Freedom of enterprise

Move to a higher demand curve

The quantity of inputs and the quantity of output

All the above

Both (a) and (c)

transfer payment

All of the above

AD < AS

Disinvestment

Autonomous items

All of the above are true

All of the above

Both (a) and (b)

decreased

labourers

All of the above

hired workers

interdependent

MNCs are driven by the profit motive, hence their production decisions are highly motivated to target high income group in India, who can afford to buy goods produced by MNCs at a higher price. As the MNCs are bringing new technology in India, it would shift India's PPC rightwards/outwards, indicating expansion of production capacity of all the goods.

Given, P = Rs.12,
P₁ = Rs.14
\(\Delta P\) = P₁ - P = 14 - 12 = Rs.2
Q = 24 units,
Q₁ = 20 units
\(\Delta Q\) = Q₁ - Q = 20 - 24 = (-)4 units
E_d = (-)\(\frac{\Delta Q}{\Delta P} \times \frac{P}{Q}=(-)\frac{-4}{2}\times\frac{12}{24}=1\)
Price Elasticity of Demand (E_d) = 1 (Unitary elastic demand)

With increase in the price of the substitute good, the equilibrium price of the concerned good will increase owing to shift in demand curve to the right.

NNP_FC =  (i) + (iv) + (vi) + (vii) + (viii) + (ix) + (xii) - (ii)
=200+700+20+30+150+100+50-10
=Rs 1240 crores
Private income = NDP_FC - (x) + (iii) + (v) - (xi) - (ii)
=1250-250+15+10-5-10
=Rs 1010 crores

Legal tender refers to money which has the power to discharge debt obligations, and a creditor cannot refuse to accept it in return for his credit. Fiat money is any money that is under the fiat or order from the government to act as money.

Here, \(\triangle\)I = RS. 2000 crore, MPS = 0.25
Now,  \(K=\frac { 1 }{ MPS } =\frac { 1 }{ 0.25 } =4\)
Again, we know that, \(K=\frac { \Delta Y }{ \Delta I } \)
or  \(4=\frac { \Delta Y }{ 2000 } \) or \(\Delta Y=2000\times 4=RS.8000\quad crore\)

Revenue  Deficit
                         = Revenue receipts - Revenue receipts  
                         = 60000-50000= Rs 1000 crore

Foreign exchange rate has an inverse relationship with the demand for foreign currency. With a fall in the price of foreign exchange, value of domestic currency increases and that of foreign currency falls. It implies that foreign goods become cheaper and their domestic demand increases.

The nsmg domestic demand for foreign goods implies higher demand for foreign exchange which increases from OD₁ to OD_2, when exchange rate falls from OR₁ to OR₂, as shown in the figur

In India, railways was introduced by British in 1850, however it began its operation in 1853.
It affected the structure of the Indian economy in many ways:
(i) It enabled people to undertake long distance travel and thereby break geographical and cultural barriers.
(ii) It fostered commercialisation on Indian agriculture which adversely affected the self-sufficiency of the village economies in India.

Devaluation of rupee means a. deliberate downward adjustment in the official exchange rate of rupee relative to other currencies. For example, if the dollar-rupee exchange rate which was $ 1 =Rs.50, is changed to $ 1 = Rs.60, under fixed exchange rate system by the government, then in such an instance, rupee is said to be devalued.
There were two important implications of devaluation of rupee in 1991. First, devaluation made India's exports relatively less expensive for foreigners and increased their competitiveness and second, it made foreign products relatively more expensive for domestic consumers, discouraging imports.

The government identifies PSUs and declares them as Maharatnas, Navratnas and Miniratnas in order to improve their efficiency and enable them to compete globally. They are given greater managerial and operational autonomy in taking various decisions. In 2011, about 90 public enterprises were designated with different status.
The granting of this special status resulted in better performance of these companies.

Poverty and unemployment usually go together. Those who fail to get employment become a burden on the limited family income and thus, per capita consumption level decreases.
Decrease in consumption levels further decreases an individual's earning capacity and he is unable to come out of vicious circle of poverty. It has been observed that most of the poor are either unemployed or intermittently employed as casual labourers. Uncertainty of income does not enable them to meet their basic needs and they are thrown into poverty. Therefore, we can safely conclude that a high degree of positive correlation exists between poverty and unemployment.

The factors which contribute
formation are as follows:
(i) Expenditure on education
(ii) On-the-job training
(iii) Migration
(iv) Expenditure on health
(v) Expenditure on information

Rural banking has not been able to give adequate credit to farmers. This is mainly due to lack of proper infrastructure and instruments to dispense credit to needy farmers. It has also failed to develop a culture of deposit mobilisation, lending to worthwhile borrowers and effective loan recovery. Agriculture loan default rates are also high with high incidence of overdue instalments by the farmers.

Unemployment is both an economic and a social problem. Unemployment is an economic problem in the sense that unemployed persons will be consumers only without being a producer.
Non utilisation of human resources due to .unemployment involves double cost of maintenance and loss of output. Unemployment is a social problem in the sense that it causes enormous sufferings to unemployed workers due to their reduced or nil income. Many social evils like dishonesty, immorality, drinking, gambling, robbery, etc are the outcome of unemployment. It causes social disruption in the society and the government has to incur a heavy unproductive expenditure on law and order

Rising imports of crude and petroleum products has led to a severe problem in balance of payments. On the other hand, the costs and prices of a wide range of goods have increased due to global inflation in oil. Inspite of stringent monetary and fiscal controls, the wholesale price index in India has been continuously rising. With such high reliance on imported energy products, a significant proportion of the export earnings, which otherwise could be channelled into productive domestic investments, is used to meet expenditure on these imported products. Therefore, India's dependence on foreign countries for crude and petroleum products is a negative feature of our energy sector.

India has abundant natural resources in the terms of rich quality of soil, hundreds of rivers and tributaries, lush green forests, plenty of mineral deposits, vast stretch of Indian Ocean, ranges of mountains, etc. The black soil of the Deccan Plateau is suitable for cultivation of cotton. The Indo-gangetic plains are the most fertile regions in the world. India's forests provide green cover for its population and wildlife. Large deposits of iron-ore, coal and natural gas are found in the country.

Production possibility curve is based on the following assumptions:
(a) The economy is producing only two goods.
(b) The resources available with the economy are given and fixed:
(c) Resources are not equally suitable for production of both the goods but can be shifted from production of one good to the other.
(d) All the available resources are fully and efficiently employed and there is no wastage
(e) Technology available with the economy is also given and fixed.

M = Rs.24, P_x =Rs.4, Py = Rs.2
(i) 4_x + 5_y = 4 x 4 + 5 x 2 26· > M
Aconsumer cannot afford this bundle as money spent is greater than income of the consumer.
(ii) At equilibrium, \(MRS={P_X\over P_Y}={4\over 2}=2\)

The law of variable. proportions states that "As we hold one factor input fixed and keep increasing the other, the factor proportions change". Initially as we increase the amount of variable input, the factor proportions become more and more suitable for the production and marginal product increases. But after a certain level of employment, the production process becomes too crowded with the variable input and the factor proportions become less and less suitable for the production and the marginal product starts falling.

Co-operative oligopoly. When firms mutually decide price and output or follow any agreement and do not compete with each other. Non-cooperative oligopoly. Here firms do not have any agreement and compete with one another on prices to get more and more share in the market.

(i) Ice-cream purchased by a consumer is a consumer good.
Reason Here, ice-cream is purchased for the direct satisfaction of human wants.
(ii) Plant and machinery of XYZ company is a capital good.
Reason XYZ company uses plant and machinery in the process of production to produce final products.

Rs 220 lakh

Main functions of money are:
(i) Money acts as a medium of exchange. Money serves as a medium of exchange or medium of payments. Money helps in buying and selling of goods. Money acts as an intermediary and facilitates trade. Money has removed the difficulty of 'double coincidence of wants'.
(ii) Unit of value. Money serves as a unit of value or common measure of value, in terms of which the value of all goods and services are measured. This helps in measuring the exchange values of commodities, The price of all the goods and services can be fixed in terms of money and the problem of expressing the value of each commodity in terms of quantities of other goods can be avoided. This function of money facilitates keeping of business accounts.
(iii) Standard of deferred payments. Money also serves as a standard of deferred payments, i.e., those payments which are made in future. When we borrow money from somebody in the present, we have to return both the principal as well as interest amount at some future date. It is easy to make such payments in terms of money.
(iv) Store of value. Money serves as a store of value. It means that money is an asset and can be stored in future. Under barter system, storing of value (savings) is very difficult in terms of goods, but money has completely solved this problem. Now, savings are done in terms of money. Moreover, goods are perishable, money is not perishable in the same sense. Money occupies less space for storage in comparison with goods. Hence, money is the best form of store of value.

Inflationary gap refers to a situation where aggregate demand exceeds aggregate supply at full employment level of income. Following monetary policy measures can be used to correct the situation of excess demand:
(i) Increase in Bank Rate. Bank rate is the minimum rate at which the Central Bank of a country gives credit to the commercial banks. For controlling excess demand, situation the Central bank should increase the bank rate. An increase in bank rate raises the market rate of interest and credit becomes costly. Accordingly, the demand for credit reduces and accordingly aggregate demand is reduced.
(ii) open Market operations. Open market operations refer to the purchase and sale of securities in the open market by the Central bank. By selling the government securities, the Central bank withdraws additional purchasing power from the system, which results in the reduction of credit. As a result, aggregate demand is reduced.
(iii) Increase in legal reserve ratio. Commercial banks are required under law to keep with the Central bank a minimum percentage of their deposits. It is called cash reserve ratio. When there is a situation of excess demand, the Central bank increase the cash reserve ratio with a view to restricting the flow of credit. As a result, aggregate demand is reduced.
(iv) Margin requirements are the discounts determined by Central bank on the security mortgaged by the borrowers to the commercial banks. To correct excess demand situation, the central bank can raise the minimum margin requirements in selected commodities. The higher the margin requirements, less is the amount that can be lent to the borrowers. This in turn will adversely affect investment and thereby the aggregate demand.
(v) Government's Expenditure. Government does incur expenditure on its various administrative and welfare activities like security, education, relief measures, Sanitation, etc. During the situation of 'Excess demand', Government's expenditure has to be reduced, so that it will directly reduce AD, and thereby check the excess demand in the economy.
(vi) Repo rate refers to the rate at which Central bank lends to commercial banks for a short period. When the Central bank raise the repo rate, the borrowings by commercial banks becomes expensive. This, in turn, compels the commercial banks to raise their leading rate. As a result, borrowing becomes expensive and people will thereby borrow less and, thus, spend less. This, in turn helps in reducing inflation.
(vii) Reverse Repo Rate is the rate at which Central Bank borrows money from commercial banks. During excess demand, Central Bank increases Reverse Repo Rate. Due the high rate of interest, more and more banks supply to Central Bank because of more earnings. This decrease the supply of money in the market and thus, decrease the excess demand.
(viii) For controlling inflationary gap, the Central bank can raise CRR to restrict the flow of credit. If the Central bank raises the amount of CRR, the amount of deposits with the commercial banks is reduced. This also reduces the capacity of the commercial banks to create credit. Lending falls and as a result investment falls. Thus, aggregate demand falls and the problem of inflationary gap can be solved.

When revenue receipts are less than the revenue expenditure in government budget, this shortfall of receipts is known as revenue deficit.

Implications of revenue deficit are:

(i)High revenue deficit shows accumulated and recurring expenses of government on repayment expenses of government on repayment of loans,expenses on defence, etc.

(ii)The revenue deficit is managed by borrowings or disinvestment.Hence, High revenue deficit either increases government liabilities or causes reduction in government assets.

(iii) High revenue deficit leads to inflationary situation in the economy, as high government expenditure increases the Aggregate Demand of the economy. 

(iv)High revenue deficit implies high future burden of loan and interest payments on government.

Factors responsible for inflow of foreign capital are as follows:
(i) Foreigners purchasing goods of home country by the way of exports.
(ii) Foreign invetment in home country through joint ventures and through financial market operation.
(iii) Foreign currency inflow into the economy due to currency dealers and speculators.

Under the British rule, basic infrastructure such as railways, ports, water-transport, postage and telegraph developed, but the objective behind the development of infrastructure was not to provide basic amenities to the people but to cater to their colonial interests.
The objectives of the Britishers behind the development of infrastructure were:
(i) Roads were developed for the purpose of mobilising armies and transporting raw materials to the nearest railway station or port.
(ii) Railways was developed to encourage commercialisation of agriculture.
(iii) Postage and telegraph were introduced to enable them to control the large sub-continent.

The merits of mixed economic system are:
(i) Mixed economy gives adequate scope to private individuals to co-exist and contribute towards economic development.
(ii) In this, planned economic development ensures stability and balanced development.
The demerits of mixed economic system are 
(i) Mixed economy cannot effectively control the private sector industries which are outside the government purview.
(ii) It is characterised by red-tapism and high degree of corruption.

Since Independence, India followed the mixed economy framework by combining the advantages of the market economic system with those of the planned economic system. But over the years, this policy resulted in the establishment of a variety of rules and laws which were aimed at controlling and regulating the economy. These rules ended up hampering the process of growth and development. The economy was facing problems of declining foreign exchange, growing imports without matching rise in exports and high inflation. India changed its economic policies in 1991 due to the financial crisis and pressure from international organisations like the World Bank and IMF.

According to Dadabhai Naoroji. the average poverty line was three-fourth of the adult jail cost of living. The computation of jail cost of living can be understood in the following manner:
Adult population = \(\frac { 2 }{ 3 } \)
Food consumed by them = \(\frac { 2 }{ 3 } \times 1=\frac { 2 }{ 3 } \)
Child population = 1 = \(\frac { 2 }{ 3 } \)=\(\frac { 1 }{ 3 } \)
Food consumed by half of the child population
\(\frac { 1 }{ 3 } \times \frac { 1 }{ 2 } \times 0\) = 0
Food consumed by other half of the child population
\(\frac { 1 }{ 3 } \times \frac { 1 }{ 2 } \times 1\times \frac { 1 }{ 2 } =\frac { 1 }{ 12 } \)
Average poverty line = Total food consumed by adult and child population
\(\frac { 2 }{ 3 } +0+\frac { 1 }{ 12 } =\frac { 9 }{ 12 } =\frac { 3 }{ 4 } \)
So, poverty line is 3 / 4th of the adult jail cost of living.

Government's unwillingness to spend 6% of GDP on education has affected this sector adversely, as is enumerated with the help of given statistics.
(i) In India, about 30.3 crore people are still illiterate.
(ii) The female literacy rate is 65.46%, which is quite low as compared to male literacy rate of 82.14 percent.
(iii) There is disparity in education levels of urban and rural areas
The value which stands violated by the Central Government is complete disregard towards expert opinion.

Some obstacles that hinder the mechanism of agricultural marketing are:
(i) Faulty weighing and manipulation of accounts by traders which results in exploitation of farmers when they sell their products to traders
(ii) Farmers do not have proper storage facilities to store their produce for selling later at a better price. Hence, they are forced to sell even at lower price to save the produce from decaying
(iii) Due to lack of knowledge about the prices prevailing in the markets, farmers are forced to sell their produce at low prices

The central problems of an economy are as follows:
(a) What to produce is defined as the problem of choice between different goods that can be produced from the given scarce resources. An economy has millions of commodities to pr.oduce. It has to decide whether to produce luxury goods or necessities. It may have to decide between capital goods and consumer goods and so on.
(b) How to produce is defined as the problem of choice between different techniques of production available in the economy. Every economy faces the problem as to how resources should be combined for the production of a given commodity. Depending upon the abundance of a particular resource, an economy may choose between labour-intensive and capital- intensive techniques.
(c) For whom to produce is defined as the problem of choice between different ways of functional and physical distribution of income and output in the economy. What goods should be consumed and by whom depends upon how national product/income is distributed among people/factors of production. All central problems arise due to scarcity of available resources, having alternative uses.

Price elasticity of demand refers to the degree of responsiveness of quantity demanded of a commodity to a change in its price.
(a) One method of measuring price elasticity of demand is the percentage method.Under this method, the price elasticity of demand is measured by using the formula:
\(e_D={Proportionate\ change\ in\ quantity\ demanded\over Proportional\ change\ in\ its\ price }\)
\(={\Delta q\over \Delta p}\times{p\over q}\)
Example: Given:

\({e}_{D}={\Delta q\over \Delta p}\times{p\over q}={-10\over 10}\times{10\over 20}={-1\over 2}< 1\)
(b) Under total expenditure method to measure elasticity of demand, find out in what direction total expenditure changes as a result of change in the price of the commodity. We can consider three possible cases:
(i) e_d > 1. If with a fall in the price of the commodity total expenditure increases and with a rise in its price, total expenditure decreases then elasticity of demand is greater than unity.
(ii) e_d = 1. If rise or fall in the price of the commodity makes no change in total expenditure, then elasticity of demand is unitary.
(iii) e_d < 1. If with a fall in the price of a commodity total expenditure decreases and with a rise in its price, total expenditure increases, the elasticity of demand is less than unity.
The following table and diagram illustrate the idea:

(c) Under Geometric Method, the elasticity of demand is measured by using the formula:
Elasticity of demand \(={Lower\ segment\ of\ demand\ curve\over Upper\ segment\ of \ demand\ curve}\)
AB is a negatively sloped straight line demand curve joining the two axes. Elasticity at different points on demand curve can be calculated as follows:
At Point \(C={Lower\ segment\over Upper\ segment}={BC\over AC}\)

ASs    BC < AC
At Mid-Point \(D={BD\over AD}, As\ BD=AD\)
At Point \(E={BE\over AE}, As\ BE > AE,\)
At Point \(B={O\over AB}\)
At Point \(A={AB\over O}\)

Elasticity of supply may be defined as the degree of responsiveness of the quantity supplied of a commodity to change in its price.

Under geometric method, the elasticity of supply is measured at a point on the supply curve. To explain this method, let us draw three straight line supply curves.

To measure elasticity of supply at a point, we extend the supply curve so that its meets the x-axis at point B in its negative range, positive range and exactly at the point of origin. Elasticity of supply at a point (say A) is equal to the horizontal segment BC divided by the quantity supplied at point A. Thus,

\({ e }_{ s\quad }=\quad { BC }/{ OC }\)

In Fig.  (i), \({ e }_{ s }=\frac { BC }{ OC } >1\)                                              \(\left[ \because \quad BC\quad >\quad OC \right] \)

In Fig,  (ii), \({ e }_{ s }=\frac { BC }{ OC } <1\)                                                 \(\left[ \because \quad BC\quad <\quad OC \right] \)

In Fig,  (iii), \({ e }_{ s }=\frac { OC }{ OC } =1\)                                                  \(\left[ \because \quad BC\quad =\quad OC \right] \)

Thus, it can be concluded that:

a straight line supply curve which intersects the x-axis in its negative range implies e_s > 1

a straight line supply curve which intersects the x-axis in its positive range implies e_s < 1.

a straight line supply curve passing the origin implies e_s = 1irrespective of how steep or flat it is.

Under percentage method,  elasticity of supply is measured by dividing the percentage change in quantity supplied of a commodity by percentage change in its price.

                                          \({ e }_{ s }=\frac { Percentage\quad change\quad in\quad quantity\quad supplied }{ Percentage\quad change\quad in\quad price } \)

                                              \(=\frac { \triangle { q }/{ p\quad }\times \quad 100 }{ \triangle { p }/{ q\quad \times \quad 100\quad } } =\frac { \triangle { q }_{ s } }{ \triangle { p } } .\frac { p }{ { q }_{ s } } \)

 \(\therefore\)                                       \({ e }_{ s }=\frac { \triangle { q }_{ s } }{ \triangle { p } } .\frac { p }{ { q }_{ s } } \)

Example. 

                                           \({ e }_{ s }=\frac { \triangle { q }_{ s } }{ \triangle { p } } \times \frac { p }{ { q }_{ s } } =\frac { 100 }{ 10 } \times \frac { 10 }{ 100 } =1\)

Thus, \({ e }_{ s }\) is unity of 1.

(i) If the price prevailing in the market for a certain good is 'above the equilibrium price', say, OP I this leads to a situation of "Excess Supply' in the market. Explaining this with the help of the following diagram.

It is equal to 'ab' in the diagram. At this price OP₁, the suppliers will not be able to sell all that they want to produce. So they start offering lower price to the consumers. The supply price starts moving downwards along the supply curve SS' (from point b to X). At a lower price consumers demand more. The demand price also starts moving downwards along the demand curve DD¹. (from point a to X). Thus the gap between the supply and demand goes on narrowing as price falls. The price stops falling when it reaches OP at point X. Where Demand_X  = Supply_X.
If the price prevailing in the market is below the equilibrium price, say OP₀. At this price D_X is greater than S_X and this leads to a situation of "Excess Demand" equal to 'Cd' in the diagram. In this situation the consumers will not be able to buy all that they want. So they will start offering higher price to the suppliers and the price will start moving upward along the demand curve DD (from point d to X). At a higher price, suppliers will be willing to supply more. Thus the supply price also starts moving upwards along the supply curve (from point c to X) The price will continue to move upwards till it reaches OP at point X, where Dernand _X = Supply_X .

Private income = (i) - (iv + vii) + (iv + vi)
= 3000 - (150 + 40) + (60 + 50)
= 2920 Crores
Personal income = 2920 - (ii) - (iii)
= 2920-30 - 80
= Rs 2810 Crores.
Personal Disposable Income = 2810 - (ix)
= 2810 - 100 = Rs 2710 Crores.
National Disposable Income = (i) + (vi) + (viii)
= 3000 + 50 + 250
=Rs 3300 Crores.

Custodian of foreign exchange reserve : The central bank is the custodian of country's stock of gold and international currencies. The central bank maintains the stability of exchange rate.All earning in foreign exchange transaction are to be deposits with the central bank and are routed through it.

By the sale and purchase of foreign currencies in the market, central bank can bring the external value of the currencies at par with their internal values and helps the government to pursue a coordinated policy towards balance of payment situation in country.

(ii) Lender of last resort : It means that if a commercial bank fails to get financial accommodation from anywhere. It  approches the central bank as a last report. central bank advance loan to such banks against approved securities. By offfering loan to the commercial bank in situation of emergency, the central bank ensures that:

(i) The banking system of the country does not suffer from any setback.(ii) Money market remains stable..

(i) Decrease in bank rate: For controlling deficient demand, the Central bank should decrease the bank rate. A decrease in bank rate lowers the rate of interest and credit becomes cheaper. Accordingly, the demand for credit expands and aggregate demand increases.
(ii) Purchase of Government Securities: For controlling deficient demand, the Central bank should resort to buying of government securities. By buying the government securities, the Central bank injects additional purchasing power in the system which results in the expansion of credit. As a result, aggregate demand increases.
(iii) Reduction in cash reserve ratio: For controlling deficient demand, the Central bank should reduce the cash reserve ratio with a view to increasing the flow of credit. As a result, aggregate demand increases.
(iv) Lower the Margin Requirements: To correct the situation of deficient demand' in an economy the central bank can lower minimum margin requirements in case of selected commodities, against which the commercial bank advance loans. This in turn will raise the capacity to borrow of the borrowers. They will now borrow more, thereby AD will increase and situation of deficient demand be corrected.
(v) Increase in government expenditure during a situation of deficient demand: There is a need for the government's expenditure to be increased. This.increase in expenditure will directly increase AD and thereby be helpful in closing the deflationary gap in the economy.

Foreign exchange rate shares an inverse relationship with the demand for the currency. With a fall in the price of foreign exchange, value of domestic currency increases (i.e. appreciation of domestic currency) and that means foreign goods become cheaper and their domestic demand (i.e. imports) increases.
The rising domestic demand for foreign goods implies higher demand for foreign exchanges which increases from OQj to OQ2 as shown in the figure.

The supply of foreign currency is directly proportional to the price of foreign exchanges. When the price of a. foreign currency falls, it leads cheaper imports and exports because it leads to appreciation of domestic currency. The exporters are discouraged due to costlier exports. This results lesser inflow or supply of foreign currency in the economy. As a result supply of foreign exchange decreases from OQ₂ to OQ₁j as shown in the figure

The negative effects of the British rule in India are as follows:
(i) Colonila expoitation through trade malpractices The Britishers exploited India by the following the given trade practices:
(a) Thry colllected raw material for British industries from India.
(b) They sold finished goods of British industries in India. To encouraged the above trade, no duty was charged on imports from Britain and subsidy was given for exporting raw material to Britain.
(ii) Use of british capital to export country's resources THe Britishers used their capital and enterpreneurial skills to exploit India's natural resources and cheap labour resources. THe Britishers invested in mining and plantation industries and paid very low wages to the workers inspite of unsafe working conditions.
(iii) Developement of industries which complemented the British industries The Britishers invested only in those industries which complemented the growth of their industries back home. So, they invested in developing railways, post and telegraphs, rubber, tea and coffee plantations, etc. They totally neglected the developement of key and basic industries like iron and steel, machine making industries, etc. Jute and cotton tectile industries, were also discouraged as they could have been a threat for the textile factories of Britain
(iv) Economic drain The Britishers drained the country economically. They took away various wealthy possessions that India possessed, e.g. the famous Kohinoor diamond. Accordigng to an estimate, approximately a trillion to the gems and jewels.
(v) Partition of the country This was the most diastatic consequence of the British rule in India; the effects of which we still face in the form of cross-border terrorism. The Britishers fuelled the Hindu-Muslim dispute for their own benifit, which led to the partition of the country.

Some major achievements of the Five Year Plans are:
(i) Increase in national income Prior to planning, the National Income of India increased at the rate of 0.5% per annum. During the period of planning, the average annual growth rate in India had been around 5%.
(ii) Increase in per capita income During the planning period, Per Capita Income increased at the rate of 2.9% per annum.
(iii) Institutional and technical changes in agriculture Planning has contributed tremendously towards the development of agriculture in our country. During the period of planning, average growth rate of agricultural produce was 2.8% per annum.
(iv) Growth and diversification of industry During the period of planning, the growth rate of industrial production has been around 7% per annum. Basic and capital goods industries have shown tremendous growth. In consumer goods industries, the country has become self-sufficient. Industrial sector has been diversified and modernised.
(v) Economic and social infrastructure During the period of planning, economic infrastructure such as means of transport and communication, irrigation facilities and power, banking and insurance facilities have shown significant growth. Health and educational facilities have recorded a significant rise.
(vi) Employment Concentrated efforts have been made to increase employment opportunities during the plan peod. In the Eleventh Five Year Plan, the government fixed the target of creating 58 million jobs. The Twelfth Plan aims at creating 70 million jobs.
(vii) International trade India's international trade has also grown at a phenomenal rate. In 1948-49, the value of foreign trade was Rs.792 crore. In 2011-2012, it stood at Rs.38,11.422 crore.
So, we can say that our economy showed considerable progress during the plan period.

IMF was conceived at the Bretton Woods Conference held in 1944 and set-up in 1946. The main objective of setting up of such an organisation was to administer a code of good conduct in international liquidity of its member countries and to grant short-term loans to economies, experiencing temporary deficit in Balance of Payments (BOP). IMF started to function from March 1947.
Its headquarters is located in Washington DC. There are 189 member countries including India. The highest authority of the IMF is the Board of Governors, which consists of the most part of Ministers of Finance or Central Bank Governors of the member countries. Each member country appoints one Governor. The board generally meets only once in a year. The main objectives of IMF are as follows:
(i) To promote international monetary cooperation.
(ii) To promote exchange stability.
(iii) To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions.
(iv) To give confidence to members by making the general resources of the fund temporarily available to them under adequate safeguards.

Rural poor are the poor people residing in villages and small towns. The rural poor work mainly as landless agricultural labourers, cultivators with very small land holdings, landless labourers and tenant cultivators.
On the other hand, the urban poor are the poor people living in metros and big cities. Urban labourers do a variety of casual jobs, sell a variety of things on roadsides and are engaged in various other such activities. It can be seen from the given table that poverty ratio has shifted from rural to urban areas.

It is evident from the above table that rural poverty has declined significantly from 56.4% in 1973-74 to 28.3% in 2004-05 whereas, decline in urban poverty (from 49% to 25.7%) is not that significant.
Moreover, the gap between the rural and urban poverty ratios which 'was around 7% in 1973-74 fell to just around 2% in 2004-05 again signifying the shift in poverty from rural to urban areas.

Education is the process of teaching, training, learning, imparting knowledge and developing skills. Because of education the citizens become responsible. It facilitates the use of natural and human resources.
Following points are describing why education is an important input for the development of a nation:
(i) Knowledge and skills A better-educated person has greater skills and knowledge which enhances productivity and therefore provides a greater opportunity to work and earn higher income.
(ii) Rationality Education develops thinking process in people and helps them in making rational choices which lead to efficient utilization of resources resulting in higher productivity.

In the pre-Independence period, and also during the period just after Independence, Indian agriculture was characterized by subsistence farming. Under this system, the small landholdings of farmers enabled them to produce just enough to fulfill the needs of their families and to provide seeds for the next sowing season. The farmers did not sell their produce in the market.
However, after Independence, the government introduced a number of reforms, such as abolition of zamindari system, consolidation of landholdings, etc which led to substantial increase in agricultural output and led to commercialisation of agriculture. The farmers started selling their produce in the market for money. This led to improvement in their living conditions.
However, This also proved to be insufficient as agricultural infrastructure was not enough to enable agricultural activity all round the year. This led to the need for encouraging diversification of non-farm activities such as animal husbandry, fishing, etc. These activities helped the farmers to supplement their earning. lIhe value which is highlighted are the attempts to improve the living standards of the farmers.

I would suggest the following activities to generate employment in village:
(i) There should be multiple cropping in the village.
(ii) Other activities related to agriculture such as plantation, horticulture, dairying, animal husbandry should be encouraged.
(iii) Cottage industry should be encouraged.
(iv) More and more facilities of education, health services, roads, etc should be created in the village

We can increase the effectiveness of healthcare programmes in the following manner:
(i) The wide gap between rural and urban areas, poor and rich in utilising healthcare facilities must be addressed through more investment in health facilities in rural and backward areas by the government as private investment is not forthcoming in these areas.
(ii) Women's health across the country should be taken irn to greater focus as a healthy mother gives birth to a healthy offspring and health status of population can be improved.
(iii) Regulated private sector health services, NGOs and community participation can improve the effectiveness of healthcare facilities and play an important role in spreading health awareness.
(iv) Indian sys tern. of medicine including Ayurveda and Naturopathy should be explored and used to support public health as they are based on natural healing and are of preventive nature.

Following are the benefits associated with solar power:
(i) It is relatively easy to install solar panels which help to generate solar power.
(ii) Solar panels, once installed, does not require much maintenance.
(iii) These panels provide sufficient solar power during the long summer days and one does not have to face the problem of power cuts.
Following are the limitations associated with solar power:
(i) It is not suitable for areas where sunlight is less or which are generally overcast.
(ii) Solar power is not available at night.
(iii) The initial cost of establishing solar panels is more and it requires active action by the consumers.

After the establishment of People's Republic of China under one party rule, all the critical sectors of the economy, enterprises and land owned and operated by individuals were brought under government control.
Certain development strategies of China are discussed below:
(I) Great Leap Forward (GLF) campaign This campaign, initiated in 1958, aimed at industrialising the country on a massive scale. People were encouraged to set up industries in their backyards. In rural areas, communes were started. Under the commune system, people collectively cultivated land. However, this campaign met with many problems, important among them are:
(a) A severe drought caused havoc in China, killing about 30 million people.
(b) Due to a political conflict, Russia withdrew its professionals from China which were sent to help in the industrialisation process.
(ili Great proletarian cultural revolution (1966-76) In 1965, Mao Tse Tung started a cultural revolution on a large scale. In this revolution, students and professionals were sent to work and learn from the countryside. Unlike GLF, campaign the cultural revolution did not have an explicit economic rationale.
(iii) 1978 reforms Since 1978, China began to introduce many reforms in phases. The reforms were initiated in agriculture, foreign trade and investmen t sector. In agriculture, lands were divided into small plots which were allocated to individual households. They were allowed to keep all income from the land after paying taxes. In later phase, reforms were initiated in industrial sector. All enterprises which were owned .and operated by local collectives in particular, were allowed to produce goods.
At this stage, enterprises owned by government (known as State Owned Enterprises-SOEs), in India we call them public sector enterprises, were made to face competition.
Prices were fixed in two ways, i.e. farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs on the basis of prices fixed by the government and the rest were purchased and sold at market prices. Over the years, as production increased, the proportion of goods or inputs transacted in the market also increased. In order to attract foreign investors, Special Economic Zones (SEZs) were set up.