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The problems of small scale industries in India are :

1. Majority of small scale industries in India suffer lack of proper financial supporter facilities.

2. Small scale industries are yet depending more on ancient technology.

3. Majority of small scale industries are struggling due to lack of proper and adequate marketing facilities.

4. The small scale industries are unable to compete with more unified large scale industries.

5. The small industries are also suffering due to inadequate raw materials.

6. Moreover many small scale industries are facing lack of proper managerial support.

7. The small scale industries have to face the problem of local and other.

• They generate more employment with less use of capital.
• Locally available raw materials is put to maximum use. They have large export potential.

A small scale industry is the one in which fixed investment does not exceed Rs.,60 lakhs.

Income earned by charging tax on land held by a person is called land revenue.

Payment burden:

• Over and above the huge salaries that the British used to draw from income earned from India, they were also paid a large sum as ‘home charges’ to the British personnel in India.
• The home charges included expenses of the British administration, maintenance of the British Army, war expenses, pensions to retired British officers and other expenses made by Britain for maintaining her colonies.
• These home charges were made of three components, They are:
  1. Interest payments for debts incurred in maintaining Indian colony,
  2. Interest on the railways and
  3. Civil and military charges.

During the British rule, the British over and above their salaries used to withdraw additional money from India on the name of expenses done for British administration, maintenance of British Army, war expenses, pensions, etc. Amount withdrawn for this purpose was called home charges.

Per Capita Income (PCI) =  \(\frac{Total\, National\, Income} {Total\,Population }\)

Correct option is (D) Norway

₹ 87,51,834 crores.

NNPpc means Net National Product at Factor Cost. It is the sum of wages, rent, interest and profits paid to factors for their contribution to the production of goods and services’produced in a year.

For all practical purposes Britain maintained a monopolistic control over India’s exports and imports as a result, more than half of India’s foreign trade was restricted to Britain.

The roads that were built primarily serve the interests or mobilising the army within India and drawing out raw material from the countryside to the nearest railway station or the port.

Marketable surplus refers to the difference between the total output produced by a farmer and his on-farm consumption. In other words, it is that portion of the total output that the farmer sells in the market.  

Marketable surplus = Total farm output produced by farmer - Own consumption of farm output

Marketed surplus refers to surplus of farm output over and above a farmer’s consumptions i.e., expected consumption or output by the farmer’s family during the year. This surplus is available to the farmers for sale in the market. Hence it is called marketed surplus.

• At the time of independence, the Indian economy was in its worst stage.
• The GDP, National, and per capita income was very low and the unemployment was very high. 
• The industrial growth was insignificant also the agricultural sector was not doing well.
• The resources were very limited.

So India opted for planning for better economic development and growth.

Plans should have goals so that it can be achieved within a specified period of time. In India, plans are of five years duration and are called a Five Year Plans.

A plan is a proposed list of goals that an economy wants to achieve within a specific period of time. It suggests the optimum ways to utilize the scarce available resources to achieve the enlisted goals. In India, planning is done for a period of five years, which is called five year plan. Plans have both specific and general goals. Some of the common goals are economic growth, modernization, self-reliance and equity. Plans lay down the basic framework over which the policies are designed.

Its aim was to establishment, expansion, and ownership of private industries according to priorities of five year plans and to check the monopoly tendency in industries. It also had the objective of removing regional disparities.

IPR 1956 was adopted in order to accomplish the aim of state controlling the commanding heights of economy. This policy was aligned with the Indian economy's inclination towards socialist pattern of system of Soviet Union. According to this resolution, industries were classified into following three categories:

Category 1: Those industries that are established and owned exclusively by the public sector.  

Category 2: Those industries in which public sector will perform the primary role while the private sector will play the secondary role. That is, the private sector supplements the public sector in these industries.  

Category 3: Those industries that are not included in Category 1 and Category 2 are left to the private sector.  

Some industries that were left to the private sector, the government owns an indirect control by the way of license. In order to initiate a new industry, private entrepreneurs should obtain license (or permit) from the government. By licensing system, tax holidays and subsidies government can promote industries in a backward region that will ,in turn, promote the welfare and development of that region. This was supposed to reduce regional disparities.

Further, in order to expand the scale of production, private sector needs to obtain license from government. This was supposed to keep a check on the production of goods that are socially undesirable and unwanted. Hence, the state fully controlled the private sector either directly or indirectly.

The different sectors of the economy from which the GDP of a country is derived are:

1. Agriculture sector or primary sector

2. Industrial Sector or secondary sector

3. Service sector or tertiary sector.

When all the economic activities which will be owned and managed by private sector or private investors then it is called as capitalistic economy.

When all the economic activities which will be owned and managed by public sector can be called as socialistic economy

Ways to increase employment opportunities :

(i) Loan should be given at cheap rates and at less documentation.

(ii) Industries should be located where a large number of people may be employed.

(iii) Educational facilities should be improved and new schools should be set up. Education system should be made employment- oriented. Vocational training should be merged in mainstream education pattern.

(iv) Small-scale industries should be encouraged. Regional craft industries and services should be promoted.

(v) Improving organised retailing Giving better facilities and allowing more foreign investment will give many employment opportunities in urban areas.

Both growth and equity are the two important aspects of India's five-year plans. While growth refers to the increase in GDP over a long period of time equity refers to an equitable distribution of GDP so that the benefits due to higher economic growth are shared by all sections of population. Equity implies social justice. Growth itself is desirable but growth in itself does not guarantee the welfare of people. Growth is assessed by the market value of goods and services (GDP) and it may be possible that the goods and services that are produced will not benefit the majority of population. In other words, only a few with high level of living and money income may get the share of GDP. Hence, growth with equity is a rational and desirable objective of planning. This objective ensures that all the people share the benefits of high growth equally and, hence, this not only leads to reduction of inequality of income, poverty promotion of egalitarian society but also enables everyone to be self-reliant. Therefore, to conclude, it can be said that growth with equity is the most important objective of an economic planning.

Growth refers to the increase in the country’s capacity to produce the output of goods and services within the country. A good indication of economic growth is the steady increase in GDP. Inequity every Indian should be able to meet his or her basic needs such as feed, a decent hotise, education, and health care and inequality in the distribution of wealth should be reduced. Hence growth with equity ‘implies that benefit of development should be evenly available to everybody.

The use of modem technology and input will raise productivity and consequently, the income of the people that will further raise the demand for goods and services. In order to fulfill these increased demands, there will be more job opportunities that will lead more people to be hired and hence more employment opportunities will be generated. Hence both modernisation and employment generation are not contradictory but are complementary to each other.

No, modernization as a planning objective does not contradict employment generation. In fact both modernization and employment generation are positively correlated. While modernization refers to the use of new and modern technology in production process that may make some people lose their jobs in the initial stages. But gradually, the use of modern technology and input will raise the productivity and, consequently, the income of the people that will further raise the demand for goods and services. In order to fulfill this increased demand, there will be more job opportunities that will lead more people to be hired and, hence, more employment opportunities will be generated. Hence, both modernization and employment generation are not contradictory but are complementary to each other.

As‘per a calculation made by Dadabhai Naoroji, in 1876, the rich contributed about 8% of the national income as taxes while the poor Indians poor contributed 15% of the national income as taxes.

RBI controls the commercial banks via various instruments like Statutory Liquidity Ratio (SLR), Cash Reserve Ratio (CRR), Bank Rate, Prime Lending Rate (PLR), Repo Rate, Reverse Repo Rate and fixing the interest rates and deciding the nature of lending to various sectors. These are those ratios and rates that are fixed by RBI and it is mandatory for all the commercial banks to follow or maintain these rates. All these measures control the commercials banks' operations and also control money supply in Indian economy.

To increase employment in urban areas, we will need to carry out the following tasks

(i) Promoting small scale industries

(ii) Providing loan facilities for the same

(iii) Increase vocational education courses, so that people educated for a vacation get jobs easily.

(iv) Give incentives for industry in urban areas to increase their capacity.

Unemployment is a major problem in India and it is prevalent in both rural and urban areas. Underemployment is also visible as disguised unemployment in agricultural sector in rural areas and as unorganised service sector in urban areas. These issues need to be addressed properly.

The steps that should he taken to increase employment:

(i) Education and health sector can create massive employment in urban as well as rural areas. Proper planning needs to strengthen these sectors.
Vocational training also creates massive employment.

(ii) Allied activities like horticulture, pisciculture should be promoted through financial assistance, awareness programmes which will create employment in rural areas.

(iii) Promotion of small scale industries and self-help groups will create employment in urban areas.

(iv) Tertiary activities like inclusive banking, promotion of market etc can penetrate service sector to rural areas and induce mobilisation and growth in Primary sector and ultimately create employment.

(v) Cheap credit for creation of new enterprises and encouraging foreign investment can also create employment in both rural and urban areas.

(vi) Social safety programmes like NREGA, NRLM (National Rural Livelihood Mission) etc generate massive employment in rural and urban areas respectively.

The sectors from which the GDP of a country derived are: 

1. Agricultural sector.

2. Service sector.

3. Industrial sector.

The first five year plan focussed on higher agriculture production as the country was confronted with an acute shortage of food grains when the first five year plan was initiated.

The capital intensive industries are those industries which use more capital (machines) and less of labour.

The labour intensive industries are those industries which use more labour and less capital.

Services such as transportation, education, water and irrigation, etc. necessary for the primary development of a nation are called basic or primary services.

The period of East India Company Raj or Rule.

At the time of independence, Indian economic conditions were very poor and weak. There were neither sufficient foreign reserve nor did India have international investment credibility. In the fact of such poor economic condition it was only the public sectors that need to take the initiative. The following are the reason that explains the driving role of the public sector in the industrial development:  

1. Need of Heavy Investment: There was a need of heavy investment for industrial development. It was very difficult for the private sector to invest such a big amount. Further, the risks involved in these projects were also very high and also these projects had long gestation period. Thus, the government played the leading role to provide the basic framework of heavy industries.  

2. Low Level of Demand: At the time of independence, the majority of population was poor and had low level of income. Consequently, there was low level of demand and so there was no impetus for any private sector to undertake investment in order to fulfill these demands. Thus, India was trapped into a vicious circle of low demand. The only way to encourage demand was by public sector investments.  

3. Development of infrastructure such as roads, railways, communication facilities etc.  

4. Development of rural villages and other backward areas.  

5. To mobilize savings and earn foreign exchange.  

6. To prevent concentration of economic power.  

7. Promotion of equality of income and equal wealth distribution.  

8. Creation of more employment opportunities.

After independence, population in India has grown annually by 1.5% which means there is population explosion in India.

Green Revolution led to an increase in the production of food grains. With the use of modern technology, extensive use of fertilisers, pesticides and HYV seeds there was a significant increase in the agricultural productivity and product per farm land. In addition, the spread of marketing system, abolition of intermediaries and easy availability of credit has enabled farmers with greater portion of marketable surplus. All these factors enabled the government to procure sufficient food grains to build the buffer stock and to provide cushion against the shocks of famines and shortages.

Class 12 Economics MCQ Questions Indian Economy 1950-1990 with Answers were prepared based on the latest syllabus and exam pattern. We should keep in mind the need for significant MCQ Questions when we are studying that we need them for better understanding the ideas after we have got done with studying.

Significant MCQ Questions for class 12 give a framework about how we should study. So, we can answer our paper with a particular goal in mind - the way that will get us the higher marks. The class 12 Indian Economy significant inquiries will help you by telling you the best way to outline your answers to such an extent that full stamps are ensured for you. We have given Indian Economy on the Eve of Independence Class 12 Economics MCQ Questions with Answers to assist understudies with understanding the idea well overall.

Let's Start Practice of given Multiple Choice Questions for scoring high in the exam: -

1. In which of the following type of economy are resources owned privately and the main objective behind economic activities is profit-making?

(A) Capitalist

(B) Socialist

(C) Mixed

(D) Global

2. Which of the following is the main objective of carrying out various economic activities?

(A) Profit

(B) Public welfare

(C) Competition

(D) Equality

3. When was the National Development Council (NDC) set up as an adjunct to the Planning Commission?

(A) 1950

(B) 1969

(C) 1952

(D) 1979

4. Which of the following had been responsible for the heavy burden of the deal and its interest?

(A) BOP deficit

(B) BOP surplus

(C) Equilibrium

(D) None of these

5. Agriculture sector contributed ___ percent to the GDP in 1990-91.

(A) 24.6

(B) 34.9

(C) 40.5

(D) 59.0

6. What is needed to provide protection against natural calamities like floods, drought, locusts, thunderstorms, etc.?

(A) Multiple cropping

(B) Green revolution

(C) Crop insurance

(D) HYV

7. When was the Planning Commission set up in India?

(a) 1952

(b) 1950

(c) 1964

(d) 1975

8. Which economy produces the goods that can be sold in the domestic or foreign market for profit motive?

(a) Capitalist economy

(b) Socialist economy

(c) Mixed Economy

(d) None of the above

9. Who was the Chairperson of the Planning Commission of India ?

(a) President of India

(b) Finance Minister of India

(c) Prime Minister of India

(d) Governor of RBI

10. Which one of the following , is not a goal of the Planning Commission ?

(a) Economic Growth

(b) Equity

(c) Resource conservation

(d) Self-reliance

11. In the language of economics, which one of the following is a good-indicator of economic growth?

a) GDP

b) NDP

c) GNP

d) NNP

12. What is the term used for the policy ,which promote setting up of an upper limit of the land that could be owned by a landowner ?

(a) Land Fragmentation

(b) Land Ceiling

(c) Land Cultivation

(d) Land Tilling

13..Name the two states in which land-reform were successful ?

(a) Maharashtra and Tamil Nadu

(b) Karnataka and West Bengal

(c) Uttar Pradesh and Bihar

(d) West Bengal and Kerala

14. Which of the following statements is true about the licensing policy followed by the Indian Economy in the 1950-1990 era?

(a) It helped to promote regional equality in the industry

(b) It helped to check the undue expansion of the industrial sector

(c) It helped to promote regional equality in the industry as well as to check the undue expansion of the industrial sector

(d) None of the above

15. Which of the following is the main differentiation between the small scale units and large scale units?

(a) The amount of investment

(b)  The volume of output

(c) The size of the unit area

(d) The volume of sale

16. What was the main reason behind the private sector not coming forward to start the capital goods industries?

(a) The private sector suffered from a lack of capital

(b)  The private sector suffered from a lack of demand for their finished goods

(c) The private sector suffered from a lack of capital as well as a lack of demand for their finished goods

(d) None of the above

17. Which of the following statements about the Indian Economy is true during the Era of 1950-1990?

(a) The abolition of intermediaries was a part of the industrial reforms in India

(b) The abolition of intermediaries was a part of the external sector reforms in India

(c) The abolition of intermediaries was a part of the land reforms in India

(d) The abolition of intermediaries was a part of the banking reforms in India

18. Which of the following statements is true about the Indian Economy in the 1950-1990 era?

(a) India had adopted the socialist form of economic system in the 1950-1990 era

(b) India had adopted the capitalist form of economic system in the 1950-1990 era

(c)  India had adopted the mixed form of economic system in the 1950-1990 era

(d) India had adopted the traditional form of economic system in the 1950-1990 era

19. Which of the following statements accurately reflects the trade policy followed by the Indian Government during the 1950-1990 era?

(a) The Government made use of quotas to protect the goods produced in India from the imports

(b) The Government made use of tariffs to protect the goods produced in India from the imports

(c) The Government made use of export promotion to protect the goods produced in India from the imports

(d) All of the above

20. Which of the following statements is true about land ceilings?

(a) The land ceiling refers to fixing rural landholdings at their existing levels

(b) The land ceiling refers to fixing the land areas for the purpose of irrigation

(c) The land ceiling refers to fixing the urban landholdings at the existing levels

(d) The land ceiling refers to fixing the total quantum of land that is held by an individual

21. Which of the following is not true about the planning commission of India?

(a) The main aim of the planning commission is to ensure economic growth in the country

(b) The main aim of the planning commission is to ensure equity in the country

(c)  The main aim of the planning commission is to ensure the conservation of resources in the country

(d) The main aim of the planning commission is to ensure self-reliance in the country

22. Planning is needed to solve the central problems of:

(a) What to produce

(b) How to produce

(c) For whom to produce

(d) All the above

23. Rate of economic growth is measured by rate of change in:

(a) Nominal GDP

(b) Read GDP

(c) DP at current price

(d) Any one of the above

24. From 2017 onwards India has adopted of the period of vision of:

(a) 5 years

(b) 10 years

(c) 15 years

(d) 20 years

25. Modernization refers to change in:

(a) Technology

(b) Management techniques

(c) Social outlook

(d) All the above

Answer:

1. Answer (A) Capitalist

2. Answer (B) Public welfare

3. Answer (C) 1952

4. Answer (A) BOP deficit

5. Answer (B) 34.9

6. Answer (C) Crop insurance

7. Answer (B) 1950 

Explanation :The Planning Commission in India was set up in 1950. 

8. Answer (A)  Capitalist economy

Explanation :  in Capitalist economy, goods are produced and sold by the market which works on profit motive.

9. Answer (c) Prime Minister of India

Explanation : Prime Minister of India always acts as the Chairperson of the Planning Commission.

10. Answer (c) Resource conservation

Explanation : Resource conservation was not one of the four goals of the Planning Commission.

11. Answer (a) GDP

Explanation :  GDP or the Goss Domestic Product can be defined as the market value of all the goods and services produced within the domestic boundary of India during a financial year. It acts as a good-indicator of economic growth of the country. 

12. Answer (b) Land Ceiling

Explanation : Land Ceiling is a policy of land reform which means setting up of a maximum limit on the ownership of the land.

13. Answer (d) West Bengal and Kerala

Explanation : West Bengal and Kerala are the two states in which land-reform was successful because Government of these states was committed towards the implementation of the policy. 

14. Answer (c) It helped to promote regional equality in the industry as well as to check the undue expansion of the industrial sector

15. Answer (a) The amount of investment

16. Answer (c)  The private sector suffered from a lack of capital as well as a lack of demand for their finished goods.

17. Answer (c) The abolition of intermediaries was a part of the land reforms in India

18. Answer (a) India had adopted the socialist form of economic system in the 1950-1990 era

19. Answer (d) All of the above

20. Answer (d) The land ceiling refers to fixing the total quantum of land that is held by an individual

21. Answer (c) The main aim of the planning commission is to ensure the conservation of resources in the country

22. Answer (d) All the above

23. Answer (b) Read GDP

24. Answer (c) 15 years

25. Answer (d) All the above

The spread of Green Revolution technology enables India to achieve self-sufficiency in food grains. New India is not importing food grains from other countries of the world. We no longer had to be at the mercy of America or any other nation for meeting our nation’s food requirements. Now we are exporting wheat and rice to number of countries.

23.84 crores.

Green Revolution led to an increase in the production of food grains with the use of modem technology, extensive use of fertilisers, pesticides and HYV seeds. There was a significant increase in agriculture productivity and product per farmland.

In addition to the spread of marketing system, abolition of intermediaries and easy availability of credit has enabled farmers with greater portion of marketable surplus. These factors enabled the Government to procure sufficient food grains to build the buffer stock and to Provide cushion against the shocks of famines and shortages.

In India, between 1950 and 1990, the proportion of GDP contributed by agriculture declined significantly but not the population depending on it (69.5% in 1950 to 64.9% by 1990). The agricultural output could have grown with much less people working in the sector. This is because the industrial sector and the service sector did not absorb the people working in the agricultural sector. Many economist call this an important failure of our policies followed during 1950-1990.

Poverty, malnutrition and poor health.

The exploitative colonial rale created a damaging effect on almost every sphere of Indian Economy. As a result, India faced major economic challenges at the time of independednce such as:

1. Low Agricultural Productivity:

During the colonial rule Indian agricultural sector was exploited by the British to serve their own interest. As a result, Indian agricultural sector experienced stagnation, low level of productivity and lack of investment in technology, fertilizers and irrigation facilities. This resulted in poor condition of landless farmers and peasants. Commercialization of agriculture created shortage of food gains in India.

Thus, the immediate concern for India was to develop its agricultural ., sector and its productivity to become self – reliant and ensure food security for people. Some v of the immediate reforms needed at die time of independence were abolition of zamindari system, heed of land reforms, reducing inequality of land ownership and upliftment of the peasant’s apart from increasing the use of fertilizers and better technology.

2. Under-developed Industrial Sector:

India Med to develop a sound industrial base during the colonial rule. There was a need of huge capital investments, infrastructure, human skills, technical know – how and modern technology for industrialization. Further, due to stiff competition from the British industries, India’s domestic industries had failed to sustain.

Thus, development of small scale and large scale industries simultaneously while facing capital shortage was matter of concern for india. The need to increase the share of industrial sector to India’s GDP was one of the important economic challenges for India.

3. Inadequate Infrastructure:

Although, the British brought about significant infrastructural development in the country, but k was done only for serving their interests and was not sufficient to improve the performance of Agricultural and industrial sector in the country. Also, there was a need to upgrade and to modernize the existing infrastructure to enhance connectivity.

4. Poverty and inequalities

India was trapped in the vicious circle of poverty and inequality. The colonial rule drained out a significant portion of India’s wealth to Britain. Consequently, majority of India’s population was living in abject poverty. Economic inequalities were present across the country due to the different economic classes that had emerged due to British policies like zamindari system.

Correct option is (C) 1935

Correct option is (B) 1853