Indian Economy: 1950-1990
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Questions and Answers

Which of the following best describes the economic system India adopted after independence?

  • A fully capitalist economy with minimal government intervention.
  • A mixed economy combining elements of socialism and capitalism. (correct)
  • A purely socialist economy with complete state control.
  • An agrarian economy focused primarily on agricultural development.

What was a common underlying goal of India's Five Year Plans?

  • Prioritizing equity while disregarding economic growth.
  • Focusing exclusively on industrial output and exports.
  • Maximizing imports to boost technological advancements.
  • Achieving growth, modernization, self-sufficiency, and equity. (correct)

What was the primary aim of land reforms implemented in the agriculture sector?

  • To redistribute land to promote equity and improve agricultural productivity. (correct)
  • To encourage the conversion of agricultural land for industrial purposes.
  • To consolidate land holdings for easier management by large corporations.
  • To facilitate the privatization of all agricultural land.

How did the Green Revolution primarily benefit Indian farmers?

<p>By improving the output of food grains through high yielding seed varieties. (B)</p> Signup and view all the answers

What was a major drawback of the public sector's role in industrial development during the planning period?

<p>Inefficient functioning and financial losses draining national resources. (B)</p> Signup and view all the answers

What does the planning objective of 'growth with equity' primarily emphasize?

<p>Ensuring that the benefits of economic growth are distributed fairly among the population. (B)</p> Signup and view all the answers

How did the import substitution policy aim to impact India's industrial sector?

<p>By increasing its contribution to GDP through domestic production. (A)</p> Signup and view all the answers

The Green Revolution enabled the government to build stocks. How did these stocks benefit the country?

<p>By providing a buffer during times of shortage. (A)</p> Signup and view all the answers

In the context of India's economic planning from 1950-1990, which question reflects resource allocation?

<p>What goods and services should be produced in the country? (C)</p> Signup and view all the answers

What fundamental decision regarding production methods did India face during its early planning period (1950-1990)?

<p>How to balance the use of human labor versus capital (machines). (C)</p> Signup and view all the answers

If a farming family adopts new irrigation technology that substantially increases their marketable surplus of crops, what broader economic impact might this have?

<p>It will likely decrease the price of agricultural goods, benefiting consumers but potentially reducing income for other farmers. (B)</p> Signup and view all the answers

What is one likely consequence of a significant shift in India's occupational structure away from agriculture and towards industry and services?

<p>Decreased need for agricultural subsidies. (B)</p> Signup and view all the answers

What is a potential drawback of government subsidies in agriculture?

<p>They can distort markets, leading to overproduction and reduced competitiveness. (A)</p> Signup and view all the answers

Suppose India decides to liberalize its trade policies in the agricultural sector. Which outcome is LEAST likely?

<p>A guaranteed increase in income for all farmers. (A)</p> Signup and view all the answers

If India aims to promote both industrial growth and agricultural productivity, which policy would be MOST effective?

<p>Investing in rural infrastructure, education, and agricultural research. (C)</p> Signup and view all the answers

What is the most direct implication of prioritizing capital-intensive production (more machines, less labor) in industry?

<p>Higher initial investment costs but potentially greater long-term efficiency and output. (B)</p> Signup and view all the answers

Flashcards

Mixed Economy

An economic system combining socialism and capitalism.

Five Year Plans

Planned economic initiatives outlined every five years in India.

Green Revolution

Agricultural initiative to improve food grain production using technology.

Land Reforms

Changes to the laws governing land ownership aimed at improving equity.

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Self-sufficiency

Ability to produce enough food and resources without imports.

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High Yielding Variety (HYV) Seeds

Genetically improved seeds that produce more crops.

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Marketable Surplus

The amount of goods produced that can be sold after consumption.

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Public Sector

Government-owned organizations and enterprises in the economy.

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India's Five Year Plans

A series of centralized economic development programs launched by the Indian government from 1951 onwards.

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Goals of Five Year Plans

To determine what goods and services to produce, how to produce them, and their distribution.

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Regulated Economy

An economic system where the government controls production, distribution, and prices.

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Agriculture Studies

Investigating farming methods, costs, and income through group activities like case studies.

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Occupational Structure

The distribution of jobs and roles in the economy over time.

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Agricultural Subsidies

Financial support given by the government to help farmers maintain their income.

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International Economic Organizations

Groups like the World Bank and IMF that influence global trade and economic policies.

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Merits and Limitations

The advantages and disadvantages of a regulated economy versus a free market.

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Study Notes

Indian Economy 1950-1990

  • Learners will understand India's five-year plans' goals
  • Students will learn about agricultural and industrial development policies during 1950-1990
  • Learners will gain insight into the merits and limitations of a regulated economy.

Introduction

  • On August 15, 1947, India gained freedom
  • Nation-building task was the new responsibility
  • Leaders sought an economic system that promoted overall welfare
  • Jawaharlal Nehru favoured socialism but rejected the Soviet Union's approach
  • The new leaders aimed for an alternative to strict capitalism and socialism, favouring a blended approach.

Types of Economic Systems

  • Societies address three key questions: goods/services production, production methods and distribution.
  • In a market/capitalist economy, supply/demand dictate production and distribution based on consumer purchasing power.
  • Socialist economies dictate production/distribution based on societal needs
  • Mixed economies adopt both government and market-driven systems.

What is a Plan?

  • A plan outlines a nation's resource allocation, setting general goals and specific, time-bound objectives.
  • Plans in India were five-year plans, initially borrowed from the Soviet Union's experience
  • Plans should not contradict their key goals, including growth, modernisation, self-reliance and equity
  • These goals may differ in importance within different plans.

The Service Sector

  • As countries develop, the agricultural sector's share decreases, and the industrial and service sectors increase.
  • In India's case, the service sector's share exceeded that of agriculture/industry by 1990
  • The rise of the service sector coincided with globalization

Mahalanobis: The Architect of Indian Planning

  • Prasanta Chandra Mahalanobis was a significant statistician
  • He played a pivotal role in shaping Indian planning, particularly during the Second Five-Year Plan.

Land Reforms

  • Land-to-the-tiller policy aims for greater cultivator interest in output
  • Land reforms aimed to reduce land concentration through ownership redistribution and fixing maximum landholdings.

The Green Revolution

  • Increased food production through high-yielding variety (HYV) seeds
  • This involved fertilisers, pesticides, and irrigation improvements
  • The revolution primarily benefited more affluent states initially, then spread gradually.

The Debate over Subsidies

  • The debate on agricultural subsidies' worthiness centres on whether to continue them for efficiency and equity.
  • Experts argue over whether subsidies disproportionately benefit large farmers or poor farmers while also being a burden on the government's finances.

Trade Policy: Import Substitution

  • Import substitution policies promoted domestic production to reduce reliance on foreign imports
  • Tariffs and quotas helped protect domestic industries from foreign competition
  • The focus on import substitution had intended positive outcomes from an economic development perspective, but also presented some setbacks.

Effects of Policies on Industrial Development

  • India's industrial sector experienced significant growth, with its share of GDP increasing significantly
  • Policies aimed to promote industrial growth in both large and small industries.

Public and Private Sectors

  • The debate over the proper role of the government versus the private sector in development efforts was evident.
  • Arguments for a prominent role for the public sector in key industries were commonly heard, while certain private sector industries could not generate enough investment in order to grow

Conclusion

  • India's economic progress during its first seven five-year plans was impressive, with diversification and self-sufficiency achievements
  • The green revolution had a significant impact on agriculture
  • The need for reforms in economic policies and a more global approach to trade and economic production models is a recurring theme in the conclusion.

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Indian Economy 1950-1990 PDF

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Explore India's economic journey from 1950-1990. Understand the goals of five-year plans and the policies for agriculture and industrial development. Analyze the advantages and disadvantages of a regulated economy during this transformative period.

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