Test: Class 10 Economy NCERT Based - UPSC MCQ

For the short-term, we need some quick measures. Recognising this, the central government in India made a law implementing the Right to Work in 200 districts of India and then extended to an additional 130 districts.

The remaining districts in rural areas were brought under the act with effect from 1 April, 2008. It is called National Rural Employment Guarantee Act 2005 (NREGA 2005).

Under NREGA 2005, all those who are able to, and are in need of, work are guaranteed 100 days of employment in a year by the government.

If the government fails in its duty to provide employment, it will give unemployment allowances to the people. The types of work that would in future help to increase the production from land will be given preference under the Act.

The unorganised sector is characterised by small and scattered units which are largely outside the control of the government. There are rules and regulations but these are not followed. Jobs here are low-paid and often not regular. There is no provision for overtime, paid leave, holidays, leave due to sickness etc.

Employment is not secure. People can be asked to leave without any reason. When there is less work, such as during some seasons, some people may be asked to leave. A lot also depends on the whims of the employer.

This sector includes a large number of people who are employed on their own doing small jobs such as selling on the street or doing repair work. Similarly, farmers work on their own and hire labourers as and when they require.

The Reserve Bank of India supervises the functioning of formal sources of loans. For instance, we have seen that the banks maintain a minimum cash balance out of the deposits they receive.

The RBI monitors the banks in actually maintaining cash balance. Similarly, the RBI sees that the banks give loans not just to profit-making businesses and traders but also to small cultivators, small scale industries, to small borrowers etc.

Periodically, banks have to submit information to the RBI on how much they are lending, to whom, at what interest rate, etc. There is no organisation which supervises the credit activities of lenders in the informal sector.

The idea is to organise rural poor, in particular women, into small Self Help Groups (SHGs) and pool (collect) their savings. A typical SHG has 15-20 members, usually belonging to one neighbourhood, who meet and save regularly.

Saving per member varies from Rs 25 to Rs 100 or more, depending on the ability of the people to save. Members can take small loans from the group itself to meet their needs. The group charges interest on these loans but this is still less than what the moneylender charges.

After a year or two, if the group is regular in savings, it becomes eligible for availing loan from the bank. Loan is sanctioned in the name of the group and is meant to create self- employment opportunities for the members.

For instance, small loans are provided to the members for releasing mortgaged land, for meeting working capital needs (e.g. buying seeds, fertilisers, raw materials like bamboo and cloth), for housing materials, for acquiring assets like sewing machines, handlooms, cattle, etc. Most of the important decisions regarding the savings and loan activities are taken by the group members

The group decides as regards the loans to be granted — the purpose, amount, interest to be charged, repayment schedule etc. Also, it is the group which is responsible for the repayment of the loan. Any case of non- repayment of loan by any one member is followed up seriously by other members in the group.

Because of this feature, banks are willing to lend to the poor women when organised in SHGs, even though they have no collateral as such. Thus, the SHGs help borrowers overcome the problem of lack of collateral.

They can get timely loans for a variety of purposes and at a reasonable interest rate. Moreover, SHGs are the building blocks of organisation of the rural poor. Not only does it help women to become financially self-reliant, the regular meetings of the group provide a platform to discuss and act on a variety of social issues such as health, nutrition, domestic violence, etc.

A MNC is a company that owns or controls production in more than one nation. MNCs set up offices and factories for production in regions where they can get cheap labour and other resources.

This is done so that the cost of production is low and the MNCs can earn greater profits. Having assured themselves of these conditions, MNCs set up factories and offices for production.

The money that is spent to buy assets such as land,building, machines and other equipment is called investment. Investment made by MNCs is callednforeign investment. Any investment is made with the hope that these assets will earn profits.

The result of greater foreign investment and greater foreign trade has been greater integration of production and markets across countries. Globalisation is this process of rapid integration or interconnection between countries.

MNCs are playing a major role in the globalisation process. More and more goods and services, investments and technology are moving between countries Besides the movements of goods, services, investments and technology, there is one more way in which the countries can be connected.

This is through the movement of people between countries. People usually move from one country to another in search of better income, better jobs or better education. In the past few decades, however, there has not been much increase in the movement of people between countries due to various restrictions.

Even more remarkable have been the developments in information and communication technology. In recent times, technology in the areas of telecommunications, computers, and the Internet has been changing rapidly.

Telecommunication facilities (tele-graph, telephone including mobile phones, fax) are used to contact one another around the world, to access information instantly, and to communicate from remote areas.

This has been facilitated by satellite communication devices. As you would be aware, computers have now entered almost every field of activity.

Tax on imports is an example of a trade barrier. It is called a barrier because some restriction has been set up.

Governments can use trade barriers to increase or decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country.

The Indian government, after Independence, had put barriers to foreign trade and foreign investment.

This was considered necessary to protect the producers within the country from foreign competition. Industries were just coming up in the 1950s and 1960s, and competition from imports at that stage would not have allowed these industries to come up.

Starting around 1991, some far- reaching changes in policy were made in India. The government decided that the time had come for Indian producers to compete with producers around the globe. It felt that competition would improve the performance of producers within the country since they would have to improve their quality.

This decision was supported by powerful international organisations. Thus, barriers on foreign trade and foreign investment were removed to a large extent. This meant that goods could be imported and exported easily and also foreign companies could set up factories and offices here.

Removing barriers or restrictions set by the government is what is known as liberalisation. With liberalisation of trade, businesses are allowed to make decisions freely about what they wish to import or export. The government imposes much less restrictions than before and is therefore said to be more liberal.

World Trade Organisation (WTO) is one such organisation whose aim is to liberalise international trade. Started at the initiative of the developed countries, WTO establishes rules regarding international trade, and sees that these rules are obeyed.

Nearly 164 countries of the world are currently members of the WTO (as of April 2020). Though WTO is supposed to allow free trade for all, in practice, it is seen that the developed countries have unfairly retained trade barriers.

On the other hand, WTO rules have forced the developing countries to remove trade barriers. An example of this is the current debate on trade in agricultural products.

India has been observing 24 December as the National Consumers’ Day. It was on this day that the Indian Parliament enacted the Consumer Protection Act in 1986.

India is one of the countries that have exclusive courts for consumer redressal. The consumer movement in India has made some progress in terms of numbers of organised groups and their activities.

There are today more than 700 consumer groups in the country of which only about 20-25 are well organised and recognised for their work.

However, for comparison between countries, total income is not such a useful measure. Since, countries have different populations, comparing total income will not tell us what an average person is likely to earn.

Are people in one country better off than others in a different country? Hence, we compare the average income which is the total income of the country divided by its total population.

The average income is also called per capita income. In World Development Reports, brought out by the World Bank, this criterion is used in classifying. Countries with per capita income of US$ 12616 per annum and above in 2012, are called rich countries and those with per capita income of US$ 1035 or less are called low-income countries.

India comes in the category of low middle income countries because its per capita income in 2012 was just US$ 1530 per annum. The rich countries, excluding countries of the Middle East and certain other small countries, are generally called developed countries.

How is it that the average person in Maharashtra has more income than the average person in Kerala but lags behind in these crucial areas? The reason is— money in your pocket cannot buy all the goods and services that you may need to live well.

So, income by itself is not a completely adequate indicator of material goods and services that citizens are able to use.

For example, normally, your money cannot buy you a pollution-free environment or ensure that you get unadulterated medicines, unless you can afford to shift to a community that already has all these things.

Money may also not be able to protect you from infectious diseases, unless the whole of your community takes preventive steps.

Literacy Rate measures the proportion of literate population in the 7 and above age group.

Net Attendance Ratio is the total number of children of age group 14 and 15 years attending school as a percentage of total number of children in the same age group.

There are many activities that are undertaken by directly using natural resources. Take, for example, the cultivation of cotton.

It takes place within a crop season. For the growth of the cotton plant, we depend mainly, but not entirely, on natural factors like rainfall, sunshine and climate. The product of this activity, cotton, is a natural product.

Similarly, in the case of an activity like dairy, we are dependent on the biological process of the animals and availability of fodder etc.

The product here, milk, also is a natural product. Similarly, minerals and ores are also natural products. When we produce a good by exploiting natural resources, it is an activity of the primary sector.

Why primary? This is because it forms the base for all other products that we subsequently make. Since most of the natural products we get are from agriculture, dairy, fishing, forestry, this sector is also called agriculture and related sectors.

The secondary sector covers activities in which natural products are changed into other forms through ways of manufacturing that we associate with industrial activity. It is the next step after primary. The product is not produced by nature but has to be made and therefore some process of manufacturing is essential.

This could be in a factory, workshop or at home. For example, using cotton fibre from the plant, we spin yarn and weave cloth.

Using sugarcane as a raw material, we make sugar or gur. We convert earth into bricks and use bricks to make houses and buildings. Since this sector gradually became associated with the different kinds of industries that came up, it is also called the industrial sector.