Third Question Paper

Section- (A) Economics

Unit 1
1) Fundamental aspects of Indian economy
2) Major features of Indian economy.
3) Developed India@2047.
4) Regional contribution of agriculture, industry and service sector.
5) Different concepts of national income.
6) Major crops and cropping patterns.
7) Challenges – Declining productivity, farmer distress and dependence on weather.
8) Government Initiatives- PM-KISAN, NMSA and various schemes.
9) Agricultural price policy, marketing and finance.
10) Agricultural start-ups and agro-processing for value addition.
11) Industrial policies and industrial development in India.
12) Manufacturing and Infrastructure- Make in India and infrastructure projects.
13) Hospitality and Tourism- Contribution to foreign exchange earnings.
14) Standardization of goods and services in India.
Fundamental aspects of Indian economy
 Economics is the study of how society allocates scarce resources
(Land, Labour, Capital, and Entrepreneurship) to produce output
(goods and services).
 This process operates on the basis of production, distribution and
consumption, and it also follows market rules or demand and supply
rules.
 Circular economy is a model of production and consumption that
involves sharing, leasing, reusing, repairing, refurbishing and recycling
existing materials and products for as long as possible. Thus, the life
cycle of the products is extended.
History of Indian Economy
 Even in the past, the Indian economy was one of the most stable economies and the largest across the globe. For
almost 2 millennia (1st century to 17th century) the Indian economy contributed 35% - 40% to the world
economy.
 By 1750, the Mughal Empire had a strong industrial manufacturing sector, with India contributing about 25% of
the world's industrial output, making it the most important manufacturing center in international commerce.
 By the end of the 18th century, Mughal India accounted for about 95% of the goods and textiles exported from
Asia to Europe, while imports were negligible and still sufficient for the country.
 During the British period, the Indian economy suffered a major setback and it declined from 24.4% of the world
economy in 1700 to 4.2% of the world economy in 1950.
Major features of Indian economy
 The fundamental elements of an economy mean on which factors that economy depends, what has been its
historical form and in which direction it is moving in the future. Like:- Indian economy is called the gamble of
monsoon, economy like Singapore, Switzerland is based on tourism, AI will play an important role in future etc.
 Current trend:
- Changing scenario:
- India has moved rapidly from a traditional agrarian economy to a service sector, which now
contributes about 58% of GDP.
- However, agriculture still employs about 50% of the workforce and remains important for rural
livelihoods.
- Engine of growth:
- The services sector, especially IT, finances and tourism, acts as a major growth driver.
- Manufacturing is also gaining momentum, although it still lags behind services in terms of
contribution to GDP.
- Dual Nature:
- There is a clear contradiction between the rapidly growing urban economy and the backward rural
area.
- Gaps in infrastructure, limited access to education and health services, and low agricultural
productivity hinder rural development.
 Strength:
- Population Dividend:
- India has a young and growing population, which provides a vast pool of workforce and potential
consumers.
- Domestic market:
- With over 1.3 billion people, India offers a huge domestic market, which attracts foreign investment
and promotes entrepreneurship.
- Natural resources:
- Rich in natural resources such as minerals, fertile land and diverse climatic zones, India has the
 potential for diverse economic activities.
- Resilience:
- The economy has shown remarkable resilience to global shocks, reflecting strong fundamentals and
accommodative policies.
- Decoupling occurs when an economy is able to grow without being influenced by external
conditions or factors. For example, the recession of 2008 did not have much impact on the Indian
economy while the European economy was hit by recession.
 Challenges:
- Unemployment:
- Despite high growth, job creation has not kept pace with the growing workforce, leading to
significant unemployment, especially among the youth.
- Income inequality:
- The wealth gap between the rich and the poor is growing, which presents social and economic
challenges.
- Infrastructure deficiencies:
- Inadequate infrastructure in transportation, logistics and energy hinders efficient economic activity
and increases costs.
- Education and skill gap:
- The education system needs to evolve to equip the workforce with the skills required for the
changing labor market.
 Other important aspects:
- Fiscal deficit:
- The government's budget deficit needs to be controlled to ensure long-term financial stability.
- Inflation:
- Managing inflation within acceptable limits is important to maintain economic stability and
consumer confidence.
- Foreign Trade:
- It is important to increase exports and reduce dependence on imports to achieve sustainable
economic growth.
 Present form (factual)
- Strong economic growth helped India overtake Britain to become the fifth largest economy after
recovering from the shock of the Covid-19 pandemic.
- India's services exports stood at US $ 164.89 billion.
- India's total exports (services and goods) estimated at US$ 376.29 billion
- With 115 unicorns worth over US$350 billion by February 2023, India currently has the third largest
unicorn base in the world.
- The government is also focusing on renewable sources by sourcing 40% of its energy from non-fossil
sources by 2030.
- India is committed to achieving the country's ambition of net zero emissions by 2070 through a five-
 pronged strategy, 'Panchamrit'. Moreover, India is ranked third in the Renewable Energy Country
Attractiveness Index.
- As of August 2023, India's foreign exchange reserves stood at US$594.90 billion.

Salient features of Indian economy

 Fast growing economy:
- India is one of the world's fastest growing major economies, with gross domestic product (GDP) growth
rates exceeding 7% in recent years.
 Changing scenario:
- The service sector dominates, contributing more than 55% of GDP, surpassing agriculture (14.2%) and
manufacturing (30%).
 Low per capita income:
- Despite growth, India's per capita income is much lower than developed countries.
 Large and growing population:
- India is the second most populous country in the world, with more than 1.38 billion, leading to
increasing pressure on resources.
 Unequal Income Distribution:
- The richest 1% own more than 53% of the wealth, which shows income inequality.
 Limited Capital Formation:
- Declining gross domestic capital formation compared to previous years hinders investment and growth.
 Critical Infrastructure Gaps:
- Lack of access to electricity, sanitation and drinking water remain as major challenges.
 Young and educated workforce:
- India has a large and young population, coupled with rising educational levels creating a potential talent
 pool.
 Digital Transformation:
- Increasing internetization opens up avenues for innovation and efficiency in various sectors.
 Diversified Economy:
- The rise of services, especially IT, finance and tourism, offers new growth opportunities.
 Mixed Economy:
- India moved from a planned economy to a mixed model, with significant government involvement
along with private sector participation.
 Poverty and inequality:
- Despite economic progress, poverty and income inequality remain serious concerns.
 Environmental Challenges:
- Pollution, resource depletion and climate change are serious threats to long-term sustainability.
 Technological Advancement:
- Adoption of automation and advanced technologies in key sectors is critical for future competitiveness.
 Social Barriers:
- Caste, gender inequality and social barriers hinder inclusive economic growth.
 These characteristics paint a complex picture of the Indian economy, highlighting both its strengths and
challenges. Addressing these issues and taking advantage of the opportunities will be critical to India's
continued economic success and inclusive growth.

Developed India@2047
What is Vision 2047?
- Vision 2047 Document: The major concern of the government is that the country should not fall into the middle
income trap.
- Middle-income trap: According to the World Bank, the middle-income trap refers to the situation under which a
middle-income country is failing to transition to a high-income economy due to rising costs and declining
competitiveness.
- Format: NITI Aayog.
- Vision 2047 Time Frame: The action points and outcome targets in the Vision 2047 document are in two
periods :-
- From 2025 to 2030
 - 17 year period from 2030 to 2047
Potential to achieve developed nation status
- Demographic Dividend:
- India is home to more than 600 million people aged 18 to 35, 65% of whom are under 35 years of age.
- Vibrant Democracy:
- India is the world's largest democracy with a population of approximately 1.44 billion people, of which
approximately 945 million are voters, characterized by unity in diversity.
- Flexible Economy:
- India's rapid post-Covid recovery and resilience amid the 2008 economic crisis testified to the resilience
of the Indian economy.
- Diplomacy:
- In this digital age, it
becomes important for
countries like India to
employ public diplomacy
as a responsible force.
- India was ranked 28th in
the Global Soft Power
Index 2023 report and
this is the second year
that the country has
featured in the top 30
countries.
- Sustainable and Inclusive Development:
- India has been a major player in the fight against climate change.
- For example, at the COP26 summit, India committed to achieve 'net zero' carbon emissions by 2070
and launched 'Mission LiFE' – Lifestyle for the Environment.
- Technology and Innovation:
- India is making progress in healthcare, infrastructure development using Artificial Intelligence (AI).
- For example, the use of AI in agriculture has proven to be a game-changer, with over 7000 farmers
using AI to monitor the health of their crops, control quality and test their produce.
Challenges to achieving Vision 2047
- Lack of inclusivity:
- For example, the top 10% of the population gets 57% of the national income and the top 1% gets 22%.
- Globalization and technological progress have created new opportunities for some groups while leaving
others behind.
- Global Uncertainty:
- Shocks arising from geopolitical conflicts (for example Israel-Hamas conflict) and the adoption of
 protectionist policies by developed countries are a challenge.
- Breaking out of lower middle income country status: To break out of lower middle income country
status and become a high income country, India will need to become a $60 trillion economy, 20 times
its size today .
- Other challenges:
- Risks to positive GDP growth projections are mainly hampered by challenges including a possible
deterioration in the asset quality of banks, delays in fiscal consolidation, difficulties in trade agreements
and the impact of a below-normal monsoon season.
Suggestion
- Using Demographic Dividend:
- Efforts are needed to make millions of our working age youth across the country industry ready and
suitable for the new set of jobs in the future.
- Increase in expenditure in education sector:
- Government expenditure in the education sector in India has been less than 3.5% of GDP, while the
global average is about 4.5% of GDP.
- Inclusive Development:
- Apart from pay equality, there is a need to increase the participation of women in the labor force in
India.
- Unlocking Manufacturing Potential:
- India aspires to increase its manufacturing sector to
25% of the economy from the current level of
around 15%.
- For example: Schemes like Production Linked
Incentive (PLI) scheme should be implemented
well.
- Extra point
- 2021: Goal of Amrit Kaal - Reducing the gap in
facilities between village and city, less government
interference, modern infrastructure. Slogan – Sabka
Saath, Sabka Vikas, Sabka Vishwas, Sabka Effort.
- 2022: Amrit Mahotsav and Panch Pran - Developed
India, end of colonial mentality, pride in roots, unity
and sense of duty. Appeal to citizens to move
forward with new resolutions and confidence.
- Green growth: Steps to combat climate change
under Panchamrit policy - 500 GW non-fossil
energy capacity (2030), 50% renewable energy
(2030), reduction in carbon emissions, green fuels,
green energy, green agriculture, green Programs on
 mobility etc.
- Role of community development
- India has to become a developed nation by 2047. For this we will have to achieve an annual economic
growth rate of more than 8% which is not possible without community cooperation.
- Community Initiatives:
- Focus on human capital development.
- To improve productivity and wages by enhancing skills.
- To increase public and private investments that generates quality employment.
- Innovative Approach:
- To improve human welfare through better social opportunities.
- Efforts to improve learning, health, nutrition, skills, and livelihoods.
- Holistic view:
- Going beyond departmental boundaries and adopting a comprehensive approach.
- Community Engagement:
- Empowering communities to prosper.
- Leveraging technology to solve last-mile problems through authenticated data.
- Local Empowerment:
- Women's organizations rich in social-capital, Pvt.

Doubling the
income of
farmers.

Creating an all
To increase the India talent pool
investment rate for the entire
from the current country and
29% to 36% by states – such as
2023. Strategy All India
Services.
for New
India @75

To increase the
To promote
tax-GDP ratio
'Make in India'
from the current
campaign
17% to 22% by
prominently.
2023.
Major Crops and Cropping Patterns in India
 India ranks second in the world in agricultural production, playing a vital role in the economy and food security.
 Diverse climate, monsoon dependence, and smallholdings necessitate different cropping patterns across the
country.
Major Crops
Food Crops
 Cereals: Rice, wheat, maize, jowar, bajra, and coarse cereals provide staple food for a large population.
 Pulses: Gram, pigeon pea, black gram, green gram are rich
in protein, essential for dietary balance.
 Oilseeds: Groundnut, mustard, sesame, sunflower are
sources of edible oil and industrial use.
 Sugarcane: Used for sugar production, a major sweetener
and industrial input.
Cash Crops
 Cotton: Textile industry and export earnings.
 Jute: Used to make packaging materials and industrial
products.
 Tea and Coffee: Major plantation crops, significant export
earners.
 Spices: Turmeric, chili, black pepper enhance flavor and have medicinal properties, exported worldwide.

Cropping Patterns
Based on Season
 Kharif: Monsoon (June-September) - Rice, maize, cotton, groundnut, jowar, bajra.
 Rabi: Winter season (October-March) - Wheat, gram, mustard, sugarcane, peas.
 Zaid: Short season (April-June) - Vegetables, fodder crops.
Based on Geography
 Northern Plains: Rice, wheat, sugarcane, pulses.
 Peninsular India: Rice, cotton, jowar, bajra.
 Eastern India: Jute, tea, rice, sugarcane.
 Western India: Cotton, groundnut, bajra, jowar, bajra.
 Types of Cropping Patterns in India:
Crop Rotation:
  A cropping pattern where a field is used to grow different types of crops in successive seasons.
 This type of cropping pattern is mostly adopted in areas with suitable
climate and adequate water supply.
Intensive Cropping Pattern:
 A cropping pattern where crops are grown close together to maximize
yield.
 This type of cropping pattern is adopted in areas with limited land area
and high demand for crops.
Multiple Cropping System:
 A cropping pattern where more than one crop is grown on the same piece
of land in a single year.
 This type of cropping system is adopted in areas with suitable climate and adequate water supply.
Mono-cropping:
 A cropping pattern where a single crop is grown on a piece of land for an extended period.
 This type of cropping pattern is adopted in areas with limited land area and high demand for the crop.
Zero Cropping Pattern:
 A cropping pattern where no crop is grown on a piece of land.
 This type of cropping pattern is adopted in areas with unsuitable climate or inadequate water supply.
Sequential Cropping:
 A cropping pattern where crops are grown on a piece of land in a sequence.
 This type of cropping pattern is adopted in areas with limited land.
Crop Rotation:
 Definition: The practice of growing different crops on the same land in successive seasons.
 Purpose:
- To improve soil fertility and health by preventing nutrient depletion from continuous monoculture.
- To minimize pest and disease problems by breaking their life cycles.
- To enhance soil structure and drainage through the action of different root systems.
- To utilize different nutrients from the soil by choosing crops with varying needs.
 Example: Growing wheat followed by legumes, followed by a root vegetable.
Mixed Cropping:
 Definition: Growing two or more crops simultaneously on the same land without a predetermined spatial
 arrangement.
 Purpose:
- To reduce the risk of crop failure from adverse weather or pests affecting one crop.
- To improve soil fertility and structure by utilizing different nutrients and root systems.
- To provide natural weed control through competition between crops.
- To maximize land use and resource efficiency.
 Example: Growing maize and beans together.
Intercropping:
 Definition: Growing two or more crops simultaneously on the same land in a definite spatial arrangement with
specific rows or patterns.
 Purpose:
- To reduce the risk of crop failure and improve resource utilization.
- To optimize light, water, and nutrient uptake by choosing complementary crops with different root
depths and nutrient requirements.
- To control weeds through shading and competition.
 Example: Growing tall maize plants intercropped with
shorter shade-tolerant vegetables like lettuce or spinach.
Factors Affecting Cropping Patterns:
 Cropping intensity: The number of crops grown on a piece
of land in a year. It is measured by the cropping index.
 Crop rotation
 Temperature
 Rainfall
 Soil
Historical Trends:
 At the beginning of the current century, about 83% of
India's total cultivated land was under food crops and the remaining 17% under non-food crops.
 However, in 1944-45, the cropping pattern in India changed and the area under food crops decreased to 80%
and the area under non-food crops increased slightly to 20%.
 Of all food crops, the largest increase in area since 1950-51 has been recorded by wheat cultivation, which
shows an increase of 132% by 1987-88.
 However, in the case of both rice and pulses, the increase in area has been limited to only 23%; only a marginal
increase of 11% was recorded in coarse cereals by 1987-88.
Crop Areas in India:
Rice-Jute-Tea Zone:
 This vast region includes the Terai region, valleys, and
river deltas.
 It covers Assam, Arunachal Pradesh, Tripura,
Meghalaya, West Bengal, Odisha, parts of northern and
eastern Bihar, Jharkhand, Chhattisgarh, and the Terai
region of Uttar Pradesh.
Wheat and Sugarcane Zone:

 This zone includes Bihar, Uttar Pradesh, Punjab,

Haryana, western Madhya Pradesh, and northeastern
Rajasthan.
 Most areas have rich fertile alluvium, with some parts
having black and red soils.
 Rainfall is moderate, with the major portion occurring
during the summer monsoon in southwestern regions.
Some winter rainfall occurs due to western
disturbances.
Cotton Zone:

 This zone spreads across the Deccan Plateau's regur or black cotton soil region, receiving 75 to 100 cm of
rainfall.
 Cotton is the main crop, but jowar, bajra, gram, sugarcane, and wheat are also cultivated.
Maize and Coarse Cereals Zone:

 This zone includes western Rajasthan and northern Gujarat.

 Rainfall is low and generally below 50 cm. Agriculture is only possible with irrigation assistance.
 Maize is mainly grown in the Mewar plateau, where wheat and ragi are also produced.
Millets and Oilseeds Zone:

 This zone covers the Karnataka plateau, parts of Tamil Nadu, southern Andhra Pradesh, and eastern Kerala with
poor soil and broken topography.
 Rainfall ranges from 75 to 125 cm. Millets include bajra, ragi, and jowar, while oilseeds grown include
groundnut and castor.
Fruits and Vegetables Zone:

 This zone stretches from the Kashmir Valley in the west to Assam in the east.
 Rainfall varies from 60 cm in the west to 200 cm in the east.
 Apples, peaches, cherries, plums, and apricots are grown in the west, while oranges are important in the east.
 Rice, maize, ragi, potatoes, chilies, and vegetables are also cultivated.
Changing Crop Patterns in India:

 Dynamic Concept: It changes with location and time, often involving crop combinations and rotations.
 Factors Influencing: Rainfall, climate, temperature, soil, technology, socio-economic status of farmers.
Major Drivers of Change:

 Rising crop prices: Make certain crops more attractive.

 Green Revolution: Introduced rice in new areas.
 New technologies: Increased profitability and productivity of food crops.
 Economic expansion: Farmers seek higher profits from cash/commercial crops.
 Climate change: Affects monsoon patterns, impacting crop selection.
 Population growth and urbanization: Land conversion and intensive agriculture alter patterns.
Challenges:
 Climate change and erratic rainfall: Affect crop yields.
 Soil degradation: Due to excessive use of fertilizers and pesticides.
 Lack of proper storage and marketing infrastructure: Leads to post-harvest losses.
 Small landholdings: Limit economies of scale and mechanization.
Government Initiatives:
 Minimum Support Price (MSP) scheme: To ensure fair prices to farmers.
 Pradhan Mantri Fasal Bima Yojana (PMFBY): For crop insurance.
 Soil Health Card Scheme: To improve soil fertility.
 National Mission for Sustainable Agriculture (NMSA): Promotes sustainable practices.
 Krishi Vigyan Kendras (KVKs): Provide extension services to farmers.

Major Crops

 Major crops can be classified into the following-

- Food crops- rice, wheat, millet, maize and pulses.
- Cash crops- sugarcane, oilseeds, horticultural crops, tea, coffee, rubber, cotton and jute.
Rice

 Top rice producing states: West Bengal > Punjab > Uttar Pradesh > Andhra Pradesh > Bihar.
 It is the main food crop of most of the Indian people.
 India is the second largest producer of rice in the world after China.
 In states like Assam, West Bengal and Odisha, three crops of paddy are grown in a year. These are Aus, Aman
and Boro.
 National Food Security Mission, Hybrid Rice Seed Production and Rashtriya Krishi Vikas Yojana are some of
the government initiatives supporting rice cultivation.
Wheat

 Top wheat producing states: Uttar Pradesh > Punjab > Madhya Pradesh > Haryana > Rajasthan.
 India is the second largest producer after China.
 It is the second most important cereal crop and the main food crop in northern and north-western India.
 The success of the Green Revolution contributed to the growth of Rabi crops especially wheat.
 Macro management mode of agriculture, National Food Security Mission and Rashtriya Krishi Vikas Yojana
are some of the government initiatives supporting wheat cultivation.
Millet (Nutritious Grain)

 Sorghum- rainfed crop grown in moist areas with little or no irrigation.

 Millet- sandy soil and shallow black soil.
 Top millet producing states: Rajasthan > Karnataka > Maharashtra > Madhya Pradesh > Uttar Pradesh
 Sorghum: Maharashtra > Karnataka > Madhya Pradesh > Tamil Nadu > Andhra Pradesh.
 Millet: Rajasthan > Uttar Pradesh > Gujarat > Madhya Pradesh > Haryana.
 These are also known as millets, which have high nutritional value. Ragi is rich in iron, calcium, other
micronutrients and roughage.
  Sorghum is the third most important food crop in terms of area and production.
 National Agricultural Insurance Scheme, Nutrition Security Initiative through Intensive Millet Promotion are
examples of government efforts to support millet production.
Maize

 Top maize producing states: Karnataka > Maharashtra > Madhya Pradesh > Tamil Nadu > Telangana
 India is the seventh largest producer worldwide.
 It is used both as food and fodder.
 The use of modern inputs such as high-yielding varieties of seeds, fertilizers and irrigation has contributed to
increasing maize production.
 Technology Mission on Mecca is one of the government initiatives for Mazi.
Pulses

 Top pulses producing states: Madhya Pradesh > Rajasthan > Maharashtra > Uttar Pradesh > Karnataka.
 India is also the largest producer and consumer of pulses in the world.
 These are the main source of protein in vegetarian diet.
 The main pulses grown in India are arhar, urad, moong, lentils, peas and gram.
 Being leguminous crops, all these crops except Pigeon pea help in restoring soil fertility by fixing nitrogen from
the air. Therefore, they are mostly grown in rotation with other crops.
 National Food Security Mission for Pulses, Pulses Development Scheme and Technical Mission on Pulses are
some of the schemes of the government to support pulses production.
Sugarcane

 Top sugarcane producing states: Uttar Pradesh > Maharashtra > Karnataka > Tamil Nadu > Bihar.
 India is the second largest producer of sugarcane after Brazil.
 It can be grown in all types of soils from sandy loam to clay loam, provided this soil should be well drained.
 It requires physical labor from sowing to harvesting.
 It is the main source of sugar, jaggery, khandsari and jaggery.
 Scheme for Enhancement of Financial Assistance to Sugar Undertakings (SEFASU) and National Policy on
Biofuels are two initiatives of the government to support sugarcane production and sugar industry.

Oilseeds

 Top oilseed producing states: Madhya Pradesh > Rajasthan > Gujarat > Maharashtra > Uttar Pradesh.
 The main oilseeds produced in India are groundnut, mustard, coconut, sesame, soybean, castor seed, cotton
seed, linseed and sunflower.
 Most of these are edible and used as cooking medium. However, some of these are also used as raw materials in
the production of soaps, cosmetics and ointments.
 Yellow Revolution and Integrated Scheme on Oilseeds, Pulses, Oil Palm and Maize (ISOPOM) are examples of
 government initiatives for oilseeds.

Horticultural crops

 Horticulture is the branch of agriculture that deals with the cultivation, production and sale of fruits, vegetables,
flowers, herbs, ornamental or exotic plants.
 India is the second largest producer of fruits and vegetables and produces both tropical and temperate fruits.
 India produces about 13 percent of the world's vegetables. It is an important producer of peas, cauliflower,
onion, cabbage, tomato, brinjal and potato.
 Swarnim Kranti, Mission for Integrated Development of Horticulture (MIDH) and Integrated Horticulture
Assessment and Management using Geo-informatics (Project Chaman) are government initiatives to help the
horticulture sector.
Tea

 Top tea producing states: Assam > West Bengal > Tamil Nadu.
 India is the second largest producer of tea.
 It was introduced by the British to the eastern hill slopes of India.
 The slopes of the eastern hills have a humid climate and evenly distributed rainfall without water logging which
are optimum conditions for tea terrace cultivation.
 Tea is a labor intensive industry. It requires abundant, cheap and skilled labour. To maintain the freshness of the
tea, the tea is processed in the tea gardens itself.
 Tea Development and Promotion Scheme, Wage Compensation Scheme and Tea Boutique are some of the
government schemes for tea.