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Any new technology will be looked upon as being risky by farmers. Subsidies were, therefore needed to encourage farmers to test the new technology Some economists believe that once the technology is found profitable and is widely adopted, subsidies should be hased out since their purpose has been served. Further, subsidies are meant to benefit the farmers but a substantial amount of fertilizer subsidy also benefits the fertilizer industry and among farmers, the subsidy largely benefits the farmers in the more prosperous regions.

Therefore, it is argued that there is no case for continuing with fertilizer subsidies, it does not benefit the target group and it is a huge burden on the Government’s finances. On the other hand, some believe that the Government should continue with agriculture subsidies because farming in Indian continues to be a risky business. Most farmers are very poor and they will not be able to afford the required inputs without subsidies.

Eliminating subsidies will increase the inequality between rich and poor farmer and violate the goal of equity. These experts argue that if subsidies are largely benefiting the fertilizer industry and big formers the correct policy is not to abolish subsidies but to take steps to ensure that only the poor farmers enjoy the benefits.

India concentrated more on agriculture and less on industries and service sector. Hence, India’s economic growth was slower post-independence.

Industries:

Post-independence India developed well in industrial sector. The contribution of industrial sector in employment and national income has increased over time.

Contribution in employment:
In 1950-51, the share of industries in employment was 10.6%. This increased to 18.2% in 2001 and further to 24.3% in 2011-12.

Contribution in national income:

• In 1950-51, the share of industries in national income was 16.6%. This increased to 26% in 2013-14
  (Source: CSO i.e. Central Statistical Organization).
• Today, 2/3rd of the export earnings are earned from the industrial sector.
• Although the industrial sector is progressing, India cannot be called a completely industrialized nation.

By 1947 i.e. when India became independent, India’s rail network spread to 53,000 km. and served 68 lakh people.

Unemployment:

• India has been a facing a severe problem of structural unemployment.
• Structural unemployment refers to a form of unemployment caused by a mismatch between the skills that workers in the economy have, and the skills, demanded by employers.
• In 1951, 33 lakh people were unemployed.
• In 1999-2000, 7.31% of the total population was unemployed. This increased to 8.2% in the 2004-05 (Source: NSSO-National Sample Survey Organization).
• The good side is that the unemployment decreased to 6.6% in 2009-10 and further to 5.6 in 2011-12.
• The proportion of disguised unemployment is higher in rural areas. Disguised unemployment cannot be exactly measured.

By the end of 19th century, Indian roads were spread to 2,78,420 km which increased to 4,47,105 by 1943. 32% of these roads were concrete (‘pakka’) roads and 68% were ‘kachcha’ roads.

Correct option is (B) 50%

Exports items of India are -spices, wheat, sugar, indigo, opium, sesame oil, cotton, parrot, live animals and animal products such as hides, skin, furs, horns, tortoise shells, pearls, sapphires, quartz, crystal, lapis, lazuli, granites, turquoise and copper etc.

Yes, we do agree with the above statement that the traditional handicrafts industries were ruined under the British times. The following are the reasons in favour of the statement.  

(i) Discriminatory Tariff Policy: The British rule in India corresponded with its industrialisation. The British rule used India both as a source of cheap raw materials as well as easy accessible market for their finished products. Thereby, they imposed heavy tariffs (export duties) on India's export of handicraft products, while allowed free export of India's raw material to Britain and free import of British products into India. This made Indian exports costlier and its international demand fell drastically leading to the collapse of handicrafts industries.  

(ii) Competition from Machine made Britain Goods: The demand for the handicrafts products experienced a downward trend in the domestic markets as well. This was due to stiff competition from the machine made textiles from Britain. This was because of the reason that the goods produced mechanically in Britain were comparatively cheaper and of superior quality than the Indian handicraft goods. This narrowed the market for Indian industries.  

(iii) Emergence of New Class: The British rule in India popularised western lifestyle in India. There was an emergence of a new section of population (consisting mainly of zamindars) in India who liked the British goods. This section used to spend lavishly on the British products that provided impetus for the development of British industries at the cost of the domestic industries. Hence, gradually Indian industries perished away.  

(iv) Disappearance of Princely State: Prior to the advent of British, India was ruled by princely states. They used to patronise handicrafts industries and consequently, Indian handicrafts gained reputation in the international markets. But during the British rule, these princely states were ruined thereby ruining the protection of these handicrafts industries. Thus, gradually Indian handicrafts lost its reputation and its importance deteriorated.

In India, employment is studied in three sectors. They are:

(a) Primary sector:

This sector includes agriculture and allied activities, dairy farming and animal husbandry.

(b) Industrial sector:

All activities that consist of production such as manufacturing, construction, mining, quarrying, etc. are included in service sector.

(c) Service sector:

Service sector includes all activities related to trade, banking, transport, information and broadcasting, health, education, etc.

ustrial policy:

• The period from 1750 to 1830 was the period of Industrial Revolution in the west.
• Also, during this period the East India Company started establishing its rule in India. By 1858 it established its rule completely.
• Due to unjust policies of the British Government, the Indian investors had lost their confidence.
• Due to these reasons, the Indian industries did not develop much. Our industries produced only few light and consumer goods. We did not have heavy and basic industries that could produce machines, engineering equipment, heavy chemicals and other such key products.

Various forms of colonial exploitation of the Indian economy during the British Raj are

1. Colonial exploitation of agriculture sector: 

Agriculture was exploited though Zamindari system of land revenue. Zamindars were declared as owners of Land. They were to pay a fixed sum to the Government by way of land revenue They were free to extract as much as they wished from tillers of the soil.

2. Colonial exploitation of industrial sector: 

Handicrafts dominated in Indian economy before British rule. They were system actically destroyed by allowing tariff-free import of machine made goods from Britain.

3. Colonial exploitation of international trade: 

India’s international trade was exploited through discriminatory tariff policy, duty free export of Indian raw material and duty free import of British goods were encouraged for the benefit of British rule.

Unemployment decreased in 2009-10 to 6.6%. It also further decreased in 2011-12 and became 5.6%.

Roadways:

The British created a good network of roadways in India.

• They set-up Public Works Department (PWD). PWD used to raise several important and basic utilities needed by a city or town.
• By the end of 19th century, Indians roads were spread to 2,78,420 km. This increased to 4,47,105 by 1943. 32% of these roads were concrete (‘pakka’) roads and 68% were ‘kachcha’ roads.

• Indian civilization has emerged from the influence of Aryans and Indus Valley Civilization.
• Indus Valley Civilization is also called the Harappan Civilization and it influenced the ancient India.
• The remains of this civilization were first found at ‘Harappa’ and ‘Mohen-jo- Daro’. In Gujarat we can find its remains at Lothal and Dholavira.
• From this civilization one can obtain evidences of the beautiful organization, prosperity, wonderful urban planning and development that existed in India.
• India was quite famous for cloth, muslin, jute, indigo, etc. that it produced. With the arrival of the British, India learnt tea plantation too. Today, India is one of the biggest tea producer and exporter.
• Thus, before the British rule, India was quite rich in agriculture, industry and civilization.

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

High rates of excise and customs:

• The British collected high excise on match sticks, sugar, steel, silver and all such commodities.
• Though salt was easily available and produced in India, the British termed its production illegal. Then they monopolized salt trade, imported salt to India by charging high custom duties and made it an expensive commodity for poor Indians.
• To suppress the Indian cotton industry, the British levied high custom duty of upto 15% on cotton cloth exported from India. On the other hand, the British imported the cotton cloth from Manchester (England) at a much lower import duty of only about 2.5%.
• The British used to buy and export cotton from India at cheap rates to England and after manufacturing clothes from same cotton used to import and sell those clothes in India and earn huge profits.
• Thus, India’s raw materials were exported so that British industry could thrive at the cost of Indian industry.

Railway:

• The British established the railway infrastructure in India.
• The first rail ran in India between Boribandar (presently, CST in Mumbai) and Thane on 16th of April, 1853.
• By 1947 i.e. when India became independent, India’s rail network spread to 53,000 km. and served 68 lakh people.

• The British ruled India for about 200 years. In all these years they exploited Indian economy and emptied our resources.
• Although India faced huge economic exploitation, it also obtained certain advantages.
• It was the British who abolished several social evils like the sati pratha, female infanticide, etc.
• The British started railways in India. By 1947 i.e. when India became independent, India’s rail network spread to 53,000 km. and served 68 lakh people.
• The British also created a good network of roadways in India. By 1943 A.D. Indian roads covered 4,47,105 km.
• They set-up Public Works Department (PWD). PWD used to raise several important and basic utilities needed by a city or town.
• All these developments played a very positive and big role of serving as a platform for the free India.

Railways were introduced in 1850.

The railways affected the structure of the Indian economy in two important ways First it enabled people to undertake long distance travel land thereby break geographicall and cultural barriers Secondly it fostered commercialisation of Indian agriculture.

Primary sector basically means agriculture, It also includes allied services related to agriculture such as dairy farming and animal husbandry. This sector includes agriculture and allied activities, dairy farming and animal husbandry.

The formation of segments and links among these segments of a society is called social structure.

Occupational structure refers to distribution of working population across primary secondary and tertiary sectors of the country.

The structure or say divisions of people employed in various sectors of an economy is called the occupational structure of that economy.

In India, occupational structure’ is divided into three sectors namely

1. Agriculture or primary sector
2. Industries and
3. Services or service sector.

The occupational structure that refers to the distribution of population engaged in different occupations, showed no variation throughout the British rule. The following are the salient features of India's pre-independence occupational structure:  

(i) Agriculture- The Prime Occupation: Under the colonial rule, India was basically an agrarian economy, employing nearly 85% of its population. As India had a massive poverty during the colonial rule, so a large proportion of the population was engaged in agricultural sector to earn their subsistence. But due to the prevalence of Zamindari system, agricultural sector lacked investment and, thereby, its growth was highly constrained. Thus, in other words, despite employing a significant proportion of the population, the growth of agriculture sector was meager.  

(ii) Industry- The Bleak Occupation: Apart from agriculture, a small proportion of population was employed in manufacturing sector. Nearly 10% of the total workforce was engaged in manufacturing and industrial sector. This was due to the stiff competition that the Indian industries faced from the machine made cheap goods from Britain. Further, the lack of investment, initiatives and the unfavourable tariff structure constrained industrial sector. Thus, the Indian industrial sector failed to contribute significantly to India's GDP.  

(iii) Unbalanced Growth: The three sectors of Indian economy, i.e. agricultural, industrial and tertiary sector were unequally developed. While the agricultural sector was relatively developed, whereas, the other two sectors were at their infant stage. In addition, there was regional variation in the occupational structure of India. While on the one hand, states like Tamil Nadu, Andhra Pradesh and Bombay experienced a fall in the agricultural work force on the other hand states like Orissa, Rajasthan and Punjab experienced a rise in the agricultural workforce.

India's Demographic conditions during the British rule depict our economy as stagnant and Downloaded from backward. Both the birth rate and death rate were as high as 48 and 40 per thousand. Due to high birth rate and high death rate the population growth was stagnant. The Infant Mortality Rate was also very high of about 218 per thousand. The Life Expectancy Rate was as low as 32 years while presently it is 63.5 years. The literacy rate was less than 16 percent that denotes  social backwardness and gender bias in the economy. We can infer from the above figures that India was featured with massive poverty, low standard and quality of living and low survival rate in the country. The lack of health care facilities and lack of health awareness were the main causes behind such demographic conditions of India. The Indian’s standard of living was so low that people were not getting basic amenities like food, clothes and shelter. Moreover, some parts of India came under severe famine conditions. The famines were so severe that millions died.

India’s demographic conditions during the British rule depict our economy as stagnant and backward. Due to high birth rate and high death rate the population growth was stagnant before 1921, the Infant Moratality Rate was also very high at about 218 per thousand which today stands at 47.57 per thousand. The life expectancy rate was low at 32 years while presently, it is around 66.8 years.

The literacy rate was less than 16% with female literacy rate of just 7% which denotes social backwardness and gender bias in the economy. We can infer from the above figures that India was featured with massive poverty, low standard and quality of living and low survival rate in the country. The lack of health care facilities and lack of health awareness were the main causes behind such demographic conditions of India.

As the British government was never interested in upliftment of our country, so they never took any initiative to measure India's national and per capita income. Though some of the economists tried to estimate India's national income and per capita income during the colonial rule, but the results were conflicting and inconsistent. The following are some of the notable economists who were engaged in estimation of national income and per capita income: 

(i) Dadabhai Naroji  

(ii) William Digbay  

(iii) Findlay Shirras  

(iv) V.K.R.V Rao  

(v) R.C. Desai   

Out of these, V.K.R.V Rao's whose estimates during the colonial period was considered very significant. Most of these studies revealed that Indian economy grew at even less than two percent during 1900-50 with half per cent growth in per capita output per year.

V.K.R.V. Rao, DadaBhaiNaoroji, Findlary Shilar, WilliamDigby, R.C.DesaiRao, etc,,

The restrictive policies of commodity, production, trade and tariff pursued by the colonial government adversely affected the structure, composition and volume of India’s foreign trade.

Capital goods industries means industries which can produce machine tools used for producing articles for current consumption.

The sector of the economy engaged in the manufacturing, processing, construction, electricity gas and water supply are known as secondary sector.

Secondary Sectors importance in Indian economy: 

(i) The Secondary sector contributes more than 20% to the GDP of India.

(ii) It provides employment to the people.

(iii) It provides goods to the people like cloth, sugarcane, iron and steel.

(iv) The Secondary sector promotes the development of the Primary and the Tertiary sectors.

It produces instruments and appliances that directly help Primary sector for better production.
It assimilates disguised unemployment and the workers of Primary sector in their leisure period and could not let them escape from their activities. It also contributes significantly to the GDP of India and employment basket.

The occupational structure of a country refers to the distribution of its workforce according to the different occupations. It indicates the structure of economic activities. It tells us on what sector the people of the country depend for their living. It also indicates the level of development of the country.

As a country develops, it undergoes structural changes with the development of the economy the share of agriculture declines and the share of industry becomes dominant. At higher levels of development, the service sector contributes more to the GDP than the other two sectors. In India, the share of agriculture in GDP is declining and the share of service sector is increasing. It reflects the relationship of economic development and structural changes.

Industrial policy resolution of 195 6 formed the basis of the second five year plan.

When all the citizen of the country do not get food for living, it is known as food problem.

The reforms which are related to institutional changes in the field of agriculture for its development.

The former ‘ Soviet union’ is the pioneer in national planning.

In the world there are majorly three important economic systems they are:

1. capitalism

2. socialism and

3. mixed economy.

Soon after independence, India faced an important choice to opt either for capitalism or socialism. Finally, India, inspired by the extraordinary success of planning in Soviet Union, opted for socialism. Although, Indian political and economic conditions were not as favourable as it was for Soviet Unions to opt for socialism, yet India adopted socialism but with a difference. India hinged upon the socialist idea with a strong emphasis on public sector and active participation of the private sector in a democratic framework. The Planning Commission (1950) was established with the motive that the government would undertake comprehensive planning for the nation as a whole, where public sector would lay down the basic economic framework and would encourage private sector for their active contribution to the economic growth.

The duration of Indian plans is ‘five years ’

Marketable surplus refers to the difference between the total output produced by a farmer and his own farm consumption or we can say, the portion of agriculture produce which is sold in the market by the farmers is called market surplus. Marketable surplus = Total farm output produced by farmer – own consumption of farm output.

Every plan should have specified goals. Plan without goal is like life without soul. While a plan specifies the means and ways to allocate scarce resources to achieve proposed targets, goals are the ultimate targets, the achievement of which ensures the success of plans. Thus, plans must include the goals. It will be unrealistic to expect all the goals of the plan to be given equal importance in all the plans. In fact, goals may actually be in conflict so the planners need to balance the goals. Different goals are being emphasized in different five year plans in India.

High Yielding Variety of seeds was developed by the Nobel Laureate Dr. Narman Barlauf in Mexico. These seeds are more productive and need regular and adequate irrigation facilities along with greater use of fertilizers and pesticides. In 1966, consequent to the use of HYV seeds, Indian agricultural sector experienced Green Revolution, especially in the crops of rice and wheat. HYV seeds grow faster than the normal seeds and, consequently, crops can be harvested in a much shorter time period. Initially, HYV seeds were used in states like Punjab, Andhra Pradesh and Tamil Nadu (as these states had more suitable irrigation facilities) and later on to other states. Consequent to the use of HYV seeds, the production of food grains in 1967-68 increased by 25% (approx).

High Yielding Variety (HYV) seeds are seeds, which produce large quantities of crops especially wheat and rice. The use of these seeds requires regular supply of water and optimum use of fertilizer and pesticide in correct proportions. Hence, the farmers require reliable irrigation facilities as well as the financial resources to purchase fertilizer and pesticide to benefit from. 

HYV seeds. Due to this reason, the use of HYV seeds was restricted to the more affluent states such as Punjab, Andhra Pradesh and Tamil Nadu and mainly benefitted Wheat production in the first phase of the Green Revolution during mid 1960s up to mid 1970s, In the second phase of the Green Revolution (mid 1970s to mid 1980s), the HYV technology spread to a large number of states and benefited more variety of crops. The HYV seeds enabled India to achieve self- sufficiency in food grains.

Tariffs are imposed to make imports from foreign countries relatively expensive than domestic goods, thereby, discouraging imports indirectly. These are imposed to provide a safe and protective environment to the infant domestic firms from their technologically advanced foreign counterparts. Tariffs facilitate the domestic firms to survive and grow. Tariffs are also imposed on those goods that the government thinks to be socially unwanted and imports of which will exert unnecessary burden on the scarce foreign exchange reserves.