CLASS-9th

NCERT-Economics

(ANMOL CHOPRA)

CHAPTER-1
STORY OF VILLAGE
PA LA M P U R

INTRODUCTION
• Palampur- small village, well-connected with neighbouring villages and towns.
• It has two primary and one high school, a primary health centre run by the government and one
private dispensary.
• Most of the houses have electric connections.
• Farming is the main production activity, whereas small manufacturing, transport, shop-keeping
and farming are the other production activities of the village.

ORGANISATION OF PRODUCTION
• The goal of production is to produce goods and services which are wanted by people.
1. LAND: Includes all free gifts of nature, e.g., soil, water, forests, minerals, etc.
2. LABOUR: Human effort which includes physical as well as mental labour.
3. PHYSICAL CAPITAL: Variety of inputs, required at different stages during production.
A) Fixed capital: Tools, machines, buildings can be used in production over many years.
B) Working capital: Raw materials and money in hand.
4. HUMAN CAPITAL: Knowledge and enterprise to be able to put together land, labour and
physical capital and produce an output.

FARMING ACTIVITIES

Farming in Villages (Palampur) is usually based on following factor:

(i) Land is fixed

→ About 75% of the population depends on farming.
→ Land area under cultivation is fixed. There has been no expansion in land area under
cultivation since 1960.

(ii) Change in the method of cultivation

→ There have been important changes in the way of farming, which have allowed the farmers to
produce more crops from the same amount of land.
These changes include:
(a) Multiple cropping farming: Cultivation of different types of crops in the same piece of
land at the same or different time.
For example, jowar and bajra grow during the rainy season, potatoes are produced between
October and December, and wheat is produced during the winter season.

(b) Modern farming methods: In this type of farming, high yielding variety seeds are used. As
a result the same piece of land produces larger quantities of food grains.
→ Due to these changes (in the late 1960s) productivity of land has increased substantially
which is known as the Green Revolution.
→ Farmers of Punjab, Haryana and western Uttar Pradesh were the first to try out the
modern farming methods in India.

(iii) Sustainability of land

→ It’s important to be careful in the use of land.
→ According to a scientific report, in modern farming natural resources are overused.
→ Groundwater, rivers and lakes are polluted by the use of chemical fertilizers.
→ Chemical fertilizers also kill bacteria and other microorganisms in the soil which are
essential for the growth of plants.

(iv) Distribution of land

→ Distribution of land is usually uneven in villages, with large farmers having large land and
others are left with small plots or landless.
→ About one third of the 450 families are landless in Palampur.
→ 240 families cultivate small plots of land less i.e 2 hectares in size and remaining 60 families
cultivate more than 2 hectares of land.
→ A few of the large farmers cultivate 10 hectares or more than 10 hectares of land.

(v) Labour
→ Small farmers provide their own labour, whereas medium and large farmers make use of
hired labour to work on their fields.
→ As the work is less for the number of labourers they are not given minimum wages set by the
government.
→ Some labourers migrate to the cities, in search of better opportunities.

(vi) Capital
→ Huge capital is required in the method of modern farming.
→ Small farmers lack capital, hence they borrow money from large farmers and money lenders
at a higher rate of interest.
→ There are three types of capital which are mostly used i.e working capital, fixed capital and
human capital.

(vii) Selling of farms products

→ Surplus products are sold to medium or large farmers by the small farmers, after which,
medium and large farmers sell their surplus directly to the market.
→ The traders buy the products from the market and sell the products to shopkeepers in the
towns and cities.

NON-FARMING ACTIVITIES
25% of the total population is engaged in non-farming activities, like:

(i) Small-scale manufacturing

Basically, the work is carried out at home or in the fields with the help of family labour. So,
labour is rarely hired.

(ii) Transporting
People and goods are ferried from one place to another through transporting service. For this
service the worker gets paid.

(iii) Dairy
Dairy is a type of business where harvesting or processing of animal milk are done mostly
from cows and buffaloes.

(iv) Shopkeeping
Shopkeepers earn money by selling a wide range of items like rice, wheat, sugar, tea, oil,
biscuits, soap, toothpaste etc.. Here, the shopkeeper is an individual who runs the shop.

CHAPTER-2
PEOPLE AS
RESOURCE

INTRODUCTION
→ Population of a nation can be its asset rather than a liability.
→ ‘People as resource’ refers to a country’s working people in terms of their existing
productive skills and abilities.
→ When an existing human resource is developed by becoming educated and healthy it turns
into human capital.
→ Human capital is superior to other resources like land and physical capital, as it uses these
capitals and adds value to them.
→ Investment in human capital via education and medical care can give high returns in the
future.
→ Countries like Japan have invested a lot in human resources. They do not have rich natural
resources, but still they are called developed nations.

ECONOMIC ACTIVITIES

Humans perform many activities which can be grouped into economic and non-economic.

Economic Activities: activities which are undertaken for monetary gain or to satisfy wants.
→ Activities of workers, farmers, shopkeepers, manufacturers, doctors, lawyers, taxi drivers, etc.
fall under this category.
→ Economic activities are also called market activities.
→ Non-market activities are production for self-consumption.

Non-Economic Activities: ones that are not undertaken for any monetary gain.
→ These are also called unpaid activities.
E.g: housekeeping, helping the poor or disabled, etc.

SECTORS UNDER ECONOMIC ACTIVITIES

WORK PERFORMED UNDER ECONOMIC ACTIVITIES
→ In India traditionally there is division of labour between men and women.
→ Women look after domestic affairs like cooking of food, washing of clothes, cleaning of
utensils, housekeeping and looking after children. Men work in the field.
→ Men are paid for their work on the contrary women are not paid for their work in the house.
→ Work done by men is recognized in the National Income whereas the household work done
by women is not recognized in the National Income.

QUALITY OF POPULATION

Human Capital: Human capital is the stock of skill and productive knowledge embodied in
human beings. Population (human beings) become human capital when it is provided with better
education, training and health care facilities.

→ Quality of population depends upon the literacy rate, life expectancy and skills formation
acquired by the people of the country.

(i) Role of Education

→ Education is the most important component of human resource development.
→ It contributes towards the growth of the society, enhances the national income, cultural
richness and increases efficiency of governance.
→ In view of its contribution towards the growth of the society, government expenditure on
education as a percentage of GDP rose from 0.64% in 1951-52 to around 3% in 2021-22.
However, our national goal is 6% of GDP.
→ Literacy is uneven between males and females. Males are more literate. It also varies with
urban and rural areas. Urban population is more literate compared to rural.
→ There are 14 lakh schools (2020). But education is diluted by the poor quality of schooling,
high drop out rates, and is further challenged by covid-19 pandemic.
→ ‘Sarv Shiksha Abhiyan’ is a significant step towards providing elementary education to all
children below the age of 14.

(ii) Health
→ Health is another very important component of human resource development. Efficiency of
workers largely depends on their health.
→ There has been considerable improvement in the country’s health standard.
For instance, the life expectancy at the time of birth in India rose from 37.2 years in 1951 to
69.2 years in 2018. Similarly, the infant mortality rate has come down from 147 to 28 by 2019.
→ India has built up a vast health infrastructure but still much more is needed to be done.

UNEMPLOYMENT
Unemployment is said to exist when people who are willing to work at the prevailing wage
rates cannot find jobs.
→ Increase in unemployment is an indicator of a depressed economy. It’s a liability to the
country, it leads to wastage of manpower resources.

Nature of Unemployment in India

(i) Seasonal unemployment: when people fail to get work during some months of the year
(during off-season). Farm labourers usually face this kind of problem.

(ii) Disguised unemployment: situation where the number of workers in a job is more than
actually required to do the job.
→ it arises due to excessive pressure of the population on agriculture.

Consequences of Unemployment:
(i) leads to wastage of manpower resources.
(ii) tends to increase the economic overload that is dependence of the unemployed on the
working population.
(iii) may lead to increase in social unrest and tension.
 CHAPTER-3
POVERTY AS A
CHALLENGE

INTRODUCTION
→ Poverty means hunger and lack of shelter, clean water & sanitation, a situation in which
parents are not able to send their children to school or a situation where sick people cannot
afford treatment, lack of a regular job at a minimum decent level.
→ Above all it means living with a sense of helplessness.
→ It has both dimensions- economical and social

POVERTY IN SOCIAL SCIENCES

→ Now poverty is looked at through other social indicators like illiteracy level, lack of access to
health care, lack of job opportunities, lack of access to safe drinking water, sanitation, etc.

→ Nowadays, analysis of poverty is usually done through:

Social exclusion: which means, poor are excluded in the community of better off people.
Vulnerability: It describes the greater probability of certain communities or individuals
becoming, or remaining poor in the coming years.
→ The people from backward castes, individuals like widows, and the physically handicapped
are more vulnerable.
Poverty Line: It is based on the income or consumption level.
→ A person is considered poor if his or her income or consumption level falls below a given
‘minimum level’ necessary to satisfy basic needs.
→ The poverty line is estimated periodically by conducting sample surveys by the National
Sample Survey Organisation. (NSSO)

Estimates of Poverty
→ Incidence of poverty in India was around 55% in 1973 which declined to 36% in 1993 and
further to 26% in 2000.
→ Social groups which are most vulnerable to poverty are Scheduled Caste and Scheduled
Tribe households.

Inequality of Incomes within a Family

→ In poor families, old people, women and female children are denied equal access to
family’s available resources. They are the poorest of the poor.

Inter-State Disparities
→ Proportion of poor people is not the same in every state.
→ In 20 states and union territories the poverty ratio is less than the national average.
→ Chattisgarh and Jharkhand are the poorest states of India (2020)

Global Poverty Scenario

→ There has been a substantial decline in global poverty, but it is marked with great regional
differences.
→ Poverty has declined more in China and South-East Asian countries.
→ The World bank has defined poverty as the people earning less than 1.25$ per day.
→ The Millennium Development Goals of the United Nations call for reducing the proportion
of people below poverty line to half the 1990 level by 2015.

CAUSES OF POVERTY
→ There are a number of causes for the widespread poverty in India.
→ One historical reason is the low level of economic development under the British colonial
administration.

→ There are some other reasons, which are:

1. Rapid growth of population, particularly among the poor is considered a major cause of
Indian poverty.
2. Our agricultural sector has failed to generate much employment opportunities for the farm
labourers. Similarly, our industries could not provide many jobs for the job seekers.
3. One of the major causes of poverty is the unequal distribution of land and other resources.
→ Various land reform measures introduced after Independence could not improve the life of
millions of rural poor because of their poor implementation.
4. Social factors: People in India, including the very poor, spend a lot of money on social
occasions like marriages, festivals, etc.
→ Poor people hardly have any savings; they are, thus, forced to borrow. Unable to pay because
of poverty, they became victims of indebtedness.

POVERTY ALLEVIATION STEPS BY THE GOVERNMENT

→ Our government’s strategy to reduce poverty has been two-fold:
One, promotion of economic growth and,
Two, targeted poverty alleviation programmes.

Poverty Alleviation Programmes

To address the poor, a need for targeted anti-poverty programmes was strongly felt. Some of
them are:

1. Prime Minister Rojgar Yojana (PMRY): The aim of this programme (started in 1993) was
to create self-employment opportunities for educated unemployed youth in rural areas and small
towns.
2. Rural Employment Generation Programme (REGP): launched in 1995, to create
self-employment opportunities in rural areas.
3. Swarna Jayanti Gram Swarojgar Yojana (SGSY): started in 1999, the programme aims at
bringing the assisted poor families above the poverty line.
4. Pradhan Mantri Gramodaya Yojana (PMGY): launched in 2000, to achieve the objective
of sustainable human development at the village level.
5. Antyodaya Anna Yojana (AAY): Launched in 2000, to provide highly subsidised food to
millions of the poorest families and elders.
6. The National Food for Work Programme (NFWP): launched in 2004, in 150 of the most
backward districts of India with the objective of generating supplementary wage employment.
7. The National Rural Employment Guarantee Act (NREGA): passed in September 2005.
The Act provides 100-days assured employment every year to every rural household in 200
districts.

THE CHALLENGES AHEAD

→ Though poverty has declined in India, poverty reduction remains India’s most compelling
challenge.
→ Something special needs to be done to fight against wide regional disparities.
→ The definition of poverty must be broadened from ‘a minimum subsistence level of living to
a reasonable level of living’.
→ Bigger challenges before us are: providing health care, education and job security for all,
hence achieving gender equality.
 CHAPTER-4
FOOD INSECURITY IN
INDIA

FOOD SECURITY
Food security means availability, accessibility and affordability of food to all people at all
times.
→ Availability: Food production in the country, import of food
→ Accessibility: Food within the reach of every person
→ Affordability: To have enough money to buy sufficient amounts of food.

→ The poorest section of the society remains food insecure all the time.
→ People above the poverty line might also feel food insecure in times of natural calamity like
earthquake, drought, flood, tsunami, etc.
→ Natural calamities may lead to starvation. Starvation in the long run turns into famine.

● Famine is characterised by widespread deaths due to starvation and epidemics caused

by forced use of contaminated water or decaying water or decaying food and loss of
body resistance due to weakening from starvation.
→ In rural areas, the worst affected people are: landless and small farmers, traditional artisans
(weavers, potters, blacksmith etc.) providers of services(barbers, washer men etc), petty
self-employed workers and the destitute.
→ In the urban areas, persons employed in ill-paid occupations and casual labourers are food
insecure.
→ Children under the age of 5 years, a large proportion of pregnant and nursing mothers also
come under the category of food-insecure.
→ In India, some states have large amounts of food-insecure like Bihar, Orissa, Uttar Pradesh,
Jharkhand, West Bengal, Chhattisgarh etc.

Types of hunger
→ Hunger has chronic and seasonal dimensions.

Seasonal hunger: It is caused by the seasonal nature of agricultural activities in rural areas. In
urban areas, seasonal hunger occurs because of the casual type of work.
→ It is related to cycles of food growing and harvesting.
→ This type of hunger exists when a person is unable to get work for the entire year.

Chronic hunger: It is a consequence of diets being persistently inadequate in terms of quantity

and/or quality
→ A person who has a low level of income comes under the category of chronic hunger.

Need for self-sufficiency in food grains

→ Our government since Independence realised the need to attain self-sufficiency in food
grains because India experienced acute shortage of food grains after partition of the country in
1947.

The need for self-sufficiency arise from:

(a) to feed rising population
(b) to fight against droughts, floods, cyclones, etc.
(c) to reduce import of food grains
(d) to control prices of food grains.

Food Security System in India

→ Since the advent of the Green Revolution in the 1960s, the country has avoided famine, even
during adverse weather conditions.
→ Punjab and Haryana have shown very impressive growth in food production with 7.23
million tonnes in 1964-65 to a record 218 million tonnes in 2009-10.
→ India has become self–sufficient in food grains during the last 30 years because of the variety
of crops grown all over the country.
→ Still a few states have lagged behind in food production.e.g. Orissa.

Buffer Stock
→ It is the stock of food grains (wheat and rice) procured by the government through the Food
Corporation of India (FCI).
→ The FCI purchases wheat and rice for the government from the farmers of surplus states at
pre-announced prices, which is called ‘minimum support price’.
→ The food is distributed to the poorer strata of society at a lower price than market place,
which is known as Issue price.

GOVERNMENT’S VIGILANCE
→ In the wake of high incidence of poverty levels in mid-1970s, three important food
intervention programmes were introduced:
(a) Public Distribution System
(b) Integrated Child Development Services (ICDS) in 1975
(c) Food for work in 1977-78.

In 2000, two special schemes were launched- Antyodaya Anna Yojana (AAY) and the
Annapurna scheme (APS) with special target groups of the poorest of the poor and indigent
senior citizens, respectively.

PDS has proved to be the most effective for stabilising prices and making food available to
consumers at affordable prices.

Public Distribution System (PDS)

→ It refers to a system through which the food procured by the FCI is distributed among the
poor through government regulated ration shops.
→ The consumers are issued ration cards.
→ Rationing was introduced in India around 1940 after the Bengal famine.

→ For the purpose of PDS, government provides three kinds of ration cards:
(a) Antyodaya cards for the poorest of the poor,
(b) BPL cards for those below poverty line and,
(c) APL cards for those above the poverty line.

MERITS OF PDS:
(i) It helps to keep food prices stable by providing food at a concessional rate.
(ii) It helps to prevent a large number of hunger and famine by supplying food from surplus
regions to deficit ones.
(iii) Poor section of the society can easily buy food at subsidized rates from fair price shops
(iv) It assures the farmers by the way of purchasing food at minimum support price.

DEMERITS OF PDS
(i) In this system, food grains are stored as buffer stock which becomes wasteful due to gradual
decrease in the quantity of foodgrains due to deterioration, wear and tear, and rotting etc.
(ii) Sometimes products of the Public Distribution System are malpracticed by the PDS dealers
through selling the foodgrains in the open market for better margin.

ROLE OF COOPERATIVES
→ Cooperative opens many fair price shops to sell food grains at a concessional rate.
→ Academy of Development Science is an organization of training and capacity building
programmes on food security for NGOs in Maharashtra. It facilitates a network of NGO for
setting up a bank of grains. It is a successful food security intervention.
→ In Tamil Naidu, 94% of the price shops are run by the cooperatives.
→ Mother Dairy is a success story of cooperatives in milk and vegetables in Delhi.
→ Amul is also a success story of cooperatives in milk and milk products in Gujarat.