Chapter 2: Understanding the Indian Economy (Solutions)

 Chapter 2: Understanding the Indian Economy (Solutions)

(EXERCISE)

Fill in the blanks:

1. Actions that involve the production, distribution and consumption of goods and services at all levels within a society are called _________.

2. The ____________ is also called as industrial sector.

3. The sum of __________ in the three sectors gives what is called the Gross Domestic Product (GDP) of a country.

4. ___________refers to in which activities of large number of business enterprises is carried out in many different locations across national boundaries.

5. The ________ and _________of the people of a country can be considered as major factors determining quality of the population of a country.

6. NSSO defines ___________as a situation in which all those who, owing to lack of work, are not working but seek work.

7. In the __________sector, the government owns most of the assets and provides all the services.

8. ____________is thus defined as a situation of lack of income to acquire minimum necessities of life.

9. The consumption levels as states to determine the poverty line are _________ k (calories) for rural areas and _______k (calories) for urban area.

10. The rate at which the FCI purchases wheat and rice from the farmers in states where there is surplus production is called ________________.

Answers:

1. Actions that involve the production, distribution and consumption of goods and services at all levels within a society are called Economic Activities

2. The Secondary Sector is also called as industrial sector.

3. The sum of production in the three sectors gives what is called the Gross Domestic Product (GDP) of a country.

4. Globalization refers to in which activities of large number of business enterprises is carried out in many different locations across national boundaries.

5. The education and health of the people of a country can be considered as major factors determining quality of the population of a country.

6. NSSO defines unemployment as a situation in which all those who, owing to lack of work, are not working but seek work.

7. In the public sector, the government owns most of the assets and provides all the services.

8. Poverty is thus defined as a situation of lack of income to acquire minimum necessities of life.

9. The consumption levels as states to determine the poverty line are 2400 k (calories) for rural areas and 2100 k (calories) for urban area.

10. The rate at which the FCI purchases wheat and rice from the farmers in states where there is surplus production is called Minimum Support Price.

One word Answers:

1. The Sector which generates employment and income in agriculture is called………….

Answer: Primary Sector.

2. Rearing of animals for milk and milk products is called ……………

Answer: Dairy Farming.

3. Tertiary sector is also called ………………

Answer: Service Sector.

4. A sector characterized by small and scattered units is called ……………..

Answer: Unorganized Sector.

5. A person living below the poverty line is …………..…

Answer: Below Poverty Line (BPL).

Very short /short Answer Type Questions:

1.What are the various activities undertaken in the primary sector, secondary sector and tertiary sector?

Answer: Primary Sector Activities are Agriculture, forestry, animal husbandry, fishing, poultry farming and mining. Secondary Sector Activities Include manufacturing and construction. Tertiary Sector Activities Trade, transport, communication, banking, education, health, tourism, services, insurance, etc.

2. What do you understand by people as a resource.

Answer: 'People as Resource' is a way of referring to a country's working people in terms of their existing productive skills and abilities. Looking at the population from this productive aspect emphasises its ability to contribute to the creation of the Gross National Product.

3. Explain the term poverty line.

Answer: Poverty line may be defined as a line which differentiates between poor and non-poor. The limits of poverty may be in terms of income and / or consumption. The consumption levels as states are to determine the Poverty line, 2400 k (calories) per person per day for rural areas and 2100 k (calories) per person per day for urban areas.

4. What is Buffer Stock.

Answer: Buffer Stock is the stock of food grains, namely wheat and rice procured by the government through FCI. The food procured by the FCI is distributed through government regulated ration shops and fair price shops to different sections of society. Such distribution is called Public Distribution System (PDS).

5. What is meant by ‘Food for Work’ programme?

Answer: The scheme was launched in 2004 in 150 most backward districts of the country. The programme is open to all rural poor who are in need of wage employment and desire to do manual unskilled work. It is implemented as 100 percent centrally sponsored scheme and food grains are provided free of cost to the states.

Long Answer Type Questions:

1.What is Gross Domestic product and how is it calculated. Describe the contribution of the three sectors to the GDP of the Indian Economy.

Answer: Gross Domestic Product(GDP) means the sum total of all goods and services produced in a country, expressed in money terms, during a specific period, generally an year. The following equation is used to calculate GDP:
GDP=Private consumption+ gross investment + government investment + government spending + (exports - imports)
Sectoral share in Gross Domestic product

1. The primary sector contributes around 17 %.

2. The secondary sector contributes around 29 % and

3. The tertiary sector contributes around 54 %.

2. Explain the term Multinational corporations and how globalization has made the world “one big market”. What are the advantages of Globalisation.

Answer: Multinational Corporations: A multinational corporation (MNC) is a corporation that is registered in more than one country or that has operations in more than one country. It is a large corporation which both produces and sells goods or services in various countries. Such MNCs set up offices and factories for production in the 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.
Globalization has integrated the economy of a country with the economies of other countries under conditions of free flow of trade and capital, and movement of persons across borders. Through Globalization economies of countries around the world become increasingly integrated over time. This integration occurs as technological advances expedite the trade of goods and services, the flow of capital, and the migration of people across international borders. Globalization has following adventages:

1. It Increased trade across national boundaries

2. One company having subsidiary companies and plants in many countries.

3. One company selling its products in many different countries.

4. Growth of joint ventures and technical collaborations between companies from different countries.

5. Lowering of trade barriers and simplified import and export procedures.

6. Faster and wider spread of new technologies across the world.

3. What are the various forms of Unemployment.

Answer: Unemployment is said to exist when people who are willing and able to work at the going wages cannot find jobs. NSSO (National Sample Survey Organisation) defines unemployment as a situation in which all those who, owing to lack of work, are not working but seek work either through employment exchange, intermediaries, friends, relatives or by making applications to prospective employers or express their willingness or availability for work under the prevailing conditions of work and remuneration. The various forms of Unemployment are:

1. Seasonal Unemployment; happens when people are not able to find jobs during some months of the year and is generally found in the agricultural sector of the economy. Since Agriculture is a seasonal occupation. Labourers find the work only during the sowing and harvesting seasons. For the rest of the year, they have to remain unemployed.

2. Disguised Unemployment; refers to that unemployment which is not open for everyone and remains concealed. This usually happens among family members engaged in agricultural activity. The work requires the service of five people but engages eight people in such a situation, even if many workers are withdrawn, the same work can be continued by few workers. In Indian villages, this form of unemployment is a common feature.

3. Educated unemployment; Joblessness among the matriculates, graduates, post graduates and above forms educated unemployment. Many youths with matriculation, graduation and post-graduation degrees are not able to find job.

4. Define poverty. Explain four important antipoverty measures undertaken by the Government of India.

Answer: Poverty refers to a situation in which a section of society is unable to meet its basic need. These needs include minimum human needs in respect of food, clothing, housing, education and health. Poverty is thus defined as a situation of lack of income to acquire minimum necessities of life. The four antipoverty measures undertaken by the Government of India are:

1. MGNREGA - 2005: Mahatma Gandhi National Rural Employment Guarantee Act is a scheme implemented by the government of India at national level. The scheme guarantees unskilled wage employment of 100 days to one person in every rural household at minimum wage. The 100 days employment under the scheme is visualised in the lean season of agricultural activities. The scheme is implemented in all the districts of the country. The state government are required to give unemployment allowance of 1/3 the wages if not able to provide employment within 15 days of their registration.

2. NFWP (National Food for Work Programme): The scheme was launched in 2004 in 150 most backward districts of the country. The programme is open to all rural poor who are in need of wage employment and desire to do manual unskilled work. It is implemented as 100 percent centrally sponsored scheme and food grains are provided free of cost to the states.

3. PMRY (Prime Minister Rozgar Yojna): PMRY is another scheme which was started in 1993. The aim of the programme is to create self-employment opportunities for educated unemployed youth in rural areas and small towns. They are helped in setting up small business and industries.

4. AAY (Antodaya Anna Yojna): This scheme was launched in December 2000. Under the scheme, one crore of the poorest eligible families among the Below poverty line were provided with twenty-five kilograms of food grains at highly subsidised rate of Rs 2 / kg for wheat and Rs 3 / kg for rice. This quantity has been enhanced from 25 to 35 with effect from April 2002. The scheme has been further expanded twice by additional 50 lakh Below poverty line families in June 2003 and August 2004.

5. Define Food security. What do you understand by TPDS. Describe the three dimensions of food security.

Answer: The 1995 World Food Summit declared, “Food Security at the individual, household, regional, national and global levels exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life”. The declaration further recognises that poverty eradication is essential to improve access to food. In simple words, food security means something more than getting two square meals.
In June 1997, the Government of India launched the Targeted Public Distribution System (TPDS) with the focus on poor replacing the RPDS (Revamped Public Distribution System was lamented in June 1992)
The allocation to the foodgrains to the Sate UT’s was made by the Government of India on the basis of average consumption in the past i.e. average Annual off - take of foodgrains for the PDS during the past 10 years at the time of introduction of TPDS. In J&K State, the TPDS is being implemented since the year 1997 as elsewhere in the country and the foodgrains are allocated to the State at a scale of 35 Kg per family per month on the basis of projected population of the State as on 1.3.2000 which has been estimated by the Registrar General of India at 99.45 lac comprising of 18.02 lac families at an average family size of 5.52 persons per family.
The three dimensions of food security are:

1. Availability of food: means food production within the country, food imports etc are suffice to meet the requirements.

2. Accessibility: means food is within the reach of every person.

3. Affordability: implies that an individual has enough money to buy sufficient, safe and nutritious food to meet one’s dietary needs.