employment program currently being implemented. It aims at promoting micro-enterprises and to bring the assisted poor families (Swarozgaris) above the poverty line by organising them into Self-Help Groups through the process of social mobilisation, training and capacity building and provision of income-generating assets through a mix of Bank Credit and Government subsidy. The scheme is being implemented on a cost sharing ratio of 75: 25 between the centre and the states.

5. Sampoorna Grameen Rozgar Yojana (SGRY). The SGRY was launched in September 2001. The schemes of Jawahar Gram Samridhi Yojana and Employment Assurance Scheme have been fully integrated with SGRY. The objective of the scheme is to provide additional wage employment along with food security, creation of durable community, social and economic assets and infrastructure development in the rural areas. The scheme envisages generation of 100 man days of employment in a year. The cost of the program is to be shared between the centre and the states on a cost sharing ratio of 87.5: 12.5 (including foodgrains component).

Basic Concepts PSEB 10th Class SST Notes

• Basic Concepts: Basic concepts are those words that have special meaning in Economics.
• National Income: National Income is the earned income by the normal residents of a country during one year.
• Per Capita Income. It is the average income earned by the people of a country in a definite period of time.
• Consumption: Consumption is the expenditure made on consumption during one year in an economy.
• Saving: The difference between income and consumption is called saving.
• Investment: When production is more than consumption during an accounting year, that is called investment.
• Capital Formation: An addition to capital stock is called capital formation.
• Disguised Unemployment: Disguised unemployment is that situation when more people are doing the same work which can be done by a few people.
• Full Employment: Full employment is that situation in which all the people who are willing to work at existing wage rates and they get work without any difficulty.
• Structural Unemployment: It rises due to the structural changes in the economy, like due to the exports etc.
• Technical Unemployment: It arises due to the changes in the techniques of production.
• Inflation: Inflation means constant rise in prices.
• Money Supply: It means currency and deposits of banks available with the people of the country.
• Government Budget: Government Budget is the detailed account of its estimated revenue and expenditure.
• Deficit Financing: It is the method by which government meets the budgetary deficits by taking loans from the Central Bank.
• Public Finance: Public Finance means the financial sources of the government, i.e. revenue and expenditure.
• Public Debt: Public debt means all types of loans taken by the Government.
• Poverty Line: The poverty line is the method of measuring the poverty of any country.
• Growth Rate: Growth rate implies that in comparison to a particular year with any other year how much percentage change took place in any economic element.
• Foreign Aid: It means capital investment, loans and grants in any country by foreign governments, individual banks and international institutions.
• Balance of Payments: Balance of Payments is the account of receipts and payments of the govt, of one country from other countries during a period of one year.
• Monetary Policy: It is related to affect the level and structure of aggregate demand by controlling the rate of interest and the availability of credit.
• Fiscal Policy: The policy related to the government’s income and expenditure is called as fiscal policy.

Punjab State Board PSEB 10th Class Social Science Book Solutions Economics Chapter 1 Basic Concepts Textbook Exercise Questions and Answers.

## PSEB 10th Class Social Science Solutions Economics Source Based Questions and Answers

Question 1.
At the time of calculation of National Income, good and services are multiplied by their prices. If the quantity of national product is multiplied by the current prices we call it national income at current price or monetary income. Conversely, if the quantity of national product is multiplied with the price of some fixed period i.e. base year, the result obtained is called National Income at constant prices or Real National Income. Prices keep on changing. As a result of it National Income is subject to increase or decrease without any change in the quantity of goods and services. In order to estimate the real economic progress of a country, the national income of different years should be measured at the prices of some particular period of a year an account of constant prices, real income will only changes with the change in quantity of goods and services.
(a) What do you mean by National Income?
National income is the net factor income earned by normal residents of a
country in the form of wages, rent, interest and profit in one year. This is the sum of domestic factor income and net factor income.

(b) State the difference between Gross national income and net national income.

• When depreciation is included in the national income of a country it is known as gross national income. Conversely when depreciation is deducted. It is known as net national income. In fact,
• National income + depreciation = Gross national income
• National income – depreciation = Net national income
• Gross is broader concept as compare to ‘Net’.

Question 2.
The word consumption is used in two senses. In the first sense as a process and in the second as an expenditure. In the sense of a noun it is the activity which satisfies human wants directly like the use of water for quenching thirst and the use of food for the satisfaction of hunger etc. Thus consumption is that process by which a person uses the utility of a good in order to satisfy his wants.
In the expenditure, sense consumption means that total expenditure which is incurred on the consumption goods.
Under national income whatever many people spend on the purchase of goods and services for the direct satisfaction of their wants is called consumption or total consumption expenditure.
(а) What is consumption? What are the factors that affect it?

• Consumption means expenditure made on consumption during one year in an economy.
• Consumption depends on many factors like income, price of commodity, fashion etc.
• Thus it can be said that consumption is a function of many factors, means it depends on many factors.
• Income has the most effect on consumption. Generally with the rise in income consumption also increase but increase in consumption is less than that of income.

(b) What is propensity to consume? State its types.
As schedule showing the various amounts of consumption which correspond to different levels of income is known as the propensity to consume.

• Average Propensity to Consume. The ratio of total consumption to total income is called average propensity to consume. This implies that people will spend how much part of their income on consumption and how much part they save. This is obtained by dividing the consumption by the income, or
APC = $$\frac{\mathrm{C}}{\mathrm{Y}}$$
• Marginal Propensity to Consume. The ratio of change in consumption to change in income is called marginal propensity to consume, i.e.,
MPC = $$\frac{\Delta \mathrm{C}}{\Delta \mathrm{Y}}$$

Question 3.
Public Finance is the combination of two words, i.e., Public + Finance. Public means group of people who are represented by the government and finance means monetary factor. Thus public finance means the financial sources of the government i.e. revenue and expenditures. That portion of economics in which the problems of revenue and expenditure are discussed is called public finance. Thus Public finance is the study of the problems of government institutions concerning central, state, and local governments. Public finance includes revenue of government i.e. tax, interest, profit etc. Public expenditure includes defense, administration, education, health industries, agriculture etc. Public debts are also studied under public finance.

The economic activities of the government of the country have also increasd with the passage of time. The area of public finance has also been widened. It studies not only the revenue and expenditure of the government but it also studies all economic activities of the government concerning special economic objectives like full employment, economic development, income and equal distribution of wealth, price stability, etc.
(а) What are the main sources of Government Income?
The main sources of income of the government are taxes which are of two types.

1. Direct taxes
2. Indirect taxes

1. Direct taxes. Direct tax is that which is paid by the same person on whom tax has been imposed legally. For example income tax, gift tax, corporate tax, wealth tax etc.

2. Indirect taxes. Indirect tax is defined as that form of taxes which are imposed on goods and services. These taxes are imposed indirectly on Public. Examples of indirect taxes are sale tax, excise duty, entertainment tax, export, import duty, GST etc.

(b) State the main objectives of Public Finance.
Following are the main objectives of Public Finance.

1. Price Stabilization. Public Finance maintains stability in the prices of goods and services thereby, preventing constant fluctuations and inflation and deflation that tend to destabilize the economy of a country.
2. Equitable Distribution of Wealth. Public Finance is also concerned with equitable distribution of income and wealth among individuals and various sections of the country. „
3. Satisfaction of Needs. The satisfaction of collective needs is another main objective of Public Finance.
4. Allocation of Resources. Public Finance performs the function of allocating resources among public and private sectors.
5. Provision of full employment. Provision of full employment opportunities to citizens of a country is another aim to public finance.

Question 4.
In every underdeveloped country there is a need and availability of infrastructure in a sufficient quantity. Lack of Infrastructure facilities will create hurdles in the development of industries and agriculture sector as a result of it their rate of growth will come down. For example, we daily feel that the industrial and agriculture sector suffer a lot on account of shortage of power. Similarly, if there is a lack of transport facilities then industries will not be able to get raw-material and their finished goods will also not reach the market in time. Thus, insufficient of economic infrastructure will bring down the rate of growth of production sectors like industries and agriculture etc. On the contrary, the sufficient availability of economic infrastructure will be helpful in acceleration of their development.
(a) What is meant by infrastructure?
The part of the capital stock of the economy which is necessary from the viewpoint of providing various kinds of services is called infrastructure in short, infrastructure means those activities, facilities and services which are helpful in the operation and development of other sectors.

(b) State the meaning of economic infrastructure? What are its kinds?
Economic infrastructure refers to that capital stock which offers various types of productive services directly to the producers. For example, a country’s transportation system like Railways, Road Airways provides services to the one part of the production and distribution system only. Similarly Banking system, money and capital market provide services to the other part of industries and agriculture.

Following are the main components of economic infrastructure.

• Transport and Communication
• Electric Power
• Irrigation
• Banking and other financial institutions.

Question 5.
The modern era is an era of consumerism. A variety of hew goods are supplied in the market daily for the utility and comfortability of the consumer^. New food products, new fashion garments, decorative items, household gadgets, new means of transport, modern means of entertainment like-coloured television, video etc. ate being invent and produced continuously. Advertisement and publicity are being used at large scale to introduce or to make available these1 goods to the coneuthers. Now a days a consumer chooses his consumption material on the basis of attractive advertisements and publicity of different producers. In this way, they are exploited in many ways. To protect the consumers from such type of exploitation,” consumer protection measures have been started.
(a) What is Consumer Protection?
Consumer protection means the protection of the buyers of consumers goods from the exploitation of the unfair trade practices of the producers.

(b) What is Consumer Education?
To protect the intersects of the consumers, it is very much essential to educate
them. It is with this view that the consumer’s week is celebrated throughout the country between March 15 and March 21 every year. During these days more stress is given on awareness among the consumers regarding their rights. The occassion is mai’ked by various exhibitions, seminars and street plays. Consumers are apprised of the possible unfair trade malpractice^ of short weights and measures, adulteration and the dike.

Question 6.
India is considered to be an agrarian economy because 68% of its population is still dependent on agriculture for livelihood. After independence Indian inherited a backward agricultural economy from the Britishers. Mahatma Gandhi considered agriculture as “Soul of India”. Iri this context Nehru had also said, “Agriculture needs utmost priorities.” Emphasising thb importance of agriculture Dr. V.K.R.V. Rao said, “If the vast mountain of development is to be crossed under five year plans, then the targets fixed for agriculture will have to be achieved. In the words of eminent Indian scholar Dantewala, “For the economic development of Indian economy. Success in the field of agriculture leads the country to the path of economic progress.”
(a) What is agriculture?
The term “Agriculture” in the English language is derived from two words, “Agri means field and ‘culture’ means cultivatioin in other words, “Agriculture is the art or science of production of crops and livestock on a farm.”

(b) State the importance of agriculture in Indian economy.
Following are the main importances of Agriculture in Indian economy.

1. Contribution in National Income. About 40% of national income of India comes from primary sector like agriculture and forestry etc. During the period of planning share of agriculture in the national income has been ranging between 51% and 29%.
2. Agriculture and Employment. In Indian economy, maximum employment opportunities are available in the agriculture sector.
3. Transport. Agriculture in India offers a crucial support to the transport industry. Both railways and roadways are the bulk carriers of farm products in India.
4. Wealth of Nation. A significant component of the country’s wealth belongs to the agricultural sector. In terms of fixed assets, land occupies the highest rank in India.
5. Contribution to Domestic trade. Agriculture also plays a significant role in the country’s domestic trade. This is borne art by the fact that huge expenditure in India is incurred on the purchase of farm products needed by more than a billion people in the country.

Question 7.
The term “Green Revolution is a combination of two words—“Green” and “Revolution”. Green stand for greenery. Revolution means so sudden and fast changes that the spectators were wonder-struck. This term has been used for the progress of agricultural production. Because of the severe agricultural reforms initiated during the period of first three plans in India, in 1967-68, the production of foodgrains increased by about 25% as compared to the last year i.e., 1966-67. Such a tremendous increase in the production of foodgrains in any one year was nothing short of revolution. That is why, the economists gave this spectacular increase in foodgrains products the name of Open Revolution.
(a) State the effects of Green-revolution.

1. Effects on Prices. During the third five-year plan, prices, especially prices of agricultural commodities had a sharp rise. However, due to Green Revolution, the pace of price rise showed down.
2. Prosperity of the Farmers. The Green revolution has very much improved the economic condition of the farmers. Their standard of living has gone up very much than before.
3. Plaughing Back of Profits. The one good effect of the Green Revolution is that now the farmers are also included to invest large part of their income on the development of agriculture.
4. Change in Thinking. Green revolution has completely revolutionized the thinking of the Indian rural people. Now they are convinced that with the help of science they can change that misfortune into fortunes.
5. Effect on Consumers. Poor Indians spend about 80% at their income on agricultural commodities. The green revolution has helped them to balance their budget and raise their standard of living.

(b) What is Green-revolution? State its features.
Green Revolution refers to an extraordinary increase in agricultural production especially in wheat and Rice, which was made possible due to the adoption of new techniques of High Yielding varieties of seeds.

Features:

• The year 1968 was the initial year of Green Revolution.
• Pant Agricultural University, Pant Nagar (U.P.) made an appreciable contribution to it by envolving a new variety of seeds.
• Indian Agricultural Research Institute (I.A.R.I.) New Delhi has also made lot of contributon in regard in bringing the Green Revolution.
• Credit of bringing Green Revolution in India goes to Dr. Norman E. Borlaugh and Dr. M.N. Swami Nathan.

Question 8.
For economic progress of Underdeveloped countries like India, industrialization occupied important place. Only through Industrial development by increasing the rate of production and employment the rate of growth of Indian economy can be increased. Prior to independence, industrial development was very low in India, but after independence, government laid great emphasis on the industrial development of the country. As a result of it, many new industries were established in the country and production capacity and the efficiency of the existing industries were also enchanced. Under the five year plans, the industries development has also been given much importance.
(a) State the importance of Industrial development

1. Employment. Through industrialisation, new industries are established. As a result of it, the millions of unemployed persons get work in these industries and it solve the unemployment problem of the country.
2. Self Dependence. Industrial development makes provision for the production of essential goods in the country. As a result there will be less dependence on other countries and our country will become self-sufficient in the production of large number of goods.
3. Increase in National Income. In India, industrialization will bring better and proper utilisation of natural resources. It will increase total production, employment national income and per capita income of the country.
4. Essential for National Defence. Through industrialization many industries like Iron, steel, aeroplane, defense, production etc. can be established which are very important for the security of the country, because these industries manufacture large quantity of war material.
5. Production of Socially Useful Goods. Through industrialization, the production of essential goods like cloth, cycles, goods, paper, oil etc. has become possible.

(b) How Industries helps in the Balanced growth of an economy?
Indian Economy is an unbalanced economy because the bulk of working population and. capital of the country is engaged in agriculture. There is uncertainty in agriculture. Industrialisation will make the economy a balanced one and it will reduce the dependence on agriculture.

Question 9.
“Cottage industries are those industries which are completely or partially run by the members of a family either as a whole-time business or as a part time business.” Mostly these type of industries are run by the artisans in their homes. Machines are rarely used. Usually these industries fulfil the local requirements. These industries are run by the members of the family. Workers on labour basis are rarely used. They need very less capital. Since these industries are mainly situated in villages, so these are known as “village or rural industries.”
(a) State the difference between cottage and small industries.

1. Cottage industries are normally set up in villages and they are spread throughout the country, whereas small scale industries are mostly set up in cities.
2. In cottage industries, only family members work whereas in small scale industries, work is done through hired workers.
3. Cottage industries normally fulfil the local needs where as small-scale industries produce goods for cities and semi-urban areas. So their production market is very large.
4. In cottage industries, production is done with the help of simple tools and very less capital is required. Whereas small-scale industries are run with power and more working capital is also required.
5. In cottage industries, traditional goods like khadi mats and shoes etc. are produced whereas in small scale industries modem goods like Radio, Television, Electrical and Electronics goods etc. are produced.

(b) What are the problems of cottage industries?

1. Problem of Raw Material and Power. These industries do not get raw material in sufficient quantity and whatever material they get it is of poor quality and for it they have to play high prices.
2. Problem of Finance. In India credit is not available to these industries in sufficient quantity. They have to depend on moneylenders for finance who charge very high rate of interest.
3. Old Method of Production. In there industries mostly old methods of production are used. Old tools like oil press for oil expelling or handlooms for weaving clothes are used. As a result of it the number of production decreases and poor qualities of products are manufactured. Their demand in the market goes down.
4. Problem of Marketing. The entrepreneurs of the industries face many problems in selling their products at fair price and quantity because the outward look of the product produced by these industries is not good.

Question 10.
The role of large scale industries is very important for the economic development of India. The major share of fixed capital investment in industries has been invested in big Industries. A large portion of the total industrial production is received from these industries.
(а) Classified the large scale industries.

1. Basic Industries. Basic industries are those industries which provide necessary inputs to agriculture and industries. The examples are steel, Iron, Good Chemical Fertizlers Aluminium and Electricity.
2. Capital Goods Industries. Capital Goods Industries are those industries which produce machinery and instruments for agriculture and industries. These include machines, mechanical instruments, tractors truck etc.
3. Intermediate Goods Industries. Intermediate goods industries are those industries which produce those goods which are used for the production of other goods. Examples of there are tyres, mobile oil etc.
4. Consumer Goods Industries. Consumer goods industries are those industries which produce consumer goods. These include sugar, cloth, paper industries etc.

(b) State the importance of large scale industries in Industrialisation of a country.