Worksheet Solutions: Indian Economy 1950-1990 - 2 | Economics Class 12 - Commerce PDF Download

Section 1: Fill in the Blanks

Q1: Following India's independence, the country's leaders had to make a decision on which economic system would serve the welfare of all its citizens. The two options available were _______ and _______.
Ans: capitalism, socialism
After India gained independence, the country's leaders had to choose an economic system. Capitalism is an economic system characterized by private ownership and free markets, while socialism is an economic system where the means of production are owned or regulated by the state in the interest of the community.

Q2: In India, the idea of planning was adapted from the former _______.
Ans: USSR
India adopted the concept of economic planning from the former Soviet Union (USSR). The Soviet Union had a centralized economic planning system, and India looked to this model when establishing its own system of economic planning after independence.

Q3: The process of modernization involves the adoption of new technology and techniques to enhance _______.
Ans: productivity
Modernization involves the adoption and integration of new technologies, methods, and techniques to improve productivity across various sectors of the economy. The aim is to enhance efficiency and output using advanced technologies.

Q4: To decrease reliance on foreign goods, it is advisable to refrain from importing items that can be produced _______.
Ans: domestically
To reduce dependence on foreign goods, it is recommended to avoid importing items that can be produced within the country, referred to as producing them domestically. This strategy helps promote self-sufficiency and supports the local economy.

Q5: The Green Revolution brought an end to the stagnation caused by the reliance on _______ for agriculture.
Ans: monsoon
The Green Revolution was a period of significant agricultural development in India. It helped overcome the stagnation caused by the country's heavy reliance on the monsoon for agricultural productivity. The introduction of high-yield crop varieties and modern farming techniques boosted agricultural output, making the country less dependent on monsoon-dependent agriculture.

Q6: The term "Green Revolution" denotes a significant increase in _______ production.
Ans: food grain
The term "Green Revolution" represents a notable increase in food grain production, primarily focusing on staple crops like wheat and rice. It involved the adoption of modern agricultural practices and technologies to significantly enhance food grain yields.

Q7: The excess food produced during the Green Revolution contributed to the country's _______.
Ans: economic output
The surplus food generated during the Green Revolution played a crucial role in boosting the country's overall economic output. Increased agricultural productivity led to surplus food, which positively impacted the economy by stabilizing food supplies and contributing to economic growth.

Q8: Protection from imports took the form of _______ and _______.
Ans: tariffs, quotas
Protection from imports was implemented through the imposition of tariffs (taxes on imported goods) and quotas (limits on the quantity of imported goods). These measures aimed to protect domestic industries by making imported products more expensive and restricting their quantity in the domestic market.

Q9: The industrial sector's contribution to India's GDP increased from 11.8% in 1950-51 to _______ in 1990-91.
Ans: 24.6%
The industrial sector's contribution to India's Gross Domestic Product (GDP) increased from 11.8% in 1950-51 to 24.6% in 1990-91. This indicates a significant growth and development of the industrial sector over the years.

Q10: The excessive regulation of the permit license raj hindered some companies from becoming more _______.
Ans: efficient
The permit license raj in India was characterized by excessive regulations and bureaucratic controls. This hindered companies from becoming more efficient as they had to navigate a complex system of permits and licenses, which often slowed down decision-making and operational processes.

Section 2: Assertion and Reason

Q1: Assertion: The leaders of India chose a mixed economy system to combine the best aspects of capitalism and socialism.
Reason: They didn't want to adopt the Soviet Union's version, which had excessive government control.
(a) Both Assertion and Reason are true and Reason is the correct explanation of the Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of the Assertion.
(c) Assertion is true, but Reason is false.
(d) Assertion is false, but Reason is true.
Ans: (a) Both Assertion and Reason are true and Reason is the correct explanation of the Assertion.

Q2: Assertion: The Green Revolution brought an end to the stagnation in Indian agriculture.
Reason: It was primarily limited to wealthy farmers in affluent states.
(a) Both Assertion and Reason are true and Reason is the correct explanation of the Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of the Assertion.
(c) Assertion is true, but Reason is false.
(d) Assertion is false, but Reason is true.
Ans: (b) Both Assertion and Reason are true, but Reason is not the correct explanation of the Assertion.

Q3: Assertion: Protection from imports in India took the form of tariffs and quotas.
Reason: The idea was to replace imported goods with domestic production.
(a) Both Assertion and Reason are true and Reason is the correct explanation of the Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of the Assertion.
(c) Assertion is true, but Reason is false.
(d) Assertion is false, but Reason is true.
Ans: (a) Both Assertion and Reason are true and Reason is the correct explanation of the Assertion.

Q4: Assertion: The public sector contributed significantly to the growth of the Indian economy.
Reason: No distinction was made between the tasks that the public sector alone could handle and those that could also be handled by the private sector.
(a) Both Assertion and Reason are true and Reason is the correct explanation of the Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of the Assertion.
(c) Assertion is true, but Reason is false.
(d) Assertion is false, but Reason is true.
Ans: (a) Both Assertion and Reason are true and Reason is the correct explanation of the Assertion.

Q5: Assertion: Some economists argue that the government should maintain agricultural subsidies.
Reason: Farming in India remains a risky and uncertain endeavor.
(a) Both Assertion and Reason are true and Reason is the correct explanation of the Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of the Assertion.
(c) Assertion is true, but Reason is false.
(d) Assertion is false, but Reason is true.
Ans: (a) Both Assertion and Reason are true and Reason is the correct explanation of the Assertion.

Section 3: Very Short Answers

Q1: What two economic systems were the options for India after independence?
Ans: Capitalism and socialism.

Q2: What were the goals of the First Five-Year Plans in India?
Ans: Growth, modernization, self-reliance, and equity.

Q3: What is the key indicator of a country's growth in terms of goods and services?
Ans: Gross Domestic Product (GDP).

Q4: What was the main focus of the Green Revolution in India?
Ans: Increasing food grain production.

Q5: What is the maximum investment allowed for small-scale industries in India today?
Ans: Five crore rupees.

Q6: What was the primary trade strategy adopted by India during the first seven plans?
Ans: Import substitution.

Q7: What was the purpose of tariffs and quotas in trade policy?
Ans: To protect domestic industries from foreign competition.

Q8: What was the contribution of the industrial sector to India's GDP in 1950-51?
Ans: 11.8%.

Q9: What did the "permit license raj" hinder in India?
Ans: Efficiency and entrepreneurship.

Q10: Why did some economists argue for continuing agricultural subsidies in India?
Ans: To support impoverished farmers and promote equity.

Section 4: Short Answers

Q1: Explain the reasons behind India's choice of a mixed economy system after independence.
Ans:

• India's leaders wanted to combine the best aspects of capitalism and socialism.
• They didn't want to adopt the excessive government control of the Soviet Union's version.
• The mixed economy was seen as suitable for a democratic nation.

Q2: Describe the goals of the First Five-Year Plans in India.
Ans:

• Growth: To enhance the country's ability to produce goods and services.
• Modernization: Adoption of new technology and techniques.
• Self-Reliance: Reducing reliance on foreign goods.
• Equity: Ensuring equal share of development advantages.

Q3: How did the Green Revolution bring about self-sufficiency in food production in India?
Ans:

• Utilization of high-yielding variety (HYV) seeds.
• Proper application of fertilizers, pesticides, and irrigation.
• Started with wealthy farmers but later spread to more states and crops.

Q4: Explain the significance of the small-scale industry in India's economic development.
Ans:

• More labor-intensive and generated employment.
• Received concessions, like lower excise duty and lower interest rate loans.
• Reserved for the production of certain goods based on their manufacturing capacity.

Q5: What were the features of the Industrial Policy Resolution of 1956 in India?
Ans:

• Categorized industries into three schedules based on state involvement.
• Emphasized the role of cottage and small-scale industries.
• Required private sector industries to obtain government licenses.

Q6: Discuss the impact of protectionism on India's industrial development.
Ans:

• Protected domestic industries from foreign competition through tariffs and quotas.
• Focused on replacing imported goods with domestic production.
• Facilitated development in various industries.

Q7: What were the criticisms of the public sector's performance in India's industrial development?
Ans:

• Some public sector enterprises incurred massive losses.
• Distinction between tasks for public and private sectors was lacking.
• Permit License Raj led to inefficiencies and prevented competition.

Q8: Explain the changing global economic scenario that led to the introduction of the new economic policy in 1991.
Ans:

• Recognition of the need for economic policy reform due to changing global economic trends.
• Emphasis on improving efficiency and reducing the inward-oriented approach.
• Transition towards a more liberalized and open economy.

Section 5: Long Answers

Q1: Discuss the significance of the Green Revolution in India's agricultural sector and its impact on self-sufficiency.
Ans:

• The Green Revolution brought a significant increase in food grain production through the utilization of high-yielding variety (HYV) seeds, improved irrigation, and proper application of fertilizers and pesticides.
• Initially limited to wealthy farmers but later spread to more states and a wider variety of crops, achieving self-sufficiency in food production and reducing dependency on other nations.
• The excess food produced during the Green Revolution was sold in the market, contributing to India's economic output and enabling the government to accumulate sufficient food grains for times of scarcity.

Q2: Explain the impact of the Industrial Policy Resolution of 1956 on the industrial sector in India.
Ans:

• The Industrial Policy Resolution of 1956 categorized industries into three schedules based on the degree of state involvement.
• It emphasized the role of cottage and small-scale industries, recognizing their potential for employment generation and economic growth.
• The policy required private sector industries to obtain government licenses for operation, ensuring government control over industrial development.

Q3: Discuss the challenges and criticisms of the public sector's role in India's industrial development.
Ans:

• Many public sector enterprises incurred massive losses without facing consequences, draining the nation's limited resources.
• Lack of distinction between tasks for public and private sectors, leading to inefficiencies and hindering competition.
• The Permit License Raj created a barrier to efficiency and entrepreneurship by delaying licensing processes and fostering monopolistic practices.

Q4: Evaluate the impact of protectionism on India's industrial development and trade policies.
Ans:

• Protectionism in India, characterized by high tariffs and import quotas, aimed to protect domestic industries from foreign competition.
• This strategy led to the development of indigenous industries, especially in areas like electronics and automobiles.
• However, it also resulted in a lack of consumer choice and inhibited improvements in the quality of domestic goods.
• Over time, changing global economic trends necessitated a shift towards a more liberalized trade policy to enhance efficiency and competitiveness.