Structure of the Indian Economy

Two Mark Questions: 1. Explain the relationship between farm size and productivity.

A. Some of the economists have an opinion that small farms are more productive than the large farms. Based on their opinion, the productivity per acre in small farms is greater than the large farms. It is known as inverse relationship between farm size and productivity. But other economists argue that large farms are capable of maximizing profitability on account of equating marginal productivity.

Four Mark Questions: 1. Describe the occupational structure of the Indian economy.

A. Occupational structure meaning:- People earn their incomes by doing different kinds of jobs for their livelihood population among different is known as occupational structure. Occupational structure- they are three types. They are: 1. Primary sector 1. 2. Secondary sector 3. Tertiary sector.

Primary sector: Primary occupations include agriculture, fishing, plantations, mining and allied activities. Food grains and raw materials are produced in the primary sector.

2.

Secondary sector:- Secondary occupations include manufacturing operations in industries both large and small and construction activity. The working population in the secondary and Tertiary has marginally increased to 37 % during the same period. But it is around 90 to 97 % in the advanced countries.

3.

Tertiary sector:- This sector generates occupations in such services like banking, commerce, communications, computers, and other professions.

2. A.

What is the role of Public Sector in Indian industrialization? Introduction:- Indian industry consists of public sector, private sector and foreign sector. Public sector meaning:- In public sector, industries are under controlled and managed by the government. Particularly large scale sector industries are under government control in public sector.

Role of public sector: 1. The government realized that it is necessary to active speedy industrialization by giving priority to the public sector. 2. The second five year plan (195661) gave priority to heavy industries so that large investments strong public sector. 3. However, due to persistent lapses in many public sector enterprises the availability of public sector is becoming difficult. 4. So the government has decided to dilute the public sector by selling valuable properties of public sector to the private sector. 5. Moreover, the maintenance of huge asses in public sector is un economical. 6. These trends are witnessed after the new industrial policy in 1991. 7. This privatization process is mostly witnessed in transport communications banking etc. 8. However public sector is still relevant to remove. 3. Explain the significance of service sector in Indian economy.

A. Service sector is one of the crucial indicators for the direction of modernization and creates employment generation. Service sector Meaning:- Transport and communications, financial institution, banking, insurance and public administration are included in the service sector. It is one of the crucial sectors along with agriculture and industry. Significance of service sector:1. Service sector plays a crucial role in building the strength of the economy along with primary and secondary sectors. 2. Transport and communications, financial institutions, banking etc are included in this sector. 3. 4. 5. Transport sector is essential for progress prosperity and modernization of the country. Without adequate means of communications and transport there can be no development. Particularly communication system provides in formation on new products and markets to bring a better interaction between the buyers and sellers.

6.

Internal and international exchange of goods and services is made easier with the help of communication sector.

7.

The financial and banking institution mobilize savings from the public and transfer them to needs organizations.

8.

Thus, service sector plays an important role in the rapid progress of the economy.

4.

What is the role of banking and financial institutions in India? Will privatization help in realizing the objectives?

A.

Introduction: Service sector is one of the crucial sectors along with agriculture and industry part of service sector.

Role of banking and financial institutions:i. Banking and financial institutions plays an important role in service sector. ii. Financial system refers to the system of borrowing and lending of funds by individuals firms, institutions and government. iii. The main objective of banking system is to mobilize savings from the Public and transfer them to the needy organizations for productive purposes. iv. They contribute to the growth of National Income. v. Government proposes to dilute its participation in financial and banking Systems and give priority for private institutions to provide better and Effective services to the people vi. There are public, private and foreign sectors banks in India. Vii. But all these banks must fulfill their requirements under the control of Reserve Bank of India, with is the monetary authority in the country. viii. Hence privatization will help in realizing the objective of banking and financial institutions in India.

Fill in the Blanks: 1. 2. 3. 4. Agriculture, fishing and plantations are included in primary sector Construction and manufacturing industries comprise secondary sector of the economy. Banking, commerce and communications generate tertiary occupations. Proper water management is associated with green revolution

5.

Firms with capital investment of not more than Rs.35 lakhs form part of Small scale industries

6.

Financial and banking institutions provide essential inputs to all industries and agriculture

7. 8. 9.

Machinery and equipment are supplied by Small scale industries Industrial stagnation and deceleration were observed during mid 1960s and late 1970s The Central bank and monetary authority in India is Reserve Bank of India

10. Scheduled Commercial Banks are those which fulfill the conditions Stipulated in the second schedule of the RBI Act.