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Class 12 Economics Chapter 6 Development Experience (1947-1990)
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Development Experience (1947-1990)
Chapter: 6
| PART – (B) INDIAN ECONOMIC DEVELOPMENT |
(A) Very Short Types Question & Answers:
1. Define occupational structure.
Ans: The economy which refers to the distribution of work force of an economy in different occupations.
2. What is meant by stagnant economy?
Ans: The economy which grows at a ver low rate is called stagnant economy.
3. During British rule, decay of Indian handicrafts was caused by—
(a) Discriminatory tariff policy of the British Government
(b) Competition from machine-made products.
(c) Change in patterns of demand.
(d) All of the above. (Choose the correct option)
Ans: (d) All of the above.
4. Name any two Navaratna industries.
Ans: Bharat Electronics Limited and Hindustan Aeronautics Limited.
5. Who is known as the architect of economic planning in India?
Ans: P.C. Mahalanobis is known as Architect of Indian Planning.
6. What is the objective of import substitution?
Ans: The objective of import substitution is to protect domestic industries, promote self-sufficiency, reduce reliance on foreign goods, and stimulate industrialization and economic growth within a country. It seeks to develop domestic industries by providing them with a competitive advantage over imported products.
7. What is the Industrial Policy Resolution 1956?
Ans: The Industrial Policy Resolution 1956 was a policy framework adopted by the Government of India to guide industrial development in the country. It outlined the goals, principles, and strategies for promoting industrialization and economic growth.
8. What is a small-scale industry?
Ans: A small-scale industry refers to a business enterprise characterised by a small investment, limited scale of operations, and a relatively low volume of production. These industries typically employ a small number of workers and are often located in rural or semi-urban areas.
9. What is meant by depleted economy?
Ans: It is an economy whose stock of capital assets gets exhausted or eroded.
10. Which is regarded as the defining year to mark the demographic transition from its first to the second decisive stage?
Ans: 1921.
11. When was India’s first official census operation undertaken?
Ans: In 1881.
12. What is commercialisation of agriculture?
Ans: It means production of crops for the market rather than for self consumption.
13. Name the body which formulates economic plans in India.
Ans: ‘Planning Commission’.
14. When was the planning commission constructed?
Ans: March 15, 1950.
15. Who is the chairman of planning commission?
Ans: The Prime Minister.
16. Name the body which finally approves the draft of plans in India.
Ans: National Development Council. (NDC)
17. What is comprehensive planning?
Ans: It is the planning which covers both economic and social sphere.
18. What is ‘Green Revolution’?
Ans: It means large increase in agricultural production due to the use of new scientific technology in agriculture.
19. What is ceiling on land holding?
Ans: It means to fix the maximum limit of cultivable land for a person or a family.
20. When was the first industrial policy announced?
Ans: 1948.
21. What is economic planning?
Ans: It is a technique by which a central authority tries to control economic factors to achieve some predetermined objectives within a specified period of time. Keeping in view the resources of the country.
22. Why did India opt for planning?
Ans: India opted for planning to utilise the resources properly. To attain higher rate of economic growth, various plans have been adopted to develop the crucial sectors of economy such as agriculture, industry and services.
23. Why should plans have goals?
Ans: It should have some goals to achieve the objectives within a specified period. In India plans are prepared for five years. All efforts are made to achieve the objectives.
24. What is HYV seeds?
Ans: It means High Yielding Variety seeds. It is also known as “miracle seeds,” because per hectare productivity of land has increased due to these seeds.
25. What is marketable surplus?
Ans: That part of agricultural produce which is sold in the market are known as marketable surplus.
26. What is structural change?
Ans: Economic growth of a country brings structural change. These changes are related to the contribution of different sectors in economy. As there is development of an economy the importance of primary sector continues to fall whereas the importance of secondary and tertiary sector continues to rise. This changes from one sector to another is known as structural change.
(B) Short Type Questions & Answers:
1. What was the focus of the economic policies pursued by the colonial govt. in India? What were the impacts of these policies?
Ans: Self interest was the focus of the economic policies pursued by the colonial Government in India. The main objective was concerned more with the protection and promotion of the economic interests of their home country than with the development of the Indian economy.
The impact was that, such policies brought about a fundamental change in the structure of the Indian economy – transforming the country into supplier of raw materials and consumer of finished industrial products from Britain.
2. What was the two-fold motive behind the systematic de-industrialization effected by the British in pre-independent India?
Ans: Two-fold motives were:
(a) India was the main exporter of raw material. The main objective was to reduce it and to open modern industries in Britain.
(b) To turn India into a big market for their finished goods.
3. The traditional handicrafts industries were ruined under the British rule. Do you agree with this view? Give reasons in support of your answer.
Ans: The indigenous industries declined during the British rule. These industries created unemployment and new consumer demand in the Indian consumer market. This demand was met by importing cheap manufactured goods from Britain. In this way in place of handicraft industries, modern industrial base was developed for the benefit of the British Government. In this way, traditional handicraft industries were ruined under the British rule.
4. What objectives did the British intend to achieve through their policies of infrastructure development in India?
Ans: The basic objectives behind infrastructure development was not the provide basic amenities to the Indian people but to sub-serve various colonial interests.
They are explained below:
(a) Roads: The built roads served the interests of mobilising the army and shifting raw materials.
(b) Railways: The most important contribution of the British was to introduce railways in India of 1850.
(c) Water Transport: Inland and Oceanic waterways were also developed during the British rule.
(d) Posts: The postal services were inadequate during the British rule.
(e) Telegraphs: The British Government introduced expensive system of electric telegraph in India. This system was useful for maintaining law and order.
5. What do you understand by the drain of Indian wealth during the colonial period?
Ans: Economic drain means transfer of wealth from one country to other. During the colonial period Indian wealth was remitted to England. In lieu of it India received nothing. For example, excess exports were made to meet the deficit on current account in England but India gained nothing.
6. Give a quantitative appraisal of India’s demographic profile during the colonial period.
Ans: Before 1921, India was in the first stage of demographic transition. The various social development indicators were also not quite encouraging. The overall literacy level was less than 16%. Again, female literacy level was at a negligible low of about 7%. The infant morality rate was quite alarming-about 218 per thousand. Life expectancy was also very low-32 years in an average.
7. Highlight the salient features of India’s pre-independence occupational structure.
Ans: Main features were:
(a) There were 3 main sectors during the British rule of occupation, viz. primary, secondary and tertiary.
(b) About 70%-75% working persons are engaged in agriculture, 10% in manufacturing and 15% – 20% in service sector.
(c) Agriculture on the primary sector occupied the dominant position in comparison to other sectors.
(d) The progress in all the sectors were not identical.
8. Under score some of India’s most crucial economic challenges at the time of independence.
Ans: India’s most crucial economic challenges at the time of independence are:
(a) To remove unemployment and poverty.
(b) To improve health and education facilities.
(c) To develop infrastructures, like industries, electricity etc.
(d) To become self reliant or self-dependant.
(e) To adopt modernisation in every sector of the economy.
9. Indicate the volume and direction of trade at the time of independence.
Ans: Volume: At the time of independence the volume of India’s trade increased tremendously. Exports were more than imports. Some exportable goods were-wheat, rice, sugar, precious stones etc. Again, some importable goods were-wool, steel, copper, paper etc.
Direction: More than half of India’s foreign trade was made with Britain. The rest was allowed with other countries like China, Cylon (Sri Lanka) and Persia. (Iran)
10. Discuss the positive contribution of the British rule in India?
Ans: The positive contributions are:
(a) Development of roads and railways.
(b) Development of modern industries.
(c) Promotion of women education and English education.
(d) Development of water transport and ports for trade and commerce.
(e) Development of posts and telegraphs.
(f) Development of aerodrums.
11. Name those industries which were in operation in our economy at the time of independence.
Ans: (a) Tata Iron and Steel Company (TISCO).
(b) Indian Iron and Steel Company (IISCO).
(c) Cotton and Jute Textile Mills.
12. What are the effects of decline of Indian industries during the British rule?
Ans: (a) Decline of Indian traditional domestic industries like handicrafts.
(b) Promotion of industrialisation in Britain.
13. What is Colonialism?
Ans: The practice of acquiring colonies by conquest. It was one of the ways to extend powers, control or rule by a country over other country. The main feature of colonialism is exploitations.
14. What was the position of basic infrastructure during British Rule?
Ans: They are explained below:
(a) Roads: The built roads served the interests of mobilising the army and shifting raw materials.
(b) Railways: The most important contribution of the British was to introduce railways in India of 1850.
(c) Water Transport: Inland and Oceanic waterways were also developed during the British rule.
(d) Posts: The postal services were inadequate during the British rule.
(e) Telegraphs: The British Government introduced expensive system of electric telegraph in India. This system was useful for maintaining law and order.
15. What was the state of the Indian economy on the eve of independence?
Ans: On the eve of independence, the Indian economy was characterised by underdevelopment, widespread poverty, and colonial exploitation. The economy was primarily agrarian, with the majority of the population engaged in agriculture. Industries were limited, and there was a heavy reliance on imports for manufactured goods.
16. How did the colonial rule impact the Indian economy?
Ans: The colonial rule had a significant impact on the Indian economy. It led to the systematic exploitation of India’s resources and wealth. Industries were underdeveloped, and raw materials were exported to Britain, resulting in a trade imbalance. India also faced high tariffs on its exports, which hampered industrial growth and hindered economic self-sufficiency.
17. What were the major economic policies adopted after independence?
Ans: After independence, India adopted a mixed economy model with an emphasis on state-led planning and development. The government implemented various economic policies, including land reforms, industrialization through Five-Year Plans, investment in key sectors, public sector expansion, and the promotion of agriculture and rural development. The focus was on achieving self-sufficiency, reducing poverty, and narrowing income disparities.
18. What were the major challenges faced by the Indian economy in the post-independence period?
Ans: The Indian economy faced numerous challenges in the post-independence period. These included the task of rebuilding a war-torn economy, addressing poverty and unemployment, promoting agricultural growth, developing infrastructure, managing a diverse population, and overcoming the legacy of colonial rule. The government also had to navigate the complexities of planning and managing a mixed economy while balancing social and economic goals.
19. How did the state of the Indian economy at the time of independence shape the economic policies and priorities of the country?
Ans: The dire state of the Indian economy at the time of independence influenced the economic policies and priorities of the country. The focus was on achieving self-sufficiency, reducing poverty, and promoting equitable development. The government recognized the need for industrialization, agricultural growth, and investment in social sectors to uplift the masses and achieve economic independence. This led to the adoption of a planned approach and the formulation of policies aimed at fostering growth, addressing inequalities, and improving the standard of living for the people.
20. What was the common goal of the Five-Year Plans in India?
Ans: The common goal of the Five-Year Plans in India was to achieve rapid economic growth and development by focusing on various sectors and addressing specific challenges. The plans aimed to promote industrialization, boost agricultural productivity, reduce poverty and unemployment, improve infrastructure, enhance education and healthcare, and narrow regional disparities.
21. How did the Five-Year Plans contribute to the Indian economy?
Ans: The Five-Year Plans played a crucial role in shaping the Indian economy. They provided a roadmap for development, guided resource allocation, and laid the foundation for economic policies. The plans emphasised key sectors such as agriculture, industry, infrastructure, and social welfare, resulting in significant progress in these areas. They helped foster industrial growth, promote technological advancements, expand educational opportunities, and improve living standards for the population.
22. What were some notable achievements of the Five-Year Plans in India?
Ans: The Five-Year Plans in India achieved several notable successes. They helped establish a strong industrial base, expanded infrastructure networks, increased agricultural production, reduced poverty rates, improved literacy rates, and enhanced healthcare facilities. The plans also played a crucial role in developing key industries, such as steel, power, and telecommunications, and promoting self-sufficiency in various sectors.
23. How did the objectives and priorities of the Five-Year Plans evolve over time?
Ans: The objectives and priorities of the Five-Year Plans in India evolved to reflect changing economic and social realities. Initially, the focus was on heavy industrialization and import substitution. Subsequent plans placed greater emphasis on rural development, poverty alleviation, and social welfare programs. In later years, the plans also incorporated environmental sustainability, technology-driven growth, and inclusive development as key priorities.
24. Write two characteristics of small-scale industries.
Ans: (a) Smaller Teams of Employees: Small-scale businesses employ smaller teams of employees than companies that operate on larger scales. The smallest businesses are run entirely by single individuals or small teams. A larger small-scale business can often get away with employing fewer than one hundred employees, depending on the business type.
(b) Small Market Area: Small-scale businesses serve a much smaller area than corporations or larger private businesses. The smallest-scale businesses serve single communities, such as a convenience store in a rural township. The very definition of small-scale prevents these companies from serving areas much larger than a local area, since growing beyond that would increase the scale of a small business’s operations and push it into a new classification.
25. What role do agricultural institutions play?
Ans: Agricultural institutions play a vital role in providing essential services, facilitating coordination, promoting knowledge transfer, and supporting policy implementation in the agricultural sector. They serve as intermediaries between farmers, government agencies, research institutions, and other stakeholders, ensuring effective functioning and development of the agricultural system.
26. How does the Industrial Policy Resolution 1956 relate to India’s industrial development today?
Ans: The Industrial Policy Resolution 1956 played a crucial role in shaping India’s industrial development and laid the foundation for the growth of public sector enterprises and the promotion of small-scale industries. While the policy framework has undergone significant changes in subsequent years, its influence can still be observed in certain sectors of the Indian economy. Today, India follows a more liberalised and market-oriented approach to industrial development, with a greater emphasis on private sector participation and foreign direct investment.
(C) Long Type Questions & Answers:
1. How did the Indian economy progress in the early years after independence?
Ans: After gaining independence in 1947, the Indian economy faced numerous challenges, including widespread poverty, agricultural backwardness, limited industrialization, and socio-economic inequalities. However, the Indian government implemented various policies and initiatives to promote economic development and address these challenges. Here is a summary of the progress made by the Indian economy in the early years after independence:
(a) Agricultural Reforms: The government implemented land reforms to address the issue of unequal land distribution and promote agricultural productivity. Measures such as land redistribution, tenancy reforms, and access to credit and irrigation facilities aimed to uplift rural farmers and increase agricultural output.
(b) Industrial Development: The government focused on developing key industries through the establishment of public sector enterprises and the protection of domestic industries through import substitution policies. The Industrial Policy Resolution of 1956 emphasised public sector dominance and the growth of heavy industries.
(c) Five-Year Plans: The Indian government introduced a series of Five-Year Plans, starting in 1951, to set economic goals and guide development efforts. These plans aimed to achieve rapid industrialization, agricultural growth, infrastructure development, and social welfare.
(d) Green Revolution: The Green Revolution, initiated in the 1960s, introduced high-yielding varieties of seeds, modern agricultural techniques, and improved irrigation to increase agricultural productivity. It played a significant role in boosting food production and reducing dependence on food imports.
(e) Infrastructure Development: The government invested in infrastructure projects such as building dams, power plants, transportation networks, and communication systems. These investments aimed to improve connectivity, promote industrial growth, and enhance overall economic development.
2. What are the main features of agriculture?
Ans: Agriculture is characterised by several key features that distinguish it from other sectors of the economy. These features include:
(a) Biological Production: Agriculture involves the cultivation of plants and the rearing of animals for food, fibre, and other products. It relies on natural resources, such as soil, water, and sunlight, to produce agricultural commodities.
(b) Seasonal Nature: Agriculture is influenced by seasonal variations and natural cycles. Planting, growth, and harvesting are often tied to specific seasons and weather conditions. Farmers need to plan and manage their activities accordingly.
(c) Dependence on Land: Agriculture requires land for cultivation and animal husbandry. The availability and quality of land significantly impact agricultural productivity. Land use practices, soil management, and access to arable land are important considerations in agricultural operations.
(d) Vulnerability to Weather and Climate: Agriculture is highly sensitive to weather patterns and climatic conditions. Extreme weather events, such as droughts, floods, and storms, can have a significant impact on crop yields, livestock health, and overall agricultural production.
(e) Labor-Intensive: Agriculture traditionally involves significant labor inputs, especially during planting, harvesting, and other critical stages. However, the level of labor intensity varies depending on the scale of operations, mechanisation, and technological advancements.
(f) Linkages to Rural Communities: Agriculture is closely tied to rural communities, as it provides livelihoods and sustenance for a large proportion of the population in many countries. It plays a crucial role in rural development, employment generation, and income distribution.
(g) Market Dependency: Agricultural products are generally sold in markets, either directly to consumers or through intermediaries. Farmers rely on market demand, prices, and trade policies for the sale of their produce. The integration of agriculture into domestic and international markets impacts farmers’ income and economic viability.
(h) Risk and Uncertainty: Agriculture involves inherent risks and uncertainties. Factors such as pests, diseases, market fluctuations, and policy changes can affect agricultural outcomes and profitability. Farmers need to manage and mitigate these risks through strategies like crop diversification, insurance, and risk-sharing mechanisms.
(i) Technological Advancements: Agriculture has witnessed significant technological advancements over time. Innovations in crop varieties, agricultural machinery, irrigation techniques, and precision farming have improved productivity, efficiency, and sustainability in the sector.
(j) Environmental Impact: Agriculture has a profound impact on the environment. It can contribute to deforestation, water pollution, soil degradation, and greenhouse gas emissions. Sustainable agricultural practices and conservation measures are essential for minimising environmental harm and promoting long-term sustainability.
These features collectively shape the dynamics of agriculture and influence the policies, practices, and challenges associated with the sector.
3. What are the main problems faced by agriculture?
Ans: Agriculture faces several challenges that can hinder productivity, sustainability, and the well-being of farmers.
Here are some of the main problems encountered in agriculture:
(a) Climate Change: Agriculture is vulnerable to the impacts of climate change, including erratic weather patterns, increased frequency of extreme events, and changes in temperature and precipitation. These factors can disrupt crop growth, lead to water scarcity, promote the spread of pests and diseases, and negatively affect agricultural productivity.
(b) Water Scarcity: Availability of water for irrigation is a major concern in many regions. Competition for water resources, depletion of groundwater reserves, inefficient irrigation practices, and inadequate water management contribute to water scarcity in agriculture, affecting crop yields and productivity.
(c) Soil Degradation: Soil erosion, nutrient depletion, salinization, and soil pollution pose significant challenges to agriculture. Unsustainable farming practices, deforestation, overuse of chemical fertilisers and pesticides, and poor land management can degrade soil quality, leading to reduced yields and long-term damage to agricultural land.
(d) Pest and Disease Management: Pests, diseases, and weeds can severely impact crop production. Inadequate pest and disease management practices can result in yield losses, increased use of chemical pesticides, and potential environmental hazards. Developing integrated pest management strategies and promoting disease-resistant crop varieties are essential for sustainable agriculture.
4. What are the main policies implemented in agriculture?
Ans: Various policies are implemented in agriculture to promote sustainable development, enhance productivity, ensure food security, and support the well-being of farmers.
Here are some key policies commonly adopted in the agricultural sector:
(a) Agricultural Subsidies: Governments often provide subsidies to farmers to support agricultural production and income. These subsidies can include input subsidies (e.g., fertilisers, seeds), price support mechanisms, direct payments, and crop insurance. The aim is to incentivize farmers, stabilise farm incomes, and promote agricultural growth.
(b) Land Reforms: Land reforms aim to address land inequalities, promote equitable land distribution, and enhance agricultural productivity. These reforms can include measures such as land redistribution, tenancy reforms, land consolidation, and the provision of land titles to small and marginalised farmers.
(c) Rural Infrastructure Development: Investment in rural infrastructure, such as irrigation systems, farm-to-market roads, storage facilities, and rural electrification, is crucial for agricultural development. These infrastructure projects improve access to inputs, markets, and services, thereby enhancing productivity and reducing post-harvest losses.
(d) Agricultural Research and Development: Governments allocate resources for agricultural research and development to promote innovation, improve crop varieties, develop sustainable farming practices, and enhance agricultural productivity. Research institutions and extension services play a vital role in disseminating knowledge and best practices to farmers.
(e) Market Support and Price Stabilization: Policies aimed at providing market support and stabilising agricultural prices are implemented to protect farmers from price volatility and market risks. These measures can include procurement systems, minimum support prices, market information systems, and the establishment of agricultural marketing boards.
(f) Agricultural Credit and Insurance: Access to affordable credit and insurance is crucial for farmers to invest in agricultural inputs, machinery, and technologies, as well as to manage risks associated with crop failure, pests, and natural disasters. Governments often facilitate agricultural credit programs and promote crop insurance schemes.
(g) Sustainable Agricultural Practices: Policies that promote sustainable agriculture focus on minimising environmental impact, conserving natural resources, and promoting climate-smart farming techniques. These policies encourage the adoption of organic farming, agroecology, water conservation practices, and integrated pest management to ensure long-term sustainability.
5. What is the significance of rural development agencies in agriculture?
Ans: Rural development agencies play a significant role in promoting agriculture by focusing on the overall development of rural areas. These agencies are often government entities or non-governmental organisations (NGOs) that work towards improving the socio-economic conditions of rural communities. Here are some key significances of rural development agencies in agriculture:
(a) Poverty alleviation: Rural development agencies aim to alleviate poverty in rural areas, and agriculture is a crucial sector for achieving this goal. These agencies implement programs and initiatives that support smallholder farmers, improve access to credit and resources, and enhance market linkages. By promoting sustainable agricultural practices and providing economic opportunities, rural development agencies help rural communities break the cycle of poverty.
(b) Infrastructure development: Rural development agencies focus on developing and improving rural infrastructure, including irrigation systems, farm-to-market roads, storage facilities, and rural electrification. These infrastructure investments facilitate agricultural activities, enhance market access, reduce post-harvest losses, and promote value addition. Improved infrastructure contributes to increased agricultural productivity, efficiency, and profitability.
(c) Capacity building and extension services: Rural development agencies provide training, education, and extension services to farmers and rural communities. They offer technical assistance, workshops, and demonstrations on various agricultural practices, such as modern farming techniques, soil conservation, water management, and livestock rearing. These capacity-building initiatives enhance farmers’ knowledge and skills, empowering them to adopt improved agricultural practices and increase their productivity.
(d) Market development and value chain enhancement: Rural development agencies work to strengthen agricultural value chains and improve market linkages for rural farmers. They facilitate the formation of farmer producer organisations (FPOs), cooperatives, and marketing networks. These entities help farmers access larger markets, negotiate better prices, and benefit from economies of scale. By promoting value addition, quality standards, and market integration, rural development agencies enhance farmers’ income and contribute to agricultural growth.
(e) Natural resource management: Sustainable management of natural resources is crucial for the long-term viability of agriculture. Rural development agencies focus on promoting conservation practices, watershed management, agroforestry, and sustainable land use. These initiatives help protect soil fertility, preserve water resources, mitigate climate change impacts, and promote biodiversity. By promoting sustainable resource management, these agencies ensure the long-term sustainability and resilience of rural agricultural systems.
(f) Entrepreneurship and rural diversification: Rural development agencies encourage rural entrepreneurship and diversification beyond traditional farming activities. They support the development of agro-processing industries, rural enterprises, and non-farm livelihood options. By promoting value addition, agribusiness development, and rural tourism, these agencies create additional income-generating opportunities for rural communities, reducing their dependence on agriculture alone.
(g) Policy advocacy and coordination: Rural development agencies play a crucial role in advocating for policies that support rural agriculture and development. They provide inputs to policymakers, government agencies, and other stakeholders to influence agricultural policies, regulations, and investment priorities. These agencies also facilitate coordination among various stakeholders, including government departments, research institutions, NGOs, and private sector entities, to ensure holistic and integrated approaches to rural development.
6. What were the key objectives of the Industrial Policy Resolution 1956?
Ans: The Industrial Policy Resolution (IPR) of 1956 was a landmark policy document in India that outlined the key objectives and framework for industrial development in the country.
The main objectives of the Industrial Policy Resolution 1956 were as follows:
(a) Industrialization and Economic Growth: The IPR aimed to promote rapid industrialization as a means to achieve economic growth and development. It emphasised the need to expand industrial production, create employment opportunities, and increase the overall productivity of the economy.
(b) Self-Reliance: A key objective of the IPR was to reduce dependence on imports and develop domestic industries to meet the country’s needs. It aimed to build a self-reliant economy by encouraging the growth of indigenous industries and reducing reliance on foreign goods.
(c) Balanced Regional Development: The policy sought to achieve balanced regional development by promoting industrial growth in backward and underdeveloped regions. It aimed to reduce regional disparities by setting up industries in areas that were economically and industrially less developed.
(d) Public Sector Dominance: The IPR emphasised the dominant role of the public sector in the country’s industrial development. It advocated for a significant presence of the state in key sectors of the economy through the establishment of public sector enterprises. The policy saw the public sector as an engine of economic growth and as a means to ensure social control over industry.
(e) Prevention of Concentration of Economic Power: The IPR aimed to prevent the concentration of economic power in the hands of a few by advocating for a mixed economy with a combination of public and private sectors. It sought to ensure a fair distribution of economic resources and opportunities.
(f) Promotion of Small-Scale Industries: Recognizing the importance of small-scale industries for employment generation and poverty alleviation, the IPR emphasised the promotid development of small-scale sector enterprises. It aimed to provide support and incentives to small-scale industries to enhance their competitiveness and contribution to the economy.
7. What were the major features of the Industrial Policy Resolution 1956?
Ans: The Industrial Policy Resolution (IPR) of 1956, a significant policy document in India, outlined several major features and principles for industrial development. Here are the key features of the Industrial Policy Resolution 1956:
(a) Public Sector Dominance: The IPR emphasised the dominant role of the public sector in the country’s industrial development. It advocated for a large and expanding public sector, with the state taking the leading role in key sectors of the economy. The policy aimed to establish public sector enterprises to drive industrial growth and ensure social control over industry.
(b) Mixed Economy: The IPR endorsed the concept of a mixed economy, combining public and private sectors. It recognized the importance of private enterprise and entrepreneurship while emphasising the need for state intervention and public ownership in strategic industries. The policy aimed to strike a balance between public and private sectors to achieve overall economic development.
(c) Regulation and Control: The IPR emphasised the need for regulation and control over the private sector to prevent the concentration of economic power. It advocated for a system of industrial licensing to ensure that private enterprises operated within certain guidelines and contributed to the overall socio-economic goals of the country.
(d) Social Justice: The policy emphasised the objective of social justice in industrial development. It aimed to prevent the concentration of wealth and promote a fair distribution of economic resources and opportunities. The IPR sought to achieve social welfare and reduce socio-economic disparities through industrialization.
(e) Self-Reliance and Import Substitution: The IPR focused on reducing dependence on imports and achieving self-reliance. It emphasised the development of domestic industries to meet the country’s needs, especially in sectors like capital goods and strategic industries. The policy aimed to promote import substitution by encouraging the growth of indigenous industries.
(f) Regional Development: The IPR aimed to achieve balanced regional development by promoting industrial growth in backward and underdeveloped regions. It sought to reduce regional disparities by setting up industries in economically and industrially less developed areas. The policy aimed to create employment opportunities and uplift the standard of living in these regions.
(g) Small-Scale Industries Promotion: Recognizing the importance of small-scale industries for employment generation and poverty alleviation, the IPR placed emphasis on their promotion and development. It aimed to provide support and incentives to small-scale enterprises, including reservation of certain products for exclusive production by the small-scale sector.
8. How did the Industrial Policy Resolution 1956 impact industrial development in India?
Ans: The Industrial Policy Resolution (IPR) of 1956 had a significant impact on industrial development in India. It set the direction and framework for industrialization in the country and shaped the industrial policies for several decades. Here are the key impacts of the Industrial Policy Resolution 1956 on industrial development in India:
(a) Promotion of Public Sector: The IPR emphasised the dominant role of the public sector in industrial development. It led to the establishment of a large number of public sector enterprises in key sectors such as steel, coal, oil, heavy machinery, and infrastructure. The public sector played a crucial role in building industrial infrastructure, promoting self-reliance, and driving economic growth.
(b) Import Substitution and Self-Reliance: The policy aimed to reduce dependence on imports and achieve self-reliance by promoting domestic industries. It encouraged import substitution through the growth of indigenous industries, especially in sectors like capital goods and strategic industries. This focus on self-reliance led to the development of domestic capabilities and the growth of various industrial sectors.
(c) Mixed Economy and Regulation: The IPR endorsed the concept of a mixed economy, combining public and private sectors. It emphasised state intervention and control over the private sector through mechanisms such as industrial licensing and regulation. This approach aimed to prevent the concentration of economic power, promote fair competition, and ensure that private enterprises contributed to national development goals.
(d) Balanced Regional Development: The IPR aimed to achieve balanced regional development by promoting industrial growth in backward and underdeveloped regions. The policy led to the establishment of industrial estates, growth centres, and public sector enterprises in these regions. This helped reduce regional disparities, create employment opportunities, and uplift the standard of living in rural and less developed areas.
(e) Promotion of Small-Scale Industries: The IPR recognized the importance of small-scale industries for employment generation and poverty alleviation. The policy provided support and incentives to small-scale enterprises, including reservation of certain products for exclusive production by the small-scale sector. This led to the growth of small-scale industries and contributed to rural industrialization and inclusive development.
(f) Technological Development: The IPR emphasised the need for technological progress and upgradation in industrial development. It encouraged the adoption of modern technology, promoted research and development, and aimed to upgrade the skills of the workforce. This focus on technology played a crucial role in enhancing industrial productivity, efficiency, and competitiveness.
(g) Social Justice and Welfare: The IPR emphasised the objective of social justice in industrial development. It aimed to prevent the concentration of wealth and promote a fair distribution of economic resources and opportunities. The policy focused on the welfare of workers, industrial labor regulations, and improving working conditions.
9. What is the role of small-scale industries in economic development?
Ans: Small-scale industries play a crucial role in economic development in several ways:
(a) Employment Generation: Small-scale industries are significant contributors to employment generation, particularly in rural areas. They provide opportunities for self-employment and create jobs for a large number of people, thereby reducing unemployment and poverty.
(b) Regional Development: Small-scale industries promote regional development by decentralising economic activities. They help in reducing regional imbalances by creating economic opportunities in areas that may be less developed or have limited access to larger industries.
(c) Income Generation and Poverty Alleviation: Small-scale industries contribute to income generation and poverty alleviation by providing livelihood options for individuals and families. They enable people to earn a sustainable income, improve their living standards, and enhance their overall well-being.
(d) Entrepreneurship and Innovation: Small-scale industries foster entrepreneurship and innovation. They provide a platform for individuals with limited resources to start their own businesses, encourage creativity and risk-taking, and promote local innovation.
(e) Utilisation of Local Resources: Small-scale industries often utilise local resources, raw materials, and skills, thereby contributing to the development and utilisation of local resources. This can help in preserving traditional crafts, promoting cultural heritage, and boosting local economies.
(f) Linkages with Large Industries: Small-scale industries often serve as suppliers or subcontractors to larger industries. They contribute to the supply chain of larger enterprises, providing essential components, parts, or services, thereby creating interlinkages and promoting industrial growth.
(g) Export Potential: Many small-scale industries have the potential to engage in export-oriented activities. They can contribute to earning foreign exchange, enhancing international trade, and expanding market opportunities for the country.
(h) Social Development: Small-scale industries contribute to social development by empowering marginalised sections of society, including women, rural communities, and disadvantaged groups. They provide avenues for social inclusion, skill development, and capacity building.
(i) Environmental Sustainability: Small-scale industries can adopt environmentally friendly practices due to their smaller scale of operations. They have the potential to promote sustainable and eco-friendly production methods, reduce resource consumption, and minimise environmental impact.
(j) Economic Resilience: Small-scale industries provide a diversified economic base and contribute to the resilience of the economy. They are often less vulnerable to economic downturns or global shocks compared to larger industries, thus providing stability to the overall economic system.
10. What are the advantages of small-scale industries?
Ans: The advantages of small-scale industries include:
(a) Flexibility and Adaptability: Small-scale industries can quickly adapt to changing market conditions and customer preferences due to their smaller size and streamlined decision-making processes.
(b) Lower Capital Requirements: These industries require relatively lower investment and capital compared to large-scale industries, making them more accessible to entrepreneurs with limited financial resources.
(c) Employment Opportunities: Small-scale industries are significant sources of employment, particularly in rural and semi-urban areas where job opportunities may be limited.
(d) Local and Regional Development: Small-scale industries contribute to local and regional development by creating economic opportunities, promoting entrepreneurship, and reducing regional imbalances.
(e) Niche Markets and Specialization: Small-scale industries often focus on niche markets or specialised products, catering to specific customer demands and preferences.
(f) Innovation and Creativity: Small-scale industries encourage innovation, creativity, and entrepreneurship, fostering a culture of experimentation and new ideas.
(g) Personalised Customer Service: These industries can provide personalised customer service and build strong relationships with customers, enhancing customer loyalty.
11. What are the advantages of import substitution?
Ans: The advantages of import substitution include:
(a) Economic Development: Import substitution can promote the development of domestic industries, leading to industrialization, technological progress, and economic growth.
(b) Job Creation: By promoting domestic production, import substitution can create employment opportunities in various sectors, reducing unemployment and poverty.
(c) Self-Sufficiency: Import substitution aims to reduce dependence on foreign goods and make a country more self-sufficient in meeting its own needs.
(d) Diversification of the Economy: Import substitution encourages the diversification of the economy by expanding the range of domestically produced goods and reducing reliance on a limited number of imports.
(e) Protection of Infant Industries: It provides protection to new and emerging industries in their initial stages, allowing them to grow and become competitive before facing international competition.
(f) Technological Advancement: Import substitution can drive technological advancement as domestic industries strive to improve their efficiency, quality, and innovation to compete with imported goods.
12. Write the features of the Industrial Policy, 1956.
Ans: The main features of Industrial Policy Resolution 1956 can be identified as follows:
(a) Categorization of industries in three schedules:
Schedule A: Industries were made the exclusive responsibility of the states.
Schedule B: Industries were to be progressively state owned.
Schedule C: Industries were left open to private enterprise.
(b) Due to the significance of cottage and small scale industries in the Indian economy, the state was bound to promote the use of these industries.
(c) Emphasis was laid on removal of regional disparities.
(d) Training of technical and managerial personnel was to receive special attention.
(e) Provision of improved living and working conditions to workers was emphasised.
13. Briefly discuss the problems faced by the Indian agriculture sector in pre reform period.
Ans: Indian agriculture during British rule went towards stagnation. Lack of supervision led to negligence in reforms, which were introduced to ensure development in productivity. Meanwhile, the British government continued in their trade deals, extracting more profit that inevitably led to the fall of India’s agricultural sector.
Agriculture Sector of India – Causes of Stagnation There are various causes for stagnation in the Indian agricultural sector during British rule. Some of these are—
(a) Zamindari System: One of the primary reasons for the cause of stagnation in India’s agricultural sector was the zamindari system. This agricultural system was mainly practised in Bengal, which was the then capital of British India. As per this system, the majority of the profits went tolan downers, i.e. zamindars instead of cultivators. As a result, the colonial bosses ultimately made the most income, while such farmers were not remunerated adequately.
(b) Forced Commercialization: Even though there was a shortage of resources, the British rule insisted on widespread commercialization to bring in more profits. Their objective was to make this industry evolve and undergo ‘cultivation for sale’ from the orthodox methods of ‘cultivation for self’.
