Test: Indian Economy - 2 - Commerce MCQ

On 4th October, the government of India approved the 12th five year plan (2012-17) that aims to achieve annual average economic growth rate of 8.2 per cent, down from 9 per cent (Eleventh plan 2007-12). The aim of the 12th Five Year plan is to achieve “faster, sustainable and more inclusive growth”.

The first Factories Act was enacted in 1881.
The Factories Act is a legislation that aims to regulate the working conditions in factories and protect the rights of workers. The first Factories Act was enacted in 1881 in response to the need for improved working conditions during the Industrial Revolution. Here are some key points about the Act:
- Objective: The main objective of the Factories Act was to ensure the health, safety, and welfare of workers in factories.
- Provisions: The Act included various provisions to regulate the working conditions, including working hours, employment of women and children, and safety measures.
- Working hours: The Act specified the maximum number of working hours for adults and prohibited the employment of children under a certain age.
- Employment of women and children: The Act introduced restrictions on the employment of women and children in certain hazardous industries.
- Safety measures: The Act mandated the implementation of safety measures in factories, such as fencing of machinery, provision of adequate ventilation, and precautions against fire and accidents.
- Inspections: The Act empowered factory inspectors to visit and inspect factories to ensure compliance with the regulations.
- Subsequent amendments: The Factories Act has been amended several times since its enactment to keep up with the changing needs and advancements in industrial practices.
Overall, the first Factories Act, enacted in 1881, marked an important milestone in the history of labor legislation, as it aimed to protect the rights and well-being of workers in factories.

Planning Commission was set up in:
- 15th March 1950
- 5th March 1951
- 20th March 1951
- 25th March 1951
Explanation:
The correct answer is option A: 15th March 1950.
Here is a detailed explanation:
1. The Planning Commission was established in India to formulate and implement comprehensive economic plans for the country's development.
2. It was set up on 15th March 1950 by a resolution of the Government of India.
3. The first Prime Minister of India, Jawaharlal Nehru, played a crucial role in the formation of the Planning Commission.
4. The main objective of the Planning Commission was to promote balanced and rapid economic development in the country.
5. It prepared five-year plans, which outlined the priorities and strategies for economic growth and development.
6. The Planning Commission was responsible for coordinating and monitoring the implementation of these plans.
7. It played a central role in the allocation of resources and guiding the development efforts of various sectors.
8. The Planning Commission was replaced by the NITI Aayog (National Institution for Transforming India) on 1st January 2015.
In conclusion, the Planning Commission was set up on 15th March 1950 to oversee and drive India's economic development.

Who presented the first five year plan?
The correct answer is Jawaharlal Nehru.
Explanation:
Jawaharlal Nehru, the first Prime Minister of India, presented the first five year plan in 1951. The plan was formulated to develop the Indian economy and bring about rapid industrialization and economic growth. Here are some key points about the first five year plan:
- This plan aimed to achieve self-sufficiency in agriculture and increase agricultural production.
- The plan focused on the development of basic industries like steel, coal, and power.
- It aimed to improve the standard of living by focusing on education, healthcare, and housing.
- The plan also aimed to promote the growth of small-scale industries and reduce poverty and unemployment.
- The first five year plan was successful in achieving its objectives and laid the foundation for future economic planning in India.
Jawaharlal Nehru, with his vision and leadership, played a crucial role in formulating and implementing the first five year plan, which paved the way for India's economic development in the years to come.

The objective of 11th Five-year plan is to Increase agricultural GDP growth to 4% per year to ensure a wider spread of benefits. Create 70 million new work opportunities. Augment minimum standards of education in primary school and to increase GDP up to 10%. Health and infrastructure were also the priority areas in 11th Five Year Plan.

First Five Year Plan:
- The first five year plan in India was implemented from 1951 to 1956.
- It aimed to achieve rapid industrialization and economic development in the country.
- The focus of the plan was on the agricultural sector as it was the primary source of livelihood for the majority of the population.
- The plan aimed to increase agricultural production, improve irrigation facilities, and promote land reforms.
- The plan also focused on developing basic infrastructure such as roads, railways, and power generation.
Shift in Focus in the Second Five Year Plan:
- The second five year plan in India was implemented from 1956 to 1961.
- The focus of the plan shifted from agriculture to industry.
- This shift was made to accelerate the pace of industrialization and reduce the dependence on agriculture.
- The plan aimed to promote the establishment of heavy industries and expand the manufacturing sector.
- It also focused on improving infrastructure related to industries, such as power generation and transportation.
- The second plan also emphasized on increasing exports to boost foreign exchange reserves.
Overall, the first five year plan focused on agriculture production, while the second plan shifted the focus to industry development.

Twelfth Five Year Plan:
The Twelfth Five Year Plan refers to the five-year period of planning in India that took place from 2012 to 2017. It was the country's twelfth such plan and aimed to achieve sustainable and inclusive growth. Here is a detailed explanation of the Twelfth Five Year Plan:
Key Points:
- Duration: The Twelfth Five Year Plan spanned from 2012 to 2017.
- Objectives: The plan aimed to achieve a sustainable growth rate of 8-9% annually, with a focus on inclusive development.
- Priority Sectors: The plan emphasized several key sectors that required attention and investment, including agriculture, infrastructure, education, healthcare, and skill development.
- Employment Generation: The plan aimed to create employment opportunities for the rapidly growing population, particularly in sectors such as manufacturing and services.
- Inclusive Growth: The plan emphasized the need to reduce poverty and inequality, with a focus on social welfare programs and inclusive policies.
- Infrastructure Development: The plan recognized the importance of infrastructure development for economic growth and aimed to increase investments in areas such as power, transportation, and urban development.
- Environmental Sustainability: The plan acknowledged the importance of sustainable development and promoted initiatives for environmental conservation and renewable energy.
- Regional Imbalances: The plan aimed to address regional disparities and promote balanced development across different states and regions of India.
- Monitoring and Evaluation: The plan emphasized the importance of regular monitoring and evaluation of its progress to ensure effective implementation and course correction if needed.
Conclusion:
The Twelfth Five Year Plan, which took place from 2012 to 2017, aimed to achieve sustainable and inclusive growth in India. It focused on key sectors, employment generation, inclusive policies, infrastructure development, environmental sustainability, and addressing regional imbalances. Regular monitoring and evaluation were also crucial aspects of the plan's implementation.

Primary Objective of Economic Planning in India:
- Growth with Social Justice: The primary objective of economic planning in India is to achieve economic growth while ensuring social justice. This means that the focus is not only on increasing the overall GDP and promoting economic development but also on ensuring that the benefits of this growth are distributed equitably among all sections of society.
- Reduction of Poverty: Economic planning aims to address the issue of poverty in the country. It involves implementing policies and programs that aim to uplift the economically weaker sections of society and provide them with better opportunities for education, healthcare, and employment.
- Unemployment Reduction: Another objective of economic planning is to reduce unemployment. This is achieved by promoting industrialization, encouraging entrepreneurship, and creating job opportunities through various initiatives such as skill development programs and the promotion of small and medium enterprises.
- Income Inequality Reduction: Economic planning also focuses on reducing income inequalities within the society. It aims to bridge the gap between the rich and the poor by implementing redistributive policies, progressive taxation, and providing social welfare schemes to uplift the marginalized sections of society.
- Overall Development: Economic planning in India aims to achieve overall development by focusing on various sectors such as agriculture, industry, infrastructure, education, healthcare, and rural development. The objective is to create a balanced and sustainable growth model that benefits all sections of society.
In conclusion, the primary objective of economic planning in India is to achieve growth with social justice by reducing poverty, unemployment, and income inequalities. The aim is to ensure that economic development is inclusive and benefits all sections of society.

GDP
Definition: GDP stands for Gross Domestic Product, which is a measure of the total value of all final goods and services produced within a country's borders in a given time period.
Explanation:
To determine the correct answer, let's analyze each option:
A: Market value of all the final goods and services produced by the residents
- This option implies that GDP includes all goods and services produced by residents, regardless of the location of production. However, GDP only considers goods and services produced within a country's borders, irrespective of the nationality of the producers.
B: Market value of all the final goods and services produced within a domestic territory
- This option correctly states that GDP measures the market value of all final goods and services produced within a country's domestic territory. It takes into account both goods and services produced by residents and non-residents within the country's borders.
C: Factor value of all the final goods and services produced by the residents
- This option refers to the factor value, which takes into account the costs of production, including labor, capital, and raw materials. However, GDP is based on the market value of goods and services, not the factor value.
D: Factor value of all the final goods and services produced within a domestic territory
- Similar to option C, this option also mentions the factor value rather than the market value, so it is not the correct answer.
Therefore, the correct answer is B: Market value of all the final goods and services produced within a domestic territory.

The Committee on Vision 2020 was constituted by the Planning Commission in June, 2000, under the chairmanship of SP Singh, for crystallising the country’s vision for the future in the year 2020.The vision will reflect people’s aspirations, the full potentials of growth and development, and lay out the efforts needed to fulfill this vision.
The objective of this committee was, as described by Dr. Abdul Kalam, "Transforming the nation into a developed country, five areas in combination have been identified based on India's core competence, natural resources and talented manpower for integrated action to double the growth rate of GDP and realize the Vision of Developed India”

Planning by Inducements: In this system there is persuasion rather than compulsion or deliberate enforcement of orders.  Here the consumers are free to consume whatsoever they like, producers are free to produce whatsoever they wish. 
A free market is one where voluntary exchange and the laws of supply and demand provide the sole basis for the economic system, without government intervention. A key feature of free markets is the absence of forced transactions or conditions on transactions.

MRTP stands for Monopolies and Restrictive Trade Practices Act.
The Monopolies and Restrictive Trade Practices Act (MRTP Act) was an Indian legislation that aimed to prevent monopolistic and restrictive trade practices. It was enacted in 1969 and replaced by the Competition Act in 2002.
The MRTP Act had the following key features:
- Prevention of monopolistic practices: The Act aimed to prevent the concentration of economic power in the hands of a few by prohibiting monopolistic practices such as the formation of cartels, abuse of dominant position, and anti-competitive agreements.
- Regulation of mergers and acquisitions: The Act regulated mergers and acquisitions to ensure that they did not lead to a substantial lessening of competition in the market.
- Consumer protection: The Act included provisions to protect consumers from unfair trade practices and misleading advertisements.
- Establishment of the MRTP Commission: The Act established the Monopolies and Restrictive Trade Practices Commission, which was responsible for enforcing the provisions of the Act and taking action against violators.
Importance and impact of the MRTP Act:
- The MRTP Act played a significant role in promoting fair competition and preventing the abuse of market power in India.
- It helped in safeguarding the interests of consumers by curbing unfair trade practices and ensuring competitive prices.
- The Act facilitated the growth of small and medium-sized enterprises by preventing the dominance of large corporations.
- The MRTP Act was eventually replaced by the Competition Act, which introduced more modern and comprehensive provisions to address competition-related issues.
In conclusion, MRTP stands for Monopolies and Restrictive Trade Practices Act, which was an Indian legislation aimed at preventing monopolistic and restrictive trade practices. It played a crucial role in promoting fair competition, protecting consumer interests, and regulating mergers and acquisitions.

The need for planning emerges from the following weaknesses of the free market system:
Exploitation of workers:
- In a free market system, businesses are driven by profit maximization, which can lead to the exploitation of workers.
- Without proper planning and regulation, businesses may engage in unfair labor practices such as low wages, long working hours, poor working conditions, and lack of benefits.
- Planning helps to ensure that workers are protected and their rights are safeguarded.
Inequalities:
- The free market system can exacerbate income and wealth inequalities.
- Without planning, resources and opportunities tend to concentrate in the hands of a few, leading to a widening gap between the rich and the poor.
- Planning can help to distribute resources and opportunities more equitably, reducing inequalities and promoting social justice.
Instability:
- The free market system is prone to economic fluctuations and crises.
- Without planning, there is a risk of market failures, such as excessive speculation, financial bubbles, and economic recessions.
- Planning can help to mitigate these risks by implementing measures to stabilize the economy, such as regulation, fiscal and monetary policies, and social safety nets.
All of these:
- The weaknesses of the free market system outlined above highlight the need for planning to address these issues comprehensively.
- Planning provides a framework for ensuring fairness, stability, and sustainable economic development.
- By implementing appropriate policies and regulations, planning can help to create a more inclusive and balanced economy that benefits all members of society.

High level of illiteracy, lack of healthcare facilities, and limited access to resources are some of the basic problems in poor areas. Pollution and environmental issues are the other challenges that India is facing at present.

Definition of Perspective Plan:
A perspective plan refers to a long-term plan that outlines the goals, objectives, and strategies of an organization or individual. It provides a roadmap for achieving desired outcomes and guides decision-making processes over an extended period of time.
Key Points:
- Perspective plans are characterized by their long-term nature, typically spanning several years or even decades.
- They are comprehensive in nature and cover various aspects of an organization or individual's goals and objectives.
- Perspective plans are forward-looking and aim to anticipate future challenges and opportunities.
- They provide a strategic framework for making informed decisions and allocating resources effectively.
- Perspective plans are dynamic and can be revised or adjusted as circumstances change or new information becomes available.
- They help in aligning the actions of different stakeholders towards a common vision and purpose.
- Perspective plans often involve setting specific targets, timelines, and milestones to track progress towards the desired outcomes.
- They require careful analysis, research, and consultation to ensure feasibility and sustainability.
- Perspective plans are crucial for long-term success and growth, providing a sense of direction and purpose.
Overall, perspective plans are essential tools for organizations and individuals to map out their long-term goals and strategies, enabling them to navigate complex challenges and achieve sustainable success.

Self-reliance, or for that matter self-sufficiency, refers to the elimination of external assistance. It means that an economy is so sufficient that it does not have to rely on any external help or assistance. In other words, it means zero foreign aid.

Norman Borlaug was also known as the “Father of the Green Revolution,” Borlaug helped lay the groundwork for agricultural technological advances that alleviated world hunger. Borlaug studied plant biology and forestry at the University of Minnesota and earned a Ph.D. in plant pathology there in 1942.

Inclusive growth can be achieved by:


Reducing inequalities:
- Implementing policies that promote equal opportunities for all individuals, regardless of their backgrounds.
- Addressing the wealth gap by redistributing resources and income more evenly.
- Providing access to quality education, healthcare, and basic services for all.
- Promoting gender equality and empowering marginalized groups.
- Encouraging inclusive hiring practices in the workforce.
Removing poverty:
- Implementing poverty reduction programs and social safety nets to provide assistance to those in need.
- Creating job opportunities and promoting entrepreneurship to uplift individuals and communities out of poverty.
- Enhancing access to financial services and credit facilities for low-income individuals.
- Investing in infrastructure development in underdeveloped areas.
Providing social justice:
- Ensuring equal treatment and protection of rights for all individuals.
- Establishing a fair and impartial legal system.
- Combating discrimination and prejudice in all forms.
- Promoting social cohesion and inclusion in society.
All of these:
- Inclusive growth can be achieved through a combination of reducing inequalities, removing poverty, and providing social justice.
- These factors are interconnected and mutually reinforcing, creating a conducive environment for inclusive economic development.
- By addressing these aspects comprehensively, societies can achieve sustainable and equitable growth, where no one is left behind.
In conclusion, achieving inclusive growth requires concerted efforts in reducing inequalities, removing poverty, and providing social justice. These factors are essential for creating a fair and inclusive society, where everyone has equal opportunities and access to resources. By implementing policies and programs that address these areas, societies can work towards a more inclusive and prosperous future.

High Yielding Variety Programme (HYVP) The core philosophy of the programme was to increase the productivity of food grains by adopting latest varieties of inputs of crops. Introduction of new high yielding varieties of improved seeds and enhanced application of the fertilizers and extended use of pesticides were its main features.

Definition of GDP:
Gross Domestic Product (GDP) is a measure of the total value of all final goods and services produced within a country's domestic territory during a specific time period. It is an important indicator of a country's economic health and is used to assess the overall size and growth rate of an economy.
Explanation:
GDP can be defined as follows:
1. Market value:
- GDP measures the market value of all final goods and services. It takes into account the prices at which these goods and services are sold in the market.
2. Final goods and services:
- GDP only includes final goods and services, which are products that are ready for consumption or investment and do not require further processing.
3. Produced within a domestic territory:
- GDP measures the value of goods and services produced within the geographic boundaries of a country. It includes both domestically owned firms and foreign-owned firms operating within the country.
Example:
To illustrate the calculation of GDP, let's consider the following scenario:
- A country produces cars, televisions, and mobile phones.
- The market value of all cars produced in a year is $100 million.
- The market value of all televisions produced in a year is $50 million.
- The market value of all mobile phones produced in a year is $75 million.
- The GDP of the country for that year would be $225 million ($100 million + $50 million + $75 million).
In conclusion, GDP is a measure of the market value of all final goods and services produced within a country's domestic territory. It provides valuable insights into the overall economic activity and performance of a nation.