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(i) The colonial power had exploited India economically. The country faced severe problems like poverty, unemployment, population growth, low standards of living, low productivity of agriculture and industries and backwardness in the fields of knowledge, science and technology. Planning was essential to solve these problems. 

(ii) India established the Planning Commission in 1950 with Prime Minister Pandit Jawaharlal Nehru as its Chairman. 

(iii) It formulated India’s five year plans that included rural and agricultural development, : balanced industrialisation, provision for a minimum standard of living and economic development consistent with democratic ideals. 

(iv) It focused on people’s participation and individual development in the formulation and implementation of the five year plans.

(i) During the tenure of Chandra Shekhar the rate of inflation was 17%. 

(ii) Economic growth rate had decreased by 1.1%. India had foreign exchange reserves only enough to last for imports for a week. 

(iii) It had become difficult to pay back its loan and the interest on it. 

(iv) In May 1991, the government had tried to control the situation by selling some of its gold reserves and by mortgaging some.

It is man-made currency essential for production.

It is physical or mental work that contributes to production.

It is coordination of land, capital and labour and to undertake production activity.

When people are unable to satisfy their basic needs of food, clothing, shelter, education and health.

Backward village economy and traditional society exist side by side with the modern urban economy.

Correct option is Eighth

(i) Iron and steel industries at Durgapur, Bhilai and Rourkela; Chemical fertilisers plant at Sindri; rail engine factory at Chittaranjan; factory of railway bogies at Perambur, Ship building factory at Vishakhapattanam and other heavy industries were set up in the Public Sector. 

(ii) Huge dams like Bhakra-Nangal, Damodar, etc. were built to make water available for agriculture.

(i) In a capitalist system, the means of production are privately owned. In a socialist economy, the means of production are owned by the State in the name of the society. 

(ii) A mixed economy works both in the private and the public sector. 

(iii) In order to achieve economic development of modem India, we gave preference to a model of ‘mixed economy’. We can see three parts in this kind of economy: 

(a) Public Sector: The industries in this sector are completely under the control and management of the government. For example, production of defence equipment.

(b) Private Sector: The industries in this sector are owned by private industrialists. Of course, the government supervises and controls them too. For example, consumer goods.

(c) Joint Sector: In this sector, some industries are owned by private industrialists, while some are run under government management.

(iv) For mixed economy to run smoothly there is a need for co-ordination between the private sector and the public sector.

(v) This system aims at maximisation of production and popular participation on a large scale.

(vi) An effort has been made in this system to bring together the good aspects of both the capitalist and the socialist systems.

(vii) A mixed economy cannot ignore the profit motive, entrepreneurship, discipline, time bound planning, etc.

(i) The year 1991 is very important in the history of modem India. After the 10th General elections, P. V. Narasimha Rao became the Prime Minister of India. 

(ii) With Dr. Manmohan Singh as Finance Minister, he adopted the new economic policy of linking India’s economy with the global economy. 

(iii) For this, fundamental changes were brought about in the Indian economy. Indian economy was brought in tune with the global mainstream.

Correct option is Liberalisation

World Development Report, 2004 categorizes countries having less than $735 per capital income as developing economy.

The features of the developing economy are as follows:

(i) Low per capita income: The per capita income in the developing countries is low. Their lesser national income gets divided by a larger population. As a result, the standard of living is poor.

(ii) Higher population growth rate: The population growth rate per annum is 2% or more in these countries. There is pressure of population on the natural resources such as land.

(iii) Agrarian economy: The principal economic activity in these countries is agriculture. More than 60% of the total population is engaged in agriculture. The contribution of agriculture to the national income is about 26%.

(iv) Uneven distribution of income: There is concentration of wealth and income. 20% rich account for 40% of the national income. On the other hand, the poorest 20% account for about 10% of the national income. Disparity in income between the rural and urban areas is another indication of the uneven distribution of income.

(v) Unemployment: The ratio of unemployment is more than 3% of the entire labour force. There is seasonal unemployment and disguised unemployment in the rural areas. Industrial unemployment exists in the urban areas.

(vi) Poverty: About one-third of the population lives in dire poverty. They are unable to satisfy their basic needs of food, clothing, shelter, education and health.

(vii) Dual economy: In these countries, backward village economy and traditional society exists side by side with the modem urban economy.

(viii) Inadequate infrastructure: Means of transport and communication, education and health and banking facilities are inadequate. This hampers economic development.

(ix) Adverse balance of trade: These countries export agro products. Their income from exports is less than expenditure on imports. Due to adverse balance of trade their foreign debt goes on increasing.

Whether the economy of a country is developed or developing can be decided on the basis of the per capita income of the country.

As per World Bank’s world development report of 2004, countries having per capita income less than $ 735 are categorized as developing economies or countries. India’s per capita income is lesser than this and hence, it is developing country.

Economic activity means any activity such as agriculture that involves earning or spending money for the exchange of goods (commodities) and services.

(c) Per capita income

Economic development consists of following three indicators:

1. National income: The total income of the country is called its national income.
2. Per capita income: It is the division of national income by total population of the country.
3. Standard of living: It includes the availability of nutritious food, clothes, proper shelter, education, health services, transportation services, etc. to people.

(c) Political Sector

(c) Caring of child by mother

(c) Economic development

Correct answer is Profit

Correct option is (b) Primary

Correct answer is Primary

Correct answer is Three

It consists of trade, transport, communication, health, education, banking and insurance activities.

In the conventional usage the term land indicates the upper layer/crust of the surface of earth. In economics, land is regarded as a natural factor of production. Besides agricultural land, it includes forests, mountains, rivers and other source of water on the surface of the earth; as well as mineral below the surface of earth. These resources are put to use for productive uses. Therefore, it is regarded as a natural resource for production.

Land is a free gift of nature. However, owing to its scarcity, it has become a ‘priced community’. Availability of land is limited and cannot be increased. Therefore, efficient use of land requires planning and technology.

Land is immobile factor of production. It cannot be shifted from one place to another. Fertility and usefulness of land differs from one place to another. Land in Rann of Kachchh is less fertile in comparison to Gangetic plains. However, the availability of mineral oil has made the deserts in West Asia very precious.

(i) India had adopted a mixed economy after independence. 

(ii) Nationalisation of banks was essential to cover the deficits if they occurred while implementing different schemes. 

(iii) Also the profits of these banks would come into the government treasury once they are nationalised.

The economic system in which both government and private individuals exercise economic control is called mixed economy. Mixed economy is a middle way of market system and socialist system. Mixed economic system attempts at removing the limitations of market system and socialist system and at the same time try to adopt goods elements of both the systems.

In mixed economy, public and private sector co-exit. Both private and public sectors work as complementary to each other rather than competitor of each other. Private ownership – exists in sectors like agriculture, trade, small consumer goods industry, etc. whereas the basic i.e. key industries like heavy industries, factories, factories producing defence material, railway, electricity, roads, irrigation, etc. are owned by the state i.e. government.

In this system market is not completely free. Government puts several controls. For example, state puts heavy taxes on production of unwanted things such as cigarettes. Similarly to attain balanced regional development government gives certain concessions to private owners for establishing industries in backward areas. These concessions could be subsidies, reduced or no taxes, cheap land, etc.

Thus, mixed economy is such an economic system in which economic planning is given a very important position for taking economic decisions. Since mixed economic system puts various controls and restrictions it is also called ‘Controlled Economic System’. Countries like India, France and England follow mixed economy. Limitations of mixed economy: Economic instability, lack of coordination, re-consistent economic policy, low rate of growth of economic development, etc. are certain limitations of mixed economy.

1. qualitative; quantitative

2. agriculture,

3. dual

4. primary

5. Primary

The socialist system that has noble intentions of social welfare and classless society has the following limitations:

1. There is no motivation to increase production as there is state ownership of industries.
2. No need is felt for innovation and quality improvement as there is no competition.
3. There is total denial of economic freedom to the citizens.
4. There is fear of bureaucracy due to dictatorial nature of the state.
5. Every aspect of people’s life is regulated by the state.

In market mechanism system, there is no interference from anybody and hence the entrepreneur. There is very less wastage of resources in this system. Entrepreneurs can innovate and invent new products. Moreover, the producers are free to distribute their products the way they want. Thus, because of the freedom one enjoys in respect to production and distribution. In this system, we can say that economic independence is maintained in market economic system. Mixed economy works as the middle way to adopt good points and ignore bad points of both market system and socialist system.

The system in which economic system is controlled and regulated by the government, so as to ensure welfare and equal opportunity to the people in a society is called socialist system. This system is opposite to the market system. In the socialist system, all economic decisions are taken by the State i.e. the government. The state owns all the resources of production. Keeping in mind the need of the society, the government decides how much to produce, how much to invest in which sector, resource distribution, production distribution, etc.

In the socialist system ‘social welfare’ rather than ‘profit’ is the center. The government governs the factories, sets the production target and also . sets the prices of good and services produced. Farming is also owned by the state. Government makes payment to farm labourers on the basis of their ability. It should be well noted that socialist system originated because of limitations and failures of market system. Countries like Russia and China have achieved fast economic progress by adopting this system.

Features of Socialist System:

1. Resources are owned by the state i.e. government.
2. All the economic decisions are taken by the state.
3. Social welfare and not profit is at the center of economic activities.
4. Labourers are paid wages in return of work they do in government managed factories.

Benefits of Socialist System:

1. Production is done on the basis of to the needs of the society. Hence, resources are not wasted in producing unimportant and luxurious things.
2. Resources do not get wasted.
3. Disparity of income and property is removed.
4. Consumers do not get exploited. Limitations of Socialist System:
5. The government owns the resources of production. Hence, people do not get encouragement and motivation to increase production.
6. There is no competition. So, new research does not take place much in the economy.
7. There is lack of individual freedom in this system.
8. There is a total control of the state. This creates the fear of bureaucracy.

Wrong Pair : National Stock Exchange – existed before WTO.

In a socialist system, all the economic decisions are taken by the state i.e. government. The state owns all the resources of production. The government governs the factories, sets in production target and also sets the prices of goods and services produced. State takes decisions keeping social welfare in mind. As a result, there is no scope of economic freedom in socialist system.

In this socialist system, labourers are paid according to their ability and needs. Labourers are encouraged to do more work by increasing their salary, giving them bonus, financial rewards and awards. All these incentives work ownership of business units. Mixed economy is free from any major interference of the state. However, due to as motivation for the labourers. At the same time, if a labourer does not work properly, he is even punished.

Punishments like removing from job or transferring the labourer to far-off places are given. Thus, motivations and punishment are the two wheels of the socialist system which balance this system and keep it rolling.

(i) In the beginning, the striking workers received help from their native villages. It was also not very difficult for them to help each other.

(ii) They set up departmental committees and distributed food grains, assistance in the form of funds, etc 

(iii) The left parties had supported the strike. As the strike dragged on, efforts were made to split the striking workers’ ranks. 

(iv) Even as the strike completed 6 months, the central government completely ignored it. The workers started a ‘Jail Bharo Agitation’. 

(v) In September 1982, one and a half lakh workers took a march on the Legislative Assembly of Maharashtra State.

(vi) It didn’t help at all. The strike completed a year. This was the first strike to have gone on for a year. 

(vii) In this period, about one and a half lakh workers became unemployed.

(viii) As polyester had come into greater demand than cotton cloth, the sale of mill cloth got affected. The mills moved from Mumbai to Surat in Gujarat. 

(ix) The Central government nationalised 13 textile mills. Appointment of arbitrators did not help to resolve the issue.

Correct option is (d) Narayan Meghaji Lokhande

Wrong Pair : Barrister A.R.Antulay – leader of Rashtriya Mill Mazdoor Sangh

Correct option is Kawasjee Dawar

(i) During the Diwali of 1981, the workers expected to get a bonus of 20%. 

(ii) The Rashtriya Mill Mazdoor Sangh, which was negotiating with the employers, agreed upon 8 to 17% bonus without taking the workers into confidence. 

(iii) The cut in the bonus proved to be the cause of unrest. Some workers went to Dr. Datta Samant. 

(iv) They asked him to accept their leadership. Workers of 65 mills came together and Dr. Datta Samant led the strike. On 18th January 1982, two and a half lakh workers went on strike.

Wrong Pair : Kawasajee Dawar – Iron and Steel factory.

Correct option is (c) Indira Gandhi

20-Point Programme: Prime Minister Indira Gandhi announced the 20-Point Programme on 1st July 1975 and resolved to make efforts towards rapidly becoming a developed nation. The main provisions of the 20 point programme are as follows:

• Land ceiling for cities and agricultural land, equal division of wealth, minimum wages for workers, increase in water conservation schemes. 
• Workers’ participation in industry, national training scheme, freeing bonded labour. 
• Prevention of tax evasion, economic crimes and smuggling. 
• Regulation of prices of basic necessities, 
• improvement in the public distribution system. Improvement in the textile industry by developing handloom sector, waiving loans for weaker sections, housing, communication facilities, making educational equipment available to schools.

(i) Our Prime Minister Pandit Nehru adopted the middle path rather than taking recourse to any extremes. Some countries had adopted Capitalism, while some had adopted Socialism. Each type of economy had its own advantages. 

(ii) In a capitalist system, the means of production are privately owned. In a socialist economy, the means of production are owned by the State in the name of the society.

(iii) A mixed economy works both in the private and the public sector. In order to achieve economic development of modem India, we gave preference to a model of ‘mixed economy’.