Ramesh Singh Test : Evolution Of The Indian Economy


10 Questions MCQ Test | Ramesh Singh Test : Evolution Of The Indian Economy


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QUESTION: 1

Why selecting Industry as the leading force of the economy seemed to be an illogical decision?

1. Absence of the natural resource of fertile land.

2. There was an absence of required Technology.

3. Lack of investable capital.

Choose from the following options.

Solution: India lacked all those prerequisites which could suggest the declaration of the industry as its prime mover:
  • Almost no presence of the infrastructure sector, i.e., power, transportation and communication.

  • Negligible presence of the infrastructure industries, i.e., iron and steel, cement, coal, crude oil, oil refining and electricity.

  • Lack of investible capital—either by the government or the private sector.

  • Absence of required technology to support the process of industrialization and no research and development.

  • Lack of skilled manpower.

  • Absence of entrepreneurship among the people.

  • Absence of a market for industrial goods.

  • Many other socio-psychological factors which acted as negative forces for the proper industrialization of the economy.

QUESTION: 2

The obvious choice for India would have been the agriculture sector as the prime moving force of the economy because:

1. The country was having the natural resource of fertile land which was fit for cultivation.

2. Human capital did not require any kind of higher training.

Which of these statements are not correct?

Solution: The obvious choice for India would have been the agriculture sector as the prime moving force of the economy because:
  • The country was having the natural resource of fertile land which was fit for cultivation.

  • Human capital did not require any kind of higher training.

QUESTION: 3

Consider the following statements:

1. Agriculture would have been the obvious choice as the prime moving force (PMF) of the economy, But Indian agriculture was using traditional tools and technology.

2. By choosing industry as the prime moving force, India opted to industrialise the economy as well as modernise the traditional mode of farming.

Which of these statements are correct?

Solution:
  • Looking at the resources available, agriculture would have been the obvious choice as the prime moving force (PMF) of the economy (i.e., cultivable land and human power).

  • But as Indian Agriculture was using traditional tools and technology its modernisation, as well as future mechanisation (later to some extent), would have been blocked due to the lack of indigenous industrial support.

  • If India would have gone for import this would have required enough foreign reserves and a natural dependence on foreign countries.

QUESTION: 4

Consider the following statements:

1. It was only in the 1990s the world and the WB/IMF changed its opinion regarding the agriculture sector.

2. After the 1990s emphasis on the agriculture sector by an economy was considered as a sign of backwardness.

Which of these statements are not correct?

Solution: After the 1990s emphasis on the agriculture sector by an economy was not considered as a sign of backwardness. Earlier it was considered as a sign of backwardness.

QUESTION: 5

Consider the following statements regarding Industrialisation of India:

1. Industrialisation of India was neglected by the colonisers-the infrastructure was not built to industrialise India but to exploit its raw materials.

2. Indian capitalists who did emerge were highly dependent on British commercial capital.

Which of these statements are correct?

Solution:
  • The industrialisation of India was also neglected by the colonisers—the infrastructure was not built to industrialise India but to exploit its raw materials.

  • Indian capitalists who did emerge were highly dependent on British commercial capital and many sectors of the industry were dominated by British firms, e.g., shipping, banking, insurance, coal, plantation crops and jute.

QUESTION: 6

Why did India select agriculture as the prime moving force in place of industry in 2002?

1. To achieve food security.

2. To tackle the challenge of poverty alleviation.

3. To induce growth in the rural economy.

Choose from the following options.

Solution:

India selected agriculture as the prime moving force in place of industry in 2002:

  • The economy will be able to achieve food security with an increase in agricultural production. Besides, the agricultural surplus will generate exports in the globalising world economy benefiting out of the WTO regime.

  • The challenge of poverty alleviation will be solved to a great extent as the emphasis will make agriculture a higher income-generating occupation and induce growth in the rural economy by generating more gainful employment.

  • The situation of India as an example of ‘market failure' will cease.

QUESTION: 7

Which of the following industries were known as the basic industries?

1. Iron and steel

2. Natural gas

3. Electricity

Choose from the following options.

Solution: There are eight core industries identified under the Index of Industrial Production. These are 1. Iron and steel 2. Cement 3. Coal 4. Crude oil 5. Oil refining 6.

Electricity 7. Natural Gas 8. Fertilizers

QUESTION: 8

Which of the following are the core industries in India?

1. Cement

2. Coal

3. Fertilizer

Choose from the following options.

Solution: The Eight Core Industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).
  • Petroleum & Refinery production, Electricity generation, Steel production, Coal production, Crude Oil production, Natural Gas Production, Cement production, Fertilizers production are included in Eight core industries.

  • QUESTION: 9

    Why the responsibility of developing the basic industries taken by the government?

    1. These basic industries require a high level of technology and skilled manpower.

    2. Management of these Industries was not considered feasible for the private sector.

    3. Low purchasing power of the consumers.

    Choose from the following options.

    Solution:
    • Similar to the infrastructure sector, these basic industries also require a high level of capital, technology, skilled manpower and articulation in entrepreneurship which was again considered not feasible for the private sector of the time to manage.

    • Even if the private sector supplied goods from the basic industries', they might not be able to sell their products in the market due to the lower purchasing power of the consumers. Perhaps, that is why again the responsibility of developing the basic industries was taken up by the government.

    QUESTION: 10

    Consider the following statements about the ambitious expansion of PSUs:

    1. Government went on creating PSUs without analysing the fiscal repercussions.

    2. The Employment generation was extended to such an extent by the government that most of them had an oversupply of the labour force.

    Which of these statements are not correct?

    Solution:
    • The government went on creating new PSUs without analysing the fiscal repercussions-moreover believing them to be the real engine of equitable growth.

    The employment generation responsibility of the PSUs was extended to such an extent by the government that most of them had over-supply of the labour force which started draining its profits on account of salaries, wages, pensions and provident funds (the latter two had a late financial impact).