NCERT Textbook: The Story of Village Palampur | Indian Economy for UPSC CSE PDF Download

 Page 1


The Story of Village Palampur      1
Overview
The purpose of the story is to introduce
some basic concepts relating to production
and this we do through a story of a
hypothetical village called Palampur.*
Farming is the main activity in
Palampur, whereas several other
activities such as small scale
manufacturing, dairy, transport, etc. are
carried out on a limited scale. These
production activities need various types
of resources — natural resources, man-
made items, human effort, money, etc. As
we read through the story of Palampur,
we will learn how various resources
combine to produce the desired goods and
services in the village.
Introduction
Palampur is well-connected with
neighbouring villages and towns. Raiganj,
a big village, is 3 kms from Palampur. An
all weather road connects the village to
Raiganj and further on to the nearest
small town of Shahpur. Many kinds of
transport are visible on this road starting
from bullock carts, tongas, bogeys (wooden
cart drawn by buffalos) loaded with jaggery
(gur) and other commodities to motor
vehicles like motorcycles, jeeps, tractors
and trucks.
This village has about 450 families
belonging to several different castes. The
80 upper caste families own the majority
of land in the village. Their houses, some
of them quite large, are made of brick with
cement plastering. The SCs (dalits)
comprise one third of the population and
live in one corner of the village and in
much smaller houses some of which are
of mud and straw. Most of the houses have
electric connections. Electricity powers all
the tubewells in the fields and is used in
various types of small business. Palampur
has two primary schools and one high
school. There is a primary health centre
run by the government and one private
dispensary where the sick are treated.
• The description above shows that
Palampur has fairly well-developed
system of roads, transport, electricity,
irrigation, schools and health centre.
Compare these facilities with those in
your nearby village.
The story of Palampur, an imaginary
village, will take us through the different
types of production activities in the
village. In villages across India, farming
is the main production activity. The other
production activities, referred to as non-
farm activities include small
manufacturing, transport, shop-keeping,
etc. We shall take a look at both these
types of activities, after learning a few
general things about production.
The Story of Village Palampur The Story of Village Palampur
1
Chapter
1
Picture 1.1 Scene of a village
* The narrative is partly based on a research study by Gilbert Etienne of a village in Bulandshahr district in Western
Uttar Pradesh.
2024-25
Page 2


The Story of Village Palampur      1
Overview
The purpose of the story is to introduce
some basic concepts relating to production
and this we do through a story of a
hypothetical village called Palampur.*
Farming is the main activity in
Palampur, whereas several other
activities such as small scale
manufacturing, dairy, transport, etc. are
carried out on a limited scale. These
production activities need various types
of resources — natural resources, man-
made items, human effort, money, etc. As
we read through the story of Palampur,
we will learn how various resources
combine to produce the desired goods and
services in the village.
Introduction
Palampur is well-connected with
neighbouring villages and towns. Raiganj,
a big village, is 3 kms from Palampur. An
all weather road connects the village to
Raiganj and further on to the nearest
small town of Shahpur. Many kinds of
transport are visible on this road starting
from bullock carts, tongas, bogeys (wooden
cart drawn by buffalos) loaded with jaggery
(gur) and other commodities to motor
vehicles like motorcycles, jeeps, tractors
and trucks.
This village has about 450 families
belonging to several different castes. The
80 upper caste families own the majority
of land in the village. Their houses, some
of them quite large, are made of brick with
cement plastering. The SCs (dalits)
comprise one third of the population and
live in one corner of the village and in
much smaller houses some of which are
of mud and straw. Most of the houses have
electric connections. Electricity powers all
the tubewells in the fields and is used in
various types of small business. Palampur
has two primary schools and one high
school. There is a primary health centre
run by the government and one private
dispensary where the sick are treated.
• The description above shows that
Palampur has fairly well-developed
system of roads, transport, electricity,
irrigation, schools and health centre.
Compare these facilities with those in
your nearby village.
The story of Palampur, an imaginary
village, will take us through the different
types of production activities in the
village. In villages across India, farming
is the main production activity. The other
production activities, referred to as non-
farm activities include small
manufacturing, transport, shop-keeping,
etc. We shall take a look at both these
types of activities, after learning a few
general things about production.
The Story of Village Palampur The Story of Village Palampur
1
Chapter
1
Picture 1.1 Scene of a village
* The narrative is partly based on a research study by Gilbert Etienne of a village in Bulandshahr district in Western
Uttar Pradesh.
2024-25
2     Economics
Organisation of Production
The aim of production is to produce the
goods and services that we want. There
are four requirements for production of
goods and services.
The first requirement is land, and
other natural resources such as water,
forests, minerals.
The second requirement is labour, i.e.
people who will do the work. Some
production activities require highly
educated workers to perform the
necessary tasks. Other activities require
workers who can do manual work. Each
worker is providing the labour necessary
for production.
The third requirement is physical
capital, i.e. the variety of inputs required
at every stage during production. What
are the items that come under physical
capital?
(a) Tools, machines, buildings: Tools and
machines range from very simple tools
such as a farmer’s plough to
sophisticated machines such as
generators, turbines, computers, etc.
Tools, machines, buildings can be used
in production over many years, and
are called fixed capital.
(b) Raw materials and money in hand:
Production requires a variety of raw
materials such as the yarn used by
the weaver and the clay used by the
potter. Also, some money is always
required during production to make
payments and buy other necessary
items. Raw materials and money in
hand are called working capital.
Unlike tools, machines and buildings,
these are used up in production.
There is a fourth requirement too. You
will need knowledge and enterprise to be
able to put together land, labour and
physical capital and produce an output
either to use yourself or to sell in the
market. This these days is called human
capital. We shall learn more about human
capital in the next chapter.
• In the picture, identify the land, labour
and fixed capital used in production.
Picture 1.2 A factory, with several  labourers
and  machines
Every production is organised by
combining land, labour, physical capital
and human capital, which are known as
factors of production. As we read
through the story of Palampur, we will
learn more about the first three factors
of production. For convenience, we will
refer to the physical capital as the capital
in this chapter.
Farming in Palampur
1. Land is fixed
Farming is the main production activity
in Palampur. 75 per cent of the people
who are working are dependent on
farming for their livelihood. They could
be farmers or farm labourers. The well-
being of these people is closely related to
production on the farms.
But remember that there is a basic
constraint in raising farm production.
Land area under cultivation is practically
fixed. Since 1960 in Palampur, there has
been no expansion in land area under
2024-25
Page 3


The Story of Village Palampur      1
Overview
The purpose of the story is to introduce
some basic concepts relating to production
and this we do through a story of a
hypothetical village called Palampur.*
Farming is the main activity in
Palampur, whereas several other
activities such as small scale
manufacturing, dairy, transport, etc. are
carried out on a limited scale. These
production activities need various types
of resources — natural resources, man-
made items, human effort, money, etc. As
we read through the story of Palampur,
we will learn how various resources
combine to produce the desired goods and
services in the village.
Introduction
Palampur is well-connected with
neighbouring villages and towns. Raiganj,
a big village, is 3 kms from Palampur. An
all weather road connects the village to
Raiganj and further on to the nearest
small town of Shahpur. Many kinds of
transport are visible on this road starting
from bullock carts, tongas, bogeys (wooden
cart drawn by buffalos) loaded with jaggery
(gur) and other commodities to motor
vehicles like motorcycles, jeeps, tractors
and trucks.
This village has about 450 families
belonging to several different castes. The
80 upper caste families own the majority
of land in the village. Their houses, some
of them quite large, are made of brick with
cement plastering. The SCs (dalits)
comprise one third of the population and
live in one corner of the village and in
much smaller houses some of which are
of mud and straw. Most of the houses have
electric connections. Electricity powers all
the tubewells in the fields and is used in
various types of small business. Palampur
has two primary schools and one high
school. There is a primary health centre
run by the government and one private
dispensary where the sick are treated.
• The description above shows that
Palampur has fairly well-developed
system of roads, transport, electricity,
irrigation, schools and health centre.
Compare these facilities with those in
your nearby village.
The story of Palampur, an imaginary
village, will take us through the different
types of production activities in the
village. In villages across India, farming
is the main production activity. The other
production activities, referred to as non-
farm activities include small
manufacturing, transport, shop-keeping,
etc. We shall take a look at both these
types of activities, after learning a few
general things about production.
The Story of Village Palampur The Story of Village Palampur
1
Chapter
1
Picture 1.1 Scene of a village
* The narrative is partly based on a research study by Gilbert Etienne of a village in Bulandshahr district in Western
Uttar Pradesh.
2024-25
2     Economics
Organisation of Production
The aim of production is to produce the
goods and services that we want. There
are four requirements for production of
goods and services.
The first requirement is land, and
other natural resources such as water,
forests, minerals.
The second requirement is labour, i.e.
people who will do the work. Some
production activities require highly
educated workers to perform the
necessary tasks. Other activities require
workers who can do manual work. Each
worker is providing the labour necessary
for production.
The third requirement is physical
capital, i.e. the variety of inputs required
at every stage during production. What
are the items that come under physical
capital?
(a) Tools, machines, buildings: Tools and
machines range from very simple tools
such as a farmer’s plough to
sophisticated machines such as
generators, turbines, computers, etc.
Tools, machines, buildings can be used
in production over many years, and
are called fixed capital.
(b) Raw materials and money in hand:
Production requires a variety of raw
materials such as the yarn used by
the weaver and the clay used by the
potter. Also, some money is always
required during production to make
payments and buy other necessary
items. Raw materials and money in
hand are called working capital.
Unlike tools, machines and buildings,
these are used up in production.
There is a fourth requirement too. You
will need knowledge and enterprise to be
able to put together land, labour and
physical capital and produce an output
either to use yourself or to sell in the
market. This these days is called human
capital. We shall learn more about human
capital in the next chapter.
• In the picture, identify the land, labour
and fixed capital used in production.
Picture 1.2 A factory, with several  labourers
and  machines
Every production is organised by
combining land, labour, physical capital
and human capital, which are known as
factors of production. As we read
through the story of Palampur, we will
learn more about the first three factors
of production. For convenience, we will
refer to the physical capital as the capital
in this chapter.
Farming in Palampur
1. Land is fixed
Farming is the main production activity
in Palampur. 75 per cent of the people
who are working are dependent on
farming for their livelihood. They could
be farmers or farm labourers. The well-
being of these people is closely related to
production on the farms.
But remember that there is a basic
constraint in raising farm production.
Land area under cultivation is practically
fixed. Since 1960 in Palampur, there has
been no expansion in land area under
2024-25
The Story of Village Palampur      3
cultivation. By then, some of the
wastelands in the village had been
converted to cultivable land. There exists
no further scope to increase farm
production by bringing new land under
cultivation.
larger areas of land more effectively. The
first few tubewells were installed by the
government. Soon, however, farmers
started setting up private tubewells. As a
result, by mid-1970s the entire cultivated
area of 200 hectares (ha.) was irrigated.
The standard unit of measuring land
is hectare, though in the villages you
may find land area being discussed
in local units such as bigha, guintha
etc. One hectare equals the area of a
square with one side measuring 100
metres.  Can you compare the area of
a 1 hectare field with the area of your
school ground?
2. Is there a way one can grow more
from the same land?
In the kind of crops grown and facilities
available, Palampur would resemble a
village of the western part of the state of
Uttar Pradesh. All land is cultivated in
Palampur. No land is left idle. During the
rainy season (kharif) farmers grow jowar
and bajra. These plants are used as cattle
feed. It is followed by cultivation of potato
between October and December. In the
winter season (rabi), fields are sown with
wheat. From the wheat produced, farmers
keep enough wheat for the family’s
consumption and sell the surplus wheat
at the market at Raiganj. A part of the
land area is also devoted to sugarcane
which is harvested once every year.
Sugarcane, in its raw form, or as jaggery,
is sold to traders in Shahpur.
The main reason why farmers are able
to grow three different crops in a year in
Palampur is due to the well-developed
system of irrigation. Electricity came early
to Palampur. Its major impact was to
transform the system of irrigation.
Persian wheels were, till then, used by
farmers to draw water from the wells and
irrigate small fields. People saw that the
electric-run tubewells could irrigate much
Not all villages in India have such
high levels of irrigation.  Apart from
the riverine plains, coastal regions in
our country are well-irrigated.  In
contrast, plateau regions such as the
Deccan plateau have low levels of
irrigation.  Of the total cultivated area
in the country a little less than 40
per cent is irrigated even today.  In
the remaining areas, farming is
largely dependent on rainfall.
To grow more than one crop on a piece of
land during the year is known as multiple
cropping. It is the most common way of
increasing production on a given piece of
land. All farmers in Palampur grow
atleast two main crops; many are growing
potato as the third crop in the past fifteen
to twenty years.
Picture 1.3  Different crops
  Let’s Discuss
• The following Table1.1 shows the land
under cultivation in India in units of
million hectares. Plot this on the graph
provided. What does the graph show?
Discuss in class.
2024-25
Page 4


The Story of Village Palampur      1
Overview
The purpose of the story is to introduce
some basic concepts relating to production
and this we do through a story of a
hypothetical village called Palampur.*
Farming is the main activity in
Palampur, whereas several other
activities such as small scale
manufacturing, dairy, transport, etc. are
carried out on a limited scale. These
production activities need various types
of resources — natural resources, man-
made items, human effort, money, etc. As
we read through the story of Palampur,
we will learn how various resources
combine to produce the desired goods and
services in the village.
Introduction
Palampur is well-connected with
neighbouring villages and towns. Raiganj,
a big village, is 3 kms from Palampur. An
all weather road connects the village to
Raiganj and further on to the nearest
small town of Shahpur. Many kinds of
transport are visible on this road starting
from bullock carts, tongas, bogeys (wooden
cart drawn by buffalos) loaded with jaggery
(gur) and other commodities to motor
vehicles like motorcycles, jeeps, tractors
and trucks.
This village has about 450 families
belonging to several different castes. The
80 upper caste families own the majority
of land in the village. Their houses, some
of them quite large, are made of brick with
cement plastering. The SCs (dalits)
comprise one third of the population and
live in one corner of the village and in
much smaller houses some of which are
of mud and straw. Most of the houses have
electric connections. Electricity powers all
the tubewells in the fields and is used in
various types of small business. Palampur
has two primary schools and one high
school. There is a primary health centre
run by the government and one private
dispensary where the sick are treated.
• The description above shows that
Palampur has fairly well-developed
system of roads, transport, electricity,
irrigation, schools and health centre.
Compare these facilities with those in
your nearby village.
The story of Palampur, an imaginary
village, will take us through the different
types of production activities in the
village. In villages across India, farming
is the main production activity. The other
production activities, referred to as non-
farm activities include small
manufacturing, transport, shop-keeping,
etc. We shall take a look at both these
types of activities, after learning a few
general things about production.
The Story of Village Palampur The Story of Village Palampur
1
Chapter
1
Picture 1.1 Scene of a village
* The narrative is partly based on a research study by Gilbert Etienne of a village in Bulandshahr district in Western
Uttar Pradesh.
2024-25
2     Economics
Organisation of Production
The aim of production is to produce the
goods and services that we want. There
are four requirements for production of
goods and services.
The first requirement is land, and
other natural resources such as water,
forests, minerals.
The second requirement is labour, i.e.
people who will do the work. Some
production activities require highly
educated workers to perform the
necessary tasks. Other activities require
workers who can do manual work. Each
worker is providing the labour necessary
for production.
The third requirement is physical
capital, i.e. the variety of inputs required
at every stage during production. What
are the items that come under physical
capital?
(a) Tools, machines, buildings: Tools and
machines range from very simple tools
such as a farmer’s plough to
sophisticated machines such as
generators, turbines, computers, etc.
Tools, machines, buildings can be used
in production over many years, and
are called fixed capital.
(b) Raw materials and money in hand:
Production requires a variety of raw
materials such as the yarn used by
the weaver and the clay used by the
potter. Also, some money is always
required during production to make
payments and buy other necessary
items. Raw materials and money in
hand are called working capital.
Unlike tools, machines and buildings,
these are used up in production.
There is a fourth requirement too. You
will need knowledge and enterprise to be
able to put together land, labour and
physical capital and produce an output
either to use yourself or to sell in the
market. This these days is called human
capital. We shall learn more about human
capital in the next chapter.
• In the picture, identify the land, labour
and fixed capital used in production.
Picture 1.2 A factory, with several  labourers
and  machines
Every production is organised by
combining land, labour, physical capital
and human capital, which are known as
factors of production. As we read
through the story of Palampur, we will
learn more about the first three factors
of production. For convenience, we will
refer to the physical capital as the capital
in this chapter.
Farming in Palampur
1. Land is fixed
Farming is the main production activity
in Palampur. 75 per cent of the people
who are working are dependent on
farming for their livelihood. They could
be farmers or farm labourers. The well-
being of these people is closely related to
production on the farms.
But remember that there is a basic
constraint in raising farm production.
Land area under cultivation is practically
fixed. Since 1960 in Palampur, there has
been no expansion in land area under
2024-25
The Story of Village Palampur      3
cultivation. By then, some of the
wastelands in the village had been
converted to cultivable land. There exists
no further scope to increase farm
production by bringing new land under
cultivation.
larger areas of land more effectively. The
first few tubewells were installed by the
government. Soon, however, farmers
started setting up private tubewells. As a
result, by mid-1970s the entire cultivated
area of 200 hectares (ha.) was irrigated.
The standard unit of measuring land
is hectare, though in the villages you
may find land area being discussed
in local units such as bigha, guintha
etc. One hectare equals the area of a
square with one side measuring 100
metres.  Can you compare the area of
a 1 hectare field with the area of your
school ground?
2. Is there a way one can grow more
from the same land?
In the kind of crops grown and facilities
available, Palampur would resemble a
village of the western part of the state of
Uttar Pradesh. All land is cultivated in
Palampur. No land is left idle. During the
rainy season (kharif) farmers grow jowar
and bajra. These plants are used as cattle
feed. It is followed by cultivation of potato
between October and December. In the
winter season (rabi), fields are sown with
wheat. From the wheat produced, farmers
keep enough wheat for the family’s
consumption and sell the surplus wheat
at the market at Raiganj. A part of the
land area is also devoted to sugarcane
which is harvested once every year.
Sugarcane, in its raw form, or as jaggery,
is sold to traders in Shahpur.
The main reason why farmers are able
to grow three different crops in a year in
Palampur is due to the well-developed
system of irrigation. Electricity came early
to Palampur. Its major impact was to
transform the system of irrigation.
Persian wheels were, till then, used by
farmers to draw water from the wells and
irrigate small fields. People saw that the
electric-run tubewells could irrigate much
Not all villages in India have such
high levels of irrigation.  Apart from
the riverine plains, coastal regions in
our country are well-irrigated.  In
contrast, plateau regions such as the
Deccan plateau have low levels of
irrigation.  Of the total cultivated area
in the country a little less than 40
per cent is irrigated even today.  In
the remaining areas, farming is
largely dependent on rainfall.
To grow more than one crop on a piece of
land during the year is known as multiple
cropping. It is the most common way of
increasing production on a given piece of
land. All farmers in Palampur grow
atleast two main crops; many are growing
potato as the third crop in the past fifteen
to twenty years.
Picture 1.3  Different crops
  Let’s Discuss
• The following Table1.1 shows the land
under cultivation in India in units of
million hectares. Plot this on the graph
provided. What does the graph show?
Discuss in class.
2024-25
4     Economics
Name of crop Month sown Month Harvested Source of irrigation (Rain,
tanks, tubewells, canals, etc.)
Picture 1.4 Modern Farming Methods: HYV
         seeds, chemical fertilizer etc.
Table 1.1: Cultivated area over the years
• Is it important to increase the area
under irrigation? Why?
• You have read about the crops grown
in Palampur. Fill the following table
based on information on the crops
grown in your region.
You have seen that one way of
increasing production from the same
land is by multiple cropping. The other
way is to use modern farming methods
for higher yield. Yield is measured as
crop produced on a given piece of land
during a single season. Till the mid-
1960s, the seeds used in cultivation
were traditional ones with relatively low
yields. Traditional seeds needed less
irrigation. Farmers used cow-dung and
other natural manure as fertilizers. All
these were readily available with the
farmers who did not have to buy them.
The Green Revolution in the late 1960s
introduced the Indian farmer to
cultivation of wheat and rice using high
yielding varieties (HYVs) of seeds.
Compared to the traditional seeds, the
HYV seeds promised to produce much
greater amounts of grain on a single plant.
As a result, the same piece of land would
now produce far larger quantities of
foodgrains than was possible earlier. HYV
seeds, however, needed plenty of water
and also chemical fertilizers and
pesticides to produce best results.
(P) - Provisional Data
Source: Pocket Book of Agriculture Statistics
2020, Directorate of Economics and Statistics,
Department of Agriculture, Cooperation and
Farmers Welfare.
Year Cultivated Area
(in Million ctares)
1950–51 132
1990–91 186
2000–01 186
2010–11 (P) 198
2011–12 (P) 196
2012–13 (P) 194
2013–14 (P) 201
2014–15 (P) 198
2015–16 (P) 197
2016–17 (P) 200
0
50
100
150
200
250
1950-51 1990-01 2000-01 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Year
Cultivated area
Cultivated area (in million hectares)
2024-25
Page 5


The Story of Village Palampur      1
Overview
The purpose of the story is to introduce
some basic concepts relating to production
and this we do through a story of a
hypothetical village called Palampur.*
Farming is the main activity in
Palampur, whereas several other
activities such as small scale
manufacturing, dairy, transport, etc. are
carried out on a limited scale. These
production activities need various types
of resources — natural resources, man-
made items, human effort, money, etc. As
we read through the story of Palampur,
we will learn how various resources
combine to produce the desired goods and
services in the village.
Introduction
Palampur is well-connected with
neighbouring villages and towns. Raiganj,
a big village, is 3 kms from Palampur. An
all weather road connects the village to
Raiganj and further on to the nearest
small town of Shahpur. Many kinds of
transport are visible on this road starting
from bullock carts, tongas, bogeys (wooden
cart drawn by buffalos) loaded with jaggery
(gur) and other commodities to motor
vehicles like motorcycles, jeeps, tractors
and trucks.
This village has about 450 families
belonging to several different castes. The
80 upper caste families own the majority
of land in the village. Their houses, some
of them quite large, are made of brick with
cement plastering. The SCs (dalits)
comprise one third of the population and
live in one corner of the village and in
much smaller houses some of which are
of mud and straw. Most of the houses have
electric connections. Electricity powers all
the tubewells in the fields and is used in
various types of small business. Palampur
has two primary schools and one high
school. There is a primary health centre
run by the government and one private
dispensary where the sick are treated.
• The description above shows that
Palampur has fairly well-developed
system of roads, transport, electricity,
irrigation, schools and health centre.
Compare these facilities with those in
your nearby village.
The story of Palampur, an imaginary
village, will take us through the different
types of production activities in the
village. In villages across India, farming
is the main production activity. The other
production activities, referred to as non-
farm activities include small
manufacturing, transport, shop-keeping,
etc. We shall take a look at both these
types of activities, after learning a few
general things about production.
The Story of Village Palampur The Story of Village Palampur
1
Chapter
1
Picture 1.1 Scene of a village
* The narrative is partly based on a research study by Gilbert Etienne of a village in Bulandshahr district in Western
Uttar Pradesh.
2024-25
2     Economics
Organisation of Production
The aim of production is to produce the
goods and services that we want. There
are four requirements for production of
goods and services.
The first requirement is land, and
other natural resources such as water,
forests, minerals.
The second requirement is labour, i.e.
people who will do the work. Some
production activities require highly
educated workers to perform the
necessary tasks. Other activities require
workers who can do manual work. Each
worker is providing the labour necessary
for production.
The third requirement is physical
capital, i.e. the variety of inputs required
at every stage during production. What
are the items that come under physical
capital?
(a) Tools, machines, buildings: Tools and
machines range from very simple tools
such as a farmer’s plough to
sophisticated machines such as
generators, turbines, computers, etc.
Tools, machines, buildings can be used
in production over many years, and
are called fixed capital.
(b) Raw materials and money in hand:
Production requires a variety of raw
materials such as the yarn used by
the weaver and the clay used by the
potter. Also, some money is always
required during production to make
payments and buy other necessary
items. Raw materials and money in
hand are called working capital.
Unlike tools, machines and buildings,
these are used up in production.
There is a fourth requirement too. You
will need knowledge and enterprise to be
able to put together land, labour and
physical capital and produce an output
either to use yourself or to sell in the
market. This these days is called human
capital. We shall learn more about human
capital in the next chapter.
• In the picture, identify the land, labour
and fixed capital used in production.
Picture 1.2 A factory, with several  labourers
and  machines
Every production is organised by
combining land, labour, physical capital
and human capital, which are known as
factors of production. As we read
through the story of Palampur, we will
learn more about the first three factors
of production. For convenience, we will
refer to the physical capital as the capital
in this chapter.
Farming in Palampur
1. Land is fixed
Farming is the main production activity
in Palampur. 75 per cent of the people
who are working are dependent on
farming for their livelihood. They could
be farmers or farm labourers. The well-
being of these people is closely related to
production on the farms.
But remember that there is a basic
constraint in raising farm production.
Land area under cultivation is practically
fixed. Since 1960 in Palampur, there has
been no expansion in land area under
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The Story of Village Palampur      3
cultivation. By then, some of the
wastelands in the village had been
converted to cultivable land. There exists
no further scope to increase farm
production by bringing new land under
cultivation.
larger areas of land more effectively. The
first few tubewells were installed by the
government. Soon, however, farmers
started setting up private tubewells. As a
result, by mid-1970s the entire cultivated
area of 200 hectares (ha.) was irrigated.
The standard unit of measuring land
is hectare, though in the villages you
may find land area being discussed
in local units such as bigha, guintha
etc. One hectare equals the area of a
square with one side measuring 100
metres.  Can you compare the area of
a 1 hectare field with the area of your
school ground?
2. Is there a way one can grow more
from the same land?
In the kind of crops grown and facilities
available, Palampur would resemble a
village of the western part of the state of
Uttar Pradesh. All land is cultivated in
Palampur. No land is left idle. During the
rainy season (kharif) farmers grow jowar
and bajra. These plants are used as cattle
feed. It is followed by cultivation of potato
between October and December. In the
winter season (rabi), fields are sown with
wheat. From the wheat produced, farmers
keep enough wheat for the family’s
consumption and sell the surplus wheat
at the market at Raiganj. A part of the
land area is also devoted to sugarcane
which is harvested once every year.
Sugarcane, in its raw form, or as jaggery,
is sold to traders in Shahpur.
The main reason why farmers are able
to grow three different crops in a year in
Palampur is due to the well-developed
system of irrigation. Electricity came early
to Palampur. Its major impact was to
transform the system of irrigation.
Persian wheels were, till then, used by
farmers to draw water from the wells and
irrigate small fields. People saw that the
electric-run tubewells could irrigate much
Not all villages in India have such
high levels of irrigation.  Apart from
the riverine plains, coastal regions in
our country are well-irrigated.  In
contrast, plateau regions such as the
Deccan plateau have low levels of
irrigation.  Of the total cultivated area
in the country a little less than 40
per cent is irrigated even today.  In
the remaining areas, farming is
largely dependent on rainfall.
To grow more than one crop on a piece of
land during the year is known as multiple
cropping. It is the most common way of
increasing production on a given piece of
land. All farmers in Palampur grow
atleast two main crops; many are growing
potato as the third crop in the past fifteen
to twenty years.
Picture 1.3  Different crops
  Let’s Discuss
• The following Table1.1 shows the land
under cultivation in India in units of
million hectares. Plot this on the graph
provided. What does the graph show?
Discuss in class.
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4     Economics
Name of crop Month sown Month Harvested Source of irrigation (Rain,
tanks, tubewells, canals, etc.)
Picture 1.4 Modern Farming Methods: HYV
         seeds, chemical fertilizer etc.
Table 1.1: Cultivated area over the years
• Is it important to increase the area
under irrigation? Why?
• You have read about the crops grown
in Palampur. Fill the following table
based on information on the crops
grown in your region.
You have seen that one way of
increasing production from the same
land is by multiple cropping. The other
way is to use modern farming methods
for higher yield. Yield is measured as
crop produced on a given piece of land
during a single season. Till the mid-
1960s, the seeds used in cultivation
were traditional ones with relatively low
yields. Traditional seeds needed less
irrigation. Farmers used cow-dung and
other natural manure as fertilizers. All
these were readily available with the
farmers who did not have to buy them.
The Green Revolution in the late 1960s
introduced the Indian farmer to
cultivation of wheat and rice using high
yielding varieties (HYVs) of seeds.
Compared to the traditional seeds, the
HYV seeds promised to produce much
greater amounts of grain on a single plant.
As a result, the same piece of land would
now produce far larger quantities of
foodgrains than was possible earlier. HYV
seeds, however, needed plenty of water
and also chemical fertilizers and
pesticides to produce best results.
(P) - Provisional Data
Source: Pocket Book of Agriculture Statistics
2020, Directorate of Economics and Statistics,
Department of Agriculture, Cooperation and
Farmers Welfare.
Year Cultivated Area
(in Million ctares)
1950–51 132
1990–91 186
2000–01 186
2010–11 (P) 198
2011–12 (P) 196
2012–13 (P) 194
2013–14 (P) 201
2014–15 (P) 198
2015–16 (P) 197
2016–17 (P) 200
0
50
100
150
200
250
1950-51 1990-01 2000-01 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Year
Cultivated area
Cultivated area (in million hectares)
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The Story of Village Palampur      5
• Modern farming methods require the
farmer to start with more cash than
before. Why?
  Suggested Activity
• During your field visit talk to some
farmers of your region. Find out:
1. What kind of farming methods —
modern or traditional or mixed — do
the farmers use? Write a note.
2. What are the sources of irrigation?
3. How much of the cultivated land is
irrigated? (very little/nearly half/
majority/all)
4. From where do farmers obtain the
inputs that they require?
3. Will the land sustain?
Land being a natural resource, it is
necessary to be careful in its use.
Scientific reports indicate that the modern
farming methods have overused the
natural resource base.
In many areas, Green Revolution is
associated with the loss of soil fertility
due to increased use of chemical
fertilisers. Also, continuous use of
groundwater for tubewell irrigation has
led to the depletion of the water-table.
Environmental resources, like soil fertility
and groundwater, are built up over years.
Once destroyed it is very difficult to
restore them. We must take care of the
environment to ensure future
development of agriculture.
  Suggested Activity
• After reading the following reports from
newspapers/magazines, write a letter
to the Agriculture Minister in your own
words telling him how the use of
chemical fertilisers can be harmful.
Production Production
of Pulses of Wheat
1965 - 66 10 10
1970 - 71 12 24
1980 - 81 11 36
1990 - 91 14 55
2000 - 01 11 70
2010 - 11 18 87
2012 - 13 18 94
2013 - 14 19 96
2014 - 15 17 87
2015 - 16 17 94
2016 - 17 23 99
2017 - 18 25 100
2018 - 19 23 104
2019 - 20 23 108
2020 - 21 25 110
2021 - 22 28 107
Table 1.2: Production of pulses and wheat
( in Million Tonnes)
...Chemical fertilisers provide
minerals which dissolve in water and
are immediately available to plants.
But these may not be retained in the
Higher yields were possible only from a
combination of HYV seeds, irrigation,
chemical fertilisers, pesticides, etc.
Farmers of Punjab, Haryana and
Western Uttar Pradesh were the first to
try out the modern farming method in
India. The farmers in these regions set
up tubewells for irrigation, and made use
of HYV seeds, chemical fertilisers and
pesticides in farming. Some of them
bought farm machinery, like tractors and
threshers, which made ploughing and
harvesting faster. They were rewarded
with high yields of wheat.
In Palampur, the yield of wheat grown
from the traditional varieties was 1300 kg
per hectare. With HYV seeds, the yield
went up to 3200 kg per hectare. There
was a large increase in the production of
wheat. Farmers now had greater amounts
of surplus wheat to sell in the markets.
  Let’s Discuss
• What is the difference between multiple
cropping and modern farming method?
• The following table shows the
production of wheat and pulses in India
after the Green Revolution in units of
million tonnes. Plot this on a graph.
Was the Green Revolution equally
successful for both the crops? Discuss.
• What is the working capital required
by the farmer using modern farming
methods?
Source: Source: Source: Source: Source: Pocket book of agricultural Statistics 2022,
Directorate of Economics and Statistics, Department of
Agriculture, Cooperation and Farmers Welfare.
2024-25