Class 10th - Economics

Development
 Development
Income and other Goals
● We look at a mix of goals
What development promises?
● Different people different development goals, even contradictory
● Example: Dam construction

National Development Thinking about fair and just path for all because ….

How to compare different countries or states?

Total income Average income/Per-capita Income Limitation is that it

hides
disparity/Income
Income of all the residents. Total income divide by its total population distribution

World Development Report brought by World Bank uses per capita income to compare and classify countries.
 Beside income, there are important attributes to compare nations. (infant
Income and other criteria mortality rate, Literacy rate, Net attendance ratio)

(Comparative data on Haryana, Kerala and Bihar)

● Facilities that are essential for all the people to live a quality life and provided by
Public facilities the government to the people are called public facilities.
● Health, education and PDS

Published by UNDP, compares

Human development report countries on the basis of
education, Health and Income.

● Development that meets the needs of the present without compromising the ability
of future generations to met their own needs.
Sustainability of development
● Eg: Ground water and crude oil
 Class 10th - Civics

Sectors of Indian Economy

 Primary sector
(Agricultural sector, uses natural resources)

Comparing the three sectors

Secondary sector

(Industrial sector, natural product are changed into ● Interconnected and intermediate goods are used up in making
finished product through manufacture) final goods and services Ex: Biscuit production
● The sum of the value of final goods and services produced in
the country during a particular year gives us GDP
Tertiary sector
(Service sector helps in the growth of
primary and secondary sector)
Why are only final goods and services counted?
 Historical Change in Sectors

Primary Sector Secondary Sector Tertiary Sector

 Primary, Secondary and Tertiary sector in India

Production (Most in tertiary sector) Employment: Similar shift has not taken place in employment
Why Why

● Majority people are employed in Primary sector

Essential services are required, growth of primary and
● Not enough jobs were generated
secondary sector leads growth of tertiary, Rise in income leads
● underemployment/disguised, unemployment in
to more service consumption, emergence of new services.
agriculture

(* But not all services are growing equally)

How to create more employment?

● Irrigation facilities → Transportation → Cheap credit → Small scale industries.
● Exploring New sectors (Education, Health, Tourism) + MGNREGA 2005

● Law implementing right to work

● All those who are able to, and are in need of work are guaranteed 100
days of employment in a year by the government.
 Sectors on the basis of Working conditions

Organised Unorganised

The organised sector covers those places of work The unorganized sector is characterized by small
where the terms of employment are regular and and scattered units. Employment is not secure.
therefore, people have assured work

Protection through
How to protect workers in unorganised sector?
● Timely delivery of seeds, agricultural
● Rural area (Landless agriculture labourers, small and marginal inputs, credits, storage facility
farmers etc)
● Procuring of raw material and marketing
● Urban area (workers in small scale industries, casual workers etc) output, economic and social protection
 Sectors of Indian Economy

Public sector Private sector

● The government owns most of the ● Ownership of assets and delivery of

assets and provides all the services services is in the hands of the private
individuals or companies.
● Eg. Railways
● Eg. TISCO
● Service Motive
● Profit motive

Importance of Public Sector?

● Certain important services cannot be provided by private sector at a reasonable cost.

● Certain activities require government support (cost bearing) E.g. PDS
● Responsibility of the government to spend on some services E.g. Health and education.
 Class 10th - Economics

Money and Credit

 Situation before money → Barter System (Double coincidence of wants)
Money as a medium of exchange
Economy with money → Money acted as Medium of exchange

Currency Deposits with Banks

Modern form of money ● Precious metals → paper notes and coins ● Demand deposits
● RBI and legal force to Indian rupees. ● Cheque facility
● No one can legally refuse payment made in Rupees. ● Settle payment without cash
Loan activities of banks

● Banks charge a higher interest rate on loan than

what they offer on deposits
● The difference is the income of bank.

Two different credit situations
(whether it will be useful or not it
depends on the risk involved)
Credit plays a vital and positive role
Positive
Example: shoe manufacturer Salim
Credit pushes the borrower into debt trap
Negative
Example: Swapna and her agricultural loan

● Interest rates, documents required, collaterals and the mode of loan repayment
Terms of credit together comprise the terms of credit.
● These terms are subjective and may differ from one lender to another.

Trick: DO CO MO internet
 Variety of credit arrangements Money lenders, Bank, employer and cooperatives

Formal sector Informal sector

Formal sector credit in India ● Banks and cooperatives ● Money lenders, friends, relatives
● Terms of credit are genuine ● Terms of credit are exploitative

Monitors that banks are maintaining cash balance.

Reserve Bank of India
Everyone gets the loan, Banks submit reports to RBI on how much
supervises it
they are lending, to whom, at what interest rate.

No organisation to supervise informal sector lending → Result ?

(Exploitation of borrower, higher interest rate, unfair means = Cost of borrowing)
Higher cost of borrowing = Borrower have less income, debt trap, no enterprise in country
ஃ Cheap and affordable credit is crucial for country’s development.
 Credit Who get’s what?

Formal sector still meets only about half of the total credit needs of rural people

ஃ Banks and cooperatives should increase their lending particularly

in rural areas. Along with the expansion of formal sector loan, it is
needed to ensure that everyone receives it.

Self Help Groups for the poor Advantages

● The moneylenders charge very high rates of interest, keep no ● Loans without collateral
records of the transactions and harass the poor borrower.
● Decisions are taken by members
● The idea is to organise rural poor, in particular women, into small
Self Help Groups (SHGs) and pool (collect) their savings. ● Building blacks of rural poor, women
become self reliant, can discuss other
● A typical SHG has 15-20 members, usually belonging to one issues.
neighbourhood, who meet and save regularly.
 Class 10th - Economics

Globalisation and the Indian Economy

Production across countries Until the middle of the twentieth century, Appeared
production was largely organised within countries. MNCs

● A MNC owns or controls production in more than one nation.

● MNCS produce goods & services globally to ensure the least cost of production in a complex way.

Interlinking production MNCs look into various factors before setting

Across countries up of production through these ways.

● Direct investment made by MNCs in the form of foreign investment.

● MNCs enter into a partnership/joint venture by setting up production jointly with local companies.
● MNCS buy/takeover/merge with local companies.
● Large MNCs place order to small producers and sell then under their brand name.
 Foreign trade & Goods are sold and purchased from one country
Integration of markets to another connecting the markets.

It creates opportunities for both

Producer : Sell their produce beyond market of their own country.
Buyers : Expanding the option to choose from + Improved quality + Price
➢ Foreign trade results in connecting/integrating the markets in different countries. = Globalisation

● The process of rapid integration or interconnection between countries.

● More & more goods & services, investments & technology are moving
What is Globalisation ? between countries
● It helps in movement of people for better- income, job, education
between countries.
Factors that have enabled globalisation

1. Technology : Improvement in technology, transportation, IT, telecommunication, internet have

brought the world closer.
Example : Containers for transport of goods, using IT in globalisation.

2. Liberalisation of foreign trade and foreign investment policy.

● After Independence : Trade barrier were used to regulate foreign trade and protect domestic producer
● After 1990’s : Trade barrier were removed to improve the performance of producers under competition
and this was supported by powerful international organisations.
● Removing barriers or restrictions set by the government is what is known as liberalisation.

World Trade Organization (WTO) is one such organisation

World Trade Organisation (WTO) whose aim is to liberalise international trade. Though WTO is
supposed to allow free trade for all, in practice, it is seen that
the developed countries have unfairly retained trade barriers.
 Globalisation has impacted both producers and
Impact of Globalisation in India
consumers in positive as well as negative sense.

Positive : Consumers enjoy improved quality and cheaper, higher standard of living more job opportunities, MNCs have
increased their investment in industries like automobile, cellphones, electronics, soft drinks, fast food & services Local
companies supplying raw material to MNCs are becoming prosperous. Some Indian companies also emerged with MNCs.
Eg: Tata Motors, Infosys, Ranbaxy Asian Paint, etc.
Negative : Many of the small producers have been hit hard e.g. Ravi the capacitor
producer and a lot of workers have lost their jobs due to cost-cutting.

The Struggle for a Fair Globalisation

A fair globalisation is when opportunities are created for all its benefits are shared.
● Government can ensure that labour laws are properly implemented & the workers get their rights.
● Government can support & protect small producers from competition. Government can negotiate at the
WTO for fairer rules.
● It can also align with other developing countries to fight against authority of developed nations at WTO.
● People can play an important role in the struggle for fair globalisation.
 SOMETHING BIG
Coming Soon… All
SOMETHING
FOR ALL !! The
15th March Best
#Together we can, we will
Crafted with love
BY DIGRAJ SINGH RAJPUT