Economics deals with the study of economic activities relating to production, distribution and consumption.
Agriculture and factory work come under production of goods.
Traffic police and doctor provide services
Examples of factors of production are land, labour, capital and entrepreneurship.
Adam Smith (1723 -1790) is the father of economics
“An Enquiry into the Nature and Causes of the Wealth of Nations” is the work of Adam Smith
The theory of”Laissez Faire” wants limited government intervention in economic activities and argued for more freedom to individuals.
Karl Marx (1818- 1883) wrote” Das Capital”
Alfred Marshall (1842-1924) wrote “Principles of Economics”
Lorenz curve explains amount of inequality in society.
Lionel Robbins (1898-1984), British economist wanted to concentrate on increasing wants and limited resources.
Paul A. Samuelson (1915-2009) is an American economist.
Gini coefficient is 0.378 for India.
Indicative Planning is followed in India and many other developed countries
Imperative Planning is followed in socialist countries
India has a federal form of government.
The types of planning are indicative, imperative, perspective and rolling.
Indian economy is an under developed economy.
India’s per capital income is $340 in terms of GNP. (USA $19840)
Investment in India is 20-25% of the national income.
Rolling Plan has perspective plan (15-20 years), there are 4 or 5 year plans and within these are annual plans.
National Development Council is headed by Prime Minister and consists of Chief Ministers of all states as members.
Only 20 to 30% of national income is saved in India.
About 75% of Indian people depend on agriculture.
Perspective Planning is for long term like 10, 15 or 20 years.
Indicative Planning sets broad economic goals and broadly indicates the target.
Imperative Planning decides all aspects of economy to the very minute details.
In UK, USA and Canada only 3, 4 and 8% depend on agriculture.
India’s population increases at 2.14% every year (1991 census)
About 10% of Indian people work in industries.
Banking, money and currency are under the control of central government.
Planning Commission was setup in March 1950.
Gross Domestic Product (GDP) refers to the value of all goods and services produced in a year within the domestic territory of an economy.
Gross National Produce (GNP)=GDP + x-M, where GDP is Gross Domestic Product, x is the value of exports and M is the value of imports
The poverty line is fixed on the basis of daily calories intake. (Rural: 2400 per person per day, Urban: 2100 per person per day)
Gross National Produce (GNP)= Gross Domestic Product (GDP) + Net Factor income from abroad
Lakarwala committee fixes poverty line on monetary terms (Rural: Rs.115.43 per capita per month, Urban: Rs. 165.50 per capita per month)
Net National Product (NNP)= Gross National Produce (GNP)-Depreciation
Rolling Plan is followed in India since sixth plan.
IndoChina war (1962) and IndoPak war (1965) affected third five year plan.
In the third five year plan, the highest allocation was given to transport and communication
The years 1966 to 1969 were declared as holidays during the implementation of five year plan.
Period of five year plans are First Plan (1951-56), Second Plan (1956-61), Third Plan (1961-66), Annual Plan (1966-69), Fourth Plan (1969-74), Fifth Plan (1974-78), Sixth Plan (1980-85), Seventh Plan (1985-90), Eighth Plan (1992-97), Ninth Plan (1997-2002), Tenth Plan (2002-2007).
National Income NI (at factor cost)= Net National Product NNP (Ni at market price – Indirect taxes + Subsidies)
National income at constant price is calculated based on the price in the base year 1993-94 in India.
Per Capita Income = National Income/Population
In India, the highest poverty is in Orissa
Central Statistical Organisation calculates the national income in India
Types of unemployment are structural unemployment, disguised unemployment, underemployment, open unemployment, frictional unemployment, educated unemployment and seasonal unemployment
In open unemployment laborers cannot find work
In educated unemployment, skilled or educated person cannot get a suitable job
In disguised unemployment, marginal productivity is zero, even though a person is engaged in a work
Under employment refer to under utilisation of efficiency and capability of workers
Indian unemployment is of structural unemployment type
First Plan concentrated more on transport and communication and next to irrigation.
The targeted and actual growth rate of first plan were 2.1% and 3.6% respectively.
The targeted and actual growth rate of second plan were 4.5% and 3.9% respectively.
The targeted and actual growth rate of third plan were 5.6% and 2.3% respectively.
The targeted and actual growth rate of fourth plan were 5.7% and 3.3% respectively.
The targeted and actual growth rate of fifth plan were 5.5% and 4.5% respectively.
The targeted and actual growth rate of sixth plan were 5.2% and 4% respectively.
The targeted and actual growth rate of seventh plan were 5% and 5.8% respectively.
The targeted growth rate of eighth plan was 5.6%
The targeted growth rate of ninth plan was 6.5%
The targeted growth rate of tenth plan was 8%
Industrial policy was announced in 1956
The tenth plan aims to achieve 75% literacy.
Examples of cash crop are sugarcane, oilseed, cotton and jute.
In the second five year plan, more emphasis was given to basic and heavy industries and transport and communication.
The Second five year plan was based on the model of P.C. Mahalonbsis.
The tenth plan aims to reduce infant mortality to 45 per 1000 live births by 2007.
The eighth plan changed economic planning from directive to a largery indicative planning.
The fourth plan concentrated more on transport and communication.
The fifth plan aims to remove poverty and attain self sufficiency.
In the fifth five year plan, highest allocation was given to industries.
Most of the Indian farmers follow sedentary or settled cultivation.
The energy sector was given highest priority from sixth to ninth plan.
Capitalist farming is followed in farms, estates, plantations and gardens.
Capitalist farming is highly capital intensive agriculture.
Jawahar Rojgar Yojana Programme was launched under seventh plan (1985 to 1990).
The tenth plan aims to reduce poverty to 20% by 2007.
MFAC stands for Marginal Farmers and Agricultural Labourers Development Agency
Intensive Agricultural District Programme (IADP) was introduced in 1960 in 7 districts.
Intensive Agricultural District Programme (IADP) was launched in Thanjavur (Tamilnadu) for rice cultivation.
Intensive Agricultural District Programme (IADP) was launched in Pali (Rajasthan) for millet cultivation.
Intensive Agricultural District Programme (IADP) was extended as Intensive Agricultural Area Programme in 1964-65.
IRDP stands for Integrated Rural Development Programme
IRDP was started in 1978-79
High yielding varieties of wheat were developed in Mexico
The types of farming in India are shifting cultivation, sedentary or settled cultivation and capitalist farming.
Human Development Index value ranges from 0 to 1.
High Yielding Varieties Programme (HYVP) was launched in 1966 in 1.89 million ha.
India occupies 10th place in industrial countries of the world.
In 2001, India ranked 115th in Human Development Index
NREP stands for National Rural Employment Programme, started in 1980
Agriculture provides work to about 65% of Indian workforce.
In shifting cultivation, the land is cleared and cultivated for 2-3 years and abandoned for 5-15 years.
Shifting cultivation is called as Jhum in Assam, Ponam in Kerala and Podu in Andhra Pradesh and Orissa
Settled cultivation is carried out in plateaus and highland areas