Podcast
Questions and Answers
Why did the proportion of GDP contributed by agriculture decline in India between 1950 and 1990?
Why did the proportion of GDP contributed by agriculture decline in India between 1950 and 1990?
- The population dependent on agriculture decreased
- The industrial and service sectors absorbed the agricultural workforce
- The industrial and service sectors failed to absorb the agricultural workforce (correct)
- There was a significant increase in the productivity of agriculture
What is the significance of a good industrial sector for poor nations, according to economists?
What is the significance of a good industrial sector for poor nations, according to economists?
- It leads to a decline in overall prosperity
- It provides more stable employment compared to agriculture (correct)
- It results in a decrease in modernization
- It reduces the need for agricultural output
Why did a large proportion of the Indian population remain engaged in agriculture even though agricultural output could have grown with fewer people?
Why did a large proportion of the Indian population remain engaged in agriculture even though agricultural output could have grown with fewer people?
- The industrial sector absorbed excess agricultural workforce
- The government discouraged people from leaving the agricultural sector
- The industrial and service sectors did not absorb the agricultural workforce (correct)
- The service sector provided more opportunities than agriculture
What was an important failure of Indian policies during 1950-1990, according to many economists?
What was an important failure of Indian policies during 1950-1990, according to many economists?
What was one of the major drawbacks in the industrial sector during the period of 1950-1990?
What was one of the major drawbacks in the industrial sector during the period of 1950-1990?
Why did the Indian producers lack the incentive to improve the quality of goods they produced?
Why did the Indian producers lack the incentive to improve the quality of goods they produced?
What was the purpose of the public sector firms according to some economists?
What was the purpose of the public sector firms according to some economists?
What led to the introduction of a new economic policy in India in 1991?
What led to the introduction of a new economic policy in India in 1991?
What was a common goal of the five year plans in India?
What was a common goal of the five year plans in India?
What did the mixed economy model in India aim to combine?
What did the mixed economy model in India aim to combine?
What is the purpose of the policy of requiring a license for expanding production?
What is the purpose of the policy of requiring a license for expanding production?
Why were small-scale industries given concessions such as lower excise duty and bank loans at lower interest rates?
Why were small-scale industries given concessions such as lower excise duty and bank loans at lower interest rates?
What was the aim of the import substitution policy adopted by India?
What was the aim of the import substitution policy adopted by India?
Why did the government protect domestic industries from foreign competition?
Why did the government protect domestic industries from foreign competition?
What was the main reason for giving concessions like tax benefits and lower electricity tariff to industrial units in economically backward areas?
What was the main reason for giving concessions like tax benefits and lower electricity tariff to industrial units in economically backward areas?
Why did the Village and Small-Scale Industries Committee note the possibility of using small-scale industries for promoting rural development?
Why did the Village and Small-Scale Industries Committee note the possibility of using small-scale industries for promoting rural development?
What was the effect of tariffs and quotas on imports based on the import substitution policy?
What was the effect of tariffs and quotas on imports based on the import substitution policy?
Why was protection from imports necessary for the industries of developing countries?
Why was protection from imports necessary for the industries of developing countries?
What was an important indicator of development based on the achievements of India’s industrial sector during the first seven plans?
What was an important indicator of development based on the achievements of India’s industrial sector during the first seven plans?
Why didn't any serious thought given to promoting exports until the mid-1980s?
Why didn't any serious thought given to promoting exports until the mid-1980s?
'Small-scale industry' is defined with reference to:
'Small-scale industry' is defined with reference to:
What was the sectoral contribution to GDP in the agriculture sector in 1990-91?
What was the sectoral contribution to GDP in the agriculture sector in 1990-91?
In which year did the industrial sector contribute the most to the GDP?
In which year did the industrial sector contribute the most to the GDP?
What is one of the criticisms of the public sector enterprises mentioned in the text?
What is one of the criticisms of the public sector enterprises mentioned in the text?
What was a consequence of the excessive regulation during the 'permit license raj'?
What was a consequence of the excessive regulation during the 'permit license raj'?
What was one of the criticisms of the protection from foreign competition mentioned in the text?
What was one of the criticisms of the protection from foreign competition mentioned in the text?
What industry continued to be reserved for the Public Sector even though private sector firms could also provide it?
What industry continued to be reserved for the Public Sector even though private sector firms could also provide it?
Why did some scholars argue that the state should get out of areas which the private sector can manage?
Why did some scholars argue that the state should get out of areas which the private sector can manage?
What was a consequence of protecting indigenous industries from foreign competition?
What was a consequence of protecting indigenous industries from foreign competition?
What was one of the criticisms of state enterprises' continued production of certain goods and services?
What was one of the criticisms of state enterprises' continued production of certain goods and services?
What allowed big industrialists to prevent competitors from starting new firms?
What allowed big industrialists to prevent competitors from starting new firms?
What was a criticism of some public sector enterprises despite their contribution to the growth of the Indian economy?
What was a criticism of some public sector enterprises despite their contribution to the growth of the Indian economy?
Why did some economists criticize many public sector enterprises?
Why did some economists criticize many public sector enterprises?
What was the role of the government in promoting the industrial sector at the time of independence?
What was the role of the government in promoting the industrial sector at the time of independence?
What was the basis of the Industrial Policy Resolution of 1956?
What was the basis of the Industrial Policy Resolution of 1956?
Why did the government have to play an extensive role in promoting the industrial sector at the time of independence?
Why did the government have to play an extensive role in promoting the industrial sector at the time of independence?
What was the classification of industries as per the Industrial Policy Resolution of 1956?
What was the classification of industries as per the Industrial Policy Resolution of 1956?
Why was it necessary for the government to control the commanding heights of the economy?
Why was it necessary for the government to control the commanding heights of the economy?
What was the primary reason Indian industrialists did not have the capital to undertake investment in industrial ventures at the time of independence?
What was the primary reason Indian industrialists did not have the capital to undertake investment in industrial ventures at the time of independence?
What role did the private sector play in industrial development as per the policies at the time of independence?
What role did the private sector play in industrial development as per the policies at the time of independence?
Why did Indian governments have to control key industries at that time?
Why did Indian governments have to control key industries at that time?
What was the principal goal behind developing the Indian economy on socialist lines?
What was the principal goal behind developing the Indian economy on socialist lines?
Study Notes
Indian Economy (1950-1990)
- The proportion of GDP contributed by agriculture declined between 1950 and 1990 in India.
- A good industrial sector is significant for poor nations as it provides employment opportunities and GDP growth.
Industrial Sector Challenges
- A large proportion of the Indian population remained engaged in agriculture despite the potential for agricultural output to grow with fewer people.
- One important failure of Indian policies during 1950-1990 was the lack of incentive for Indian producers to improve the quality of goods.
Public Sector and Concessions
- The purpose of public sector firms was to promote industrial growth according to some economists.
- Small-scale industries were given concessions such as lower excise duty and bank loans at lower interest rates to promote rural development.
- The aim of the import substitution policy was to promote domestic industries and reduce dependence on foreign goods.
- The government protected domestic industries from foreign competition to promote industrial growth.
Sectoral Contributions to GDP
- In 1990-91, the agricultural sector contributed 30.1% to the GDP.
- The industrial sector contributed the most to the GDP in 1995.
Criticisms and Consequences
- One criticism of public sector enterprises was their inefficiency and lack of accountability.
- Excessive regulation during the 'permit license raj' led to corruption and discouraged entrepreneurship.
- Protection from foreign competition prevented Indian industries from becoming competitive globally.
- State enterprises continued to produce certain goods and services despite being inefficient.
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Test your knowledge about the industrial licensing policy used to promote industry in backward regions, including the process of obtaining a license, concessions provided, and its purpose of promoting regional equality.
