CHAPTER NO. 1
1) EXPLAIN ECONOMICS “AS A SCIENCE” & “NOT A SCIENCE” ?
ANS : -
ECONOMICS AS A SCIENCE : -
Lord Robbins, walras, Cournot, Antoine, Augustine and Senior Nassau Williams considered economics as a science. A science is a systematic and comprehensive study if facts which explain the cuase and effect relationship. A science must have the following features : -
1) A science is a systematized study of a subject.
2) Science establishes the relationship between cause and effect of a fact.
3) Law of science are universal. Robbertson says that last three letters if the word ‘economics’ i.e ‘ics’ present a clear proof that it is a science like physics, and dynamics which have ‘—ics’ at the end as economics.
ARGUMENT IN FAVOUR OF ECOMONICS AS A POSITIVE SCIENCE.
Systematized study :-
In economics, there is a systematized collection, classification and analysis of economic facts. The subject matter divided into consumption, production, exchange and distribution.
Consisting of Law :-
Law of economics are similar to the law of other science. In economics law, we establish cause and fact relationship of economic activities. For Example. The law of demand shows the relationship between a change in price and change in demand.
Universal :-
All the economic laws are universally true. The laws of economics are equally applicable to capitalist, socialist, and mixed economy.
ECONOMICS IS NOT A SCIENCE :-
Some economist like Marshall do not regard economic as a pure science.
The main reasons for this are as under : -
The law of economic are not universal :-
The applicability of economics laws is limited by the differences in physical, social and cultural factors between different countries. The laws of economics are based on the habits and taste of people. These laws differs from different countries. Therefore, the laws of economic are not so universal.
The laws of economics are not so exact :-
The laws of economics are not so exact as they are conditional and with the phrase, ‘other things remain the same’ but the laws of pure science are exactly applicable under similar conditions.
2) WHAT DO YOU MEAN BY MICRO ECOMONICS. GIVE ITS FEATURE AND LIMITATIONS ?
ANS:-
MICROECONOMICS:-
This is considered to be the basic economics. Microeconomics may be defined as that branch of economic analysis which studies the economic behavior of the individual unit, may be a person, a particular household, or a particular firm. It is a study of one particular unit rather than all the units combined together. The microeconomics is also described as price and value theory. The theory of the household, the firm, and the industry. Most production and welfare theories are of the microeconomic variety.
FEATURES LIMITATION ARE AS FOLLOWS: -
1) Explain the working of a free enterprise economy.
2) Explain how price are determined.
3) Explains conditions of efficiency in production and distribution.
4) Provides tools or economic policies.
5) Helps the consumers to get maximum satisfaction.
6) Its helps in understanding the problem of taxation.
7) It helps in international trade and foreign exchange.
8) Explains the conditions of economic welfare.
SHORT NOTE: -
1) LIMITED RESOURCES AND UNLIMITED WANTS :-
Wants are defined as a goods or services we desire but do not need. It is said that wants are unlimited, because once satisfied another appears
The basic economic problem that arises because people have unlimited wants but resources are limited. Because of scarcity, various economic decisions must be made to allocate resources efficiently.
2) STUDY OF MATERIAL WELFARE :-
Economics is a subject that studies the welfare if man of the material type. Study of non material welfare is outside the scope of economics.
MERITS OF WALFARE DEFINATION:-
1) Welfare defines and emphasizes man his welfare.
2) Marshall’s definition classifies economics into material and non material welfare. Further economic actions are classified as individual and social.
3) This definition considers economics as a social science.
4) Scope of economics according to Marshall studies material aspects, it studies individuals as well as the society as they are inter – related through economic activities.
3) DISTINGUISHED BETWEEN MICROECONOMICS AND MACROECONOMICS.
MICRO ECONOMICS
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MACRO ECONOMICS
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1) Micro economics is the study of individual unit like a consumer, a firm, a producer etc.
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1) Macro economics is the study of behavior as a economic of whole.
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2) It deals with the problem of pricing and income distribution the factors of production.
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2) It deals with problem of the role of national income, economic growth and general level of economic.
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3) The scope is limited.
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3) The scope is wider.
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4) It is a independent concept.
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4) Its concepts are inter dependents.
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5) It uses the slicing method to deal with its problems
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5) It uses with lumping method to deal with its problems.
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6) These concepts were popularized by Alfred Marshall
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6) These concepts were popularized by J. M. Keyms.
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4) MARSHAL DEFINATION OF WELFARE : -
Alfred Marshal did not agree to Adam Smith’s definition of economics as a science of wealth. He criticized him on the basis of welfare.
DEFINATION :
According to Marshall.
“Economics is a study of man action in ordinary business of life”. It requires how he gets his income and how he uses it.” It examines that part of individual and social action which is most closely connected with attainment and with the use of material requisites of “wellbeing”.
FEATURE OF WELFARE:-
1) STUDY OF MANKING :-
Economics study economics activity of man which relates to his welfare.
2) ORDINARY BUSINESS OF LIFE :-
An ordinary man works mostly to earn money. He spends his earning to get maximum satisfaction. Economic studies such activities that are related to men’s welfare.
3) STUDY OF INDIVIDUAL AND SOCIAL ACTION :-
Economic welfare deals with not individual isolation but as a member of social activities. Which is concern with material welfare.
4) STUDY OF MATERIAL WELFARE :- (SHORT NOTE – 2 MARKS)
Economic is a subject that studies the welfare if man of the material type. Study of non – material welfare is outside the scope of economics.
5) ROBBINS DEFINATION OF SCARCITY :-
SCARCITY THEORY. EXPALIN ?
Robbins criticize Marshall for his Nor native views of economics. Robbins define economics – “Economics is the science which study human behavior as a relationship between ends and scares means that have alternative uses.
FEATURES : -
1) Scientific is more scientific then Marshall it is based on analytical economics.
2) Robbins has given a wider concept. The subject matter of economics according to him is the choice problem that arises due to scares resources and unlimited wants.
3) State a positive science :-
Robbins the subject to be a positive science – that is :- A science which has nothing to do with the goodness or the bad nature of ends or wants.
4) A universal definition :-
Robbins definition is appreciable as well as applicable everywhere. It is concerned with unlimited wants and limited resources which is problem that is faced everywhere.
5) Wider concept :-
According to Robbins. Economics takes into accounts all types of human wants – Material or Non – material, good or bad, etc.
CHAPTER NO. 3
COST AND REVENUE ANALYSIS
COST CONCEPT
1) Cost and revenue of a product influences profit. It influences the demand as well as market supply. Some of the concepts are as follows :-
a) MONEY COST : -
Money cost of a product means aggregated, the cost expenditure incurred by the firm on various items, entering into the production of a commodity.
b) REAL COST :-
Real cost of production is expressed not only by money cost, but also the efforts of workers and scarifies of the capitalist.
c) SOCIAL COST :-
It is a total cost of a production of a commodity that includes direct and indirect cost which the society has to pay for the output of the commodity.
d) SELLING COST :-
They are incurred to increase the demand of the product. E.g. : - (advertisement)
e) PRODUCTION COST : -
They consist of material cost, wages cost, interest cost, etc.
f) SUNK COST :-
It is an expenditure that has to be made and which cannot be renewed. E.g. :- specific equipments
g) FIXED COST :-
Fixed cost are cost which does not increase or decrease with the size of its production.
E.g. :- land
h) VARIABLE COST :-
Variable cost (VC) of a firm is those cost which varies with the size of its production.
i) TOTAL COST :-
Total cost are the combination of fixed cost and variable cost. FORMULA: TC = VC + FC
J) VARIABLE FIXED COST: -
VFC is obtained by dividing the total cost by the no. of unit of the output produce.
K) AVERAGE VARIABLE COST :-
AVC is obtained by dividing the total variable cost by the no. of unit produce.
L) MARGINAL COST :-
Addition made to the total cost, by the production of one more unit is called marginal cost.
2) RELATION BETWEEN MARGINAL AND AVERAGE COST CURVE
1) Both AC and MC is calculated from TC of production. That is :-
2) When average cost. When AC is falling MC also falls. It always remain lower then AC.
3) The MC curve cut the AC curve at the minimum point. When AC is constant.
MC = AC
REVENUE
when we deduct total cost TC from total revenue TR, we got the profit of the firm. This profits of the firm is called the revenue of the producer. The revenue of a firm is expressed as follows.
1) TOTAL REVENUE :
Total revenue of firm is calculated by multiplying the total output by the price at which the product is sold.
FORMULA: - TR = PRICE X OUTPUT
2) AVERAGE REVENUE :-
Average revenue is the revenue per unit of the commodity sold it is obtained by dividing TR by numbers of unit sold.
3) Marginal revenue : -
Marginal revenue is the addition made to the TR by means of an additional unit of the product in the market.
CHAPTER NO. 4
MARKET
In economics sense market refers to an arrangement where buyers and sellers come in contract with each other directly or indirectly to sell and buy goods.
FEATURES OR CHARECTERISTIC OF MARKET
1) It does not refer to any fixed location; it can also exist in an absence of place.
2) It is an arrangement, where there is an exchange of goods.
3) There is the existence of different prices for specific commodities.
4) There is a competition between buyers and sellers. The demand & supply forces determine the price of a commodity in the market.
STATE THE DIFFERENT TYPES OF MARKET : -
1) MONOPOLY : -
In this category of market. In which there is a single seller who dominates the market where there is no close substitute & no competition exist.
2) DROPOLY :-
Duopoly is a category in which two seller dominate the market.
3) OLIGOPOLY :-
Oligopoly is market in which few sellers compete with each others to sell their products.
4) MONOPOLISTIC COMPETITION :-
It is a market category in which there are many seller & buyers. The product is heterogeneous.
5) PERFECT COMPETITION :- ( BY ADAM SMITH)
Perfect competition refers to a market in which there are large no. of buyer and seller involved in the activities of buying and selling homogeneous product at a single uniform price.
FEATURES OF PERFECT COMPETITION:-
FEATURE OF PERFECT COMPETITIVE MARKET (IMPORTANT)
1) LARGE NUMBER OF SELLER :-
There is an existence of large number of seller, which is a unique feature of this competitive market, as there is a numbers of sellers. The sellers are not in a position to influence market price. The market price is determined by the force of total demand and total supply. The price in this market is uniform. Thus the sellers are “Price taker” and not “Price Makers”
2) LARGE NUMBER OF BUYERS :-
The buyers are very large in numbers in a perfect competitive market. A single buyer cannot influence the market demand. Therefore he is also a “Price Taker”.
3) HOMOGENEOUS PRODUCT :-
In a perfectly competitive market, the product of all firms is homogeneous that is identical in single shape, color, design, etc…. (Substitute goods)
4) IGNORES GOVERNMENT INTER SENTENCE :-
Government inter sentence may living about tariffs (Tax), subsidies, controls licensing that can disturb the free functioning of the market machineries. That us why under perfect competition government interference is ignored.
5) PERFECT KNOWLEDGE FOR THE BUYERS AND SELLERS :-
Buyers and Sellers have good knowledge regarding the market conditions. The buyers know the “ruling price and does not offer a higher price on the other land “. The sellers are aware of the preventing price in the market.
6) OFFER FREE ENTRY AND EXIT FOR FIRMS :-
Perfect competition is characterized by the freedom of entry & exit of firms, that is an existing firm can leave the industry. Whenever it desire and a new firm can enter the industry whenever it wishes.
7) RATIONAL BEHAVIOUR :-
Under the market the seller and the buyers behave rationally, that is producers produce to get maximum profit while the consumers demand to get maximum satisfaction.
8) SINGLE UNIFORM PRICE :-
Under the perfect competition, uniform price prevail. Price is determined by the inter selection of market demand and market supply.
MONOPOLY
MEANING:-
Monopoly is a market situation in which a firm has sole wrights over the productions or sells of the products, and has no competitors in the market and has no close substitute for his product.
DEFINATION:-
According to “monopoly is said to access when one term is the sole producer or the seller of the product that has no close substitute.
That the monopolist has control over the market. Mono means one and poly means seller. The monopolist controls the supply of commodities and thus “He is a price maker”.
MONOPOLISTIC COMPETITION
Monopoly and perfect competition are the pure form which does not exist in the real world. There is a competition where monopoly and perfect competition are interlinked. The monopolistic completion refers to a market organization where many sellers sell similar, but differentiate products to a large number of buyers which is called monopolistic competition.
According to MS JOHN ROBINSON, it is called imperfect competition. It is a market category in which there are many sellers and buyers buying and selling heterogeneously.
CHAPTER NO. 5
FACTORS OF PRODUCTION
1) LAND IS THE FREE GIFT OF NATURE :-
Land is the primary and original factor of production so ordinary language it refers to the land surface, in economic it can be define as all kind of natural resources that are truly found in the nature use in production of goods. Therefore land is a free gift of nature. Land includes all natural resources.
1) On the surface of the earth :-
For eg. :- Farms, Land, Forest, Mountains, Rivers, etc.
2) Below the surface of the earth :-
For Eg. :- Coal, Gold, Silver, Petrol, Iron, Etc.
3) Above the surface of the earth :-
For Eg. :- Sunshine, Rainfall, Climate, Etc.
n All those productive service made available by the nature for the creation of wealth are collectively refer to as land.
- Land is the natural factor of production.
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2) FEATURE OF LAND. OR WHAT DO YOU MEAN BY LAND ?
1) LAND DIFFERS IN FERTILITY :-
Land differs in fertility. Therefore, it is a heterogeneous factor. Fertility differs from one plot to another. The fertility also varies. So, it is heterogeneous.
2) REWARD FOR LAND IS RENT :-
Land is a factor of production that accrues, rent as its reward (price) for different purpose. For Eg. :- Farming, Road, Railways, Etc. it can have multiple uses.
3) LAND IS INELASTIC IN SUPPLY :-
Supply for land is inelastic that means even if the price change, the supply of land remains constant.
4) LAND IS PERMANENT FACTOR OF PRODUCTION :-
This means that land can neither be created nor destroyed.
3) TRANSFER EARNIGN / INCOME :-
Transfer earning is the minimum cost price of a factor unit it is a price a factors unit must
get unit present use. In order to stay in needs employments, economics rent means surplus over transfer earnings.
LABOUR –
FACTOR DETERMINING SUPPLY FOR LABOUR:-
1) WAGES RATE : -
Higher the wages, higher will be the supply of labor.
2) EFFICIENCY OF LABOUR :-
Supply of labor depends not only on quality but also the quantity of labors.
3) AGE OF RETIREMENT :-
If the age of retirement is high, the supply of labor will be high and vice-versa.
4) TRADE UNION :-
Strong trade union restricts the supply of labor and tries to raise the wage structure.
QUAZI RENT
The concept of quazi rent was introduced by Alfred Marshall quazi means ‘ as if’ or ‘just like’. Quazi rent is something like or similar to rent but it is not a proper rent.
Quazi rent refers to that additional income to a factor other than land which is similar to rent. Rent arise on account of the fixed supply of land. But there are other factor which are also fixed supply.
Example :- Capital goods like Machineries, Heavy plants etc.
Increase in the demand for service of capital goods cannot ne immediately supplied as they are fixed. The rewards is surplus, according to Marshall is Quazi Rent.
Thus, Quazi rent is ----
1) It is rent like element to the factors of produced other than land.
2) It arises due to short inelastic supply of certain factor.
COLLECTIVE BARGAINING
Collective bargaining refer to negotiate it means the workers (labours) and the management on the terms of employment and service conditions through the medium of “Trade Union”.
Labours is likely to be exploited the workers are not organized and the employer is powerful. Hence the workers and industry organize themselves into union. It strengthen their position. Collectively bargaining is a process of discussion & negotiation by the labour – leaders who is the representative with the management for settlement of terms & condition of employee.
ADVANTAGES OF COLLECTIVE BARGAINING
1) Collective bargaining prevents exploitation of labours.
2) It leads to favorable and peaceful settlement with the management.
3) It helps to secure rise in wage. Rules improvement in the standard of living of labour.
4) Trade union can force the management except their demands by adopting tactics like lockout, strikes, etc.
5) It compels the employers to recognize the dignity of labours.
DISADVANTAGE OF COLLECTIVE BARGAINING.
1) Collective bargaining may lead to force & violence.
2) Due to strong trade union, workers may become irresponsible.
3) Sometime it may lead to inequalities of wages.
TIME PREFERENCE THEORY OF CAPITAL ?
FEATURE OF CAPITAL
1) Capital is man – made.
2) Passive Factor :-
It is a passive because it becomes productive only with the help of labour.
3) Greater Mobility :-
Capital can easily be moved from one place to another unlike labour.
4) Capital defficiates :-
Constant use of capital lead to depreciation tha is the value of capital goes on falling. It needs repair and maintenance.
5) Capital is indestructible :-
Capital goods lie machineries, tools, equipment etc. become useless with the passage of time.
6) Increase the productivity of production :-
Capital helps to increase the productivity of workers there by increase in economic development rising the national income of the country.
LIQUIDITY PREFERENCE THEORY (Short Note – 5 marks)
This theory was forwarded by Lord Keynes – According to Keynes the real reason of interest is liquidity preferent in the desire to hold cash money to utilize as per need by lending money, the liquidity is lost. The compensation paid for it is called interest. Thus, interest is a reward for parting with liquidity for sum specific period.
FUNCTIONS OF ENTERPRENEUR
1) CO-ORDINATION :-
The enterprise co-ordinate all the other factors of production is Land, Labour and Capital in an optimum level i.e. he combines them in such a way that minimizes the cost and maximizes his profit and output.
2) DECISION MAING :-
The entrepreneur plants and undertakes several decisions like ‘what’ ‘where’ ‘how much’ ‘when’ to be produce etc.
3) RISK AND UNCERTAINITY BARING :-
One of the most important function of the enterprise is to take risk and undertake involved in business.
4) INNOVATION :-
The entrepreneur is an innovation refers to the application of new technique, discovery of new technology etc. the entrepreneur take further risk by involving new technology to improve his business. He is considered to be “Captain” of the industry.
5) DIVISION OF LABOUR :-
The entrepreneur divides the duties to the labour according to their qualification and ability.
THEORIES OF PROFIT
PROFIT OF AN ENTERPRENEUR IN HIS INCOME, EXPLAIN ?
RISK BEARING THEORY :-
This theory was given by an American economist, professor Holuley in 1907. According to him risk bearing is an important function of the enterprise. Profit is the reward for performing their function. Every business is subject to variety of risk unless a reward in form of atleast “Normal Profit” is assured, the entrepreneur will not take risk. Higher the risk greater is the possibility of profits.
SECTION II
CHAPTER NO. 06
INDIAN ECONOMY
SHORT NOTES :-
1) LOW PER – CAPITA INCOME
· All developing countries are faced with the problem of poverty is reflected in the low per capita income. India has very low per capita income. In comparision that per – capita income of U.S.A is about 57 times higher than that of CANADA, 116 times is higher that of JAPAN during 2004. Low per capita income is due to slow growth of the gross domestic product “GDP” this is deu to improper utilization of our natural resources.
2) ABSOLUTE POVERTY
· Absolute poverty refers to the absence of minimum income to get minimum needs of life. When the personal income or the consumption expenditure is too less then the minimum subsistence level, the person is said to be living in the absolute poverty.
3) RELATIVE POVERTY
· It is a comparison of different groups of people having different income. The people with the below income are relative. The poor people in poor country are relatively poorer then the poor person in reach country.
4) CAUSES POPULATION EXPLOTION / CAUSES OF HIGH POPULATION
· Explosion means the rapid growth of population. When there is decline of death rate which become imbalanced due to rapid growth in birth rate (high birth rate). There is addition in the population tren, but no decline due to low death rates.
Population in India has been steadily increasing year after year. It began increasing fastly since 1991 and the year 1991 is refer to as “Year of big divide”
There are three major causes for increasing population :
1) High birth rate
2) Low death rate
3) Immigration.
Q.1 WHAT IS POVERTY LINE? WHAT ARE ITS CAUSES AND THE MEASURE TAKEN BY THE GOVERNMENT TO ERADICATE THE POVERTY LINE IN INDIA ?
ANS: Poverty line is based on the daily intake of 2100 calories of food per person per day for the urban areas and 2400 calories per person per day in rural areas.Thus, poverty refers to the minimum amount of income required to maintain the minimum level of living “poverty line” is a margin which divided the poor & the Not so poor.
CAUSES OF POVERTY:
1) RAPID GROWTH OF POPULATION :-
Over population is the significant cause for the prevailing poverty in India. India is the most populated country in the world. When the national income is divided, per capita income becomes low. Production of goods and services is unable to keep pace with the rate of growing population.
2) LOW AGRICULTURAL PRODUCTIVITY :-
India, even today follows rudimentary techniques of agricultural production. i.e. old method of insufficient irrigation small size land holding and so on. This keeps the agricultural productivity in India at a very low rate.
3) INEQUALITIES IN INCOME DISTRIBUTION :-
In India, poverty to a great extend is attributed to an unequal distribution of income and wealth. A major proposition of population is left with less income which is insufficient to meet their need of minimum consumption.
4) UNEMPLOYEMTNAND UNDER EMPLOYMENT :-
Lack of gainful employment is another important factor responsible for mass poverty in India. Employment opportunity does not keep pace with the rapid growth of population their by leading to large scale unemployment in the country.
5) UNDER EMPLOYMENT :-
It is due to underdevelopment of the economy that the level of national income and per capita income is low. Underdevelopment is due to lack of industrialization as there is no savings. There are no investments due to low income of the people.
MEASURES TAKEN BY THE GOVERNMENT TO ERADICATE POVERTY IN INDIA :
1) POPULATION CONTROL :-
The government pays attention to the increasing population with in the economy, Family Planning has been implicated for the subside in terminated poverty.
2) LAND REFORMS :-
Land reforms like abolitions of Zamindari system, securing the tenants against fixing fair rent and distribution of surplus land, among small landless labor was initiated by the Indian government in its five (5) year plan.
3) ACCELERATION OF ECONOMIC GROWTH :-
Greater the growth rate, larger would be the employment opportunities and expansion of the economy this would lead to the removal of poverty.
4) INSENTIVED FOR LABOUR IN INDUSTRIES :-
The government makes provision for incentive like – TAX concession, subsidies to the industries which employees labour to encourage industrialization, cottage and small scale industries being labour intensive creates large employment opportunities which in term helps the removal of poverty.
5) FAIR PRICE SHOPS :-
A network of fair price shops in rural areas has been initiated by the government. Necessaries like food grains, cloths, edible oils, sugar and so on, are made available to the weaker section of the society at a subsidies price.
EFFECTS OF POVERTY
1) ECONOMIC EFFECTS :-
· Due to low standard of living the productivity of labour tend to be low. It leads to low level of production of food and services.
· Low income results in less saving less capital formation and low industrialization.
· Lack of capital prevents modernization of agriculture and industries.
· Poverty leads to illiteracy and low skills and leading to increase in unemployment.
· Poor people become poorer due to indebted.
Q3) CUASES OF POPULATION EXPLOTION :-
INTRODUCTION :
Explosion means rapid growth of population. When there is decline of death rate which become in balanced due to rapid growth in birth rate (high birth rate). There is addition in the population trend, but no decline due to low death rates.
Population in India has being steadily increasing year after year. It began increasing rapidly since 1991 and the year 1991 is refer to as “years of big divide”
There are these major causes for increasing population:
1) High birth rate
2) Low death rate
3) Immigration.
Q4) CAUSES OF HIGH BIRTH RATE IN INDIA:-
The birth rate of the country is a highly complex phenomenon. It is determine by socio economic, cultural and religious factor.
1) ECONOMIC FACTORS.
· POOVERTY :-
Poor people tend to have more children because they do not bother or worry about their own standard of living. Poverty works against the acceptability of family planning programs initiated by the government for the poorer section of the society.
· PRE-DOMINANCE OF AGRICULTURE :-
Specially during the harvest time weeding and sowing, child labour is highly effective in agriculture. For agriculture it has become necessary for abundant labour (manpower) in the form of child labour.
· SLOW URBANISATION :-
Urbanization form people to bring down the birth rate. Space problems, sanitation and hygiene coupled with income and employment reduces the charms of high birth rate.
SOCIAL FACTORS :-
· UNVERSAL MARRIAGE :-
Marriages in India, is an universal institution and every one sooner or later maries. Woman’s who cannot bear children are looked down in the society. Having a male child is a religious necessity.
· JOINT FAMILY SYSTEM :-
The joint family system induces young couple to have children though they may not in position to support them.
· ILLETERACY AND IGNORANCE :-
Majority of the population being illiterate, ignorant and superstitious, excepts more children’s as “gift of God”. Absence from family planning methods also add up to the growth in the population.
· RELIGIOUS FACTOR :-
In Indian society they lives in the concept of “Mukti”, liberation form the cycle of birth and death, in the presence of son is essential in the family. The couples do not entertain the family programs.
Q5) CAUSES OF LOW DEATH RATE :-
· IMPROVEMENT IN MEDICAL FACILITIES :
Medical facilities in term of Hospitals, Primary Health Care, Efficient Doctors and Nurses etc., has led to decline in the death rate. Discovery of medicines, improved health services, techniques for prevention has controlled many diseases from Cholera, Malaria, Plague, T.B, which were fatal in the past.
· BETTER CONTROL OVER NATIONAL CALAMITIES :-
Improvement in a means of transport and communication have indirectly reduce death rates. Natural calamities like Earth Quake, Floods, etc. are now controlled and effective services, quick relief is sent to effected areas. Necessary like food, medicine and cloths are rushed to the people in need by means of helicopters, air plane , etc.
· FALL IN POST – MORTALITY RATE :-
Due to easy availability of service of hospitals, medicine, efficient doctors, transport facilities and communication, there is a rapid fall in the death rates, specially amo0ng women pre and post delivery.
· FALL IN INFANT MORTALITY RATE :-
Due to better medical facilities, the infant mortality rate was reduced.
· PUBLIC HELTH SERVICES :-
The state as well as central government undertakes various ‘public health schemes’, ‘five year plan’, measure like free food and milk for children in municipal schools, supply of portable drinking water etc. are undertaken. Besides these education public welfare and awareness program help the people to keep themselves healthy and updates.
Q6) NATIONAL POPULATION POLICY :-
A national policy that seeks to bring about changes in the “fertility rate” levels by 2010 and stabilized the population by 2045 was initiated and approved by the union cabinet on February 10, 2000.
National Population Policy 2000 enlisted the following recommendation :-
· Reduction in infant mortality rate.
· Reduction in maternal mortality rate
· Access to information containing “AIDS PREVENTION AND CONTROLL OF COMMUNICABLE DEASES”.
· Incentives to adopt to children’s, a small family norm.
· Strict enforcement of “Child Marriage ACT” and “Pre total diagnostic techniques ACT”. Etc.
· Raising the age of marriage for girls to 20 years.
· Health insurance cover for those who live below the poverty line having two children
· The appointment of “National Commission 2000” that is to be headed by the Prime Minister to monitor the implementation of the policy.
Q7) CAUSES FOR THE FALIURE OF POPULATION CONTROL:-
India has not yet achieved sufficient success in controlling the ever increasing population due to the following reasons :-
· Inadequate preparation and insufficient education system.
· Hospitality from private doctors and the prevalence of mid wives.
· Financial constrain.
· Religious belief among the mass.
· Difficulties involved in conducting “Population Contact Programs” among the illiterate population.
· Failure and in implementing the incentives.
· Failure for providing facilities for the rural population.
DISTINGUISH BETWEEN ABSOLUTE AND RELATIVE POVERTY
ABSOLUTE
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RELATIVE
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1) It is refer to as the total absence of minimum subsistence of minimum subsistence level
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1) It is a comparison of the standard of living
of rich and poor
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2) It is defined with reference to a minimum nutritional level
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2) It is defined with reference to inequalities of income
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3) It exist in poor country
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3) It exist in all the countries and is universal problem
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CHAPTER NO. 07
AGRICULTURE
AGRICULTURE :
INTRODUCTION:
Agriculture is the back bone of the Indian economy. It occupies the distinct place in our economy. It id the largest industry which provides employment to about 65% of the total work force (labour) in the country, agriculture is the source of livelihood for about 2/3 of the working population in the country.
Q1. CAUSES OF LOW AGRICULTURAL PRODUCTIVITY IN INDIA.
Agricultural Productivity refers to land productivity i.e field per hector. It is expressed in the quantity produced and not the value. Agricultural productivity in India is low. But has been steadily increasing since 1950-51.
CAUSES OF LOW PRODUCTIVITY :-
A) GENERAL CAUSES :-
· Overcrowding in agriculture : -
Indian agriculture is overcrowded by people. It has lead to decline in the per – capita land area, fragmentation and sub-division of land holdings, disguised unemployment and negative marginal productivity.
· Unfavorable rural environment :-
The atmosphere in the village is unfavorable and not conclusive to the development of the agriculture. They are influenced by customs and social institutions, like cast systems, joint family systems, etc. all these discourage the farmers from improving agricultural production.
· Lack of finance storage and marketing facilities :-
Productivity in India has suffered due to non-availability of credits, warehouses, for storage and marketing facilities. The provisions made under planning has been inadequate.
B) INSTITUTIONAL FACTORS :-
· Uneconomical size of holdings :-
India is a poor country, consisting of small farmers. Every farmer owns a land. 70 % of the total land holdings are small in size and are scattered. Application a model technology has become a difficult task on small holdings which has contributed to low productivity.
· Faculty land system :-
Defective land system gives rise to land lords and tenants. The land lords exploit the tenants. Tenants have no security and are unable to invest. All these leads to pressure on productivity.
C) TECHNOLOGY FACTORS :-
· Poor techniques of production :-
Failure to implement modern technique, absolute nature of implements etc. has led to low productivity.
· Inadequate irrigational facilities :-
Indian agriculture is skill a “Gamble in the monsoon”. Agriculture totally depends upon the rainfall in India. 70% of the cultivable land is deprived of irrigational facilities that lead to low productivity.
· Rural indebtedness :-
It is another factor leading to declining productivity in India. The farmer is not able to come out of it. He is unable to invest as the income goes away to the borrower.
Q2. MARKETING SURPLUSS IN AGRICULTURE. WHAT IS IT ?
PRESENT SYSTEM OF AGRICULTURE MARKETING.
There are many ways by which the farmer disposes his surplus produce :-
· The farmer sells his produce to the village traders.
· The farmer may sell it in a weakly markets, village bazaar, etc. they conduct festivals like jatra, fairs etc. to sell their products.
· The farmers may sell it in mandees of small and large towns. In the mandees there are brokers or dalals who help the farmers to sell their products to the whole-seller.
SHORT NOTE : (CHAPTER NO. 09)
1) CALL MONEY MARKET :-
Refers to market of extremely short period. The money – (loan advancement by banks to bill brokers and stock exchange dealers) is lent up to 7 days. Now a days the transaction takes place every day or even within a overnight. Such money or loan is termed as “call money”. Since the money can be called at the shortest possible notice (time).
2) ACCEPTENCE MONEY MARKET :-
Acceptance money market refers to the market for “banker’s acceptance” which arise due to trade practice both at home and foreign transaction.
3) THE COMMERCIAL BILL MARKET :-
The “bill Market” or “discount Market” refers to market in which short date trade bills or paper documents are bought and sold E.g.:- Stock, Shares.
4) TREASURY BILL MARKET :-
Treasury bill market refers to “promissory notes” of the government which promises to pay a specified sum of amount after a particular period of time generally 90 days.
Organized feature of money market:-
1) Highly organized commercial banking system.
2) Presence of a central bank
3) Availability of proper credit instrument
4) Availability of ample resource.
CHAPTER NO. 08
INDUSTRY
· NEED FOR RAPID INDUSTRIALIZATION IN INDIA
Economist argue and were in favour of rapid industrial growth. It breaks the economy precious cycle of poverty, low productivity, low employment opportunity, low per capita income, low investments etc. need for rapid growth in India is necessary as –
1) TO IMPROVE THE ECONOMIC INFRA STRUCTURE :-
The infra structure facilities included transport and communication network, generation and distribution of electricity etc. for the progress of the economy, they are essential for the growth of small scale and large scale industries, it is also necessary to improve the trade and commerce in our country.
2) TO MAKE A STRONG INDUSTRILA SECTOR :-
Developed countries have a strong basic industrial structure. It is essential for growth and development of the economy.
3) TO EXPLOIT NTURAL RESOURCES :-
Proper exploitation of the natural resources of the country would be possible only through rapid industrialization. Thus mineral resources, water resources and forest resources in our country can lead to expansion in various industries which utilize them to create production (manufacture)
4) TO REDUCE POPULATION PRESSURE ON LAND :-
Agriculture – One of the most important need for rapid industrialization is to reduce the pressure of the population of the India agriculture and direct human labour to the secondary sector (Industries)
5) TO INCREASE EXPORT EARNING :-
Rapid industrialization leads to diversification of different item. It create items to be exported. Jute, Tea, Coffee, Sugar Etc. are the primary products which are now exported and money flows into the economy by way of “balance of payment”
6) INCREASE AGRICULTURE DEVELOPMENT :-
Agriculture depends upon the scientific growth of modern techniques and innovation in its field. The industrial sector supports this process of development by supplying chemical fertilizers, tractors, improved machineries and so on to the agriculture sector.
· NEW INSDUSTRIAL POLICY (1991)
The new Economic policy was introduced in 1991 it was characterized by –
1) (popularly known as L.P.G – Liberization, privatization, globalization) it is with reference to remove the control imposed by the government on the economy and allowing the market forces to influence economic activities.
2) PRICATIZATION :
It refers to allowing and giving permission to private sectors to play a greater role in various fields.
3) GLOBALISATION :
It refers to integrating the Indian economy with the world economy by removing restrictions and allowing free flow of goods and services.
· ABOLISHING OF MRTP LIMITS :-
(Monopoly restrictive trade practice )
Earlier monopoly firms exploided trade practices, all the firms with assets about 100 crorers were considered MRTP firms that is they were subject to a number of rules and regulation which effected their growth. In 1991 the government remove the limits of MRTP firms. Which helped such firm to be on par with others. They required no approval from the government for investments.
· PUBLIC SECTOR ROLE DILUTED :-
Initially during planning process the public process the public sector had a major role to play. But with the introduction of industries were given privatization by 2000 only three industries were held by the public sector. Eg:. 1) Atomic energy 2) Railways 3) Mineral.
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