CHAPTER NO.

1
1)      EXPLAIN ECONOMICS “AS A SCIENCE” & “NOT A SCIENCE” ?
ANS :  -

ECONOMICS AS A SCIENCE : - 

Lord Robbins, walras, Cournot, Antoine, Augustine and Senior Nassau

Williams considered economics as a science. A science is a systematic and
comprehensive study if facts which explain the cuase and effect relationship. A
science must have the following features : -
1)      A science is a systematized study of a subject.
2)      Science establishes the relationship between cause and effect of a fact.
3)      Law of science are universal. Robbertson says that last three letters if the word
‘economics’ i.e ‘ics’ present a clear proof that it is a science like physics, and dynamics
which have ‘—ics’ at the end as economics.

ARGUMENT IN FAVOUR OF ECOMONICS AS A POSITIVE SCIENCE.

Systematized study :- 

In economics, there is a systematized collection, classification and analysis of
economic facts. The subject matter divided into consumption, production, exchange
and distribution.
Consisting of Law :-
Law of economics are similar to the law of other science. In economics law, we
establish cause and fact relationship of economic activities. For Example.  The law of
demand shows the relationship between a change in price and change in demand.
Universal :-
All the economic laws are universally true. The laws of economics are equally
applicable to capitalist, socialist, and mixed economy.

ECONOMICS IS NOT A SCIENCE :-

            Some economist like Marshall do not regard economic as a pure science.

The main reasons for this are as under : -
The law of economic are not universal :-
The applicability of economics laws is limited by the differences in physical, social
and cultural factors between different countries. The laws of economics are based on
the habits and taste of people. These laws differs from different countries. Therefore,
the laws of economic are not so universal.
The laws of economics are not so exact :-
The laws of economics are not so exact  as they are conditional and with the phrase,
‘other things remain the same’ but the laws of pure science are exactly applicable
under similar conditions.

  
2)      WHAT DO YOU MEAN BY MICRO ECOMONICS. GIVE ITS FEATURE
AND LIMITATIONS ?
ANS:-

MICROECONOMICS:-
 This is considered to be the basic economics. Microeconomics may be defined as that
branch of economic analysis which studies the economic behavior of the individual
unit, may be a person, a particular household, or a particular firm. It is a study of one
particular unit rather than all the units combined together. The microeconomics is
also described as price and value theory. The theory of the household, the firm, and
the industry. Most production and welfare theories are of the microeconomic variety.

FEATURES LIMITATION ARE AS FOLLOWS: -

1)      Explain the working of a free enterprise economy.

2)      Explain how price are determined.
3)      Explains conditions of efficiency in production and distribution.
4)      Provides tools or economic policies.
5)      Helps the consumers to get maximum satisfaction.
6)      Its helps in understanding the problem of taxation.
7)      It helps in international trade and foreign exchange.
8)      Explains the conditions of economic welfare.
SHORT NOTE: -
1)      LIMITED RESOURCES AND UNLIMITED WANTS :-
Wants are defined as a goods or services we desire but do not need. It is said
that wants are unlimited, because once satisfied another appears
The basic economic problem that arises because people have unlimited wants
but resources are limited. Because of scarcity, various economic decisions must be
made to allocate resources efficiently.

2)      STUDY OF MATERIAL WELFARE :-

Economics is a subject that studies the welfare if man of the material type. Study of
non material welfare is outside the scope of economics.
            MERITS OF WALFARE DEFINATION:-
1)      Welfare defines and emphasizes man his welfare.
2)      Marshall’s definition classifies economics into material and non material welfare.
Further economic actions are classified as individual and social.
3)      This definition considers economics as a social science.
4)      Scope of economics according to Marshall studies material aspects, it studies
individuals as well as the society as they are inter – related through economic
activities.

3)      DISTINGUISHED BETWEEN MICROECONOMICS AND

MACROECONOMICS.

MICRO ECONOMICS MACRO ECONOMICS

1)      Micro economics is the study of 1)      Macro economics is the study of

individual unit like a consumer, a behavior as a economic of whole.
firm, a producer etc.
2)      It deals with the problem of pricing 2)      It deals with problem of the role of
and income distribution the factors of national income, economic growth
production. and general level of economic.
3)      The scope is limited. 3)      The scope is wider.
 4)      It is a independent concept. 4)      Its concepts are inter dependents.
5)      It uses the slicing method to deal 5)      It uses with lumping method to deal
with its problems with its problems.
6)      These concepts were popularized by 6)      These concepts were popularized by
Alfred Marshall J. M. Keyms.

4)      MARSHAL DEFINATION OF WELFARE : -

Alfred Marshal did not agree to Adam Smith’s definition of economics as a science of
wealth. He criticized him on the basis of welfare.
            DEFINATION :
                        According to Marshall.
“Economics is a study of man action in ordinary business of life”. It requires how he
gets his income and how he uses it.” It examines that part of individual and social
action which is most closely connected with attainment and with the use of material
requisites of “wellbeing”.
FEATURE OF WELFARE:-
1)      STUDY OF MANKING :-
Economics study economics activity of man which relates to his welfare.
2)      ORDINARY BUSINESS OF LIFE :-
An ordinary man works mostly to earn money. He spends his earning to get
maximum satisfaction. Economic studies such activities that are related to men’s
welfare.
3)      STUDY OF INDIVIDUAL AND SOCIAL ACTION :-
Economic welfare deals with not individual isolation but as a member of social
activities. Which is concern with material welfare.
4)      STUDY OF MATERIAL WELFARE :- (SHORT NOTE – 2 MARKS)
Economic is a subject that studies the welfare if man of the material type. Study of
non – material welfare is outside the scope of economics.
  
5)      ROBBINS DEFINATION OF SCARCITY :-
SCARCITY THEORY. EXPALIN ?
Robbins criticize Marshall for his Nor native views of economics. Robbins
define economics – “Economics is the science which study human behavior as a
relationship between ends and scares means that have alternative uses.
FEATURES : -
1)      Scientific                       is more scientific then Marshall it is based on analytical
economics.
2)      Robbins has given a wider concept. The subject matter of economics according to
him is the choice problem that arises due to scares resources and unlimited wants.
3)      State a positive science :-
Robbins the subject to be a positive science – that is :- A science which has nothing to
do with the goodness or the bad nature of ends or wants.
4)      A universal definition :-
Robbins definition is appreciable as well as applicable everywhere. It is concerned
with unlimited wants and limited  resources which is problem that is faced
everywhere.
5)      Wider concept :-
According to Robbins. Economics takes into accounts all types of human wants –
Material or Non – material, good or bad, etc.
   
CHAPTER NO. 3
COST AND REVENUE ANALYSIS
COST CONCEPT
1)      Cost and revenue of a product influences profit. It influences the demand as well as
market supply. Some  of the concepts are as follows :-
a)      MONEY COST : -
Money cost of a product means aggregated, the cost expenditure incurred by the firm
on various items, entering into the production of a commodity.

b)      REAL COST :-
Real cost of production is expressed not only by money cost, but also the efforts of
workers and scarifies of the capitalist.

c)      SOCIAL COST :-
It is a total cost of a production of a commodity that includes direct and indirect cost
which the society has to pay for the output of the commodity.

d)      SELLING COST :-
They are incurred to increase the demand of the product. E.g. : - (advertisement)

e)      PRODUCTION COST : -
They consist of material cost, wages cost, interest cost, etc.

f)       SUNK COST :-
It is an expenditure that has to be made and which cannot be renewed. E.g. :- specific
equipments

g)      FIXED COST :-
Fixed cost are cost which does not increase or decrease with the size of its
production.
E.g. :- land

h)      VARIABLE COST :-
Variable cost (VC) of a firm is those cost which varies with the size of its production.

i)        TOTAL COST :-
Total cost are the combination of fixed cost and variable cost. FORMULA: TC = VC +
FC

J)    VARIABLE FIXED COST: -

VFC is obtained by dividing the total cost by the no. of unit of the output
produce.

K)     AVERAGE VARIABLE COST :-

AVC is obtained by dividing the total variable cost by the no. of unit produce.

L)    MARGINAL COST :-
Addition made to the total cost, by the production of one more unit is called
marginal cost.
       
2)      RELATION BETWEEN MARGINAL AND AVERAGE COST CURVE
1)      Both AC and MC is calculated from TC of production. That is :-

2)      When average cost. When AC is falling MC also falls. It always remain lower then
AC.
3)      The MC curve cut the AC curve at the minimum point. When AC is constant.
MC  =  AC
REVENUE
            when we deduct total cost TC from total revenue TR, we got the profit of the
firm. This profits of the firm is called the revenue of the producer. The revenue of a
firm is expressed as follows.
1)      TOTAL REVENUE :
Total revenue of firm is calculated by multiplying the total output by the price at
which the product is sold.
FORMULA: -    TR = PRICE X OUTPUT
2)      AVERAGE REVENUE :-
Average revenue is the revenue per unit of the commodity sold it is obtained by
dividing TR by numbers of unit sold.

3)      Marginal revenue : -
Marginal revenue is the addition made to the TR by means of an additional unit of
the product in the market.

CHAPTER NO. 4
MARKET
            In economics sense market refers to an arrangement where buyers and
sellers come in contract with each other directly or indirectly to sell and buy goods.

FEATURES OR CHARECTERISTIC OF MARKET

1)      It does not refer to any fixed location; it can also exist in an absence of place.
2)      It is an arrangement, where there is an exchange of goods.
3)      There is the existence of different prices for specific commodities.
4)      There is a competition between buyers and sellers. The demand & supply forces
determine the price of a commodity in the market.

STATE THE DIFFERENT TYPES OF MARKET : -

1)       MONOPOLY : -
In this category of market. In which there is a single seller who dominates the market
where there is no close substitute & no competition exist.
2)      DROPOLY :-
Duopoly is a category in which two seller dominate the market.
3)      OLIGOPOLY :-
Oligopoly is market in which few sellers compete with each others to sell their
products.
4)      MONOPOLISTIC COMPETITION :-
 It is a market category in which there are many seller & buyers. The product is
heterogeneous.
5)      PERFECT COMPETITION :- ( BY ADAM SMITH)
Perfect competition refers to a market in which there are large no. of buyer and seller
involved in the activities of buying and selling homogeneous product at a single
uniform price.
FEATURES OF PERFECT COMPETITION:-
FEATURE OF PERFECT COMPETITIVE MARKET
(IMPORTANT)
1)      LARGE NUMBER OF SELLER :-
There is an existence of large number of seller, which is a unique feature of this
competitive market, as there is a numbers of sellers. The sellers are not in a position
to influence market price. The market price is determined by the force of total
demand and total supply. The price in this market is uniform. Thus the sellers are
“Price taker” and not “Price Makers”
2)      LARGE NUMBER OF BUYERS :-
The buyers are very large in numbers in a perfect competitive market. A single buyer
cannot influence the market demand. Therefore he is also a “Price Taker”.
3)      HOMOGENEOUS PRODUCT :-
In a perfectly competitive market, the product of all firms is homogeneous that is
identical in single shape, color, design, etc…. (Substitute goods)
4)      IGNORES GOVERNMENT INTER SENTENCE :-
Government inter sentence may living about tariffs (Tax), subsidies, controls
licensing that can disturb the free functioning of the market machineries. That us
why under perfect competition government interference is ignored.
5)      PERFECT KNOWLEDGE FOR THE BUYERS AND SELLERS :-
Buyers and Sellers have good knowledge regarding the market conditions. The
buyers know the “ruling price and does not offer a higher price on the other land “.
The sellers are aware of the preventing price in the market.
6)      OFFER FREE ENTRY AND EXIT FOR FIRMS :-
Perfect competition is characterized by the freedom of entry & exit of firms, that is an
existing firm can leave the industry. Whenever it desire and a new firm can enter the
industry whenever it wishes.
7)      RATIONAL BEHAVIOUR :-
Under the market the seller and the buyers behave rationally, that is producers
produce to get maximum profit while the consumers demand to get maximum
satisfaction.
8)      SINGLE UNIFORM PRICE :-
Under the perfect competition, uniform price prevail. Price is determined by the
inter selection of market demand and market supply.

MONOPOLY
MEANING:-

            Monopoly is a market situation in which a firm has sole wrights over the
productions or sells of the products, and has no competitors in the market and has
no close substitute for his product.

DEFINATION:-
             According to                                      “monopoly is said to access when one term is
the sole producer or the seller of the product that has no close substitute.
            That the monopolist has control over the market. Mono means one and poly
means seller. The monopolist controls the supply of commodities and thus “He is a
price maker”.

MONOPOLISTIC COMPETITION
Monopoly and perfect competition are the pure form which does not exist in
the real world. There is a competition where monopoly and perfect competition are
interlinked. The monopolistic completion refers to a market organization where
many sellers sell similar, but differentiate products to a large number of buyers
which is called monopolistic competition.
            According to MS JOHN ROBINSON, it is called imperfect competition. It is a
market category in which there are many sellers and buyers buying and selling
heterogeneously.

  
CHAPTER NO. 5
FACTORS OF PRODUCTION
1)      LAND IS THE FREE GIFT OF NATURE :-
Land is the primary and original factor of production so ordinary language it refers to
the land surface, in economic it can be define as all kind of natural resources that are
truly found in the  nature use in production of goods. Therefore land is a free gift of
nature. Land includes all natural resources.
1)      On the surface of the earth :-
For eg. :- Farms, Land, Forest, Mountains, Rivers, etc.
2)      Below the surface of the earth :-
For Eg. :- Coal, Gold, Silver, Petrol, Iron, Etc.
3)      Above the surface of the earth :-
For Eg. :- Sunshine, Rainfall, Climate, Etc.
  All those productive service made available by the nature for the creation of wealth are
collectively refer to as land.
-          Land is the natural factor of production.
-           
2)      FEATURE OF LAND. OR WHAT DO YOU MEAN BY LAND ?
1)      LAND DIFFERS IN FERTILITY :-
Land differs in fertility. Therefore, it is a heterogeneous factor. Fertility differs from
one plot to another. The fertility also varies. So, it is heterogeneous.
2)      REWARD FOR LAND IS RENT :-
Land is a factor of production that accrues, rent as its reward (price) for different
purpose. For Eg. :- Farming, Road, Railways, Etc. it can have multiple uses.
3)      LAND IS INELASTIC IN SUPPLY :-
Supply for land is inelastic that means even if the price change, the supply of land
remains constant.
4)      LAND IS PERMANENT FACTOR OF PRODUCTION :-
This means that land can neither be created nor destroyed.

3)      TRANSFER EARNIGN / INCOME :-

 Transfer earning is the minimum cost price of a factor unit it is a price a factors unit
must
get unit present use. In order to stay in needs employments, economics rent means
surplus over transfer earnings.
LABOUR –
FACTOR DETERMINING SUPPLY FOR LABOUR:-
1)      WAGES RATE : -
Higher the wages, higher will be the supply of labor.
2)      EFFICIENCY OF LABOUR :-
Supply of labor depends not only on quality but also the quantity of labors.

3)      AGE OF RETIREMENT :-
If the age of retirement is high, the supply of labor will be high and vice-versa.
4)      TRADE UNION :-
Strong trade union restricts the supply of labor and tries to raise the wage structure.
QUAZI RENT
The concept of quazi rent was introduced by Alfred Marshall quazi means ‘ as
if’ or ‘just like’. Quazi rent is something like or similar to rent but it is not a proper
rent.
Quazi rent refers to that additional income to a factor other than land which is
similar to rent. Rent arise on account of the fixed supply of land. But there are other
factor which are also fixed supply.
            Example :- Capital goods like Machineries, Heavy plants etc.
Increase in the demand for service of capital goods cannot ne immediately
supplied as they are fixed. The rewards is surplus, according to Marshall is Quazi
Rent.
                        Thus, Quazi rent is ----
1)      It is rent like element to the factors of produced other than land.
2)      It arises due to short inelastic supply of certain factor.
COLLECTIVE BARGAINING
Collective bargaining refer to negotiate it means the workers (labours) and the
management on the terms of employment and service conditions through the
medium of “Trade Union”.
Labours is likely to be exploited the workers are not organized and the
employer is powerful. Hence the workers and industry organize themselves into
union. It strengthen their position. Collectively bargaining is a process of discussion
& negotiation by the labour – leaders who is the representative with the management
for settlement of terms & condition of employee.
ADVANTAGES OF COLLECTIVE BARGAINING
1)      Collective bargaining prevents exploitation of labours.
2)      It leads to favorable and peaceful settlement with the management.
3)      It helps to secure rise in wage. Rules improvement in the standard of living of
labour.
4)      Trade union can force the management except their demands by adopting tactics
like lockout, strikes, etc.
5)      It compels the employers to recognize the dignity of labours.
DISADVANTAGE OF COLLECTIVE BARGAINING.
1)      Collective bargaining may lead to force & violence.
2)      Due to strong trade union, workers may become irresponsible.
3)      Sometime it may lead to inequalities of wages.
 TIME PREFERENCE THEORY OF CAPITAL ?
FEATURE OF CAPITAL
1)      Capital is man – made.
2)      Passive Factor :-
It is a passive because it becomes productive only with the help of labour.
3)      Greater Mobility :-
Capital can easily be moved from one place to another unlike labour.
4)      Capital defficiates :-
Constant use of capital lead to depreciation tha is the value of capital goes on falling.
It needs repair and maintenance.
5)      Capital is indestructible :-
Capital goods lie machineries, tools, equipment etc. become useless with the passage
of time.
6)      Increase the productivity of production :-
Capital helps to increase the productivity of workers there by increase in economic
development rising the national income of the country.

LIQUIDITY PREFERENCE THEORY (Short Note – 5 marks)

                        This theory was forwarded by Lord Keynes – According to Keynes the
real reason of interest is liquidity preferent in the desire to hold cash money to utilize
as per need by lending money, the liquidity is lost. The compensation paid for it is
called interest. Thus, interest is a reward for parting with liquidity for sum specific
period.
FUNCTIONS OF ENTERPRENEUR
1)      CO-ORDINATION :-
The enterprise co-ordinate all the other factors of production is Land, Labour and
Capital in an optimum level i.e. he combines them in such a way that minimizes the
cost and maximizes his profit and output.
2)      DECISION MAING :-
The entrepreneur plants and undertakes several decisions like ‘what’ ‘where’ ‘how
much’ ‘when’ to be produce etc.
3)      RISK AND UNCERTAINITY BARING :-
One of the most important function of the enterprise is to take risk and undertake
involved in business.
4)      INNOVATION :-
The entrepreneur is an innovation refers to the application of new technique,
discovery of new technology etc. the entrepreneur take further risk by involving new
technology to improve his business. He is considered to be “Captain” of the industry.
5)      DIVISION OF LABOUR :-
The entrepreneur divides the duties to the labour according to their qualification and
ability.

  
THEORIES OF PROFIT
PROFIT OF AN ENTERPRENEUR IN HIS INCOME, EXPLAIN ?
                        RISK BEARING THEORY :-
                        This theory was given by an American economist, professor Holuley in
1907. According to him risk bearing is an important function of the enterprise. Profit
 is the reward for performing their function. Every business is subject to variety of
risk unless a reward in form of atleast “Normal Profit” is assured, the entrepreneur
will not take risk. Higher the risk greater is the possibility of profits.

  
SECTION II
CHAPTER NO. 06
INDIAN ECONOMY
SHORT NOTES :-
1)      LOW PER – CAPITA INCOME
         All developing countries are faced with the problem of poverty is reflected in the low
per capita income. India has very low per capita income. In comparision that per –
capita income of U.S.A  is about 57 times higher than that of CANADA, 116 times is
higher that of JAPAN during 2004. Low per capita income is due to slow growth of
the gross domestic product “GDP” this is deu to improper utilization of our natural
resources.

2)      ABSOLUTE POVERTY
         Absolute poverty refers to the absence of minimum income to get minimum needs of
life. When the personal income or the consumption expenditure is too less then the
minimum subsistence level, the person is said to be living in the absolute poverty.

3)      RELATIVE POVERTY
         It is a comparison of different groups of people having different income. The people
with the below income are relative. The poor people in poor country are relatively
poorer then the poor person in reach country.

4)      CAUSES POPULATION EXPLOTION / CAUSES OF HIGH POPULATION

         Explosion means the rapid growth of population. When there is decline of death rate
which become imbalanced due to rapid growth in birth rate (high birth rate). There is
addition in the population tren, but no decline due to low death rates.
Population in India has been steadily increasing year after year. It began increasing
fastly since 1991 and the year 1991 is refer to as “Year of big divide”
There are three major causes for increasing population :
1)      High birth rate
2)      Low death rate
3)      Immigration.

   
Q.1      WHAT IS POVERTY LINE? WHAT ARE ITS CAUSES AND THE
MEASURE TAKEN BY THE GOVERNMENT TO ERADICATE THE
POVERTY LINE IN INDIA ?
ANS:    Poverty line is based on the daily intake of 2100 calories of food per person per day
for the urban areas and 2400 calories per person per day in rural areas.Thus, poverty
refers to the minimum amount of income required to maintain the minimum level of
living “poverty line” is a margin which divided the poor & the Not so poor.
CAUSES OF POVERTY:
1)      RAPID GROWTH OF POPULATION :-
 Over population is the significant cause for the prevailing poverty in India. India is
the most populated country in the world. When the national income is divided, per
capita income becomes low. Production of goods and services is unable to keep pace
with the rate of growing population.
2)      LOW AGRICULTURAL PRODUCTIVITY :-
India, even today follows rudimentary techniques of agricultural production. i.e. old
method of insufficient irrigation small size land holding and so on. This keeps the
agricultural productivity in India at a very low rate.
3)      INEQUALITIES IN INCOME DISTRIBUTION :-
In India, poverty to a great extend is attributed to an unequal distribution of income
and wealth. A major proposition of population is left with less income which is
insufficient to meet their need of minimum consumption.
4)      UNEMPLOYEMTNAND UNDER EMPLOYMENT :-
Lack of gainful employment is another important factor responsible for mass poverty
in India. Employment opportunity does not keep pace with the rapid growth of
population their by leading to large scale unemployment in the country.
5)      UNDER EMPLOYMENT :-
It is due to underdevelopment of the economy that the level of national income and
per capita income is low. Underdevelopment is due to lack of industrialization as
there is no savings. There are no investments due to low income of the people.
                        MEASURES TAKEN BY THE GOVERNMENT TO ERADICATE
POVERTY IN INDIA :
1)      POPULATION CONTROL :-
The government pays attention to the increasing population with in the economy,
Family Planning has been implicated for the subside in terminated poverty.
2)      LAND REFORMS :-
Land reforms like abolitions of Zamindari system, securing the tenants against fixing
fair rent and distribution of surplus land, among small landless labor was initiated by
the Indian government in its five (5) year plan.
3)      ACCELERATION OF ECONOMIC GROWTH :-
Greater the growth rate, larger would be the employment opportunities and
expansion of the economy this would lead to the removal of poverty.
4)      INSENTIVED FOR LABOUR IN INDUSTRIES :-
The government makes provision for incentive like – TAX concession, subsidies to
the industries which employees labour to encourage industrialization, cottage and
small scale industries being labour intensive creates large employment opportunities
which in term helps the removal of poverty.
5)      FAIR PRICE SHOPS :-
A network of fair price shops in rural areas has been initiated by the government.
Necessaries  like food grains, cloths, edible oils, sugar and so on, are made available
to the weaker section of the society at a subsidies price.
EFFECTS OF POVERTY
1)         ECONOMIC EFFECTS :-
         Due to low standard of living the productivity of labour tend to be low. It leads to
low level of production of food and services.
         Low income results in less saving less capital formation and low industrialization.
         Lack of capital prevents modernization of agriculture and industries.
         Poverty leads to illiteracy and low skills and leading to increase in unemployment.
         Poor people become poorer due to indebted.
Q3)      CUASES OF POPULATION EXPLOTION :-
             INTRODUCTION :
            Explosion means rapid growth of population. When there is decline of death
rate which become in balanced due to rapid growth in birth rate (high birth rate).
There is addition in the population trend, but no decline due to low death rates.
            Population in India has being steadily increasing year after year. It began
increasing rapidly since 1991 and the year 1991 is refer to as “years of big divide”
            There are these major causes for increasing population:
1)      High birth rate
2)      Low death rate
3)      Immigration.
Q4)      CAUSES OF HIGH BIRTH RATE IN INDIA:-
The birth rate of the country is a highly complex phenomenon. It is determine
by socio economic, cultural and religious factor.
1)         ECONOMIC FACTORS.
          POOVERTY :-
Poor people tend to have more children because they do not bother or worry about
their own standard of living. Poverty works against the acceptability of family
planning programs initiated by the government for the poorer section of the society.
         PRE-DOMINANCE OF AGRICULTURE :-
Specially during the harvest time weeding and sowing, child labour is highly effective
in agriculture. For agriculture it has become necessary for abundant labour
(manpower) in the form of child labour.

         SLOW URBANISATION :-
Urbanization form people to bring down the birth rate. Space problems, sanitation
and hygiene coupled with income and employment reduces the charms of high birth
rate.
                  SOCIAL FACTORS :-
         UNVERSAL MARRIAGE :-
Marriages in India, is an universal institution and every one sooner or later maries.
Woman’s who cannot bear children are looked down in the society. Having a male
child is a religious necessity.
         JOINT FAMILY SYSTEM :-
The joint family system induces young couple to have children though they may not
in position to support them.
         ILLETERACY AND IGNORANCE :-
Majority of the population being illiterate, ignorant and superstitious, excepts more
children’s as “gift of God”. Absence from family planning methods also add up to the
growth in the population.
         RELIGIOUS FACTOR :-
In Indian society they lives in the concept of “Mukti”, liberation form the cycle of
birth and death, in the presence of son is essential in the family. The couples do not
entertain the family programs.
Q5)      CAUSES OF LOW DEATH RATE :-
         IMPROVEMENT IN MEDICAL FACILITIES :
Medical facilities in term of Hospitals, Primary Health Care, Efficient Doctors and
Nurses etc., has led to decline in the death rate. Discovery of medicines, improved
health services, techniques for prevention has controlled many diseases from
Cholera, Malaria, Plague, T.B, which were fatal in the past.
         BETTER CONTROL OVER NATIONAL CALAMITIES :-
Improvement in a means of transport and communication have indirectly reduce
death rates. Natural calamities like Earth Quake, Floods, etc. are now controlled and
effective services, quick relief is sent to effected areas. Necessary like food, medicine
and cloths are rushed to the people in need by means of helicopters, air plane , etc.
         FALL IN POST – MORTALITY RATE :-
Due to easy availability of service of hospitals, medicine, efficient doctors, transport
facilities and communication, there is a rapid fall in the death rates, specially
amo0ng women pre and post delivery.
         FALL IN INFANT MORTALITY RATE :-
Due to better medical facilities, the infant mortality rate was reduced.
         PUBLIC HELTH SERVICES :-
The state as well as central government undertakes various ‘public health schemes’,
‘five year plan’, measure like free food and milk for children in municipal schools,
supply of portable drinking water etc. are undertaken. Besides these education public
welfare and awareness program help the people to keep themselves healthy and
updates.
Q6)      NATIONAL POPULATION POLICY :-
A national policy that seeks to bring about changes in the “fertility rate” levels
by 2010 and stabilized the population by 2045 was initiated and approved by the
union cabinet on February 10, 2000.
National Population Policy 2000 enlisted the following recommendation :-
         Reduction in infant mortality rate.
         Reduction in maternal mortality rate
         Access to information containing “AIDS PREVENTION AND CONTROLL OF
COMMUNICABLE DEASES”.
         Incentives to adopt to children’s, a small family norm.
         Strict enforcement of “Child Marriage ACT” and “Pre total diagnostic techniques
ACT”. Etc.
         Raising the age of marriage for girls to 20 years.
         Health insurance cover for those who live below the poverty line having two children
         The appointment of “National Commission 2000” that is to be headed by the Prime
Minister to monitor the implementation of the policy.
Q7)      CAUSES FOR THE FALIURE OF POPULATION
CONTROL:-
India has not yet achieved sufficient success in controlling the ever increasing
population due to the following reasons :-
         Inadequate preparation and insufficient education system.
         Hospitality from private doctors and the prevalence of mid wives.
         Financial constrain.
         Religious belief among the mass.
         Difficulties involved in conducting “Population Contact Programs” among the
illiterate population.
         Failure and in implementing the incentives.
         Failure for providing facilities for the rural population.

DISTINGUISH BETWEEN ABSOLUTE AND RELATIVE POVERTY

ABSOLUTE RELATIVE
 1)      It is refer to as the total absence of minimum 1) It is a comparison of the standard of
subsistence of minimum subsistence level living        
     of rich and poor
2)      It is defined  with reference to a minimum 2) It is defined with reference to inequalities
nutritional level of income
3)      It exist in poor country 3) It exist in all the countries and is
universal problem

CHAPTER NO. 07
AGRICULTURE
                        AGRICULTURE :
                        INTRODUCTION:
Agriculture is the back bone of the Indian economy. It occupies the distinct
place in our economy. It id the largest industry which provides employment to about
65% of the total work force (labour) in the country, agriculture is the source of
livelihood for about 2/3 of the working population in the country.
Q1.      CAUSES OF LOW AGRICULTURAL PRODUCTIVITY
IN INDIA.      
Agricultural Productivity refers to land productivity i.e field per hector. It is
expressed in the quantity produced and not the value. Agricultural productivity in
India is low. But has been steadily increasing since 1950-51.
                        CAUSES OF LOW PRODUCTIVITY :-
A)     GENERAL CAUSES :-
         Overcrowding in agriculture : -
Indian agriculture is overcrowded by people. It has lead to decline in the per – capita
land area, fragmentation and sub-division of land holdings, disguised unemployment
and negative marginal productivity.
         Unfavorable rural environment :-
The atmosphere in the village is unfavorable and not conclusive to the development
of the agriculture. They are influenced by customs and social institutions, like cast
systems, joint family systems, etc. all these discourage the farmers from improving
agricultural production.
         Lack of finance storage and marketing facilities :-
Productivity in India has suffered due to non-availability of credits, warehouses, for
storage and marketing facilities. The provisions made under planning has been
inadequate.
B)     INSTITUTIONAL FACTORS :-
         Uneconomical size of holdings :-
India is a poor country, consisting of small farmers. Every farmer owns a land. 70 %
of the total land holdings are small in size and are scattered. Application a model
technology has become a difficult task on small holdings which has contributed to
low productivity.
         Faculty land system :-
Defective land system gives rise to land lords and tenants. The land lords exploit the
tenants. Tenants have no security and are unable to invest. All these leads to pressure
on productivity.
C)     TECHNOLOGY FACTORS :-
         Poor techniques of production :-
Failure to implement modern technique, absolute nature of implements etc. has led
to low productivity.
         Inadequate irrigational facilities :-
Indian agriculture is skill a “Gamble in the monsoon”. Agriculture totally depends
upon the rainfall in India. 70% of the cultivable land is deprived of irrigational
facilities that lead to low productivity.
         Rural indebtedness :-
It is another factor leading to declining productivity in India. The farmer is not able
to come out of it. He is unable to invest as the income goes away to the borrower.
Q2.      MARKETING SURPLUSS IN AGRICULTURE.
WHAT IS IT ?
            PRESENT SYSTEM OF AGRICULTURE
MARKETING.
            There are many ways by which the farmer disposes his
surplus produce :-
         The farmer sells his produce to the village traders.
         The farmer may sell it in a weakly markets, village bazaar, etc. they conduct festivals
like jatra, fairs etc. to sell their products.
         The farmers may sell it in mandees of small and large towns. In the mandees there
are brokers or dalals who help the farmers to sell their products to the whole-seller.
SHORT NOTE :            (CHAPTER NO. 09)
1)      CALL MONEY MARKET :-
Refers to market of extremely short period. The money – (loan advancement by
banks to bill brokers and stock exchange dealers) is lent up to 7 days. Now a days the
transaction takes place every day or even within a overnight. Such money or loan is
termed as “call money”. Since the money can be called at the shortest possible notice
(time).
2)      ACCEPTENCE MONEY MARKET :-
Acceptance money market refers to the market for “banker’s acceptance” which arise
due to trade practice both at home and foreign transaction.
3)      THE COMMERCIAL BILL MARKET :-
The “bill Market” or “discount Market” refers to market in which short date trade
bills or paper documents are bought and sold E.g.:- Stock, Shares.
4)      TREASURY BILL MARKET :-
Treasury bill market refers to “promissory notes” of the government which promises
to pay a specified sum of amount after a particular period of time generally 90 days.
Organized feature of money market:-
1)      Highly organized commercial banking system.
2)      Presence of a central bank
3)      Availability of proper credit instrument
4)      Availability of ample resource.

CHAPTER NO. 08
INDUSTRY
        NEED FOR RAPID INDUSTRIALIZATION IN INDIA
Economist argue and were in favour of rapid industrial growth. It breaks the
economy precious cycle of poverty, low productivity, low employment opportunity,
 low per capita income, low investments etc. need for rapid growth in India is
necessary as –
1)      TO IMPROVE THE ECONOMIC INFRA STRUCTURE :-
The infra structure facilities included transport and communication network,
generation and distribution of electricity etc. for the progress of the economy, they
are essential for the growth of small scale and large scale industries, it is also
necessary to improve the trade and commerce in our country.

2)      TO MAKE A STRONG INDUSTRILA SECTOR :-

Developed countries have a strong basic industrial structure. It is essential for
growth and development of the economy.

3)      TO EXPLOIT NTURAL RESOURCES :-

Proper exploitation of the natural resources of the country would be possible only
through rapid industrialization. Thus mineral resources, water resources and forest
resources in our country can lead to expansion in various industries which utilize
them to create production (manufacture)

4)      TO REDUCE POPULATION PRESSURE ON LAND :-

Agriculture – One of the most important need for rapid industrialization is to reduce
the pressure of the population of the India agriculture and direct human labour to
the secondary sector (Industries)

5)      TO INCREASE EXPORT EARNING :-

Rapid industrialization leads to diversification of different item. It create items to be
exported. Jute, Tea, Coffee, Sugar Etc. are the primary products which are now
exported and money flows into the economy by way of “balance of payment”

6)      INCREASE AGRICULTURE DEVELOPMENT :-

Agriculture depends upon the scientific growth of modern techniques and innovation
in its field. The industrial sector supports this process of development by supplying
chemical fertilizers, tractors, improved machineries and so on to the agriculture
sector.

        NEW INSDUSTRIAL POLICY (1991)

                        The new Economic policy was introduced in 1991 it was characterized
by –
1)      (popularly known as L.P.G – Liberization, privatization, globalization) it
is with reference to remove the control imposed by the government on the economy
and allowing the market forces to influence economic activities.
2)      PRICATIZATION :
It refers to allowing and giving permission to private sectors to play a greater role in
various fields.
3)      GLOBALISATION :
It refers to integrating the Indian economy with the world economy by removing
restrictions and allowing free flow of goods and services.

        ABOLISHING OF MRTP LIMITS :-

                                     (Monopoly restrictive trade practice )
Earlier monopoly firms exploided trade practices, all the firms with assets
about 100 crorers were considered MRTP firms that is they were subject to a number
of rules and regulation which effected their growth. In 1991 the government remove
the limits of MRTP firms. Which helped such firm to be on par with others. They
required no approval from the government for investments.

        PUBLIC SECTOR ROLE DILUTED :-

                        Initially during planning process the public process the public sector
had a major role to play. But with the introduction of industries were given
privatization by 2000 only three industries were held by the public sector.  Eg:. 1)
Atomic energy 2) Railways 3) Mineral.