Plus One Economics – Chapter 1 Questions and Answers in English

MULTIPLE CHOICE QUESTIONS

1. Occupational structure of India is divided into …. sectors.
1. One
2. Three
3. Two
4. Four

Answer:

B. Three

2. What is the another name of service sector?
1. Secondary
2. Tertiary
3. Primary
4. None of these

Answer:

B. Tertiary

3. What is the nature of Indian economy on the eve of Independence?
1. Stagnant
2. Under-developed
3. Backward
4. All of these

Answer:

D. All of these

4. Life expecting at birth on the eve of Independence was-
1. 23 years
2. 32 years
3. 64 years
4. 42 years

Answer:

B. 32 years

5. Growth rate of per capita income on the eve of independence was-
1. .2%
2. 5%
3. .5%
4. 2%

Answer:

C. .5

6. Primary sector includes-
1. Agriculture
2. Industries
3. Service
4. All of these

Answer:

A. Agriculture

7. Manufacturing comes in the
1. Primary
2. Secondary
3. Tertiary
4. None of these

Answer:

B. Secondary

8. The first iron and steel company was established in
1. Kolkatta
2. Patna
3. Jamshadpur
4. Meerut

Answer:

C. Jamshadpur

9. On the eve of Independence major occupation was-
1. Agriculture
2. Manufacturing
3. Service
4. All of these

Answer:

A. Agriculture

10. The first census of India was conducted in the year
1. 1872
2. 1782
3. 1972
4. 1873

Answer:

A. 1872

VERY SHORT ANSWER TYPE QUESTIONS

1. Name those industries which were in operation in our economy at the time of Independence.

Answer:

Handicrafts industries, metal and precious stone works, cotton and jute textile mills, iron and steel industries were in operation in our economy at the time of Independence.

2. What is meant by primary sector?

Answer:

Primary sector refers to that sector wherein goods are produced by making use of natural resources.

3. What is meant by secondary sector?

Answer:

Secondary sector refers to that sector wherein the enterprises transform goods from one type to another.



4. Define tertiary sector.

Answer:

The sector which provides services such as banking, insurance, transport, communication, trade, commerce etc. is known as tertiary sector.

5. What was the nature of Indian economy on the eve of Independence?

Answer:

At that time, the nature of Indian economy was stagnant and backward.

6. Define occupational structure.

Answer:

It refers to the relative importance of primary, secondary and tertiary sectors in terms of output and employment.

7. What is meant by stagnant economy?

Answer:

Stagnant economy is that one, where the pace of development remains extremely low.

8. What was the percentage of population engaged in primary sector on the eve of Independence ?

Answer:

It was 72.7 per cent of the population.

9. What was the percentage of population engaged in secondary sector at the time of Independence ?

Answer:

It was 10.1 per cent of the population.

10. What was the percentage of population engaged in tertiary sector on the eve of Independence?

Answer:

The percentage of population engaged in tertiary sector was 17.2 per cent on the eve of Independence.

11. When the first official census was exercised?

Answer:

The first official census was exercised in 1891.

12. In how many sectors has the occupational structure of Indian economy been divided?

Answer:

In three sectors.

SHORT ANSWER TYPE QUESTIONS

1. What is Colonialism?

Answer:

Colonialism is the practice of acquiring colonies by conquest or other means and making them dependent was one of the ways to expand power, control or rule, by a country over the economic and political life of areas outside its borders. Exploitation is the main feature of colonialism.

2. What was the meaning of commercialisation of Agriculture during British rule ?

Answer:

Generally, commercialisation of agriculture implies production of crops for the market rather than for self-consumption. During British rule it acquired a different meaning. It became basically commercialisation of crops. The British started offering higher prices to farmers for producing cash crops rather than for food crops. British government used these cash crops as raw materials for industries in Britain.

3. What is tariff? Why is it imposed ?

Answer:

Tariff is a tax or a duty on imports which can be levied either on physical units or on value. Tariff is imposed for a following variety of reasons:

(i) To raise government revenue.

(ii) To boost domestic employment.

(iii) To protect domestic industry from subsidized or low-wage imports.

(iv) To ease a deficit on the balance of payments.

4. Explain the first stage of Demographic transition.

Answer:

This stage is associated with pre-modern times and is characterized by a balance between birth rates and death rates. In this stage both birth and death rates are very high, which resulted in only very slow population growth. This stage is also known as the "High Stationary Stage" of population growth.

5. Why death rates are high in the first stage of demographic transition?

Answer:

The death rates are high in the first stage of demographic transition due to, lack of knowledge of disease prevention and cure. Occasional food shortages is also another reason for the high death rates in this stage.

6. Describe the level of development on the eve of Independence.

Answer:

Level of Economic Development. Before the advent of the British rule, India was well known for its handicraft industries in the fields of cotton and silk textiles, metal and precious stone works etc. The economic policies of the British government in India were concerned more with the protection and promotion of the economic interests of their mother country, than with the development of the Indian economy. Indian economy was a mere supplier of raw materials and consumer of the finished industrial products from England. As a result of it, the level of development in India was very low. Its growth of the aggregate real output during that period was less than 2 per cent and the growth of per capita output per year was only half per cent.

7. Describe the scenario of Foreign Trade during British rule.

Answer:

Scenario of Foreign Trade. British colonial rule adversely affected the structure, composition and volume of India’s foreign trade. India became an importer of finished consumer goods like cotton, silk, woollen clothes, and capital goods like light machinery and exporter of primary products like raw silk, cotton, wool, sugar, indigo and jute etc., which led to the drain of Indian wealth. Thus the structure of foreign trade was typically colonial with primary goods being exported and finished goods imported and trade relations being confined to Britain and its other colonies.

LONG ANSWER TYPE QUESTIONS

1. What was the focus of the economic policies pursued by the colonial government in India? What were the impacts of these policies ?

Answer:

The focus of the economic policies pursued by the colonial government in India was concerned more with the protection and promotion of the economic interests of their home country, than with the development of the Indian economy.

The impacts of these policies were to bring about a fundamental change in the structure of the Indian economy, by transforming the country into a mere supplier of raw materials and consumer of finished industrial products from Britian.

2. Name some notable economists who estimated India’s per capita income during the colonial period.

Answer:

Some notable economists who estimated India’s per capita income (PCI) during colonial period were Dadabhai Naroji, William Digby, Findlay Shiras, V.K.R.V. Rao and R.C. Desai. Among them, V.K.R.V. Rao was considered very significant in this regard.

3. What are the main causes of India’s agriculture stagnation during the colonial period?

Answer:

The low productivity of agriculture sector was caused mainly because of the various systems of Land Settlement thatwere introduced by the colonial government. Under the zamindari system. the profit accruing out of the agricultural surplus went to the zamindars instead of the cultivators. However, a considerable number of zamindars and not to speak of colonial government, alone, did nothing to improve the condition of agriculture.

Besides, the low level of technology, lack of irrigation facilities and the use of negligible amount of fertilizers, all added up to aggravate the plight of the farmers and contributed to the dismal level of agricultural productivity.

4. Name some modern industries which were in operation in our country at the time of Independence.

Answer:

The cotton and jute textile mills, iron and steel industries, sugar, cement and paper industries were some modern industries which were in operation in our country at the time of independence.

5. What was the two-fold motive behind the systematic de-industrialising effected by the British in pre-Independent India?

Answer:

As in the case of agriculture, as also in manufacturing, India could not develop a sound industrial base under the colonial rule. Even as the country’s world famous handicraft industries declined, no corresponding modern industrial base was allowed to come up to take pride to place, so long as enjoyed by the former.

The primary motive of the colonial government behind this policy of systematically de-industrialising India was two-fold. The intention was, first, to reduce India to the status of a mere exporter of important raw materials for the upcoming modern industries in Britain and, second, to turn India into a sprawling market for the finished products of those industries, so that, their continued expansion could be ensured to the maximum advantage of their home country Britain.

6. The traditional handicraft Industries were ruined under the British rule. Do you agree with this view? Give reasons in support of your answer.

Answer:

Traditional handicraft industries got set-back during British period. The main reasons were the following:

• (i) The economic policies pursued by the colonial government in India were concerned more with the protection and promotion of the economic interests of their mother country, than with the development of the Indian economy.
• (ii) During British period, Indian economy was transformed into a mere supplier of raw materials and consumer of the finished industrial products from Britain.



7. What objectives did the British intend to achieve through their policies of Infrastructure development in India?

Answer:

The British government wanted to achieve the following objectives through its economic policies :

• (i) They wanted to protect and promote economic interests oftheir mother country.
• (ii) They wanted to hinder the economic development of Indian economy.
• (iii) They wanted to transform the Indian economy into a mere supplier of raw materials and consumer of finished industrial products from Britain.

8. Critically appraise some of the shortfalls of the industrial policy pursued by the British colonial administration.

Answer:

Following were the some of short falls of the industrial policy pursued by the British colonial administration:

• (i) The decline of the indigenous handicraft industries.
• (ii) Slow progress of modern industries.
• (iii) Absence of capital goods industry.
• (iv) The contribution of industrial sector to the G.D.P. remained very small.

9. What do you understand by the drain of Indian wealth during the colonial period?

Answer:

By the drain of Indian wealth during the colonial period we mean that, the wealth of India was sent to Britain through the exploitation of the Indian economy by the Britishers. During the colonial period, India was turned into a sprawling market for finished products and exporter of raw materials.

10. Which is regarded as the defining year to mark the demographic transition from its first to the second decisive stage?

Answer:

1921 is regarded as the defining year to mark the demographic transition from its first to the second decisive stage. However, neither the total population of India, nor the rate of population growth at this stage was very high.

11. Give a quantitative appraisal of India’s demographic profile during the colonial period.

Answer:

Demographic Conditions. Population growth had increased fast after 1921. On the eve of Independence, population was in reasing and the economy was firmly in a ‘Vicious circle of poverty The overall literacy level was less than 16 per cent and the female literacy was less than 7 per cent. Infant mortality rate was quite alarming about 218 per thousand in comparison with the present infant mortality rate of 63 per thousand. Life expectancy was only 32 years in contrast to the present 63 years. Extensive poverty prevailed in India on the eve of Independence. The first official census operation was exercised in 1881.

12. Highlight the salient features of India’s pre- independence occupational structure.

Answer:

The following are the salient features of India’s pre- independence occupational structure-

• (i) The distribution of working persons across different industries and sectors showed little sign of change.
• (ii) The agricultural sector accounted for the largest share of work force, which usually remained at a height of 70-75 percent, while the manufacturing and the service sectors accounted for only, 10 and 15-20% respectively.

13. Underscore some of India’s most crucial economic challenges at the time of Independence.

Answer:

At the time of Independence economic challenges before the country were enormous. The agricultural sector was already saddled with surplus labour and extremely low productivity. The industrial sector was crying for modernisation, diversification, capacity building and increase of public investment. Foreign trade was oriented to feed the industrial revolution in Britain. Infrastructure facilities including the famed railway network, needed upgradation, expansion and public orientation. Prevalence of rampant and unemployment required welfare orientation of public economic policy.

14. When was India’s first official census operation undertaken ?

Answer:

India’s first official census was undertaken in 1881. In the Independent India, it was undertaken in 1951.

15. Indicate the volume and direction at trade of the time of Independence.

Answer:

India has been an important trading nation since ancient times. But 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. Consequently, India became an exporter of primary products such as raw silk, cotton, wool, sugar, indigo, jute etc. and an importer of finished consumer goods like cotton, silk and woollen clothe and capital goods like light machinery produced in the factories of Britain. For all practical purposes, Britain maintained a monopoly control over India’s exports and imports. As a result, more than half of India’s foreign trade was restricted to Britain while the rest was allowed with a few other countries like China, Ceylon and Persia.

16. Were there any Positive Contributions made by the British in India? Discuss.

Answer:

Under the colonial regime, basic infrastructure in the form of roads, railways, ports, water-transports, posts and telegraphs did develop. Roads constructed in India prior to the advent of the British rule were not fit for modern transport. The roads that were constructed by the colonial rule were meant for drawing out raw material from the countryside to the nearest railway station or the port and to send to far away England or other lucrative foreign destinations.

The British introduced railways in India in 1850 and it is considered as one of their most important contributions. The railways affected the structure of Indian economy in many ways. On the one hand, it enabled people to undertake long distance travels and thereby break geographical and cultural barriers, while on the other hand it fostered commercialisation of Indian agriculture adversely affecting the comparative self-sufficiency of the Indian village economy.

Alongwith the development of roads and railways, the colonial dispensation also took measures for developing the inland and oceanic waterways.

17. Describe the occupational structure of India on the eve of Independence.

Answer:

Occupational Structure. Occupational structure on the eve of Independence is shown in the following table :

Table 1.1 Occupational Distribution of India at the Time of Independence.

Occupation	1951 (in percentage)
1. Primary Sector	72.7
(i) Agriculture (ii) Agricultural Labour (iii) Forestry, Fisheries, Animal Husbandry and Plantation (iv) Mining	50 19.7 2.4 0.6
2. Secondary Sector	10.1
(i) Small and Large Scale industries (ii) Building Construction	9.0 1.1
3. Tertiary Sector	17.2
(i) Trade and Commerce (ii) Transport, Storage and Communication (iii) Other Services	5.2 1.4 10.6
Total (1+2+3)	100

Note: This table shows data relating to 1951 because for 1947, reliable statistics is not available. (Source: Senses of India 1991)

We can conclude from this table that on the eve of Independence, agriculture was the main occupation. This sector accounted for the largest share of workforce which usually remained at a height of 73 per cent while the manufacturing (Secondary Sector) and services (Tertiary Sector) sectors accounted for only 10 and 17 per cent respectively. This shows the less growth of Industries. This table shows the unbalanced growth of the economy. Thus at the time of Independence, there were growing regional variations.

18. Explain the main features of Indian economy at the time of Independence.

Answer:

Salient features or typical conditions or characteristics of the Indian economy on the eve of Independence were as under :

• i. Agriculture was the Main Source of Subsistence. Agriculture was the main source of subsistence on the eve of Independence. 72.7 per cent of the population of India was dependant on agriculture and this sector was the main contributor to the national income.
• ii. Inadequate Agricultural Production. Level of production and productivity in Indian agriculture was extremely low at the time of Independence. As a result of it, agricultural production was inadequate to meet the demand of the country. In 1947, only 13 crore hectare of land was under cultivation and total production of foodgrains was 527 lakh tonnes. Out of which, the production of rice and wheat was 17 and 64 lakh tonnes respectively.
• iii. Land Tenure System. Zamindari, Mahalwari and Ryotwari systems of land tenure were prevalent in the Indian economy at the time of Independence. Under this system, the profit accruing out of the agricultural surplus went to the middlemen instead of the cultivators.
• iv. Commercialisation of Agriculture was Limited. Agricultural production was mainly for self-subsistence of the farmers and a little surplus for sale was generated in the market. Thus commercialisation of agriculture was very limited.
• v. Stagnant and Backward Economy. Indian economy at the time of Independence was stagnant and backward economy. The pace of development was extremely low. The growth rate of per capita income was only 0.5 per cent per year.
• vi. Little Growth of the Consumer Goods Industries. At the time of Independence, source of consumer goods industries like jute, textile, sugar, match box etc., were established in India which were aided by British capital. The profit of these industries went to Britain. As a result these industries were backwarded at that time.
• vii. Less Development of Infrastructure. At the time of Independence, the growth of economic as well as social infrastructure was very low. These services were in their infant stages.
• viii. Downfall of Cottage and Small Scale Industries. Prior to the British rule, India was particularly well known for its handicraft industries in the field of cotton, silk textiles, metal and precious stone works etc. which enjoyed world wide market. But the policy of British colonial rule led to their downfall. At the time of Independence, these industries were almost in a state of ruin.
• ix. Lack of Basic Industries. At the time of Independence, there was a lack of basic industries. Tata Iron and Steel Company was the only important basic industry.
• x. Limited Foreign Trade. At the time of Independence. India’s foreign trade was very limited. India was the exporter of raw materials and importer of finished goods.
• xi. Other Challenges. At the time of Independence, Indian economy was facing many other challenges like poverty, malnutrition, poor health facilities and rapidly increasing population.

19. Explain the methods of colonial exploitation of the Indian economy.

Answer:

The British colonial rule exploited the Indian economy in the following ways:

• i. India was Treated as a Supplier of Raw Materials to the British Industry. There was an Industrial Revolution in England in the eighteenth century. For the cheap raw materials, British industries were wholly dependant on Indian economy. They exploited the Indian economy to the maximum extent.
• ii. Indian Economy was a Market for the British Products. Indian economy was used as a market for the finished products by the British rule. For this purpose, British government developed railways in India.
• iii. Exploitative Land Revenue Policy. The stagnation in the agricultural sector was caused mainly because of exploitative land revenue policy. Under this policy, the profit accruing out of the agriculture surplus went to zamindars instead of the cultivators.
• iv. High Cost of Administration and Large Scale Remittances. The British colonial rule inflicted upon the Indian economy a very high cost of administration. It also made heavy remittances to Britain in the form of savings and surpluses from their business ventures in India.
• v. Destructive Approach Towards the Indian Handicrafts. Before the British rule, Indian handicrafts enjoyed a worldwide reputation of being quality products. British colonial rule destroyed the demand for Indian handicrafts by imposing discriminatory tariff policy.
• vi. Deliberate Neglect of Economic and Social Infrastructure. British colonial rule deliberately neglected the development of economic infrastructure such as transportation, power, communication and social infrastructure such as education, health and housing etc.