NOTES OF

INDIAN ECONOMIC
DEVELOPMENT

CLASS XII

DHEERAJ JAGIYA CLASSES

THESE NOTES OF INDIAN ECONOMY ARE AS PER LATEST

SYLLABUS ISSUED BY CBSE FOR 2022-2023.

- CS DHEERAJ JAGIYA
CH 1ST INDIAN ECONOMY ON THE EVE OF INDEPENDENCE

CH 2ND INDIAN ECONOMY 1950 - 1990

CH 3RD LPG POLICY

CH 4TH DELETED FROM SYLLABUS

CH 5TH HUMAN CAPITAL FORMATION

CH 6TH RURAL DEVELOPMENT

CH 7TH EMPLOYMENT

CH 8TH DELETED FROM SYLLABUS

CH 9TH ENVIRONMENT AND SUSTAINABLE DEVELOPMENT

CH 10TH COMPARATIVE STUDY OF INDIA, CHINA AND PAKISTAN

 CHAPTER 1ST INDIAN ECONOMY ON THE EVE OF INDEPENDENCE

INTRODUCTION
The foundation of British Empire in India was laid by battle of plassey in
1757.

BASIC PURPOSE OF BRITISH RULE IN INDIA

The main purpose of British rule in India was to use Indian economy as a feeder
economy for the development of Britishers.

Britishers exploited the natural resources as well as human resources of India for
their own development.

LEVEL OF ECONOMIC DEVELOPMENT DURING BRITISH RULE

BEFORE THE BRITISH RULE,

Before the british rule, Indian economy was characterized by following;

AGARIAN ECONOMY; Agriculture was the main source of livelihood and

around two third of the population was engaged in agriculture

PROPEROUS ECONOMY ; India was an independent and prosperous economy

WELL KNOWN HANDICRAFT INDUSTRIES ; India was also known for its
handicraft industries in the field of cotton, silk and other precious metals.

HOWEVER UNDER BRITISH RULE,

the economic policy of Britishers was concerned with the promotion of their own
interest. They transformed the India into the supplier (exporter) of raw-
materials and consumer of finished goods from Britain.

NOTE:

Colonialism refers to a system of political and social relations between two

countries, out of which one is ruler and other is its colony. In our case, Britain
was ruling country and India was its colony.
AGRICULTURE SECTOR DURING BRITISH RULE
Agriculture sector during British rule was stagnant due to following reasons;

1.) ZAMINDARI SYSTEM –

Zamindari system is also known as land revenue system or land settlement
system. The most important reason for stagnation of Indian agricultural sector
was introduction of Zamindari system. Zamindari system states the
following:

• Under this system the profits of agriculture sector went to zamindars in

the form of lagan.
• The main interest of zamindars was to collect lagan from farmers
irrespective of conditions of farmers.
• Zamindars have to deposit these lagaans to Britishers on a fixed date.
• Zamindars were considered as permanent owner of land.
• Zamindars and british govt. did nothing to improve the condition of
agriculture

2.) COMMERCIALIZATION OF AGRICULTURE –

it means production of crops for sale in the market rather than for self
consumption.

During the british rule, farmers were given higher price for producing cash crops
like cotton or jute or sugarcane. Britishers forced the farmers to produce cash
crops because britishers can use these crops as a raw-material in their industries.

The british industries were in the need of raw-material and thus they offered
higher prices to Indian farmers for production of cash crops like jute and cotton.

3.) LOW LEVEL OF PRODUCTIVITY –

Low level of technology, lack of irrigation facilities and lack of fertilizers
resulted in low level of productivity.
The cultivators i.e farmers were not interested to invest in agriculture and
zamindars had no roots in the villages and all these lead to decline in the
productivity of agriculture.

4.) SCARCITY OF INVESTMENT –

The agriculture of India during british period was facing scarcity of
investment in flood control system and drainage system. Britishers and
zamindars were not interested in making investments in agriculture and
moreover farmers shifted from food crops to cash crops. It all leads to decline in
the growth and productivity of agriculture.

NOTE :

ADVERSE EFFECT OF PARTITION ON INDIAN AGRICULTURE

Due to partition, a large portion of India’s fertile land went to Pakistan and
almost jute producing area became part of east Pakistan (now east Pakistan is
Bangladesh).

INDUSTRIAL SECTOR DURING BRITISH RULE

The poor state of industrial sector during British rule is described as following;

1.) DE - industrialization :
British govt systematically destroyed the Indian handicrafts industries. The
main motive of britishers was;

a) to get raw-material from India at cheaper rates for their industries in Britain

b) to sell finished goods to India at higher prices.

Britishers introduced DISCRIMINATORY TARIFF POLICY which means no

custom duty was imposed on export of raw material by India to Britain and no
custom duty on import of finished goods from Britain but heavy taxes were
imposed on export of handicrafts by India.
2.) ADVERSE EFFECT OF DE-INDUSTRIALIZATION AND
DISCRIMINATORY TARIFF POLICY –
Due to decline of handicraft industries, the Indian economy affected as follows;

a) due to import of finished goods, we faced a great outflow of foreign currency

b)the decline of Indian handicrafts resulted in unemployment on mass scale

and people were forced to take up agriculture for their livelihood.

3.) LACK OF CAPITAL GOODS INDUSTRIES –

Capital good industry refers to an industry which can produce machines, tools,
etc. during british rule , there was hardly any capital goods industry which
leads to fall in growth of industrial sector.

Britishers never paid any attention on growth of capital goods industries as

they always wanted Indians to be dependent on Britain.

4.) LOW CONTRIBUTION IN GDP –

The growth rate of new industries was very small which leads to decline in GDP

5.) LIMITED ROLE OF PUBLIC SECTOR –

The public sector was just focused on railways, electricity and communication.
There were no serious steps for the promotion of industries.

FOREIGN TRADE UNDER BRITISH RULE :

Foreign trade under british rule can be described as follows;

1.) EXPORTER OF PRIMARY PRODUCT AND IMPORTER OF

FINISHED GOODS –
India become the exporter of raw-material like cotton , jute, etc and became the
importer of finished goods which leads to more outflow of foreign currency and
thus India’s foreign trade significantly declined

2.) MONOPOLY CONTROL OF BRITISHERS –

British government maintained a monopoly control on the export and import of
India.

a) around half of India’s foreign trade was restricted to Britain and the
remaining half was allowed for only these three countries namely like Ceylon
i.e srilanka, china and Persia i.e Iran

b) the opening of suez canal in 1869 served as a direct route between India and
britain

3.) DRAIN OF INDIAN WEALTH –

Under the british rule , India became the exporter of raw-material which leads to
surplus of exports. This surplus was used by britishers for the following
purposes :

a) to make payment for expenses incurred by British government.

b)to meet expenses on war fought by british government.

c)to import invisible items.

Q.) WRITE A SHORT NOTE ON SUEZ CANAL

Ans. Suez canal is an artificial water way from north to south in the
north eastern Egypt.
The opening up of suez canal in 1869 reduced the cost of
transportation and made the capturing of Indian market easier.

The suez canal provided a direct route for ships between Britain and
India and avoided the route around Africa.

DEMOGRAPHIC PROFILE DURING BRITISH RULE

The demographic condition during British rule can be described as that the
Indian economy was stagnant and backward.

1921 is called as year of great divide. BEFORE 1921, India was in the first
stage of demographic profile or transition. BUT, after 1921 second stage of
demographic transition begin and population is continuously rising.

1.) HIGH BIRTH RATE AND DEATH RATE – BIRTH rate refers to the no. of children born
per thousand in a year. Death rate refers to no. of people dying per thousand in a year. Birth
rate and Death rate both were very high i.e 48 and 40 per thousand respectively.

2.) EXTREMELY LOW LITERACY RATE – A person who is able to read and write is called
literate. The overall literacy rate was less than 16% . out of this, the female literacy level was
about 7%

3.) POOR HEALTH FACILITIES – Health facilities were not available in large areas and if
available then it was totally inadequate. It leads to water and air borne diseases.

4.) INFANT MORTALITY RATE – It means number of Infants dying before reaching the age
of 1 year per thousand. The infant mortality rate was alarming around 218 per thousand
and in 2011 it was 32 per thousand in 2018.

5.) LOW LIFE EXPECTANCY – Life expectancy refers to average no. of years for which people
are expected to live. Life expectancy was 32 years during British rule and now in 2018 its
69 years.

6.) WIDE SPREAD POVERTY – there was no doubt about the poverty situation of India
during British rule. The extensive poverty prevailed in India during British rule. The
standard of living of common people was very low.
NOTE : so we can conclude that British rule was the main reason behind the poor
demographic profile of India.

INFRASTRUCTURE DURING BRITISH RULE

The infrastructure during British rule were very poor but some efforts were
made by Britishers to develop infrastructure in India. The infrastructural
development during british rule can be described as follows:

1.) ROADS – the british government could not accomplish much on the
construction of roads due to shortage of funds. The roads were built to mobilize
the army and raw-material from one place to another.

However, there always remained the shortage of roads in the rural areas and
they suffered badly during natural calamities.

2.) RAILWAYS – It was introduced in India in 1850. The railways affected

Indian economy in following ways:

a) railways enabled people to undertake long distance travelling and helps in

removing all the cultural barriers.

b)it enhanced the commercialization of agriculture.

3.) AIR AND WATER TRANSPORT – British govt. took various measures for
development of air and water transport but this development was not
satisfactory because these canals were built at a very huge cost.

4.) COMMUNICATION – postal and telegraph facilities were the most popular
mean of communication. Electric telegraph in India was introduced for
maintaining law and order but at a huge cost. Postal services were somehow
inadequate.
REASONS BEHIND INFRASTRUCTURE DEVELOPMENT BY BRITISHERS IN
INDIA

1.) REASON BEHIND DEVELOPMENT OF ROADS – roads were built to

mobilize the army within India and to mobilize the raw-material from
countryside(rural areas) to nearest railway stations or ports.

2.) REASON BEHIND DEVELOPMENT OF RAILWAYS – railways was

developed for three reasons:

a) To have effective control and administration on India

b) To spread machine made goods all over India.

c)To earn profits through foreign trade by linking railways with ports

3.) ELECTRIC TELEGRAPHS – electric telegraphs were introduced to maintain

law and order in India.

OCCUPATIONAL STRUCTURE DURING BRITISH RULE

It refers to distribution of working population among different sectors of
economy. Different sectors are following…….

1.) PRIMARY SECTOR – it includes all those units using natural resources
like land , water etc. it includes farming, fishing, mining, animal husbandry,
forestry, etc.

2.) SECONDARY SECTOR – it includes production units which are engaged

in transforming one good into another good. They convert raw-material into
finished goods. For example construction companies, sugar mill, power
generation, etc.

3.) TERTIARY SECTOR – it includes units which are engaged in producing

services. For example – transport, education, finance, banks, insurance
companies, govt. administration, etc. tertiary sector is on 3 rd place because its
growth dependent on primary and secondary sectors.

Occupational structure during British rule can be described as following;

• The agriculture sector accounted for around 70-75% of total working

population and the remaining 25% were involved in secondary and
tertiary sector. (10% secondary sector and 15% tertiary sector).
• There were some regional variations like

(a) states i.e Tamilnadu, Andhra Pradesh , kerala , Karnataka , Maharashtra

and west Bengal showed a decline in dependence of workforce on agriculture
and rise in workforce in secondary and tertiary sector.

(b)states like orrisa, rajasthan and Punjab witnessed a great rise of workforce
in agriculture.

POSITIVE CONTRIBUTIONS OF BRITISH RULE :

1.) SELF SUFFICIENCY IN FOOD GRAIN – Commercialization of Indian agriculture
initiated by britishers resulted in self sufficiency in food grain production.

2.) BETTER MEANS OF TRANSPORTAION – development of roads and railways provided

cheap and rapid transport system and new opportunities of growth were now openend.

3.) CHECK ON FAMINES – roads and railways was the greatest achievement because it
provided check on famines because food now can be easily supplied in case of drought.

4.) SHIFT TO MONETARY SYSTEM – British rule helped Indian economy to shift from
barter system to monetary system of exchange.

5.) EFFECTIVE ADMINISTRATION – British government had an effective administration

system which ultimately provided benefits to the Indian politicians.

INDIAN ECONOMY ON THE EVE OF INDEPENDENCE

1.) COLONIAL ECONOMY – In India British exploitation is a long history.

 • British rule resulted in drain of Indian wealth for the growth and development of
britishers.
• They encouraged Indian farmers for commercialization of agriculture from food crops
to cash crops.

2.) SEMI- FEUDAL ECONOMY – by the end of British period there were two
aspects of INDIAN economy.

• INTRODUCTION OF FEUDAL SYSTEM – the zamindari system gave birth to

landlords – tenant relations in which landlords used to charge very high rate of lagan
from the tillers (farmers)
• INTRODUCTION OF CAPITALIST SYSTEM – this system leads to creation of two
classes - (a) capitalist (b) labourers

3.) STAGNANT ECONOMY – A stagnant economy is one which is growing at a

very low rate. At the eve of independence Indian economy was stagnant because
real GDP was less than 2% and per capita income was only 0.5%

4.) BACKWRD ECONOMY – At the time of independence, Indian economy was

the backward economy because;

• Low level of productivity

• Low per capita income
• Traditional methods of agriculture
• High birth and death rate
• Mass illiteracy

5.) DEPLETED ECONOMY – depleted economy also called as depreciated

economy. At the time of independence, Indian economy became a depleted
economy. Depleted economy refers to an economy where no arrangements have
been made to replace the assets with new one. British rulers did not make any
arrangements to replace the depreciated assets.

During the 2nd world war, Indian industries had to work beyond their capacities
to meet the increased demand of Britishers but Britishers did not make any
arrangement to replace the depreciated assets and had left India as a depleted
economy.

6.) AMPUTATED ECONOMY – the British policy of DIVIDE AND RULE always
encouraged discrimination between people on the basis of language, caste,
religion, culture, etc. due to this , at the time of independence country was
divided into two parts India and Pakistan.

The partition adversely affected Indian economy because most of the fertile land
went to Pakistan and most of the jute producing area became part of east
Pakistan.

IMPORTANT NOTES OF CHAPTER 1ST :

• National income and per capita income estimation were considered very
significant by Dr. RAO
• FIRST National Income was estimated by Dadabhai naroji
• First official census of India was conducted in 1881
• The industries established during independence were cotton textiles and jute
mills.
• The cotton textiles were dominated by Indians and were located in
Maharashtra and Gujrat.
• Jute mills were dominated by foreigners and were located in Bengal.
• The main Industry was Tata iron and steel company (TISCO) established in
1907 in Jamshedpur (Bihar) .
• Railway was introduced in 1850 but first train operated between bombay to
thane with a distance of 34 kms on 16th april 1853.
• Britain was a ruling country and India was a colony.
• Zamindari system (permanent settlement system) was introduced by LORD
CORNWALLIS in 1793.
• Share cropping means when land owner allows the farmer to use his land and
in return farmer will share some crops to landlord as a rent.
• Before 1921, high Birth rate and High death rate but after 1921 there was high
birth rate but low death rate. Dats why population rises continuously and
1921 is called as year of Great divide.
• Coast canal was in Orissa.
• J.R.D TATA was the pioneer of Indian aviation in 1932.
CHAPTER 2ND INDIAN ECONOMY DURING 1950 – 1990

ECONOMIC SYSTEM refers to an arrangement by which central problems of an economy are

solved.

CENTRAL PROBLEMS
1.) WHAT TO PRODUCE –
It involves deciding the combination of goods and services to be produced and the quantity of
the goods the economy should produce.

2.) HOW TO PRODUCE –

It involves deciding the technique of production i.e labour intensive technique or capital
intensive technique. When goods are produced with more labour and less capital then it is
called labour intensive technique whereas, when goods are produced with more capital and less
labour then it is called capital intensive technique. Economy have to decide by which
technique we should produce the goods.

3.) FOR WHOM TO PRODUCE –

it involves deciding the distribution of output among people. It involves selection of category
of people who will consume the goods.

TYPEOF ECONOMIES AND SOLUTIONS OF CENTRAL PROBLEMS IN

DIFFERENT ECONOMIES.
There are three types of economies…

1.) capitalist economy

2.) socialist economy

3.) mixed economy

1.) CAPITALIST ECONOMY –
Capitalist economy is one in which all the means of production like labour, machinery, etc
are owned, controlled and operated by private sector. Production is done mainly for profits. In
this, central problems are solved with the help of demand and supply.

• WHAT TO PRODUCE? -- under the capitalist economy, only those goods are
produced that can be sold at handsome profit
• HOW TO PRODUCE? – goods are produced with the cheaper technique of production.
In case of cheap labour, labour intensive technique should be used where as in case of
costly labour, capital intensive technique will be used.
• For whom to produce? – goods produced are distributed among people on the basis of
their purchasing power not on the basis of needs.

2.) SOCIALIST ECONOMY –

A socialist economy is the one in which means of production are owned, controlled and
operated by government. Under socialist economy, central problems are solved as follows;

• WHAT TO PRODUCE? – In socialist economy, government will produce those goods

which is accordance with the need of society and social welfare.
• HOW TO PRODUCE? – Government will decide the technique of production in the best
interest of economy.
• FOR WHOM TO PRODUCE? – Under this goods are distributed among people on the
basis of need not on the basis of purchasing power.

3.) MIXED ECONOMY –

A mixed economy refers to a system in which public sector and private sector both are allotted
their respective roles to solve their central problems.

In the mixed economy, the government and market together solve the three central problems
in such a way that the private sector will provide those goods and services which they can
produce and government will produce essential goods which the private sector fails to provide.
INDIA ADOPTED THE MIXED ECONOMY
After the independence , the Indian leaders were in the favour of socialist economy but the
complete dilution of private ownership was not possible because it will lead to low
developments in economy.

Only capitalist economy was also not preferable because their would be less chances for
empowerment of life of poor.

As a result, India adopted the mixed economy with a a strong public sector but also with
private property and democracy.

ECONOMIC PLANNING

It can be defined as making major economic decisions by a determinate authority on the

basis of survey of whole economy.

The government of India setup planning commission in 1950 with the prime minister as
chairman.

The purpose of planning commission was to analyze the effective utilization of physical and
human resources.

The planning commission fixed the planning period for 5 years.

It must be noted that the first industrial policy resolution was passed in 1948 and planning
commission was setup in 1950.

The concept of five year plans was borrowed from former soviet union and the first five year
plan of India was launched from 1st april 1951 to 31st march 1956.
LONG TERM GOALS OF FIVE YEAR PLANS

1.) GROWTH –

Growth refers to increase in the country’s capacity to produce the output of goods and services
within the country.

GROWTH implies;

Either a larger stock of productive capital (or) a larger size of supporting services like
banking, transport, etc (or) increase in the efficiency of productive capital and services.

A good indicator of economic growth is steady increase in GDP. GDP refers to market value
of all final goods and services produced in the country during a period of one year. Increase
in GDP enables people to enjoy a more rich and varied life.

The GDP of a country derived from primary sector, secondary sector and as well as from
tertiary sector.

By 1990, the share of the service sector was 40.59 % in the total GDP of India.

2.) MODERNISATION –

We have always recognize the need for modernization to raise the standard of living of
people. Modernization includes the following:

1.) ADOPTION OF NEW TECHNOLOGY – Modernization aims to increase the production of

goods and services with the help of new technology. For example: a farmer can increase the
output by using new variety of seeds. Similarly a factory can increase its output by using
new types of machines.

2.) CHANGE IN SOCIAL OUTLOOK – modernization also require change in social outlook
like gender empowerment or providing equal rights to men and women.

The term modernization implies the following:

a) diversification of activities

b)advancement of technology and innovations

the main aim behind modernization is to convert feudal economy into independent and
modern economy.
3.) SELF – RELIANCE –

The main objective of our economy is to be self – reliant. Self – reliance means overcome the
need of external assistance(help) and to develop the Indian economy through domestic
resources.

The policy of self – reliance considered a necessity due to following two reasons;

1.) to reduce foreign dependence – it is necessary for Indian economy to reduce the foreign
dependence especially on Food.

2.) to avoid foreign interference – due to dependence on foreign country for food, technology,
capital etc. they may increase their interference in our country and it must be avoided to the
maximum possible level.

4.) EQUITY –

The objective of growth, modernization and self reliance may not improve the standard of
living of people.

It is important to ensure that the benefits are availed by all the sections of the society whether
rich or poor.

According to equity, every Indian should be able to meet his basic needs income distribution
should be equitable.

Equity aims to increase the standard of living of all the people and not of particular section.

5.) FULL EMPLOYMENT –

Full employment refers to a situation when all the people who are able to work and willing to
work are getting work. Full employment indicates those who are able to work and willing to
work, must get work.

This objective implies that;

1.) more and more people should participate in the process of growth of economy.

2.) benefits of growth must be shared with all the sections of society.
ECONOMIC POLICIES DURING 1950 – 1990

1.) HEAVY RELIANCE ON PUBLIC SECTOR – economic policies before 1991

indicated heavy reliance on public sector. According to IPR 1956, 17 industries
were reserved for public sector only. It was realized that objective of our society
can be achieved only through development of public sector.

2.) REGULATED PRIVATE SECTOR – according to IPR 1956, new industries

in the private sector could not be established without any license or registration.
Regulated development of privates sector was to ensure that there was no
concentration of economic power in the private hands.

3.) PROTECTION OF SMALL SCALE INDUSTRIES – small scale industries

were offered protection from competition. Certain areas and goods were reserved
for small scale industries and financial institutions were developed to provide
them financial help.

4.) IMPORT SUBSTITUTION – it implies domestic production of goods which

were imported from abroad. The main idea behind this was to save foreign
exchange.

FAILURES OF ECONOMIC POLICIES DURING 1950 – 1990

1.) elimination of poverty was the main objective of this planning but still in
India 21.9% of population lives below poverty line.

2.) we have failed to tackle the inflation and due to high rate of inflation,
purchasing power of people tends to decline.

3.) development of infrastructure continues to be inadequate and actual growth

had failed to match with target growth.

4.) social inequality forced the government to offer job reservations to the
economically backward areas.
AGRICULTURE SECTOR DURING 1950 – 1990

Problems of Indian Agriculture during 1950 – 1990

1.) LOW LEVEL OF PRODUCTIVITY – Indian agriculture sector was known for its low
productivity. Lack of knowledge among the farmers was the main reason behind stagnation
of agriculture.

2.) DISGUISED UNEMPLOYMENT – it refers to a situation in which more people are engaged
in work than are actually required. There were high incidents of disguised unemployment in
the agriculture during 1950 – 1990.

3.) HEAVY DEPENDENCE ON RAINFALL – due to poor agricultural techniques, farmers were
dependent mainly on rainfall. There was minimum growth of this sector in case of least
rainfall.

4.) SUBSISTENCE FARMING – it is the practice of growing crops only for own use. There were
very high incidents of subsistence farming.

5.) OUTDATED TECHNOLOGY – there were many outdated technology and harvesting
machines. Harvesting was generally done manually.

6.) CONFLICTS BETWEEN LANDLORDS AND TENANTS – farmers were often a part of
contract with the landlords. Landlords were used to charged a very high rate of interest on the
loan taken by farmers.

7.) SMALL LAND HOLDINGS – Most of the land holdings of the farmers were small. Small
land holding is a hindrance in the process of agricultural growth as on small land, farming
is not possible with high-tech machines and moreover with small land holdings, farmers were
able to produce just for their own consumption rather for sale in the market.

POLICIES FOR GROWTH OF AGRICULTURE:

LAND REFORMS –
LAND REFORMS mainly refer to change in the ownership of land holdings.
Indian government took various steps to abolish intermediaries (zamindars) and to make the
farmers the owner of land.

 The ownership rights provided to farmers gave them incentives to produce more output
in the agriculture.
 Due to abolition of intermediaries, 200 lakhs farmers were into the direct contact of
the government.

THE MOTIVE OF THE GOVERNMENT WAS NOT ACCOMPLISHED DUE TO

FOLLOWING REASONS;

 The zamindars were continued to hold large areas of land by making use of some
loopholes in the law.
 Zamindars claimed to be self cultivators.
 Even after getting the ownership of land, the farmers didn’t get any benefit due to
lack of finance.

LAND CEILING
LAND CEILING refers to fixing the specified limit of land which could be owned by an
Individual.

Beyond the specified limit, all the land would be taken over by the government and will be
allotted to small farmers.

The purpose of land ceiling policy was to reduce the concentration of land ownership in few
hands.

Land ceiling helped to promote equity in the agriculture

LAND REFORMS WERE SUCCESSFUL ONLY IN KERALA AND WESTBENGAL.

GREEN REVOLUTION (NEW AGRICULTURAL STRATEGY)

The traditional agricultural practices followed in India were replaced by modern technology.
The aim of this strategy was to increase the agricultural output. It was adopted during the
third five year plan.

NEED FOR GREEN REVOLUTION:

At the time of independence, 75% of country’s population was dependent on agriculture.
There is need for green revolution because of two main reasons:

(a) India’s agriculture was mainly dependent on the monsoon and in case of least rainfall
farmers had to face lot of problems.

(b)the productivity in the agriculture was very low due to outdated technology.

INTRODUCTION AND ORIGIN OF GREEN REVOLUTION:

GREEN REVOLUTION refers to the large increase in the production of food grain due to the
use of high yielding varieties of seeds (HYV SEEDS). Green revolution is the advancement
in the field of agriculture.

ORIGIN:

In 1966, India adopted high yielding variety of seeds programme for the very first time. This
programme was successful due to following reasons:

a) High yielding variety of seeds.

b) Adequate irrigation.

c) Application of latest technology and fertilizers

GREEN REVOLUTION is also known as MODERN AGRICULTURE TECHNOLOGY.

IMPORTANT NOTE:

DR. NORMAN E. BORLAUG ( AMERICAN SCIENTIST IN AGRICULTURE) IS CALLED

AS FATHER OF GREEN REVOLUTION AND he was awarded a nobel peace prize in 1970.

IN INDIA, GREEN REVOLUTION WAS FOUND BY M.S SWAMINATHAN.

IMPORTANT POINTS ABOUT HYV SEEDS:

a) These seeds can be used in those places where there are adequate facility of water supply
and drainage system.

b) These seeds require heavy dose of chemical fertilizers

c) Indian farmers need to have proper irrigation and proper financial support to derive benefit
from HYV seeds.

GREEN REVOLUTION IN TWO PHASES:

PHASE I (MID 60s to MID 70s) – In this, HYV seeds were limited to few states like Punjab,
Andhra Pradesh and Tamilnadu. In this phase, the use of HYV seeds was only for wheat
growing areas.

PHASE II (MID 70s to MID 80s) – HYV technology now spread to large number of states and
provided benefit to almost all crops.

POSITIVE EFFECTS OF GREEN REVOLUTION

1.) MARKETABLE SURPLUS – Green revolution resulted in marketable surplus. Marketable

surplus refers to that part of agricultural produce, which is sold in the market after meeting
own consumption.

Due to Green revolution, a greater proportion of rice and wheat were produced which were sold
by the farmers in the market.

2.) BUFFER STOCK – the Green revolution enabled the government to purchase sufficient food
grains from the market to build a stock which could be used in the times of food shortage.

3.) BENEFIT TO LOW INCOME GROUP – due to Green revolution, there is large increase in the
output of food grains which leads to rise in supply of food grains in the market and thus fall
in its prices. It ultimately provided benefit to low income people.

RISK INVOLVED IN GREEN REVOLUTION

1.) RISK OF PEST ATTACK –the HYV crops were more prone to attack by pests. There was a risk
that small farmers who adopted this technology could lose everything in the pest attack.

SOLUTION: in order to overcome this risk, government provided training and research
institutes to the farmers.

2.) RISK OF INEQUALITY – there was a risk that costly HYV seeds will increase the gap between
small and big farmers because only big farmers were able to purchase these costly HYV seeds.

SOLUTION: in order to overcome this risk, government provided loans to the small farmers so
that they could also purchase HYV seeds.

LIMITATIONS OF GREEN REVOLUTION:

1.) LIMITED CROPS – due to green revolution, there is large increase in output
but the benefit was limited only for production of food grains i.e. wheat and
rice.

2.) UNEVEN SPREAD – the spread of green revolution has not been uniform
across all the states. In the states like Punjab, Haryana, Andhra Pradesh,
Maharashtra and Tamilnadu, there was a remarkable impact but in other states
it was insignificant.

3.) LIMITED FARMING POPULATION – the bulk of farming population in

India consist of small and marginal farmers and they were not benefitted from
green revolution because of expensive inputs and HYV technology.

DOES INDIA NEED ANOTHER GREEN REVOLUTION?

YES, India needs another green revolution because of following problems:

a) Our productivity standards are extremely low.

b) Our food grain stocks are still uncertain

c) Most of the farmers in India continue to face uncertainties of weather.

d) Loan waivers are now becoming a compulsion.

SUBSIDIES
Subsidy means that the farmers get input at a price lower than the market
price. It was necessary for the government to grant subsidies for the farmers to
provide an incentive for adoption of new technology.

POINTS IN FAVOUR OF SUBSIDIES

1.) The government should continue with agricultural subsidies because

farming in India continues to be a risky business.
2.) Majority of the farmers are very poor and they will not be able to afford the
inputs without any subsidy.

3.) By providing subsidies to the small and marginal farmers, government can
reduce inequalities between rich and poor farmers.

POINTS AGAINST SUBSIDIES

1.) According to some economists, subsidies were granted by the government to

provide an incentive for adoption of HYV technology. After the adoption of HYV
technology, subsidies should be removed as the purpose is accomplished.

2.) Subsidies do not benefit the poor and small farmers because the substantial
amounts of subsidy go to fertilizer industry.

IMPORTANT OBSERVATIONS –

1.) PRICE AS SIGNALS – Prices act as signals about the availability of

GOODS. When a good becomes scarce, its price tends to rise. For eg. With the
outbreak of covid, sanitizers, masks, etc become very costly due to their
shortage in market.

Similarly, when price of petrol increases, then it means that there is less
availability of petrol in market. Thus, prices act as a signal for shortage and
surplus.

2.) SUBSIDIES MAY LEAD TO WASTAGE –

Subsidies may lead to wastage and it can be clearly seen with following
examples :

a) When electricity is provided with subsidized rate then then it will be used
wastefully irrespective of its scarcity.

b) Fertilizer and pesticide subsidies result in overuse of resources which can be

harmful for the environment.

CRITICAL APPRAISAL OF AGRICULTURAL DEVELOPMENT

A) The green revolution was the greatest achievement of Indian government
because it leads to rise in productivity.

B) Due to green revolution, there is large increase in output and thus India
became a self sufficient country in food grains.

C) The proportion of GDP contributed by agriculture significantly declined.

D) During 1950 to 1990, still 65% of total population employed in agriculture.

INDUSTRIAL SECTOR DURING 1950-1990

1.) SOURCE OF EMPLOYMENT – Industry is an important source of

employment. In case of over burdened agriculture, industries become a
significant source of employment. It must noted that labour force is rising
rapidly in the India and in such a case industries are useful to generate
employment.

2.) TECHNICAL MEANS OF FARMING – Industry plays a significant role in

the development of farming because machines which are used in farming are
possible only due to the growth of industries.

3.) IMPARTS GROWTH PROCESS – Industry provides growth to the economy.

In the absence of industry growth would have been limited to the production of
food only.

4.) INFRASTRUCTURE GROWTH – Industries lead to infrastructure growth in

the economy. Due to spread of industries there will be expansion of
infrastructure facilities like transport, communication, banking, insurance,etc

ROLE OF PUBLIC SECTOR IN INDUSTRIAL DEVELOPMENT DURING 1950-

1990
There was a leading role of government for setting up of industries. during
1950-1990 government played a significant role in setting up of industries
because:

1.) Shortage of capital with private sector – private entrepreneur did not have
much capital to undertake investment in industrial sector. At the time of
independence, only TATA and Birla were the only well known private
entrepreneurs. As a result, government undertake all the powers of industries
development.

2.) Lack of incentive with private sector – The Indian market was not big
enough to encourage private entrepreneur due to limited size of market, less
demand and low profits.

3.) Objective of social welfare – the objective of social welfare and equity could
be achieved only with the direct interference of government.

IPR 1956 (INDUSTRIAL POLICY RESOLUTION)

On 30th April 1956, Industrial policy resolution was adopted in India. It
contains various procedures, principles, rules and regulations for controlling
Industrial enterprise in India.

1.) CLASSIFICATION OF INDUSTRIES

According to IPR 1956, Industries were classified into three categories:

SCHEDULE A – the first category comprised those industries which would be

exclusively owned by the state. In this schedule, 17 industries were included
like arms, atomic energy, aircraft, oil, railways, shipping, etc

SCHEDULE B – in this schedule, 12 Industries were placed which would be

progressively owned by the state. The state would take the initiative of setting
up of industries and private sector will supplement efforts of the governments. It
includes aluminium, mining industries, machinery , fertilizers, etc

SCHEDULE C – this schedule consisted of remaining industries which were owned

and controlled by private sector only. Government will control these industries
only by imposing license on private sector.

2.) INDUSTRIAL LICENSING – An industrial licensing is a written permission

from the government for setting up of Industries. Government grant licenses
for the following:

a) Setting up of Industries.

b) Expansion of existing industries.

c) Diversification of product.

Industrial licensing states the following;

No new industries were allowed unless license is obtained from the government.

It was easier to obtain the license if the industry was established in a backward
area.

License was needed even industries were expanded.

3.) INDSUTRIAL CONCESSIONS – The private entrepreneurs were offered many

type of concessions to establish the industry in backward area. The concessions
were

Tax holiday and subsidized power supply.

SMALL SCALE INDUSTRIES

In 1955, the village and small scale industries committee (KARVE
COMMITTEE) recognized the need for small scale industries. The motive was
rural development.
In 1950, small scale industries are defined as the industry whose maximum
investment in the fixed assets is 5 lakhs.

Recently small scale industries is defined as the industry whose maximum

investment in fixed assets is 1 crore.

FEATURES/IMPORTANT POINTS OF SMALL SCALE INDUSTRIES

1.) EMPLOYMENT GENERATION – Small scale industry are labour intensive

I.e they use more labour than the machinery. As a result, it provides
employment to the largest number of people in India. After the agriculture,
small scale industries is the second largest employment generation source.

2.) NEED FOR PROTECTION – Small scale industries cannot compete with
large firms. So, various steps were taken by the government for their growth.

• Government reserved number of products for the small scale industry.

• Government provided various concessions like subsidy on loan at lower
rate of interest to the small scale industries or lower excise duty

3.) EQUITY ORIENTED – small scale industry needs much smaller investment
as compared to large scale industry. It does not lead to concentration of power in
few hands rather it provides equality among all the sections of society.

CRITICAL APPRRAISAL OF INDUSTRIAL DEVELOPMENT DURING 1950 –

1990
1) The proportion of GDP contributed by industrial sector increased
significantly from 11.8% in 1950 to 24.6% in 1990. The 6% annual
growth rate of industrial sector during 1950-1990 is remarkable.

2)Indian industries were no longer restricted to cotton textiles and jute. It

also included engineering goods and wide range of consumer goods.
Industrial sector became well diversified due to public sector.
 3) The promotion of small scale industries gave opportunity to people with
small capital for the business startup. It promoted growth with equity.

4) IMPORT SUBSTITUTION MEANS PROTECTION FROM FOREIGN

COMPETITION enabled the development of domestic industries. But this
import substitution policy had two drawbacks:

a) Our policies were inward looking trade so we failed to develop a strong export
sector.

b) domestic producers made no sincere efforts to improve the quality of domestic

products.

5) LICENSING POLICY helped the government to monitor and control the

industrial production. But licensing created two difficulties:

a) it was misused by big industrial houses. Sometimes they tried to get the
license not to start a firm but to prevent other competitors to enter into the
market.

b) the procedure for obtaining license was very time consuming.

6) Public sector made a remarkable contribution by creating a strong

industrial base and provided a great contribution in the industrial
development, but,

The public sector (govt.) created monopoly in certain areas of production

and many public sector firms incurred huge losses but still continued.

FOREIGN TRADE DURING 1950-1990

INWARD LOOKING TRADE STRATEGY (OR) IMPORT SUBSITUTON POLICY

In order to be self reliant, India has followed the strategy of replacing imports
by domestic production.

The policy was characterized by Inward looking trade strategy or Import

substitution policy.
Import substitution refers to a policy of replacement of imports by domestic
production.

For example: Instead of importing vehicles from abroad, domestic industries

should be encouraged to produce vehicles in India.

THE MAIN AIM OF THIS WAS:

a) To protect India from foreign competition.

b) To save foreign currency.

c) To achieve self reliance.

REASONS BEHIND IMPORT SUBSTITUTION POLICY

1.) The policy of import substitution is based on the fact that industries of
developing countries are not in a position to compete against the goods produced
in abroad. In order to avoid such foreign competition we adopted the policy of
import substitution.

2.) Restriction on imports was necessary as there was a risk of drain of foreign
currency due to import of luxury goods.

REDUCTION OF IMPORTS THROUGH TARIFF AND QUOTAS

OR

TOOLS OF IMPORT SUBSTITUTION POLICY

1.) TARIFF – tariff means taxes imposed on imported goods. The basic aim for
imposing heavy taxes was to make the imported goods more expensive and thus
imports will reduce.
2.) QUOTA – Quota refers to fixing the maximum limit on the imports by a
domestic producer. Above that limit goods cannot be imported.

The tariff and quota were the successful ways and domestic firms now could
expand their business without any fear of competition.

GOOD EFFECTS OF IMPORT SUBSTITUTION POLICY –

1.) Due to import substitution policy , there was high rate of industrial growth
with structural transformation (technological transformation). Due to this,
contribution of industries in GDP rises by 13%

2.) Due to import substitution policy, there was diversification of industrial

growth:

• Modern industries were no longer limited to cotton and jute textiles. There
was wide range of consumer goods.
• There was a remarkable growth of electronic and automobile industries.
• Protection to small scale industries opened up new opportunities of
investment for those who didn’t have much capital

BAD EFFECTS OF IMPORT SUBSITUTION POLICY –

1.) Due to import substitution policy, there was acreation of inefficient

monopoly of the government. Telecommunication was a government monopoly
till 1990 in BSNL AND MTNL.

2.) Due to import substitution policy, there was lack of competition for domestic
producers and thus domestic producers didn’t make any efforts for upgradation
of quality.
CHAPTER 3RD LPG POLICY/NEW ECONOMIC
POLICY/ECONOMIC REFORMS/1991 POLICY
CRISIS OF 1991 BEHIND LPG POLICY
To manage the economic crisis of 1991, Indian government approached the
World Bank (IBRD) (INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT) and the IMF (INTERNATIONAL MONETARY FUND)
and received a loan of 7 Billion dollars.

To avail this loan, World Bank and IMF expected India to follow three
conditions:

• Remove licensing on private sector.

• Reduce the role of government in many areas.
• Remove trade restrictions

India agreed to the conditions of World Bank and IMF and announced the new
economic policy.

MEASURES OF NEW ECONOMIC POLICY

The new economic policy was announced in July 1991. The main aim of this
policy was to create a competitive environment and remove trade barriers in the
economy.

Measures under LPG policy are:

1.) Stabilization measures – it refers to short term measures which aim at:

a) to maintain balanced BOP and b) to control inflation.

2.) Structural reform measures - it refers to long term measures which aim at:

a) to improve the efficiency of economy and b) to increase the foreign

competition.
LIBERALISATION
Liberalization means removal of entry and growth restrictions on the private
sector.

Liberalization involves deregulation, reduction of government control and

freedom of private investment to make India more competitive.

The purpose of liberalization was twofold:

a) to unlock the economic potential by encouraging the private sector.

b) to introduce more competition in the economy.

LIBERALIZATION INCLUDES THE FOLLOWING REFORMS:

INDUSTRIAL SECTOR REFORMS –

On 24th July 1991, government introduced new industrial policy which
includes the following:

1.) REDUCTION OF INDUSTRIAL LICENSING – this new policy abolished all the
industrial licensing except for following 5 industries:

a) Distillation and brewing of alcoholic drinks b) cigars, cigarettes and

tobacco c)industrial explosives d) defence equipments and electronic aerospace
e) dangerous chemicals.

No license is needed to setup a business, to expand a business and to diversify a

business.

However, license is required for industries related to security.

2.) DECREASE IN ROLE OF PUBLIC SECTOR – there was significant reduction in the
role of public sector for development of industries. The no. of industries
exclusively owned by govt. reduced from 17 to 8. These three industries were
Arms and ammunitions, defence aircrafts and warships, atomic energy, coal
and lignite, mineral oils, mining business, Minerals related to atomic energy
and railways.
3.) DE- RESERVATION OF SSI – many goods produced by small scale industries is
now de-reserved. The market was allowed to determine the price through demand
and supply and not through government interference. Maximum investment in
small scale industries increased upto 1 crores.

4.) MRTP ACT – MONOPOLY AND RESTRICTIVE TRADE PRACTICES ACT

The approval for expansion, establishment for new companies, merger and
amalgamation were eliminated. MRTP act has been replaced by competition act
2002 and further amendments made on 2007 and further, competition act
2009

FINANCIAL SECTOR REFORMS

Financial sector includes financial institutions like commercial banks,
investment banks, stock exchange operations and foreign exchange market. The
financial sector in India is controlled by central bank – RBI. Financial sector
reforms include:

1.) CHANGE IN ROLE OF RBI – the role of RBI was reduced from
regulator to facilitator of financial sector. As a result, financial sector was
allowed to take decisions on many matters without even consulting the RBI.

2.) ORIGIN OF PRIVATE BANKS – The reform policies led to

establishment of private sector banks, Indian banks as well as foreign banks.
This increased the competition and benefitted the consumers with lower interest
rates and better services.

3.) INCREASE IN LIMIT OF FOREIGN INVESTMENT – The limit of

foreign investment in banks was raised to around 74%. Foreign investors like
merchant bankers, mutual funds , etc are now allowed to invest in Indian
financial markets.

4.) EASE IN EXPANSION PROCESS – Banks were given freedom to set up

new branches without the approval of RBI but after fulfilling certain conditions
imposed by government and RBI.
 TAX REFORMS
Tax reforms refer to reforms in government taxation and public expenditure
policies which are collectively known as its fiscal policy. Taxes are of two types:

 DIRECT TAXES consist of taxes on income and property of individuals

and companies. Like Income tax.
 INDIRECT TAXES refer to those taxes which are imposed on goods and
services. For example GST

Tax reforms include the following:

1.) REDUCTION IN TAXES – There has been a significant reduction in

income and corporate tax as high tax rates were an important reason for tax
evasion (manipulation in filing taxes). Moderate rate of income tax encourage
savings and reduce tax evasion.

2.) REFORMS IN INDIRECT TAXES – various reforms have been made in

indirect taxes to facilitate establishment of common market for goods and
services.

3.) SIMPLIFICATION OF PROCESS – In order to encourage better

compliance on the part of tax payers, many tax procedures have been simplified.

GST (GOODS AND SERVICE TAXES)

The GST was passed in the parliament on 29th march 2017 to simplify and
introduce a unified indirect tax system in India. The act came into effect on 1 st
July 2017. This is expected to generate additional revenue for the government,
reduce tax evasion and create “one nation, one tax and one market”

FOREIGN EXCHANGE REFORMS

This reform includes the following:

1.) Devaluation of rupee – devaluation refers to reduction in the value of
domestic currency by the government. To overcome the BOP crisis, the rupee was
devalued against foreign currency like dollar means foreign currency becomes
costly. It led to cheaper Indian goods in foreign market and led to rise in our
exports.

2.) Market determination in exchange rate – the government allowed rupee

value to be free from its control. It means market forces of demand and supply
will determine the exchange rate.

TRADE AND INVESTMENT POLICY REFORMS

Before 1991, a lot of restrictions were imposed on imports to protect the domestic
industries. But this protection reduced the efficiency of domestic industries due
to lack of competition. So, trade and investment policy reforms were initiated :

a) To increase the international competition

b) to promote foreign investment and technology

c) to promote efficiency of local industries by adoption of modern technology.

1.) REMOVAL OF QUANTITATIVE RESTRICTIONS (QUOTA) –

under this, quantitative restrictions on imports and exports were greatly
reduced. For example: quantitative restrictions on Imports of manufactured
consumer goods and agricultural goods were fully removed from April 2001.

2.) REMOVAL OF EXPORT DUTIES – export duties were removed to

increase the competitive position of Indian goods in the international market.

3.) REDUCTION IN IMPORT DUTIES – Import duties were reduced to

improve the position of domestic goods in the foreign market.

4.) RELAXATION IN IMPORT LICENSING SYSTEM- the import

licensing was abolished in all the goods except in case of hazardous goods and
environment sensitive industries. This encouraged domestic producers to import
raw material at better prices and produce quality goods in INDIA.
PRIVATISATION
Privatization means transfer of ownership, management and control of public
sector to the private sector.

Privatization implies greater role of private sector in the development of

economy.

Privatization can be done in two ways:

a) Transfer of ownership of public sector companies to the private sector.

b) By selling a part of equity shares of PSU (public sector undertakings) to the

private sector or to the general public. This is called disinvestment.

The motive behind privatization was to improve financial discipline and to

facilitate modernization because private sector capabilities will help in
improving the performance of government companies.

BENEFITS OF PRIVATIZATION
1.) Government companies were putting large burden on the government due to
huge losses in the government industries. Privatization helped to reduce the
financial burden.

2.) Privatization abolished the monopoly of government and helped in

improving the competition in economy.

3.) Privatization was helpful in quick decision making process due to no

involvement of government.

4.) Privatization leads to consumer power I.e they provided choices to consumers
because their survival is mainly dependent on customer satisfaction.

LOSSES OF PRIVATIZATION
1.) Private sector mainly operates with the objective of profit motive. Thus,
privatization neglected social welfare.

2.) Privatization leads to concentration of economic power.

3.) Under privatization there is always a fear of retrenchment and

unemployment as there is no job security.

4.) Privatization leads to LOP SIDED GROWTH I.e growth without balance in
economy. Private sector does not take any interest in those projects which are
risky and thus they neglect certain industries and certain areas.

WRITE A SHORT NOTE ON NAVRATNAS, MINIRATNAS AND

MAHARATNAS.
Ans. Government made attempts to improve efficiency of PSUs by giving
private sector an authority for taking managerial decisions.

In order to enable PSU to be more competitive and effective, government started

granting Navratnas status to the PSUs.

The granting of navratnas status resulted in better performance of these

companies because greater managerial and operational autonomy given to
private sector for taking various decisions of these PSUs.

After observing performance of navratnas, other profit making companies were

granted operational, financial and managerial powers and their status were
known as Miniratnas.

As on 1st JULY. 2021, we have

10 MAHARTNAS like Indian oil corporation limited, steel authority of India

limited, etc.

73 MINIRATNAS like airport authority of India, Antrix corporation, etc

14 NAVRATNAS like Bharat electronics limited, Container corporation of

India limited, etc.
GLOBALISATION
Globalization means integrating our economy with the world economy by
removing all the trade barriers.

Globalization aims to create a borderless world.

CHANGES MADE IN INDIA DUE TO GLOBALIZATION/STRATEGIES

PROMOTING GLOBALIZATION

1.) the new economic policy prepared a list of priority industries in which
automatic permission will be available for FDI up to 51% of foreign equity.

2.) In respect of foreign technology agreements, automatic permission is

provided up to 1 crore rupees. No permission is now required for hiring foreign
technicians even.

3.) Rupee was devalued by 20%. It was done to encourage exports and
discourage imports.

4.) The peak rate of custom duty has been reduced from 250% to 10% in 2007-
2008 budget

5.) This policy removed all the trade barriers and allowed demand and supply
forces to play a main role in the market during 1992-1997

6.) In budget 1992-93, Indian rupee was partially convertible (exchange of

currency with some restrictions of government)

7.) In budget 1993-94, Indian rupee was fully convertible ( exchange of

currency without any intervention of government)

BENEFITS OF GLOBALIZATION
1.) Greater access to global market.

2.) Advanced technology.

3.) Better future opportunities for large scale industries to become important
players in International Market.

4.) Better prospects for skilled people across the world to increase their earnings
by utilizing their skills.

LOSSES OF GLOBALIZATION
1.) Benefits of globalization were mainly for developed countries because only
developed countries are able to expand the market.

2.) Globalization compromises with the welfare of people belonging to poor

countries.

3.) Globalization increases economic disparities among the people.

4.) MNCs gained strong position in developing countries and thus domestic
companies have to face strong competition.

OUTSOURCING( very imp.)

OUTSOURCING refers to contracting out some of its activities to a third party
which were earlier performed by the organization.

For example many companies have started outsourcing their security services to
agencies.

Outsourcing is one of the important outcomes of globalization process.

It has increased/intensified/stronger in recent times because of the growth of

fast modes of communication especially IT sector.

INDIA has become a favourable destination of outsourcing for most of the

multinational companies because of

1.) low wage rates and availability of skilled manpower in cheap rates.

2.) India has vast skilled manpower for MNCs.

3.) MNCs are getting favourable schemes and policies from Government like
tax concessions, tax holiday, etc.

For example Indian business process outsourcing (BPO) is already gaining

importance and earning much foreign exchange.

Some of the services outsourced to INDIA

1.) voice based business processes/BPO/CALL CENTRES 2.) record keeping 3.)
accountancy 4.) banking services 5.) music recording 6.) film editing 7.)
book transcription/converting live speech into text 8.) clinical advice

DO YOU THINK OUTSOURCING IS GOOD FOR INDIA? WHY ARE DEVELOPED

COUNTRIES OPPOSING IT?

ANS. Yes OUTSOURCING is good for INDIA because of following reasons:

a) EMPLOYMENT: It provides employment to large number of unemployed

people in India.

b) Outsourcing enables the exchange of ideas and technical know how of

complex and advanced technology.

c) Outsourcing also enhances India’s international worth

d) by creating more and higher paying jobs, outsourcing improves the standard
of living of people.

BUT, OUTSOURCING TO INDIA IS OPPOSED BY MANY DEVELOPED

COUNTRIES because it leads to outflow of funds from developed countries to
INDIA and also it creates job insecurity in their countries due to outsourcing of
work in INDIA.

IMPORTANT TERMS:

1.) BILATERAL TRADE – trade between two countries is known as bilateral

trade.
2.) Multi-lateral trade – trade between more than two countries is called multi
lateral trade.

3.) Tariff barriers – the barriers which are imposed on imports to make imports
more costly and to encourage domestic production.

4.) Non tariff barriers – non tariff barriers are the barriers which are imposed on
the account of exports and imports.

WORLD TRADE ORGANISATION (WTO)

Prior to WTO, GATT (GENERAL AGREEMENT ON TRADE AND TARIFF)
was established as a global trade organization in 1948 with 23 countries.

GATT was setup to administer all trade agreements by providing equal

opportunities to all countries in international market.

WTO was founded in 1995 as successor organization to the GATT.

The WTO covers trade in goods as well as in services and at present, there are
164 member countries of WTO and all the members are required to abide all
laws and policies framed by WTO.

India has kept its commitments made to the WTO and removed all the
quantitative restrictions and reduced import tariffs.

MAJOR FUNCTIONS OF WTO:

1.) To facilitate international trade bilateral as well as multilateral trade,

through removal of tariff as well as non tariff barriers.

2.) To establish rule based trading system n which there is no restrictions on

trade.

3.) To enlarge production and trade of services.

4.) To ensure optimum utilization of world resources.

5.) To protect the environment.

Q.) SHOULD INDIA BE A MEMBER OF WTO?????

ANS. Some scholars are of the view that there is no use for a developing country
like INDIA to be a member of WTO. According to them..

a) Major volume of international trade occurs among the developed nations.

b) Developing countries are being cheated as they are forced to open up their
mostly markets for developed countries.

DEMONETISATION
The govt. of India announced demonetisation of two largest denomination currency notes of 500 ad
1000 Rs. as a result, 500 and 1000 existing currency notes ceased to be legal tender.

This led to 86% of the money in circulation invalid.

Demonetization is the act of the government to cancel the legal tender status of a currency unit in
circulation.

Its main aim was to curb corruption, stop counterfeiting of notes for illegal activities and to curb the
accumulation of black money.

FEATURES OF DEMONETISATION;

(A) TAX ADMINISTRATIVE MEASURE –

Cash holdings was readily deposited in banks and exchanged for new notes. But those with black
money had to declare their unaccounted wealth and pay taxes at penalty rate.

(B) IMPROVE TAX COMPLIANCE –

It indicated that tax evasion will no longer will be accepted or tolerated. Tax collection increased and
tax evasion decreased.

(C) CHANNELISING SAVINGS INTO INVESTMENT –

Due to this bank deposits increased, it increases lending capacity of banks and thus interest rate
decreased.

(D) CASH – LESS ECONOMY –

Cash transactions declined. Digital transactions increased involving the use of debit cards, paytm
,etc. but it involves lot of arguments bcoz which will only work if there is internet connection.

IMPACT OF DEMONETISATION –

1.) MONEY/INTEREST RATE –

Decline in cash transactions leads to bank deposits increased thus rise in lending capacity and
interest rate falls

2.) TAX COLLECTION –

rise in income tax collection because of increased disclosure of black money.

3.) DIGITISATION –

Digital transactions amongst new users increased many times.

4.) PRIVATE AND PUBLIC SECTOR WEALTH –

Private wealth declined and real estate prices declined. No affect on public sector wealth.

5.) Real estate – prices declined due to less demand.

DIGITALIZATION IMPACTED THREE SECTIONS OF SOCIETY:

1.) The poor, who are largely outside the digital economy.

2.) The less affluent, who are becoming parts of digital economy.

3.) The affluent, who are fully connected with digital transactions.

POINTS IN FAVOUR AND AGAINST OF LPG POLICY

FAVOUR OF LPG POLICY

1.) Increase in role of economic growth – The growth in GDP was 5.6% during
1980-1991. The growth rate in GDP in 2017-18 was 6.7% and growth in GDP
was 8.4% in 2021.

During the economic reform period the growth of agriculture has declined,
industrial sector was in fluctuation but the growth of service sector has gone up.
Service sector showed highest growth rate of 10.3% in 2014-15.
2.) Inflow of foreign investment – due to globalization there was rapid increase
in GDP. The FDI increased from 100 million $ in 1991 to 30 billion $ in 2017-
18.

With the launch of make in India programme in September 2014, FDI increased
by 48%.

3.) Rise in foreign exchange reserves – there has been a significant increase in
foreign exchange reserves from 6 billion $ in 1991 to 443 billion $ in 2017-18.
India is one of the largest foreign exchange holders in the world. Now in 2021
its 637 billion US $.

4.) Rise in exports – during the reform period India experienced significant
increase in exports of auto spare parts, engineering goods, IT software and
textiles.

5.) Check on inflation – Due to reform or LPG policy, the annual rate of inflation
reduced from the peak level of 17% in 1991 to 5.48% in 2015-16.

NOTE: Abolition of licensing system and removal of restrictions on entry of

the private sector have enlarged the area of operation of private sector.

CRITICISM OF LPG POLICY

1.) GROWING UNEMPLOYMENT – as we know GDP growth rate has increased

but even after such growth we failed to generate sufficient employment in the
economy.

2.) NEGLECT OF AGRICULTURE (VERY IMP.) – due to LPG policy, economy

neglected the agriculture as compared to industries and services.

a) Reduction of public investment – Public investment in agriculture has been

reduced especially in infrastructure like irrigation, roads, etc
b) Removal of subsidy – removal of subsidies increased the cost of production
which adversely affected the small farmers.

c) Reduction of import duty – reduction of import duty on agriculture goods

and removal of quota adversely affect the Indian farmers due to increase in
competition and Govt. also removed minimum support price for the farmers.

Due to LPG policy farmers shifted from food crops to cash crops and leads to rise
in price of crops

3.) LOW LEVEL OF INDUSTRIAL DEVELOPMENT (VERY IMP.) – industrial growth

recorded a slow down due to following two reasons:

a) Cheaper imported goods: cheaper imported goods replaced the demand for
domestic goods and the domestic producers started facing competition.

b)Lack of infrastructure: the infrastructure facilities including power supply

was inadequate.

Export of textiles affected because some developed countries still imposing quota
restrictions while purchasing textiles from India.

4.) INEFFECTIVE DISINVESTMENT POLICY – the government fixed a target for

disinvestment of public sector undertaking. The target was to mobilize 2500
crores in 1991-92 and the government was able to mobilize 3040 crores from
dis-investment.

In 2017-18, the target of disinvestment was 1 lakh crores but achievement was
about 100057 crores.

The assets of PSUs whowever, ere undervalued and receipts of amount from
disinvestment were used to compensate the shortage of government rather for the
social infrastructure.
5.) The taxation policy was ineffective because it didn’t result in increase in tax
revenue as tax evasion still continued.

6.) Growth from LPG policy has been limited in selected areas only like
telecommunications, IT, finance, real estate, banking sector, entertainment,
travel and hospitality, etc rather agriculture and industries.

NOTE: LPG policy spread consumerism by encouraging the production of

luxuries and superior items.

GOODS AND SERVICES TAX (GST) (very important)

Goods and services tax is a comprehensive indirect tax which has replaced many
indirect taxes in India. The GST act was passed in the parliament on 29th
march 2017. The act came into effect or implemented on 1 st July 2017. It is a
destination based tax which is levied on every value addition.

The government of India implemented GST following the credo of “ONE

NATION, ONE TAX”

FEATURES OF GST POLICY:

1.) It’s a big source of revenue for government and effective taxation ensures
that public funds are effectively employed in fulfilling social objectives.

2.) GST has replaced 17 indirect taxes like VAT, service tax, excise duty, sales
tax, etc. and 23 Cess and now there is no need of filling multiple returns.

3.) The last dealer/retailer passes the GST to the consumer and thus, GST is a
destination based tax or consumption based tax.

4.) The territorial spread of GST is the whole country including Jammu and
Kashmir.

5.) GST is levied at rates mutually agreed upon by the central and state
government. There are four tax slabs namely 5%, 12%, 18% and 28% for all
goods and services. Exports and supplies to special economic zones are zero
rated.

TYPES OF TAXES UNDER GST

1.) Central GST – it is the GST levied on the intra-state supply of goods and
services by the central govt.

2.) State GST – it is the GST levied on the intra-state supply of goods and
services by the state including union territories.

3.) Integrated GST – it is the GST levied on the inter-state supply of goods and
services and collected by central government. IGST is equivalent to the sum
total of CGST AND SGST.

SOME FACTS ABOUT GST:

1.) SINGLE TAX STRUCTURE – GST aims to subsume multiple taxes into one
single tax across the country. Thus, some goods become costly and some become
cheaper.

2.) EFFECT ON PRICES – with the implementation of GST, luxury goods become
costlier and goods of consumption/necessity/comforts become cheaper.

3.) CONSUMPTION BASED TAX – the tax is received by the state in which goods
are consumed and not by the state in which goods are manufactured. Its is so
because final tax burden levied on person who is consuming the goods.

4.) INVOICE MATCHING – The Indian GST having a mechanism of matching of

invoices. The inward supply details filed by buyer must match with outward
supply details filed by the seller.

5.) ANTI-PROFITEERING MEASURES – it means the benefit of reduced GST

should be passed on to the consumer by reducing prices.
6.) REGISTRATION UNDER GST – A business whose aggregate turnover in a
financial year exceeds Rs. 20 lakhs has to mandatory register under GST.
This limit is set at Rs 10 lakhs for north east and hilly states flagged as
special category states.

INPUT TAX CREDIT UNDER GST

Input tax credit means reducing the taxes paid on inputs from taxes to be paid
on output.

For example: if tax payable by a manufacturer on the output/ final product is

450 Rs. and he has already paid tax of Rs 300 on Input then he can claim
input credit of Rs. 300 and he needs to deposit only remaining Rs. 150 as tax
of GST.

GST will provide benefit by:

Reduction in overall tax burden , no hidden taxes , higher diposable income in

hand , etc

GST COUNCIL

1.) CONSTITUTION - as per article 279 A of Indian constitution the GST council
shall consist of following members:

Chairperson: finance minister

Vice chairperson: chosen amongst the ministers of state government.

Members: all ministers of finance/taxation from every state

2.) QUORUM – 50% of total number of members of GST council shall constitute
the quorum at its meeting. Quorum means a situation which makes the
meeting valid.

3.) DECISIONS – Every decision of the GST council shall be take at its meeting
by majority of at least 75% votes of the members present and voting in
meeting.
Vote of central government shall have a weightage of one third of total votes and
votes of state government shall have a weightage of two thirds of total votes.

CH – 4TH (POVERTY) DELETED FROM

SYLLABUS IN SESSION 2022 -2023.

CHAPTER 5TH HCF (HUMAN CAPITAL FORMATION)

PHYSICAL CAPITAL – It includes all those inputs which are required for further
production like plant, machinery, land building, factory, raw-materials, etc

• The physical capital is needed to make use of physical resources.

• Its accumulation is quite important for economic growth of a country.
• The ownership of physical capital is the rational decision of its owner. One
should calculate the expected rate of return and then decide which
investments should be made.
• Physical capital formation is an economic and technical process.

HUMAN CAPITAL – It refers to the stock of skills, ability, expertise, education

and knowledge embodied in the people.

• Human capital is needed to make effective use of physical capital.

• There is need for investment in human capital to produce more human
capital.
• Societies need sufficient human capital in the form of competent people
who are educated and trained in their field. In simple words, we need good
human capital to produce other human capital. For example.. we need good
doctors and trainers to produce more good doctors.
Here, a student is human resource and by proper training he becomes doctor,
engineer, etc and now he will be called as human capital.

VERY IMPORTANT NOTE: Physical capital creates only private benefit. It

happens because physical capital provides benefit to its owner only.

Whereas, human capital generates private benefit as well as social benefit. For
example an educated and skilled person can earn more (private benefit) as well
as can contribute in social welfare with his skills and knowledge (social benefit).

PHYSICAL CAPITAL HUMAN CAPITAL

Physical capital is tangible and can be easily Human capital is intangible and cannot be esily sold
Sold in the market in the market.

It depreciates with the passage of time. Its depreciation can be reduced by making
Investments in education and health.

It is more mobile between countries Human capital is less mobile between countries

Physical capital can be separated from its owner Human capital cannot be separated from its owner

It is an economic and technical process it’s a social process too

HUMAN CAPITAL FORMATION (HCF)

It refers to development of abilities and skills among the population of the
country. It is the process of acquiring and increasing the number of persons
who have skills, education and experience.
HCF is associated with investment in human resources and his development to
make them productive human resources.

SOURCES OF HUMAN CAPITAL FORMATION

1.) EXPENDITURE ON EDUCATION – Proper utility of manpower depends on the
system of education and training of people.
 • Labour skill of an educated person is more than that of an uneducated
person., which enables him to generate more income than the uneducated
person.
• Education accelerates the development process of Economy.
• Spending on Education by individuals is similar to spending on capital
goods by companies.
EDUCATION contributes to ECONOMIC growth because:
a) Education confers higher earning capacity on people.
b) it gives better social standing and pride.
c) It enables one to make better choices in life.
d) It also stimulates innovations and adaption of new technologies.

2.) EXPENDITURE ON HEALTH – Health expenditure is a source of human capital

formation as it directly increases the supply of healthy labour force.
Poor health affects the quality of manpower.
A sick labour is compelled to abstain from work and thus there will be less
productivity.
Expenditure on Health is more important to build and maintain productive
Labour force and to improve quality of life of people in the society.
Adequate food and proper nourishment to people along with adequate health and
sanitation lead to qualitative improvement in Human capital.

Health expenditure includes the following:

PREVENTIVE MEDICINE – means vaccination.
CURATIVE MEDICINE – medical intervention during illness
SOCIAL MEDICINE – spread of health literacy
PROVISION OF CLEAN DRINKING WATER
GOOD SANITATION FACILITY

3.) ON THE JOB TRAINING – As we know, productivity of physical capital is

based on improved human capital and thus, many firms provide On the job
training to their workers.
Such training has the advantage that it can be provided fast and without much
cost. It increases the skill and efficiency of workers and lead to increase in
productivity and it make the workers up to date with latest technology.

On the job training can be provided in two forms:

a) Workers may be trained under the supervision of skilled worker.
b) Workers may be sent to another place for off campus training (on the job
training but at different premises.)

After On the job training, worker can work in firm with high skills and
enhance the productivity of firm.

It is one of the main source of Human Capital Formation because the benefits of
training in the form of increased productivity which is more than the cost of
training.

4.) EXPENDITURE ON MIGRATION – People migrate from one place to another in

search of jobs that provides them higher salaries.

Unemployed people from rural areas migrate to urban areas in search of jobs.

Technically qualified people like doctors, engineers, etc migrate to other

countries because of higher salaries in that country.

Migration involves two kinds of cost:

Cost of transportation from one place to another and higher cost of living in
migrated place.

Sometimes psychic cost means cost of increased stress and loss of quality of
life also occur due to migration.

Expenditure on Migration is the source of human capital formation as increased

earnings in the migrated place is more than the increase in cost due to
Migration.
5.) EXPENDITURE ON INFORMATION: Expenditure is incurred to acquire
information relating to labour market, other markets, etc

It involves amount spent on seeking information about educational

institutions, their educational standards and cost of education.

For example: collecting information about salaries associated with various jobs,
collecting information about educational institutions that will provide proper
skills and their cost structure, etc

Information is necessary to make decisions regarding investments in Human

Capital so that they can be properly Utilized.

RELATION BETWEEN HUMAN CAPITAL AND ECONOMIC GROWTH

Economic growth means the increase in real national income of a country.

• The contribution of an educated person to the economic growth is more

than that of an illiterate person.
• Similarly, a healthy person also contributes more to economic growth by
providing continuous labour supply in economy.

Thus there exists a direct relation between human capital and economic growth.

Does HCF promote innovations?

Ans. The human capital formation not only increases the productivity of
human resources but also stimulates innovations and ability to perform on
latest technologies.

Education provides knowledge to Understand changes in society and thus it

promotes innovations/upgradation of technology.

DOES HCF ALWAYS PROMOTE ECONOMIC GROWTH? (OR)

CAUSE AND EFFECT RELATION BETWEEN HCF AND ECONOMIC GROWTH

ANS. It is difficult to prove that increase in Human Capital always causes
economic growth.

Education measured in numbers of schooling, teacher-student ratio , etc does

not reflect the true quality of education in our country.

Health services measured in monetary terms, life expectancy, mortality rate

does not reflect the true health status of our country.

Thus, it is very difficult to say that human capital formation always promote
economic growth.

REPORT BY DEUTSCHE BANK AND WORLD BANK

A) REPORT BY DEUTSCHE BANK – The DEUTSCHE bank, a German bank

published a report named “GLOBAL GROWTH CENTRES” identified that
India will emerge as one among four major growth centres in the world by
2020.

It further states that Human Capital is the most important factor of production
in today’s economies. Thus Increase in HUMAN Capital is needed to increase
the GDP.

This report states that between 2005 and 2020, a 40% rise in the average years
of education in India is expected.

B) REPORT BY WORLD BANK – The recent report of WORLD BANK named

“India and the Knowledge Economy” states that India should make a
changeover to the Knowledge Economy.

If Indian economy uses its knowledge effectively then its per capita Income will
increase from US $ 1000 in 2002 to US $ 3000 in 2020.

This report further states that the Indian economy has all the key ingredients
like skilled workers, infrastructure, etc for making this changeover
(transition).
These above two reports point out the fact that human capital formation in India
will move its economy to higher growth path.

NOTE: 7TH FIVE YEAR PLAN RECOGNISED THE NEED FOR HUMAN
CAPITAL FORATION IN INDIA.

IMPORTANCE/ROLE OF HUMAN CAPITAL FORMATION

1.) EFFECTIVE USE OF PHYSICAL CAPITAL the growth and productivity of

physical capital depends extensively on human capital formation.

The physical capital can be created only by means of hard and intelligent work
of human beings in the economy.

Hence human skills and efforts help in effective utilization of physical capital.

2.) HIGHER PRODUCTIVITY Human capital formation raises the productivity

and production as knowledgeable and skilled worker makes better use of the
resources.

Increase in productivity and quality production depends on technical skills of

the people which can be acquired only by means of education, training, etc

3.) INNOVATIONS & TECHNOLOGICAL IMPROVEMENTS The human capital

formation stimulates innovations and creates ability to absorb new
technologies. Education provides knowledge to understand changes in society
which facilitates innovations.

The availability of educated labour provides adaptation to new technologies.

4.) MODERNIZATION OF ATTIUDES the skilled and physically fit people are
powerful instrument in society. Economic development of a country depends on
the minds of the people and their changing attitudes towards society.

Increase in human capital helps in changing mental outlook and promotes

development of the economy.

5.) INCREASES LIFE EXPECTANCY formation of human capital raises life

expectancy of the people. Health facilities and availability of nutritive food
enable people to live a healthy and long life.

6.) IMPROVES QUALITY OF LIFE the quality of life of people depends upon the
level of education, health and skills acquired by people.

Human capital formation not only makes people productive and creative but
also transforms the lives of people. People start living and enjoying higher
incomes.

7.) CONTROL OF POPULATION GROWTH It has been observed that educated

persons have smaller families as compared to illiterate families. It means spread
of education is necessary to control the population growth rate.

PROBLEMS OF HUMAN CAPITAL FORMATION

1.) INSUFFICIENT RESOURCES the resources allocated to the formation of human

capital have been much less than actually required. Due to this reason, the
benefits of human capital will always be inadequate.

2.) SERIOUS INEFFICIENCIES there is lot of wastage of society resources as

capability of educated people are either unused (unemployed) or underutilized
(underemployed). Massive illiteracy, non education and poor health facilities
are some other inefficiency.
3.) BRAIN DRAIN people migrate from one place to another place in search of
better job opportunities and handsome salaries. It leads to loss of quality people
like doctors, engineers, etc who have high caliber. The loss of such quality people
is very high.

4.) HIGH GROWTH RATE OF POPULATION the continuous rise in population has
adversely affected the quality of human capital. It reduces per-head availability
of facilities.

5.) SEVERAL IMBALANCES a greater proportion of resources have been diverted

towards higher education as compared to primary and secondary education.
Due to this, general productivity of economy has remained low.

6.) LACK OF PROPER MANPOWER PLANNING there is an imbalance between the

demand and supply of human resources of highly skilled people. The absence of
such balancing has resulted in the wastage of resources.

7.) WEAK SCIENCE AND TECHNOLOGY in respect of education, the performance is

particularly unsatisfactory in the fields of science and development of modern
technology.

REGULATORY AUTHORITY

• IN EDUCATION, the ministries of education at the union and state level

and departments of education, National council for educational research
and training(NCERT) , University grants commission (UGC) and All
India council of technical education (AICTE) regulate the education
sector.
• IN HEALTH, the ministries of health at the union and state level,
departments of health and various organizations like Indian council for
medical research (ICMR) regulate the health sector.

NOTE:
NCERT is an autonomous organization setup in 1961 for qualitative
improvement in school education.

UGC was set up on 28th dec. 1953 and became a statutory organization by he
parliament in 1956 for maintaining standards of teaching, examination and
research in university education.

AICTE was setup in November 1945 for development of technical education.

ICMR is an apex body in India for promotion of bio-medical research.

HUMAN CAPITAL AND HUMAN DEVELOPMENT

There is a clear distinction between human capital and human development.

• Human capital considers education and health as a tool to increase the

productivity. But, according to human development education and health
are important to all human beings because only when people are able to
read and write only then they will be able to make better choices in life.
• Human capital treats human beings as a tool to increase its productivity
but according to human development, investment in education and
health is necessary even if such investment do not result in any
productivity.

CONCLUSION: According to human development, every human being has a

right to get basic education and health irrespective of their productivity.

HUMAN CAPITAL FORMATION IN INDIA

 India is a federal country with union government, state government and

local government like municipalities. The constitution of India mentions
the functions to be carried out by each level of government.
 Expenditures on education and health are to be carried out
simultaneously by all the three levels of the government.
  Education and health care services create both private and social benefits.
As a result, both private and public institutions exist in the education
and health service markets.
 The education commission (1964-1966) had recommended at least 6% of
GDP should be spent on education. At present, only, 4.13% of GDP is
spending on Education.

NEED FOR GOVERNMENT INTERVENTION

The expenditure on education and health is very important for human capital
formation. To generate positive results of these expenditures, government
interference is important because of following reasons:

• The expenditures of education and health make a substantial impact and

they cannot be easily reversed. For example: if a child is admitted to a
school and health care and required services are not provided there, then,
substantial damage can be caused to that child. Thus, government
intervention is necessary to make better choices and decisions.
• Individual consumers do not have complete information about the quality
of education and health and their cost.
• The providers of education and health may acquire monopoly power and
can easily exploit the market.
Thus, government intervention is mandatory to provide proper benefits to
all the population.
NOTE: India was declared as a polio free country by WHO on 27th March
2014 and it was possible only because of Government Intervention in
polio vaccination.

BASIC EDUCATION AND HEALTH: A FUNDAMENTAL RIGHT

In a developing country like India, a large section of the population lives below
poverty line and are unable to afford even basic education and health care
services.
Major sections of our economy are unable to afford super specialty health care
and higher education.
So, government should provide education and health free of cost to the deserving
citizens and those from the socially backward classes.

EDUCATIONAL SECTOR IN INDIA

TOPIC 1ST GOVERNMENT EXPENDITURE GROWTH ON EDUCATION

1.) As a percentage of total government expenditure: it indicates the importance

of education in the economy. During 1952, govt. was spending 7.92% of their
expenditure on education. Recently in 2014, 15.7% of government expenditure
is spending on education.

2.) As a percentage of GDP: in 1952, government was spending 0.64% of GDP

ON EDUCATION. Recently in 2014, 4.13% of GDP is spending on education.

TOPIC 2ND IMPORTANT POINTS ABOUT GOVT. EXPENDITURE

1.) Govt. spends more on elementary education elementary education (primary

and middle school education) takes a major share of total education
expenditure. Share of higher education or tertiary education like colleges,
universities, etc is at the least.
2.) Expenditure on tertiary education is important Govt spends less on tertiary
education. Expenditure per student in tertiary education is higher but total
expenditure on tertiary education is quite less than expenditure on elementary
education. Our economy needs more teachers who are trained in higher
education. In short, expenditure on elementary as well as on tertiary education
both should be given equal priorities.
3.) Different educational opportunities across states In 2014-2015, the per
capita education expenditure differs across states from as high as 34,651 Rs.
in himachal pradesh and quite low i.e 4088 Rs. in Bihar. This leads to
difference in educational opportunities.

TOPIC 3RD PRIVISION OF FREE AND COMPULSORY EDUCATION

The TAPAS MAJUMDAR COMMITTEE appointed by Indian government in

1998 estimated an expenditure of Rs. 1.37 lakhs crores over 10 years from 1998
to 2007 to bring all Indian children in the age group of 6 to 14 yrs under the
concept of school education.

In 2009, government of India enacted The right to Education act to make free
and compulsory education a fundamental right of all the children of age group
of 6 to 14 years.

Government of INDIA also started 2% education cess on all taxpayers and the
revenue generated from education cess should be used for elementary education
in India.
Government also sanctioned a large amount for the promotion of higher
education and also loan schemes for students to pursue higher education.

EDUCATIONAL ACHIEVEMENTS IN INDIA

ADULT LITERACY RATE – It refers to the ratio of literate adult population out of
total adult population in a country.
During 1990 to 2018, adult literacy rate increased from 61.9% to 82% in case of
males and adult literacy rate increased from 37.9% to 66% in case of females
in the same time period.

PRIMARY COMPLETION RATE – it is the percentage of students completing the

last year of primary school. During 1990 to 2018, the primary completion rate
increased from 78% to 93% in case of males and the primary completion rate
increased from 61% to 96% in case of females in the same time period.
YOUTH LITERACY RATE – It is the percentage of people who are of age 15 yrs to 24
yrs and are able to read and write.
During 1990 to 2018, the youth literacy rate increased from 76.6% to 93% in
case of males and the youth literacy rate increased from 54.2% to 90% in case
of females in the same time period.

FUTURE PROSPECTS IN EDUCATIONAL SECTOR

IT includes the following
EDUCATION FOR ALL – STILL A DREAM –
• The literacy rates for both adults as well as youth have increased. But the
absolute no. of literates in India is still high.
• In 1950, it was noted in the directives of constitution that the government
should provide free and compulsory education for all the children up to the
age of 14 years. If we had done this, then we would have achieved 100%
literacy by now.

GENDER EQUITY –
The difference in literacy rates between males and females are narrowing. It
indicates a positive development in gender equity. But still, women education
needs to be promoted more:
To improve economic independence and social status of women.
And Women education makes a favourable impact on fertility rate and health
care of women and children.

So, we cannot be satisfied with upward movement in literacy rate until 100 %
literacy rate is achieved.

HIGHER EDUCATION – A FEW TAKERS

The Indian education pyramid is steep indicating lesser and lesser no. of people
reaching the higher education level.

AS PER NSSO DATA, 2011 -12,

➢ In rural areas, the rate of unemployment among youth males who studied
graduation is 19%.
➢ In urban areas, the rate of unemployment among youth males who
studied graduation is 16%.
➢ In rural areas, the rate of unemployment among youth females who
studied graduation is 30%.
➢ 3 to 6% of primary level educated youth are unemployed.

Thus, govt. needs to increase the expenditure on higher education and should
raise its standard and should maintain its exp. In the same way for elementary
education.

BETI BACHAO, BETI PADHAO……(V. IMP)

It was launched in 2015 by the Indian government to generate awareness and
improve the efficiency of welfare services intended for girls in India.

The objective of this initiative are:

a.) prevention of gender biased selective elimination

b.) ensuring survival and protection of girl child.

c.) ensuring education and participation of the girl child.

CHAPTER 6TH RURAL DEVELOPMENT
In INDIA, majority of people live in rural areas and around 22% of population of
India is living below poverty line. In last 50 years, agriculture has grown at a
rate of only 2.7% and agricultural output has grown at 3.2%.
Agricultural contribution in GDP has declined and industrial and service
sector contribution in GDP has increased.
All the above facts clearly indicate that progress of India is possible only when
rural areas and rural people are developed.
RURAL DEVELOPMENT
Rural development refers to continuous and comprehensive socio-economic
process, attempting to improve all aspects of rural life.
2/3rd population of India is dependent on agriculture, so development of
agriculture is significant.
Rural development not only involves agricultural development but all the
aspects which improves quality of life of people of rural areas.

PROCESS OF RURAL DEVELOPMENT

Following are the areas of rural life which need fresh initiatives for the
development of India;
1.) DEVELOPMENT OF HUMAN RESOURCE – the quality of human resource
needs to be improved through following measures;
Proper attention to literacy, education and skill development
Better health facilities for physical growth

2.) DEVELOPMENT OF INFRASTRUCTURE – it involves;

Improvement in electricity, irrigation, credit marketing and transport facilities
Better facilities for agriculture research

3.) LAND REFORMS – it includes the following objectives;

Elimination of exploitation of farmers
Actualization of goal of “land to tiller”
Improvement of socio economic conditions of rural poor
Increasing agricultural productivity and production.

4.) ALLEVIATION OF POVERTY – around 22% population of India is still below

poverty line. So there is a need for taking serious steps for alleviation of poverty and
improvement in conditions of weaker section of society.

5.) DEVELOPMENT OF PRODUCTIVE RESOURCES – this should be done to

enhance opportunities of employment other than farming.

RURAL CREDIT
In agriculture , farmers are in strong need for credit due to long time gap
between crop sowing and realization of income.
SOURCES OF RURAL CREDIT

NON –INSTITUTIONAL SOURCE INSTITUTIONAL SOURCE

NON-INSTITUTIONAL SOURCES
Non institutional sources have been the traditional source of agricultural credit
in India. Non-institutional sources are;
1.) money lenders – money lenders have been advancing a major share of farm
credit. The farmers are exploited through very high rates of interest. Their
accounts are manipulated without their knowledge.
2.) relatives – cultivators borrow funds from their own relatives in time of crisis.
These loans are kind of informal loans and carry no interest and normally
returned after harvest.
3.) traders and commission agents – they provide credit to the farmers on the
mortgage of crops at high rates of interest on a condition that the crops will be
sold to them at low prices.
4.) rich landlords – small and marginal farmers and tenants, take loans from
landlords for meeting their financial requirements. Landlords charge high rate
of interest on such loans and exploit the farmers and tenants.

INSTITUTIONAL SOURCES
in 1969 when India adopted the institutional credit approach through various
agencies;
Objectives behind this;
To provide adequate credit to farmers at cheaper rate of interest.
To assist small and marginal farmers in raising their agricultural
productivity.
IMPORTANT NOTE: (NATIONALIZATON OF BANKS)
It refers to transfer of public sector assets to be operated by central or state government. The
banks which were previously functioning under private sector, were transferred to public
sector and these banks are called as nationalized banks. It occurred because private sector
banks were providing loans to only large scale industries and neglecting agriculture and small
scale industries.
Government nationalized 14 major commercial banks in 1969 and six more banks were
nationalized in 1980 in order to provide loans to small scale industries as well as agriculture.
Institutional sources are –
1.) Co-operative credit – the primary objective of the co-operative credit is to liberate the
Indian farmers from the clutches of money lenders and to provide them credit at low rate of
interest.

2.) Land development banks – they provide credit to farmers against the mortgage of
their land. Loans are provided for permanent improvement of land, purchasing agricultural
equipments and for paying old debts.

3.) Commercial bank credit – commercial banks played a marginal role in advancing
rural credit. After nationalization in 1969, they expanded their branches in rural areas and
started directly financing the farmers.

4.) Regional rural banks – they are opened up in those areas where there are no banking
facilities. Their main objective is to provide credit and other facilities especially to small and
marginal farmers, agricultural labourers, artisans and small entrepreneurs in rural areas.

5.) Government – the loans provided by the government are known as taccavi loans and
are lent during emergency or distress like famines, floods, etc. the rate of interest charged is
as low as 6%.

6.) NABARD – NATIONAL BANK FOR AGRICULTURAL AND RURAL

DEVELOPMENT. It is the apex bank which coordinates the functioning of different
financial institutions working for expansion of rural credit.
Its objective is to promote health and strength of credit institutions .
Besides providing finance to credit institutions , NABARD also provides financial
assistance to the non-farm sector to promote integrated rural development and prosperity of
backward rural areas.

7.) SHG BANK LINKAGES PROGRAMMES - SHG has emerged as the micro
finance programme in the country in recent years.
Their focus is largely on those rural poor who have no access to the formal banking system.
Their target groups comprise of small and marginal farmers , agricultural and non-
agricultural labourers , artisans, etc.
SHGs promote thrift in small proportions by a minimum contribution from each member.
From the pooled money, credit is given to the needy members at reasonable rate of interest, to
be repaid at small installments.
By may 2019, more than 54 lakhs SHGs had reported and around 6 crores women become
member of SHG.
SHGs have also helped in the empowerment of women. The borrowings are mainly for
consumption purpose and little proportion for productive purposes.

CRITICAL APPRAISAL OF RURAL BANKING/ PROBLEMS FACED BY RURAL

BANKING
1.) INSUFFICIENCY - the volume of rural credit in the country is still insufficient in
comparison to its demand.
2.) INADEQUATE COVERAGE OF INSTITUTIONAL SOURCE – the institutional credit
arrangement continues to be inadequate as they have failed to cover entire rural farmers in
the country.
3.) INADEQUATE AMOUNT OF SANCTION – the amount of loan sanctioned to the farmers
is also inadequate. As a result, farmers often divert such loans for unproductive purposes
which dilute the purpose of such loan.
4.) LESS ATTENTION TO POOR AND MARGINAL FARMERS – lesser attention has been
given on the credit requirements of small and marginal farmers. On the other hand, well to
do farmers are getting more attention due their credit worthiness.
5.) GROWING OVERDUES – the problem of overdue in agricultural credit continues to be an
area of concern. The basic reason of so much overdues is the poor repaying capacity of
farmers. Agriculture loan default rates have been chronically high.

IMPORTANT NOTE ;

To improve the situation;

Bank needs to change their approach from being lenders to building up relationship banking
with the borrowers.
Farmers should also be encouraged to increase the habit of savings and efficient utlisation of
financial resources.

TANWA ( TAMILNADU WOMEN IN AGRICULTURE)

TANWA is a project initiated in Tamil Nadu to train women in latest
agricultural techniques.
It induces women to actively participate in raising agricultural productivity
and family income.
Women are making farm women group which acts like SHGs.
Many other farm women groups are creating savings in their group by
functioning like mini banks.
With the accumulated savings they promote small scale household activities
like mushroom cultivation, soap manufacture, doll making and other income
generating activities.

AGRICULTURAL MARKETING SYSTEM

Agricultural marketing is a process that involves assembling, storage,
processing, transportation, packaging, grading and distribution of different
agricultural commodities across the country.
Under this system, farmers can also dispose their surplus stock at reasonable
price.
PROBLEMS FACED BY FARMERS ---
1.) MANIPULATIONS BY BIG TRADERS – prior to independence, farmers suffered
from faulty measurements and manipulation of accounts while selling their production to
traders.

2.) LACK OF MARKET INFORMATION - farmers were often forced to sell at low
prices due to lack of required information on prices prevailing in the markets.

3.) LACK OS STORAGE FACILITY – farmers did not have proper storage facilities to
keep their production for selling later at better prices and thus there was lot of wastage.

SO, government intervention is necessary to regulate the activities of the private traders.

MEASURES TO IMPROVE AGRICULTURAL MARKETING

1.) REGULATED MARKETS –
The first measure is regulation of markets to create orderly and transparent marketing
conditions. Regulated markets have been organized with a motive to protect the farmers from
malpractices of sellers and brokers. This policy benefited famers as well as consumers.
2.) INFRASTRUCTURAL FACILITIES – the government aims to provide physical
infrastructure facilities like roads, railways, warehouses, cold storages, etc. the current
infrastructure facilities are quite inadequate to meet the growing demand.
3.) CO-OPERATIVE MARKETING – the aim of co-operative marketing is to realize the fair
price for formers products. Cooperative Marketing system in which the farmers pool their
marketable surplus of crops and distribute the sale proceeds according to share of each
individual farmers. Under this, marketing societies are formed by farmers to sell the output
collectively and to take advantage of collective bargaining, in order to obtain better price.
MILK co-operatives in Gujarat have been very successful in transforming social and
economic conditions of Gujarat.
Cooperative marketing benefits the farmers in following ways……..(A) It improves
bargaining power of farmers as they sell their produce through one agency. (B) It help
farmers in fulfilling immediate cash requirements (C) it provides better storage facilities to
farmers as well as cheaper transportation facilities.
BUT co-operative marketing have received setback because of inadequate coverage of farmer
members, lack of link between marketing and processing cooperatives and inefficient
financial management.
4.) DIFFERENT POLICY INSTRUMENTS – in order to protect the farmers government has
initiated the following policies

• Minimum support price(MSP) – to safeguard the interest of farmers , government

fixes the minimum prices of agricultural products like wheat, rice, maize, cotton, etc.
such price may be regarded as an offer price at which govt. is willing to buy any
amount of grains from the farmers.

• Buffer stocks – THE FCI (food corporation of INDIA) purchases wheat and rice at the
procurement prices to maintain buffer stock. Buffer stock is created in the year of
surplus and is used during shortages. It helps to ensure regularity in supply and
maintaining of prices.

• Public distribution systems(PDS) – PDS in our country operates through a

network of Ration shops and fair price shops. It offer essential commodities like
wheat, rice, kerosene, etc at a price below than market price to the weaker sections of
society.

NOTE; despite of all these measures agricultural markets are still dominated by private
traders and thus much government intervention is necessary to protect the farmers.

EMERGING ALTERNATE MARKETING CHANNELS

1.) ORIGIN OF FARMERS MARKET – farmers can increase their incomes if they directly sell
their product to consumers. Thus, concept of FARMERS MARKET was started to give boost
to the small farmers by providing them direct access to the consumers and eliminating the
middlemen like brokers. Some examples of these channels are;
APNI MANDI in Punjab, Haryana and Rajasthan
HADASPAR Mandi in PUNE
Rythu bazaars in Andhra Pradesh
Farmers market in Tamil Nadu (also called as Uzhavar sandies).

2.) ALLIANCE WITH NATIONAL AND MULTINATIONAL COMPANIES – several national

and multinational fast food chains are entering into contracts with farmers.
They encourage the farmers to cultivate farm products of desired quality. They provide
farmers not only seeds but also assure purchase of output at pre-determined prices.
Such arrangements will help in reducing price risk of farmers and farmers can expand their
markets.

DIVERSIFICATION OF AGRICULTURAL ACTIVITIES

Need for diversification arises because;
(a) there is greater risk on depending exclusively on farming for livelihood.
(b) to provide productive sustainable livelihood options to rural people.

BENEFITS OF DIVERSIFICATION
Much of the agricultural employment is concentrated in kharif season
(autumn season i.e. July to October), because during Rabi season (spring
season i.e. October to March) , it becomes difficult to find gainful employment
in those areas where there is lack of irrigation facilities.
So, diversification is essential
To provide supplementary gainful employment
To enable them to earn higher levels of income
To enable people of rural areas to overcome poverty.

TYPES OF DIVERSIFICATION –
1.) DIVERSIFICATION OF CROP PRODUCTION – it involves a shift from
single cropping system to multi cropping system. It also involves a shift in
cropping pattern from food grains to cash crops. The main aim is to promote
shift from subsistence farming to commercial farming.
In India, agriculture is dominated by subsistence farming and farmers give
prime importance to cereals in cropping system.
Multi-cropping system reduces the burden of farmers to depend on one crop
because now they are engaged in growing variety of crops.
It helps in increasing the income of farmers and helps in reducing the risk of
price fluctuations.
2.) DIVERSIFICATION OF PRODUCTIVE ACTIVITIES –
As agriculture is already overcrowded, so increasing labour force needs to find
alternate employment opportunities in other non – farm areas.
It would provide alternate sources of sustainable livelihood and would raise the
level of income.
Non-farm activities have several segments. Some segments of non-farm
activities possess healthy growth while others possess low productivity.
Healthy growth areas ( dynamic areas) are agro processing industries, food
processing industries, leather industry, tourism, etc
While low productivity areas are household based industries like pottery, crafts,
handlooms etc.
NON- FARM AREAS OF EMPLOYMENT
ANIMAL HUSBANDRY – animal husbandry or livestock farming is that
branch of agriculture which is concerned with breeding, rearing and caring for
farm animals.
Under this cattle, goats and fowls like ducks are the widely held species. India
owns one of the largest livestock populations in the world.
Livestock production provides increased stability in income, food security,
transport, fuel and nutrition for the family.
This sector provides alternate livelihood options to more than 70 million small
and marginal farmers including landless workers and also provide
employment to women.
In India, poultry accounts for largest share of 61% out of total livestock
farming.
Pigs 1%, sheeps and goats 16%, cattle and buffalos 22%, poultry 61% and
others % having shares in animal husbandry.

DAIRYING –
it is that branch of agriculture which involves breeding , raising and
utilization of dairy animals for the production of milk and various dairy
products.
It is the business of producing, storing and distributing milk and milk
products.
Due to successful implementation of ‘OPERATION FLOOD’ , India ranks first
in the world in MILK production. It increased from 17 million tonnes in 1951
to 198.4 million tonnes in 2019-20.
OPERATION FLOOD ( white revolution) was started by national dairy
development board in 1970 under the guidance of Dr. Verghese Kurien. The
objective was to create a nationwide milk grid(chain)
All the farmers pool their milk according to different grades and it will be
marketed to urban areas at fair prices.
Gujarat state is held as a success story for implementing milk cooperatives.

FISHRIES - (also called as blue revolution)

It refers to occupation devoted to the catching, processing or selling of fish and
other aquatic animals.
IMPORTANT POINTS ABOUT FISHING –
1.) the water bodies(sea, oceans, rivers, lakes, natural aquatic ponds, streams)
are considered as MOTHER as they provide life giving source to the fishing
community.
2.) recently fish production from inland source contributes about 65% to the
total fish production and balance 35% comes from marine sector i.e sea and
oceans.
3.) total fish production accounts for 0.9% of GDP.
4.) west Bengal, Andhra Pradesh, Kerala, Gujarat, Maharashtra and Tamil
Nadu are major fishing states.
5.) 60% of workforce in export marketing of fish and 40% of workforce in
internal marketing of fish are women.
PROBLEMS FACED IN FISHING –
(a) widespread underemployment.
(b) low per capita earnings
(c) less mobility of labour
(d) high illiteracy rate.

HORTICULTURE – ( ALSO CALLED AS GOLDEN REVOLUTION)

It refers to the science or art of cultivating fruits, vegetables, tuber crops, flowers,
aromatic plants, spices and plantation crops. All these crops are necessary to
provide food and nutrition.
IMPORTANT POINTS ABOUT HORTICULTURE
1.) Horticulture contributes nearly 1/3 of total agricultural output and 6% of
GDP of India.
2.) India is the second largest producer of both fruits and vegetables in the
world. India has emerged as a world leader in producing a variety of fruits and
no. of spices.
3.) horticulture has increased economic conditions of many farmers.
4.) flower harvesting , nursery, hybrid seed production, etc are highly
remunerative employment options for women in rural areas.
IMPORTANT NOTE:
GOLDEN REVOLUTION - it refers to a period in which there was tremendous
rise in horticultural products. 1991 to 2003, this period was known as golden
revolution. It made India a world leader of mangoes, bananas, coconut and
spices. Father of golden revolution is NIRPAKH TUTEJ.
INFORMATION TECHNOLOGY –
Information technology refers to that branch of engineering that deals with the
use of computers and telecommunications to retrieve and store and transmit
information.

• Through appropriate information and software tools, government has been

able to predict areas of food insecurity and to prevent the likelihood of an
emergency.

• It also has a positive impact on the agriculture as it circulates

information regarding emerging technology and its applications, prices,
weather and soil conditions for growing different crops.

• It acts as a tool for releasing the creative potential and knowledge in the
society and also generates employment in rural areas.
The main aim of this is to make every village a knowledge center where it
provides an option of employment and livelihood.
NOTE: In October 2014, govt. of India introduced a new scheme called as
“Sansad Adarsh gram yojana” in which Members of parliament need to
identify and develop one village from their constituencies (area of operation).

IMPORTANT REVOLUTIONS –
1.)Black revolution – for petroleum production. 2.) pink revolution – for meat
production. 3.) Grey revolution – for fertilizer production. 4.) white revolution
– for milk production. 5.) yellow revolution – oilseeds production. 6.) green
revolution – agricultural overall production. 7.) silver revolution – eggs
production. 8.) golden revolution – for horticulture 9.) Brown revolution – for
coffee. 10.) blue revolution – for fisheries. 11.) Golden fiber revolution – jute
production.
EVALUATION OF RURAL DEVELOPMENT
The rural sector will continue to remain backward until some changes occur, so,
some of the following changes need to be taken for development of rural sector ;
1.) STRESS ON DIVERSIFICATION – there is a need to make rural areas more
vibrant through diversification into dairying, poultry, fisheries, vegetables and
fruits.
2.) RURAL AND URBAN LINKAGE – efforts should be made to link up rural
production centres with urban and foreign markets to realize higher returns on
the investment from the production.
3.) BETTER FACILITIES – proper efforts should be made to develop
infrastructure like credit and marketing, state agricultural departments,
farmer friendly agricultural policies, etc. the aim is to achieve full potential of
the rural sector.
4.) MORE EMPHASIS ON SUSTAINABLE DEVELOPMENT – there is need to
invent eco – friendly technologies that lead to sustainable development.

ORGANIC FARMING ( V. IMP.)

ORGANIC FARMING is the form of agriculture that relies on techniques such
as crop rotation, green manure, compost and biological pest control. This
method avoids the use of synthetic chemical fertilizers.

• It is the process of producing safe and healthy food without leaving any
adverse impact on the environment.
 • Organic farming is a whole system of farming that restores, maintains
and enhance ecological balance.

• There is an increasing demand for organically grown food to enhance

food safety throughout the world.

BENEFITS OF ORGANIC FARMING;

1.) ECONOMICAL FARMING – organic farming offers a means to substitute costlier
agricultural inputs with locally produced cheap organic inputs.
2.) GENERATES INCOME THROUGH EXPORTS – it generates income through international
exports as demand for organically grown crops is on rise.
3.) PROVIDES HEALTHY FOOD – it provides healthy food because organically grown crop
has more nutritional value than food produced through chemical farming.
4.) SOURCE OF EMPLOYMENT – it generates more employment opportunities as it requires
more labour input than conventional farming.
5.) SAFETY OF ENVIRONMENT – the produce of organic farming is pesticide free and is
produced in an environment sustainable way.
6.) SUSTAINS SOIL FERTILITY – it improves soil fertility through application of organic
inputs in the form of animal manures, compost ,etc. however, conventional farming use
chemical fertilizers which erode soil fertility.

CHALLENGES BEFORE ORGANIC FARMING;

1.) LESS POPULAR – it needs to be popularized by creating awareness and willingness on
the part of farmers for adoption of new technology. There is a need for proper agricultural
policy to promote organic farming.
2.) LACK OF INFRASTRUCTURE AND MARKET FACILITIES – organic farming faces
problem of inadequate infrastructure and marketing facilities.
3.) LOW RETURNS – organic farming has a lesser return in the initial years as compare to
modern agricultural farming and thus small and marginal farmers find difficult to adapt
large scale production.
4.) SHORTER FOOD LIFE – organic food has a shorter life as compare to chemically sprayed
food.
5.) LIMITED CHOICE OF CROPS – the choice in production of off season crops is quite
limited in organic farming.

CHAPTER 7TH EMPLOYMENT

EMPLOYMENT is an activity from which a person earns means of livelihood.
WORKER is an individual who is involved in some economic activity to earn a
living. A worker contributes to GDP by rendering his productive activities.

WORKERS include the following;

• It includes self- employed people like shopkeepers , barbers, etc

• It includes those people who remain temporarily absent from work due to
illness or any other reason.

• It includes those people who help the main workers.

It means all those who are engaged in some economic activity are called
workers.
MULTIFACETED NATURE OF EMPLOYMENT
 ➢ some get employment throughout the year, while others get employed for
few months i.e seasonal workers.
➢ Many workers do not get fair wages for their work.
➢ While estimating the number of workers, all those who are engaged in
some economic activities are included as employed.

NUMBER OF WORKERS
➢ During 2017-18, total number of workers in India was 471 million
people. Out of them, around 2/3rd were rural workers.
➢ Around 77% of total workers are male and others are female.
➢ Rural women participate in economic activities as compare to urban
women.

LABOUR FORCE
All persons who are working and though not working, are seeking and are
available for work are termed as labour force.
LABOUR FORCE = persons working + persons seeking/available for work.
Labour force is the total of employed and unemployed people.

TO calculate the labour force, subtract the following from total population;
(a) unfit people like old or handicapped people.
(b) people who are not willing to work.
(c) people who are not available for work.
It must be noted that children below 15 years and old people above 60 years are
excluded from labour force.
LABOUR FORCE PARTICIPATION RATE
The ratio of labour force in total population is called labour force participation
rate ( LFPR)

WORK FORCE
The number of persons who are actually employed at a particular time are
known as work force. It includes all those people who are actually engaged in
some economic activities.
Work force = labour force – unemployed people.
It means unemployed people = labour force – work force.
Rate of unemployment = no. of unemployed / size of labour force x 100

PARTICIPATION OF PEOPLE IN EMPLOYMENT

WORKER-POPULATION RATIO is used to indicate the employment situation
of a country. It is calculated by dividing the total number of workers in India
by total population and multiply by 100.

• It is very useful in determining the portion of population that actively

contributes in the production of goods and services.

• Higher ratio indicates higher population is involved in economic activities

where as lower/medium ratio indicates less population are involved in
economic activities.
 • This ratio indicates the status of workers in society and their working
conditions and by this we can determine quality of employment in a
country.

IMPORTANT FACTS AND DATA ABOUT WORKERS IN INDIA –

▪ For every 100 persons, 34.7% are workers in India.
▪ In urban areas, worker population ratio is 33.9% and in rural areas this
ratio is 35%.
▪ Rural people have limited resources and participate more in employment
market, whereas urban people mainly look for appropriate job which suits
their qualification.
▪ Ratio of women workers in rural areas is 17.5% than women workers in
urban areas i.e 14.2%. this is all due to poor economic conditions in rural
areas.

EMPLOYMENT
EMPLOYMENT is an activity which enables a person to earn means of living.
SELF – EMPLOYMENT
An arrangement, in which a worker uses his own resources to make a living, is
known as self- employment. Workers who own and operate an enterprise to earn
their livelihood are known as self-employment.
Around 52% work-force in INDIA are self-employed.
Self-employment is a major source of livelihood for both men and women.
In this, a person uses his own land, labour, capital and enterprise to make a
living. For example shop-keepers, traders, businessmen , etc.
 WAGE – EMPLOYMENT
An arrangement in which a worker sells his labour and earns wages in return,
is known as wage – employment. Under this, worker is known as employee and
buyer of worker is known as employer.
Workers do not have any other resource except their own labour. They offer their
labour services to others and in return get wages.
If a doctor is running his own clinic, he is self employed where as if that doctor
will work in some hospital , then, it will be wage employment.
WAGE EMPLOYMENT IS OF TWO TYPES;
(A) REGULAR WORKERS (B) CASUAL WORKERS

REGULAR WORKERS – when a worker is engaged by someone or by an

enterprise and is paid wages on regular basis, then such worker is called regular
worker or regular salaried employee.
Workers are hired on permanent basis and also get social security benefits like
pension, provident funds, etc
Regular workers account for just 22.8% of total workforce in India.
For example teachers, professors, engineers working in company, etc
CASUAL WORKERS – Workers who are casually employed and in return get
remuneration for the work done, are called casual workers.
Casual workers are not hired on permanent basis. It means they do not have
regular income, regulation from the government, job security and social
security benefits.
Casual workers account for 25% of workforce in India.
DISTRIBUTION OF EMPLOYMENT BY GENDER
• Self employment is a major source of livelihood for both, men (52%) and
for women (52%).

• Casual workers account for second major source for both, men (24%)
and women (27%).

• In case of regular salaried workers, men are found in greater

proportion(24%) where as women found only(21%). Reason behind this
is regular employment require skills and high level of literacy.

DISTRIBUTION OF EMPLOYMENT BY REGION

• SELF – EMPLOYMENT – it is a major source of livelihood in both, rural
areas(58%) and in urban areas(38%). In rural areas, self employed
workers are more because majority of rural people are engaged in
farming.

• CASUAL- WORKERS – in case of rural areas, casual workers account

for second major source of employment with 29% of workforce and in
urban areas, it is only 15%.

• REGULAR SALARIED EMPLOYEES – in urban areas, it is the second

major source with 47% of workforce. Urban people have variety of
opportunities due to their education. Only 13% of rural people are
engaged in regular salaries employment due to lack of education and
skills.
DISTRIBUTION OF EMPLOYMENT IN DIFFERENT SECTORS
We divide all economic activities into following 8 divisions
(a) agriculture (b) mining and quarrying (c) manufacturing (d)
electricity, gas and water supply (e) construction (f) trade (g) transport
and storage (h) services.
For simplicity, all the workers working are divided into three sectors
(a) primary sector – it includes agriculture and mining and quarrying.
(b) secondary sector – it includes manufacturing, electricity, gas and
water supply and construction.
(c) tertiary sector – it includes trade, transport and storage and services.
So, data is
1.) primary sector is the main source of employment (44.6%) for
majority of workers in India.
2.) secondary sector provides employment to only 24.4% of workforce.
3.) 31% of workers are engaged In service sector.

DISTRIBUTION OF RURAL-URBAN EMPLOYMENT IN DIFFERENT SECTORS

EMPLOYMENT IN RURAL AREAS
• 59.8% of workers in rural areas are engaged in primary sector

• 20.4% of workers in rural areas are working in secondary sector.

• 19.8% of workers in rural areas are working in tertiary sector.

EMPLOYMENT IN URBAN AREAS

• 6.6% of workers in urban areas are engaged in primary sector.
 • 34.3% of workers in urban areas are engaged in secondary sector.

• 59.1% of workers in urban areas are engaged in tertiary sector.

DISTRIBUTION OF MALE-FEMALE EMPLOYMENT IN DIFFERENT SECTORS

MALE EMPLOYMENT
• 40.7% of male population is engaged in primary sector.

• 26.5% of male population is engaged in secondary sector.

• 32.8% of male population is engaged in tertiary sector.

FEMALE EMPLOYMENT
• 57.1% of female population is engaged in primary sector. Quite high
than male population. It happens because men get opportunities in both
secondary as well as tertiary sectors.

• 17.7% only of female population is engaged in secondary sector.

• 25.2% of female population engaged in tertiary sector.

Q.) write a short note on jobless growth. ( v. v. important)

Ans. During 1950 – 2010, GDP of India grew positively and rate of GDP was
higher than the rate of employment growth. There was great rise in GDP but
employment rises at a rate less than 2% only. During these years, the gap
between growth of GDP and growth of employment was widening and this is
termed as jobless growth.
JOBLESS GROWTH refers to a situation when the economy is able to produce
more goods and services without a proportionate increase in employment
opportunities.
Jobless growth is actually a situation when there is an acceleration in he growth
rate of GDP without any increase in employment.
Indian economy is achieving GDP more through technology than from labour.
It leads to jobless growth.

IMPORTANT NOTE ;
In 1972-73, 74.3% of workforce was engaged in primary sector and now in
2017-18, only 44.6% of workforce is engaged in primary sector. It shows
substantial shift from farm work to non-farm work.
Secondary sector workforce increased from 10.9% to 24.4% and tertiary sector
workforce increased from 14.8% to 31% during 1972-73 to 2017-18.

CASUALISATION OF WORKFORCE
The process of moving from self-employment and regular salaried employment
to casual wage work is known as casualization of workforce.
FROM 1972-1973 TO 2017-18 :

• Share of self employed workers declined from 61.4% to 52.2%

• Share of regular salaried employees has stagnated at an average of 14%.

It increased from 15.4% to 22.8%.

• Share of casual workers has increased from 23.2% to 25%.

INFORMALISATION OF WORKFORCE
It refers to a situation whereby the proportion of workforce in the informal
sectors increases.
The employment structure in India can be studied with two sectors;
(A) FORMAL SECTOR (ORGANISED SECTOR) –
All the public enterprises and private establishments which employ 10 or more
hired workers are called formal sector establishments.
Workers who work in such establishments are called formal sector workers.
Formal sector workers enjoy social security benefits and earn more than
informal sector workers.
The government protects them in various ways through labour laws and these
workers can form trade union also.
This sector provides work to only 6% of total workforce of India.
(B) INFORMAL SECTOR (UNORGANISED SECTOR) –
Informal sector includes all those private enterprises which hire less than 10
workers. Workers who work in such enterprises are known as informal sector
workers. For example farmers, agricultural labourers, etc.
It also includes those casual wage workers who work for more than one employer.
In India, more than 94% employment is found in informal sector like small
farms, household industries, shops and other self-employment units.
Workers in the informal sector do not get regular income and they do not have
any social security protection.

RECENTLY IN INDIA, workers are switching more towards informal sector and
this is called informalisation and it is not a positive sign of economy.
(READ DIFF. OF FORMAL AND INFORMAL SECTOR WORKERS FROM SANDEEP
GARG BOOK) VERY IMPORTANT

IMPORTANT NOTE –

• Out of total 473 million workers in India. 30 million workers are in

formal sector and 443 million workers are in the informal sector. It
means only 6 - 7% of workforce are engaged in formal sector and rest
94% in the informal sector.

• In the formal sector, out of 30 million, 24 million are male and rest
female. Where as in the informal sector, out of 443 million, 310 million
are male and 133 million are female.

UNEMPLOYMENT AND SOURCES OF DATA

Un employment refers to a situation in which people are willing and able to
work at the existing wage rate but do not get work.
With prolonged employment, workers may also lose their skills and work habits
and become unemployable.

SOURCES OF UNEMPLOYMENT DATA –

1.) REPORT OF CENSUS OF INDIA population census collects information on the

economic activity of people.

2.) NSSO National sample survey organisation collects data through sample

surveys and gives annual estimate of employment and unemployment.

3.) DIRECTORATE GENERAL OF EMPLOYMENT AND TRAINING (DGET) DGET

has been implementing the employment market information scheme over last
30 years. It provides information about the structure of employment,
occupational compositions and educational profiles of people.

All the above sources just provide an estimate of data of employment because
variety of employment prevails in our country.

TYPES OF UNEMPLOYMENT IN INDIA –

1.) DISGUISED UNEMPLOYMENT (HIDDEN UNEMPLOYMENT) (V. IMP) –
It refers to a state in which more people are engaged in work than are really
needed. Foe example if two workers are needed on a land and five workers are
engaged on the same job, then extra three workers are disguised unemployed.
It is the most predominant form of unemployment in the agricultural sector in
India.
IN 1950, AROUND 1/3 of agricultural workers were hidden unemployed.
The main problem of this is all workers seem to be employed but marginal
productivity of extra labour is zero means contribution of extra workers is zero.
CAUSES OF DISGUISEDUNEMPLOYMENT-
(A.) Non availability of alternate job opportunities outside agriculture compels
people to work on family farms. (B.) small land holdings with increase in size
of family. (C.) in case of joint family, people continue to work on their
family land.

2.) SEASONAL UNEMPLOYMENT (V. IMP.) –

Unemployment that occurs at certain seasons of the year is known as seasonal
unemployment.
In India, seasonal unemployment is predominant form of unemployment in
agriculture.
In agriculture work is seasonal and there are no employment opportunities in
the village.
When there is no work to do on farms , men go to urban areas and look for jobs
and during rainy seasons they come back to their village.
Seasonal unemployment varies from state to state depending upon methods of
farming.
3.) OPEN UNEMPLOYMENT ( V. IMP.) –
Open unemployment refers to that economic phenomena in which persons are
able and willing to work at the prevailing wage rate but fails to get work. It is
called open unemployment because such unemployment can be seen and
counted in terms of number of unemployed people. In open unemployment
workers are totally idle where as in case of disguised unemployment, workers
appear to be working and do not seem to be idle.

CAUSES OF UNEMPLOYMENT (VERY VERY IMP.)

1.) Slow rate of economic growth - the actual growth rate always lies below the
targeted growth rate. Employment opportunities created under the plans could
not make progress with increasing labour force (person available for jobs).
2.) Population explosion – the rapid rate of population growth has been another
cause of rising unemployment. It has not been possible to generate so many
employment opportunities to absorb large growing labour force.
3.) Underdeveloped agriculture – heavy pressure of population on land and the
traditional methods of agriculture are responsible for massive rural
unemployment.
4.) Defective educational system – the prevailing education system in India is
full of defects as it fails to make any provision for providing technical and
education. As a result, everyone is getting only general education and are
unemployed even after education.
5.) Slow growth of industry – due to shortage of capital and lack of modern
technology, industrial sector could not generate sufficient employment
opportunities in the country.
6.) Decline of small – scale and cottage industries – a number of traditional
cottage industries have declined over the years due to change in demand
preference and emergence of modern industries. As a result, no. of people are
unemployed.
7.) Faulty planning – the government plans could not stop the migration of rural
people to urban areas, plans were unable to encourage labour intensive
techniques and plans have failed to generate alternate employment programmes
like fisheries, dairies, etc. all these failed planning lead to unemployment in
India.
8.) Inadequate employment planning – there has been complete absence of any
legal provision to implement employment generating schemes.
9.) Low capital formation – low rate of capital formation i.e. less investment has
hampered the growth of agriculture and industries. Thus job creating capacities
have been affected adversely.

REMDIAL MEASURES FOR UNEMPLOYMENT

(OR) MEASURES TO GENERATE EMPLOYMENT
OPPORTUNITIES
1.) Accelerate growth rate of GDP – the aggregate employment problem can be
solved through the process of accelerated growth. Growth rate of GDP between 8 to
9% are needed over next ten years to achieve significant improvement in
employment situation.
2.) Population control – the rapid growth rate of population should be slowed
down, so that additional jobs created do not fall short for new comers in labour
market. It is necessary to adopt an effective population control policy like
family planning programmes.
3.) Agriculture development – increase in agricultural growth is important to
increase labour productivity and quality of employment for existing labour
force. There is a need for agricultural revolution through improved techniques ,
irrigation facilities and land reforms.
4.) Encourage small-scale industries – the small scale sector needs to be
encouraged through multiple initiatives like liberal finance , technical training
and supply of raw material as well as marketing of their products.
5.) Improvement in infrastructure – the infrastructural facilities like health,
education, irrigation, electricity, roads, etc are crucial for overall development of
an economy. Better infrastructure enable agriculture and industries to produce
to their full capacity and generate more employment.
6.) Special employment programs – programs which aim at providing self and
wage employment should be implemented.
7.) Improvement of employment exchanges – the employment exchanges
spreads all over the country are of great assistance in directing the job seekers to
the possible areas of employment. Their functioning should be improved.
8.) Self-employment opportunities – government should provide various
facilities like financial assistance, training of skills, supply of inputs,
marketing of products, etc to generate more self- employment opportunities.
9.) Educational system – the present system of education should be made more
vocational, technical and work oriented. Educational facilities should be more
diversified and training programme is necessary to develop skills of the
educated unemployed people.
NOTE: Indian government launched Pradhan mantra kaushal vikas
yojana(PMKVY) or skill India programme on 16th july 2015 as a skill
development initiative scheme for recognition and standardization of skills.
Under this scheme, the trainees are offered a financial reward and a
government certification on successful completion of training and assessment
which will help them in securing a job for better future.

10.) Manpower planning – the future requirements of educated manpower

should be forecasted and thus intake into various professional courses should be
determined. As a result, excess manpower in market will be eliminated.
GOVERNMENT POLICIES AND EMPLOYMENT GENERATION
GOVERNMENT generates employment in two ways;
1.) DIRECT EMPLOYMENT –
Govt. provides direct employment by employing people in various departments
for administrative purposes. It also runs industries , hotels and transport
companies and thus provides employment their directly to workers. For example;
jobs given to workers during dam construction.

2.) INDIRECT EMPLOYMENT –

Government enterprises purchase raw-material from private enterprises for
production of goods and services. It means if there is rise in output of govt.
industries, private sector will also grow and thus no. of employment
opportunities in the economy will increase. This is called indirect employment.

EMPLOYMENT GENERATION PROGRAMMES

Government has also implemented a number of employment generation

programmes like mahatma Gandhi national rural employment guarantee act
2005, prime minister’s Rozgar Yojana, Swarna Jayanti Shahri Rozgar
Yojana, etc.
Government aims to alleviate poverty through such employment generation
programmes.
All these programmes aim to provide employment.
A) Self-employment programmes

B) wage-employment programmes
 SELF EMPLOYMENT PROGRAMMES

1.) RURAL EMPLOYMENT GENERATION PROGRAMME (REGP) – This programme

was started by the government to create self employment opportunities in the
rural areas and small towns.

It was implemented by Khadi and village industries commission.

Under this programme, one could get financial assistance in the form of bank
loans to set up small industries.

2.) PRIME MINISTER ROZGAR YOJNA (PMRY) - Under this programme, the
educated unemployed from low income families in rural and urban areas were
given financial help to set up any kind of enterprises that generates
employment.

PMRY attempted to generate employment by setting up 7 lakhs micro

enterprises during the eight five year plan.

By 2003-04, 3 million people got employment under this scheme.

3.) PRIME MINISTER EMPLOYMENT GENERATION PROGRAMME (PMEGP) – The

Indian government merged REGP with PMRY and introduced a new scheme
called prime minister’s employment generation programme with effect from 1 st
April 2008.

It aims to generate employment opportunities in rural and urban areas through

setting up of self employment ventures.

It also aims to bring together artisans and unemployed youth and to give them
self employment opportunities at their place.

4.) SWARNA JAYANTI SHAHRI ROZGAR YOJNA – SJSRY mainly aims at

creating employment opportunities for both self employment as well as wage
employment in urban areas.
This programme seeks to provide employment by setting up of self employment
ventures or provision of wage employment.

It is centrally sponsored scheme which is funded on 75:25 basis between centre

and states.

5.) SWARNA JAYANTI GRAM SWAROJGAR YOJNA (SGSY) – SGSY aims at

promoting micro enterprises and to bring the assisted poor families above the
poverty line, by organizing them into self help groups.

People who wish to benefit from this scheme are encouraged to form self help
groups.

People are encouraged to save money and lend among themselves as small
loans.

The government also provides partial financial assistance to SHGs which then
decide to whom loan should be given for self employment opportunities.

SGSY is now redesigned with name National rural livelihood mission (NRLM)
and one more National Urban livelihood mission also implemented for urban
poor.

WAGE EMPLOYMENT PROGRAMMES

1.) SAMPOORNA GRAMEEN ROZGAR YOJNA – the scheme aims to provide

additional and supplementary wage employment by undertaking labour
intensive work and providing food security.

Wages were paid as a combination of food grains and cash.

The scheme of SGRY is open to all rural poor who need wage employment and
desire to do manual and unskilled work in and around their village.

2.) NATIONAL FOOD FOR WORK PROGRAMME (NFFWP)– this programme was
launched in 2004 with the objective of intensifying the generation of
supplementary wage employment.

• It was initially implemented in 150 most backward districts of the

country to provide additional resources apart from SGRY
• It was implemented as 100% centrally sponsored scheme.
• This programme was incorporated in MAHATMA GANDHI NATIONAL
RURAL EMPLOYMENT GUARANTEE ACT (MGNREGA)
• MGNREGA aims at enhancing the livelihood security of people in rural
areas by providing guaranteed 100 days wage employment in a
financial year to rural people who are willing to do unskilled manual
work.
• In 2013-14,nearly 5 crores households got employment opportunities
under this.

3.) SOCIAL SECURITY PROGRAMME/NATIONAL SOCIAL ASSISTANCE

PROGRAMME – It was initiated by central government on 15th august 1995, to
help a few specific groups. Under this programme, elderly people who do not have
anyone to take care of them are given pension to sustain themselves. Poor
women like widows are also covered under this scheme.

4.) PRADHAN MANTRI JAN-DHAN YOJNA – from 2014, JAN DHAN YOJNA is
available in which people in India are encouraged to open bank accounts. Besides
promoting saving habits, this scheme aims at providing all the govt. benefits
like subsidies to account holders directly. Each bank account holder is also
entitled to 1 lakh accident insurance and 30,000 life cover insurance.

CH – 8TH INFRASTRUCTURE DELETED

FROM SYLLABUS 2022-2023.
CHAPTER 9TH ENVIRONMENT AND SUSTAINABLE
DEVELOPMENT
INTRODUCTION
Environment is defined as the total planetary inheritance and totality of all
resources. It is the sum total of all external forces which surrounds us.

It includes all the biotic and abiotic elements.

Biotic elements include all living elements like birds, animals and plants,
forests, fisheries, etc. whereas, abiotic elements include all non living things
like air, water, land, etc.

India is following Environment protection act 1986.

FUNCTIONS OF ENVIRONMENT

1.) PROVIDES RESOURCES FOR PRODUCTION – environment supply renewable

and non renewable resources. Renewable resources are those which can be used
without any possibility of being depleted. For eg. Tree, water, etc.

Non renewable resources means those resources which get depleted over time like
fossil fuels i.e petrol, diesel ,e tc

These resources provided by environment are used for further production.

2.) ENVIROMENT ASSIMILATES WASTE – the process of production and

consumption generates a lot of wastage which is absorbed by environment.

3.) ENVIRONMENT SUSTAINS LIFE – some basic necessities of life are part of
environment like sun, water, air, land, etc. environment sustains life by
providing these essential elements.

4.) IT PROVIDES ASTHETIC SERVICES – Environment includes land, forests, water

bodies, mountains, etc. people enjoy beauty of these elements which helps in
improving our quality of life also.
NOTE : the environment is able to perform these 4 basic functions without any
problem as long as demand of resources is within the carrying capacity.

Carrying capacity implies two things:

a) Resource extraction should remain below the rate of resource regeneration.

b) generation of waste should remain within the absorption capacity of the

environment.

If above two conditions are not fulfilled, then environment will not perform its
basic functions and leads to ENVIRONMENTAL CRISIS.

REASONS OF ENVIRONMENTAL CRISIS

1.) the population explosion and industrial revolution has increased the demand
for environmental resources, but its supply is limited due to overuse and
misuse.

2.) the massive extraction of resources has exhausted some of vital resources and
thus we are spending huge amount on technology and research to explore new
resources.

3.) due to massive consumption and production, the waste generated are beyond
the absorption capacity of environment.

4.) the development process has polluted atmosphere and water and thus there is
decline in air and water quality . 70% water of India is polluted now a days
and leads to water-borne diseases.

5.) Global environmental issues such as global warming and ozone depletion
also contribute to the increased financial commitments of the government.
HIGH OPPORTUNITY COST OF NEGATIVE ENVIRONMENT IMPACTS

Opportunity cost means cost of next best alternate. Due to global warming,
ozone depletion, decline in air and water quality and due to other
environmental problems, the financial commitments of the government
increased manifolds. Thus we can say that the opportunity cost of negative
environmental impacts is very high.

Government is spending a very huge amount to explore new resources and

technology.

REVERSAL OF SUPPLY-DEMAND RELATION : MAIN REASON OF ENVIRONMENTAL

DEGRADATION

IN THE PAST….. IN the early days of civilization, demand for environmental

resources was less than their supply.

Pollution was within the absorptive capacity of the environment.

Rate of resources extraction was less than the rate of resource regeneration.

As a result, environmental crisis did not arise.

IN THE PRESENT….. IN the present period, the demand for resources is in far
excess of its supply.

Pollution and waste is now beyond the absorptive capacity of environment.

Demand of resources is beyond the rate of regeneration of resources.

Due to population explosion and industrial revolution, demand of resources has

increased tremendously.

Due to this reversal of supply – demand relation, environmental

crisis/degradation arises.
GLOBAL WARMING
Global warming is the observed and projected increase in the average
temperature of earth’s atmosphere and oceans. During the past century, earth’s
temperature has risen by 1.1 degree F OR 0.6 degree Celsius and thus sea water
level has risen several inches.

CAUSES OF GLOBAL WARMING –

Global warming occurs due to increase in the green house gas concentrations
like water vapour, carbon dioxide, methane in the atmosphere.

Following factors are contributing in global warming:

a) burning of coal and petroleum products because it creates carbon dioxide,

methane, nitrous oxide, etc.

b) deforestation (cutting of trees), which increases the amount of carbon dioxide

in the atmosphere.

c) methane gas released in animal waste.

Since 1750, the concentrations of carbon dioxide (CO 2) and methane (CH 4)
rises by 41% and 160% respectively.

MAIN EFFECTS OF GLOBAL WARMING –

Global warming adversely affects the earth:

a) ICE is melting worldwide, especially at earth poles. It leads to rise in sea water
level by several inches.

b) Hurricanes and other tropical storms are likely to become stronger.

c) Increased incidence of tropical diseases like malaria, cholera, dengue,

chikungunya, etc.
d) Species like polar bears are in danger of becoming extinct.

e) Global warming has lead to shift in cycle of seasons as summers are getting
unusual longer than winters.

OZONE DEPLETION
OZONE depletion refers to destruction of ozone in the ozone layer due to
presence of chlorine from manmade CFC(chlorofluorocarbons) and other forces.

CAUSES OF OZONE DEPLETION

The problem of ozone depletion is caused by high levels of chlorine and bromine
compounds in the stratosphere. The origin of these chemicals are:

a) CFC which is used as a cooling substance in AC and refrigerators.

b) Aerosol propellants and BFC (bromofluorocarbons) also called as halons,

which is used in fire extinguishers.

MAIN EFFECTS OF OZONE DEPLETION

As a result of ozone depletion, UV rays (ultra violet rays) come to earth and
cause damage to living organisms.

a) UV rays seem to be responsible for skin cancer in human beings.

b) UV rays lowers production of phytoplankton which affects other aquatic

organisms.

c) UV radiations can also influence the growth of terrestrial plants.

MONTREAL PROTOCOL
AS ozone layer prevents most harmful ultraviolet rays from passing through
earth’s atmosphere. So depletion of ozone layer is a great concern.

Thus for recovery of ozone layer, adoption of Montreal protocol is much required.

• Montreal protocol is a treaty (agreement) designed by the members of

united nations to protect the ozone layer by phasing out (removing) CFC
as CFC is the main reason for ozone depletion.
• Under the Montreal protocol, all the signing members agreed to freeze the
consumption and production of CFC by the year 2013.
• India signed the Montreal protocol with its London amendment on 17
September 1992.
• Montreal protocol has significantly reduced the burden of CFC in the
stratosphere and helped in Ozone recovery.

Now its time for PRYAVARAN MITRA means friend of environment.

STATE OF INDIA’S ENVIRONMENT AND DICHOTOMY

India has abundant Natural resources in terms of rich quality of soil, hundreds
of rivers and plenty of mineral deposits.

• The black soil of Deccan plateau is particularly suitable for cultivation of

cotton leading to concentration of textile industries.
• The Indo Gangetic plains spread from Arabian sea to the Bay of Bengal
are one of the most fertile and densely populated area in the world.
• India’s forests though unevenly distributed provide green cover for a
majority of its population and natural cover for its wildlife.
• Large deposits of iron-ore, coal and natural gas are found in the country.
India alone accounts for 20% of world’s total iron ore.
 • Bauxite, copper, chromate, diamonds, gold’s, lead, lignite, zinc, uranium,
etc. also available in different parts of the country.

INDIA’S ENVIRONMENTAL PROBLEMS POSE A DICHOTOMY

1.) Poverty is causing environmental degradation through cutting down of

trees, overgrazing of animals, pollution of water, etc.

2.) Rising standard of living is causing environmental degradation

because due to increase in population and wealth, demand of resources has
increased which causes misuse and overuse of natural resources.

CRITICAL ISSUES OF OUR INDIA’S ENVIRONMENT

1.) LAND DEGRADATION

LAND degradation refers to a decline in the overall quality of soil, water or
vegetation condition commonly caused by human activities.

It occurs through various natural and man-made process especially water-

logging.

Land degradation leads to the loss of various nutrients and lower food grain
production.

CAUSES OF LAND DEGRADATION

1.) Loss of vegetation due to deforestation.

2.) Overgrazing i.e grazing of natural pastures above the capacity.

3.) Encroachment into forest lands.

4.) Non – adoption of adequate soil conservation measures.

5.) Unsustainable fuel wood extraction.

6.) Improper crop rotation.

7.) Improper use of chemical fertilizers and pesticides.

 NOTE: According to a survey, 174 million hectares means 53% of total land
area in India is facing problem of land degradation and mainly due to soil
erosion.

2.) DEFORESTATION OR FOREST DEGRADATION

DEFORESTATION involves the permanent destruction of indigenous forests

and woodlands. It refers to cutting, clearing and removal of rain-forest
where land is converted to a non-forest use.

• Deforestation is rising at such a rapid scale that it has totally

disturbed the ecological balance of the country.
• The per capita forest land in the country is only 0.08 hectare against
the requirement of at least 0.47 hectare forest land to meet basic
needs.
• Chances of more floods, soil erosion, changes in climate are some of
the serious consequences of deforestation.

APPIKO MOVEMENT – On 8th September 1963, when felling of trees

started in Sirsi district of Karnataka, then, 160 Men, Women and
children hugged the trees and forced the woodcutters to leave.

These people saved 12000 trees and within months, this movement spread
to many adjoining districts.

3.) SOIL EROSION – Soil erosion takes place when the surface soil is washed
away through excessive rains and floods. Deforestation is the main reason for
soil erosion.

As per the estimates, soil is being eroded at a rate of 5.3 billion tonnes a year,
which is quite high.

The quantity of nutrients lost due to erosion each year ranges from 5.8 to 8.4
million tonnes.
VERY IMPORTANT NOTE: India carries around 17% of world’s total
population of humans and around 20% population of total livestock in world.
But, India is having only 2.5% of total land area in world. Due to this rising
population in limited land, India is facing issue of deforestation and soil
erosion.

4.) BIO-DIVERSITY LOSS – BIO-diversity is defined as the varities of species

available on earth from all sources including terrestrial (on land), marine and
aquatic, etc.

Extinction of any species is called bio-diversity loss. Bio-diversity loss has

serious economic and social costs for any country as many plant and animal
species are threatened by over- exploitation of resources.

There is immediate need for bio-diversity conservation.

NOTE –

WATER POLLUTION: when toxic substances enter rivers, streams and other
water bodies and get dissolved or lie suspended in water, it leads to water
pollution. Water pollution degrades the quality of water and has led to the death
of several animals and posed a serious threat to human life.

5.) AIR POLLUTION

AIR POLLUTION is the presence of materials in air in such concentration
which are harmful to man and the environment.

 Air pollution is widespread in Urban areas where vehicles are major

contributors along with thermal power plants and various other
Industries.
 Emissions from vehicles are main concern as these are ground level
sources and have main impact on general population.
 The number of motor vehicles increased from 3 lakh in 1951 to 30 crores
in 2019. Out of total vehicles in India, 85% are registered vehicles.
  The central pollution control board has identified 17 categories of
Industries which are main reason for pollution.

WAYS TO CONTROL AIR POLLUTION –

Some of the ways to control air pollution are:

(a) Promotion of Public transport like use of Delhi Metro instead of private
vehicles. Steps must be taken for effective traffic planning and management.

(b) Promotion of cleaner fuels in vehicles like use of CNG instead of petrol and
diesel.

(c) Use of cleaner fuels such as LPG in households to reduce Indoor air pollution.

(d) Promotion of cleaner technologies, proper monitoring system and reporting

system must be there to control air pollution.

CENTRAL POLLUTION CONTROL BOARDS

In order to address water and air pollution in India, the government set up the
Central pollution control board (CPCB) in 1974.

MAIN FUNCTIONS OF CPCB are:

a) They investigate, collect and publish information relating to water, air and
land pollution and laid down standards for emissions.

b) CPCP provides technical assistance to government for cleanliness of streams,

wells and sewage to prevent and control air and water pollution.

c) CPCP carries out and sponsor investigations and research relating to the
problems of air and water pollution.

d) CPCB also organize mass awareness programme for the same cause.

e) CPCB prepares codes and guidelines relating to disposal of sewage waste.

f) They assess the air and water quality from time to time.
 SUSTAINABLE DEVELOPMENT
Sustainable development is the development, which will allow all future
generations to have a potential average quality of life which is being enjoyed by
the current generation.

• The basic aim of sustainable development is to ensure that present

generation should leave resources for next generation also.
• Sustainable development means economic growth of present generation
and environmental preservation for future, at the same time.
• In economics terms, sustainable development maintains when stock of
overall capital assets and resources remains constant and rises over time.
• The term sustainable development has its origin in the
INTERNATIONAL UNION FOR THE CONSERVATION OF NATURAL
RESOURCES (IUCN) in 1980.
• Sustainable development refers to the development which means meeting
the needs of present generations without compromising with the needs of
future generations.

AIMS OF SUSTANABLE DEVELOPMENT –

1.) Equitable and sustainable use of resources to meet the needs of the present
and future generations without causing damage to the environment.

2.) To prevent future damage to our life – support systems.

3.) To conserve Bio-diversity and other resources for long term food security.

HOW TO ACHIEVE SUSTAINABLE DEVELOPMENT?? (OR) Five basic rules

of sustainable development.

1.) RESTRICT USE OF RENEWABLE RESOURCES Renewable resources should

be extracted on a sustainable basis. It means usage of renewable resources
should be less than resource regeneration.
2.) SUBSTITUTE NON-RENEWABLE WITH RENEWABLE RESOURCES Non
renewable resources are depleting overtime, so, renewable resources should be
developed. It means rate of development of renewable resources should be more
than rate of depletion of non-renewable resources.

3.) BECOME INPUT EFFICIENT Technological progress should be made to

become input efficient and not input consuming. It means, efforts should be
made to produce more output with less input.

4.) CONTROL POLLUTION - Pollution emissions should be limited to the

absorption capacity of the environment.

5.) CONTROL THE GROWTH OF POPULATION – The growth of human

population should be controlled to a level which must be within the carrying
capacity of the environment.

STRATEGIES OF SUSTAINABLE DEVELOPMENT

1.) USE OF NON-CONVENTIONAL SOURCES OF ENERGY – India is hugely

dependent on thermal power plants to meet its power needs which has lot of
environmental impacts.

Non conventional sources like wind energy and solar energy are better ways to
generate electricity but still they are not explored on large scale due to lack of
technological devices.

In areas with high speed of wind, wind mills can provide electricity without any
adverse impact on environment. Similarly, with the help of photovoltaic cells ,
solar energy can be converted into electricity.

Both the sources wind energy and solar energy is totally free from pollution.
Although they are costly but benefits are far better than costs.
 2.) USE OF CLEANER FUELS – in urban areas, use of compressed natural Gas
(CNG) is being promoted to be used as fuel. In Delhi, use of CNG public
transport has significantly lowered the pollution.

In rural areas, households generally use wood, cow dung , etc as fuel. These
fuels have adverse environmental impacts like deforestation, excess pollution,
etc. to overcome this problem use of LPG is being promoted as kitchen Gas and
can help in reducing pollution at large scale.

3.) ESTABLISHMENT OF MINI-HYDEL PLANTS – In mountain regions, perpetual

streams (waterfalls) can be found almost everywhere.

These streams can be used to generate electricity via turbines through mini-
hydel plants. Such power plants are environment friendly and generate enough
power to meet local power needs.

In this, transmission cables and towers are also not required and thus it is less
costly.

4.) TRADITIONAL KNOWLEDGE AND PRACTICES – Traditionally Indian people

have been close to their environment. All practices relating to agriculture,
healthcare system used to be environment friendly.

Shift from traditional system to modern system caused large scale damage to
our environment.

For example: India is well known for its AYUSH treatment with 15000 species
of plants of medicines. But, recently we are following western treatment and
causing great harm to our environment. We must adopt traditional system so
as to achieve sustainable development.

5.) USE OF BIO-COMPOST – the use of chemical fertilizers to increase the

agricultural output has not only adversely affected the large areas of
production but also polluted the water bodies.
With the rise in demand for organic food, farmers have again started using
natural compost like cow-dung, etc. environment will be safe with use of bio-
compost/natural compost.

6.) BIO-PEST – the advent of green revolution has increased the use of chemical
pesticides which not only pollutes food products but also pollutes the water
bodies.

To meet this problem, better methods of pest control are promoted. For example
neem based pesticides should be used as they are environment friendly.

Awareness must be created for use of various animals, mammals and birds like
snakes, lizards, owls, peacocks, etc as they are natural pest cotrollers.

7.) SUSTAINABLE PATTERN OF PRODUCTION AND CONSUMPTION – with

increasing purchasing power, wasteful consumption impact our environment
adversely.

It is important to counter this through education and public awareness.

In several areas, desirable limit and standards for consumption and production
need to be established to conserve natural resources for present as well as for
future.
CHAPTER – 10TH COMPARATIVE DEVELOPMENTS OF
INDIA, CHINA AND PAKISTAN
INDIA the largest democracy of the world with a secular and liberal
constitution.
CHINA which has recently started moving towards a more liberal constitution
with its command (socialist economy).
PAKISTAN having an autocratic militarist political power structure.

DEVELOPMENT PATH OF INDIA, CHINA AND PAKISTAN

India, China and Pakistan have many similarities in their development
strategies.

• All the three nations started their development path at the same time.

• India and Pakistan got independence in 1947 and people’s republic of

china was established in 1949.

• All the three countries have started planning their development strategies
in similar ways. India announced its first five year plan in 1951,
Pakistan in 1956 and China in 1953.

• India and Pakistan adopted similar strategies like creating a large public
sector and increase expenditure on social development.

• Till 1980s, all the three countries had similar growth rates and per capita
incomes.
COMPLETE STRUCTURE OF CHINA
HISTORICAL BACKGROUND –

China has one of the oldest people and continuous civilization consisting of
states and culture. The people’s republic of China (PRC), commonly known as
china was established in 1949.

GEOGRAPHY –

China is situated in eastern Asia bounded by the pacific in the east. It is the
third largest country in the world next to Canada and Russia with 9.6 million
square kms.

POPULATION AND LANGUAGE –

China is the most populous country in the world with 1371 million people as per
2015 data and a growth rate of population is 0.5% per annum. Most languages
in China belong to Sino – Tibetan language family. There are also several
major dialects (ordinary language for people) with in Chinese language itself.

ECONOMY –

China has been the world’s largest economy. After the establishment of people
republic of China, all the controls were brought under government control.
Following are the points related to economy of CHINA.
1.) GREAT LEAP FORWARD CAMPAIGN –
In 1958, GLF campaign was initiated by MAO to modernize china’s economy.
The aim of this campaign was to transform agrarian economy into modern economy by
rapid industrialization.
People were encouraged to set up industries in their backyards. In rural areas, communes were
started. Under commune system, people collectively cultivate their lands. In 1958, there were
26000 communes covering almost all the farm population.
GLF campaign met with many problems. A severe drought caused havoc in China killing
about 30 million people.
2.) GREAT PROLETARIAN CULTURAL REVOLUTION –
In 1965, MAO introduced this revolution (1966-76), under which students and
professionals were sent to work and learn from the countryside. When Russia had conflicts
with China, it withdrew its professionals who earlier had been sent to china to help in
industrialization process.
3.) REFORMS INTRODUCED IN CHINA –
China introduced reforms in 1978 in phases;
IN THE INITIAL PHASE, reforms were initiated in agriculture, foreign trade and
investment sectors. In agriculture, commune lands were divided into small plots and then
allocated to individual households only for use, not ownership.
They were allowed to keep all the incomes from land after paying taxes.
IN THE LATER PHASE, reforms were initiated in industrial sector. Private sector firms and
township & village enterprises are now allowed to produce goods. Enterprises owned by
government were facing competition at that stage.
4.) DUAL PRICING –
The reform process also involved dual pricing. This means fixing the price in two ways.
Farmers and industrial units were required to buy and sell fixed quantities of inputs and
outputs at a price fixed by the government.
For other transactions, inputs and outputs were purchased and sold at market prices.
5.) SPECIAL ECONOMIC ZONES (SEZ) –
In order to attract foreign investors, special economic zones were set up.
COMPLETE STRUCTURE OF PAKISTAN
HISTORICAL BACKGROUND

Pakistan (Islamic republic of Pakistan), gained independence on 14 august

1947. In 1971, a civil war in East Pakistan resulted in the independence of
Bangladesh. Pakistan’s history is characterized by periods of economic growth,
military rule and political instability.

GEOGRAPHY

Pakistan is located in south Asia and borders central Asia and middle East. Its
borders are with China in the north , towards west and north west are Iran and
Afghanistan , towards east and south east its borders are with India. The
country has an area of 796095 square Kms. Total cultivated area is 221300
square kms and area under forest is 42300 square kms.

POPULATION AND LANGUAGE

Pakistan is the 6th most populous country in the world with 188 million people
as per 2015 data with a population growth rate of 2.1% per annum. 1/3 rd
population lives below poverty line. It has second largest Muslim population in
the world after Indonesia. National language is URDU and official language is
English.

ECONOMY

Following are the points regarding economic system of Pakistan;

1.) MIXED ECONOMIC SYSTEM –
Pakistan follows mixed economic model with co-existence of public and private sectors.
2.) INTRODUCTION OF VARIOUS POLICIES –
In late 1950 and 1960, Pakistan introduced various regulated policy frameworks for growth
of domestic industries. Tariff imposed on imports for protection of domestic goods.
3.) GREEN REVOLUTION –
In case of agriculture, introduction of green revolution and increase in public investment in
infrastructure led to rise in production of food grains.
4.) ROLE OF PUBLIC SECTOR IN EARLY 1970s –
In the early 1970s, nationalization of capital goods industries took place i.e. capital goods
industries under govt. control.
5.) ROLE OF PRIVATE SECTOR IN LATE 1970s –
1n late 1970s, government adopted the policy of de-nationalization and encouraged the
private sector and offered various incentives to them. It created a conductive climate for new
investments.
6.) FINANCIAL SUPPORT IN LATE 1970s –
Pakistan also received financial support from western nations. Remittances from emigrants
to the middle-east. This helped the country in stimulating economic growth.
7.) REFORMS –
IN 1988, various reforms were initiated in the country.

COMPARISON OF DEMOGRAPHIC INDICATORS OF INDIA, CHINA AND PAKISTAN

(YEAR 2015)
1.) POPULATION –
China is the most populous country in the world with 1393 million people and India is the
second most populated country with 1352 million people. Population of Pakistan is very less
i.e. 212 million people. Data belongs to year 2019. Out of every six persons living in this
world, one is Indian and another one is Chinese. Population of Pakistan is around 1/10 th of
India and china.

2.) GROWTH RATE OF POPULATION –

Though China is the most populated country in the world but its annual population growth
rate is just 0.46% per annum as compare to India i.e. 1.03% per annum and of Pakistan its
2.05% per annum. Low population growth rate in China is one child policy introduced in
1979. one child policy in China reduced the growth rate but the drawback was after some
decades there will be more elder people in the country as compare to young people.

3.) DENSITY OF POPULATION –

China is the third largest country in the world and growth rate of population in China is
very low as compare to India and Pakistan. Density of population in China is lowest 148
persons living in per square km area. In India its 455 persons living in per square km area
and in Pakistan its 275 persons living in per square km area.

4.) SEX-RATIO –
Due to preference of SON, sex ratio is lowest in all the three countries. Sex ratio is lowest in
INDIA with 924 females per 1000 males. In china and Pakistan, its 949 and 943
respectively.

5.) FERTLITY RATE –

It is calculated as number of children born by a woman in the reproductive age ( 15 – 45 )
years. After introduction one child policy, fertility rate in china has fallen from 3 births per
women to 1.7 births per women. Fertility rate is highest in Pakistan at 3.6 births per woman
and India comes second with 2.2 births per woman. It is calculated on an average.

6.) URBANISATION –
Urbanization is highest in China i.e. 59%. In India and Pakistan, it is 34% and 37%
respectively.
COMPARISON OF GROWTH INDICATORS OF INDIA, CHINA AND PAKISTAN
(YEAR 1980 and 2015)
FIRST of all, you should know about PPP i.e. purchasing power parity. It shows the equality of

purchasing power among countries i.e. quantity of goods and services that can be bought with a unit of

money. All the three countries have different currencies i.e. Indian rupee, Pakistani rupee and YUAN in

China. So GDP of all three countries are expressed in US $ and called PPP US $.

GDP growth rate is considered as the most important indicator of an economy.

CHINA with second largest GDP is estimated to be 22.5 trillion US $. India’s GDP is 9.03
trillion US $ and Pakistan’s GDP is around 11% of GDP of INDIA i.e 0.94 trillion US $.

DURING 1980 – 1990, GDP growth rate;

• China was having double-digit growth of 10.3%

• Pakistan’s growth rate was 6.3%

• India was at the bottom of 5.7% growth rate.

DURING 2015-17, GDP growth rate;

• There was a drastic fall in China’s growth rate from 10.3% to 6.8%.

• Pakistan also met with a drastic decline in growth rate from 6.3% to 5.3%.

• India recorded an increase from 5.7 % to 7.3% growth rate.

SECTORAL CONTRIBUTION OF INDIAN, CHINA AND PAKISTAN IN

PRIMARY SECTOR, SECONDARY SECTOR AND TERTIARY SECTOR –
( YEAR 2018-19)
PRIMARY SECTOR
IN CHINA -
• Due to climatic conditions, area suitable for cultivation is just 10% of total land area.
 • Total cultivation area in CHINA is just 40% of total cultivation area of India.

• Till 1980, more than 80% of population was dependent on farming as livelihood.

• Government encouraged people to leave their fields and pursue other activities such as
handicrafts, commerce and transport.

• Workforce engaged in agriculture was just 26% with 7% GDP contribution of

agriculture in total GDP of China.
IN INDIA –
• The contribution of agriculture to GDP was 16%. Proportion of workforce engaged in
agriculture was 43%
IN PAKISTAN
The contribution of agriculture to GDP was 24% and the proportion of workforce engaged in
agriculture was 41%.

SECONDARY SECTOR
In China, secondary sector contributes 41% in the total GDP, where as in India and Pakistan,
the share of secondary sector in total GDP is 30% and 19% respectively.

China has been shifting employment and output from agriculture to manufacturing and
then to services. But in India and Pakistan, the shift is taking place directly to the service
sector.
IN India, proportion of workforce engaged in manufacturing sector is just 25%, In Pakistan
24% of total workforce engaged in manufacturing sector where as in China, 28% of
workforce was engaged in agriculture.

TERTIARY SECTOR
In both India and Pakistan, service sector is emerging a major player of development. Service
sector contributes major share to their GDP. In India, service sector contributes 54% to their
GDP where as in Pakistan, its 57%.
The contribution of service sector was 52% in the total GDP of China.

In 1980s, Pakistan was faster in shifting their workforce to service sector than India and
China.
The proportion of workforce engaged in service sector ;
IN 1980…
In India, 17% workforce was engaged in service sector, 12% in China and 27% in Pakistan.
IN 2014…
In India, 32% workforce is engaged in service sector, 46% in China and 35% in Pakistan.

SO, we can conclude that the contribution of agriculture to GDP has declined.
In the industrial sector, China has maintained a double digit growth rate, but in India and
Pakistan, it has declined.
In case of service sector, China was able to rise its growth rate but India and Pakistan was
stagnant with its service sector growth rate.
China’s main growth was due to secondary sector and India’s main growth was due to
tertiary sector. Pakistan showed decline in all three sectors.

HUMAN DEVELOPMENT INDICATORS OF INDIA, CHINA AND

PAKISTAN (YEAR 2019)
1.) HUMAN DEVELOPMENT INDEX –
HDI is an important indicator to study the human development. Higher value of HDI shows
higher level of growth and development. Now, In 2019, HDI of India, China and Pakistan is 0.645,
0.761 and 0.557 respectively and rankings are 130,87 and 154 respectively.

2.) LIFE EXPECTANCY AT BIRTH –

I t refers to the average number of years for which people are expected to live. Higher life
expectancy indicates longer and active life span. China has the highest life expectancy of
76.9 years. India and Pakistan have life expectancy of 69.7 and 67.3 years respectively.
3.) MEAN YEARS OF SCHOOLING –
It is highest in case of China with 8.1% while the corresponding figures for India and
Pakistan are 6.5% and 5.2% respectively.
4.) INFANT MORTALITY RATE –
It refers to number of Infants dying before reaching the age of one year per 1000 live births
in a year. Low IMR shows better health and sanitation. It is lowest in China with just 9
infants and highest in Pakistan with 66 infants. IMR in India is 38 infants.
5.) PEOPLE BELOW POVERTY LINE –
It means those people who do not even have that level of income and expenditure, which is
necessary to fulfill basic needs. According to international poverty rate, minimum
consumption should be 3.10$ a day.
In India, 37% people are below poverty line, 32% people in China and 44% people in Pakistan
are below poverty line.
6.) MATERNAL MORTALITY RATE –
Both India and Pakistan have not been able to save women from maternal mortality. In
China, for one lakhs births, only 29 women die where as in India and Pakistan, maternal
mortality rate is 133 and 140 respectively.
7.) GDP PER CAPITA –
Higher rank of China in HDI is mainly due to higher GDP per capita. In 2016, China’s GDP
per capita was estimated to be 16057 US $. It was just 6681 US $ for India and 5005 US $
for Pakistan.
8.) IMPROVED WATER SOURCES –
It refers to the % of population which has a reasonable access to water and is able to obtain at
least 20 liters per day. China at 96%, India at 93% and Pakistan at 91% in providing
improved water sources.
9.) IMPROVED SANITATION –
Pakistan performance in providing sanitation is better than India and China. China has
provided sanitation to 75% of population, whereas Pakistan provided sanitation to 60% of
population and for India it is just 60%.
10.) POPULATION UNDERNOURISHED –
The % of population which is not able to obtain adequate diet is termed as undernourished
population. China has lowest % of population, only 8.1% people who are undernourished. In
India, 37.9% of total population is undernourished and in Pakistan 37.6% of population is
undernourished.
IMPORTANT NOTE;
HDI is not sufficient. Along with these, we also need liberty indicators.
Liberty indicators may be defined as measure of the extent of demographic participation in the
social and political decision making. Examples of liberty indicators are constitutional protection
rights given to the citizens.

APPRIASAL OF DEVELOPMENT STRATEGIES OF CHINA AND PAKISTAN

CHINA
China introduced various reforms in 1978.
In Pre reforms period;
(a) There had been massive extension of basic health services in rural areas.
(b) Even with commune system, there was more equitable distribution of food grains.
(c) per capita food grain output was same as like in 1950s.
In 1978, China government was not satisfied the slow pace of economic growth under the
Maoist rule. Thus, number of other reforms was introduced in 1978.
So,
In post reforms period,
(a) Each reform was first implemented on smaller level and then extended on massive scale.
(b) Development of infrastructure in the areas of education and health, existence of small
enterprises, etc helped positively in improving the social and income indicators.
(c) Agricultural reforms brought prosperity to a vast no. of poor people.

PAKISTAN
The reform process led to worsening of all economic indicators.
As compare to 1980, GDP growth rate declined in 1990s.
Proportion of poor was around 40% in 1960s, which declined to 25% in 1980 and again
started rising in 1990s.
Reason behind slow growth and massive poverty even after reforms;
(a) Agricultural growth and food supply situation was based on good harvest and not on
technical change.
(b) Most of the foreign exchange earnings come from remittances from Pakistani workers in
the Middle East and through exports of agricultural goods, but not from exports of
manufactured goods.
(c) Growing dependence on foreign loans and difficulty in paying back.

(1) NITI AAYOG (REPLACES PLANNING COMMISSION)

NITI which stands for national institute for transforming India. NITI AAYOG has been established
on 1st January 2015 to replace 65 yrs old planning commission. Aayog will also be chaired by the
prime minister. The govt aims at transforming the development agenda of India and use NITI aayog
as a means to serve the people of India in better way.

REASONS FOR ESTABLISHMENT OF NITI AAYOG –

1.) India’s population has increased three times. With increasing level of development, people now
heading from scarcity and survival to safety and surplus. So planning commission needed to be
replaced to be updated with different India.
2.) India’s economy has expanded from GDP of 1000 crores to 100,00,000 crores to emerge as one of the
largest economies. Hence strategies adopted by planning commission must be changed.

3.) there is growth and expansion of private sector. Now private sector has matured enough to play iys
dynamic role in the economy as the role of govt has drastically changed.

4.) India’s economy is now globalised. This needs a change in policy making along with the function
of government.

MAIN FEATURES OF NITI AAYOG –

(a) it design the development policy according to the needs of nation. It means this will be a fully
integrated planning process.

(b) it has to adopt bottom up approach instead of top down approach of past.

(c) the finalization of plans and required funds, all stakeholders will be having their opinions.

(d) promoting the idea of TEAM INDIA will be working on a common NATIONAL AGENDA.

(e) the aayog has to promote the idea of enabling states to have active participation in the formulation
of national policy.

NOTE from privatization chapter –

When more than 51% of PSU are sold to private enterprise, it is called strategic sale.

When less than 50% of PSU are sold to private enterprises, it is called minority sale.

(2) MAKE IN INDIA

MAKE IN INDIA is an international marketing campaigning slogan coined by the prime minister of
INDIA , on 25th September 2014, to attract business from around the world to invest and manufacture
in INDIA.

OBJECTIVES OF MAKE IN INDIA

(a) the major objective behind this initiative is to focus upon heavy and public enterprises while
generating employment in India.

(b) MAKE IN INDIA IS DEVELOPED TO FACILITATE THE FOLLOWING

- investment

- foster innovation

- enhance skills development

- protect intellectual property like trademarks, copyrights, etc

- to built best in class manufacturing infrastructure.

CHALLENGES IN MAKE IN INDIA PROGRAMME

(a) India’s poor infrastructure with inefficient transport networks makes it tough for manufacturing
companies to achieve on time production.

(b) a large chunk of manufacturers in India even believe that globalization is a myth for them and
they consider foreign industries as a threat for their domestic business.

UJJWALA YOJNA BY MODI GOVERNMENT

The Pradhan Mantri Ujjwala Yojana (PMUY) is a government scheme launched in 2016 by
Prime Minister Narendra Modi. The scheme originally envisaged the distribution of 50
million LPG connections to women below the poverty line. Later, it aimed to provide LPG
connections to eight crore women by March 2020. However, this target was achieved
seven months prior, in September 2019 .

Objectives of Pradhan Mantri Ujjwala Yojana

The Pradhan Mantri Ujjwala Yojana was launched for providing clean fuel to women below the
poverty line. The use of unclean cooking fuel is harmful to human health. The aims of the
Pradhan Mantri Ujjwala Yojana are given below:

• To empower women and protect their health.

• To minimize health issues arising from the use of unclean fossil fuel and other fuel while
cooking.
• To control indoor pollution from the use of fossil fuel which causes respiratory issues.
• To prevent degradation of the purity of the environment that is compromised by
widespread usage of unclean cooking fuel.