Written By: Ujjwal Matoliya
Chapter 1 & 2 – Easy Notes
(Brief & Simple Explanation for Exams)
1. What is Fiscal Policy?
Fiscal policy means the government’s policy related to tax and government spending.
Government increases or decreases tax and expenditure to control inflation, unemployment and economic growth.
2. What do you understand by Drain of Indian Wealth during the Colonial Period?
Drain of wealth means the continuous transfer of India’s wealth to Britain during British rule.
The British took money in the form of taxes, salaries, profits and exports without giving equal benefit to India.
This made India poor.
3. What is Green Revolution? Why was it implemented and how did it benefit farmers?
Green Revolution started in the 1960s to increase food production.
It used HYV seeds, fertilizers, irrigation and modern machines.
Why implemented?
To solve food shortage
To reduce imports of food grains
Benefits:
Increase in wheat and rice production
Higher income for farmers
India became self-sufficient in food grains
4. Were there any positive contributions made by the British in India?
Yes, some positive contributions were:
Introduction of railways
Modern education system
Postal and telegraph services
Development of legal system
But mainly their policies were for their own benefit.
5. Why was Public Sector given a leading role in Industrial Development during Planning Period?
Public sector was given importance because:
Private sector had less money
Big industries required huge investment
Government wanted equal development
To reduce economic inequality
6. What is Sectoral Composition of an Economy?
Sectoral composition means division of economy into three sectors:
Primary Sector (Agriculture)
Secondary Sector (Industry)
Tertiary Sector (Services)
It shows which sector contributes more to GDP and employment.
7. Does Navratna Policy help Public Sector Undertakings?
Yes.
Navratna policy gives more freedom to selected PSUs to take financial decisions.
It improves:
Efficiency
Performance
Profitability
So it helps in empowering PSUs.
8. Discuss All Five Year Plans (Briefly)
India started Five Year Plans in 1951.
1st Plan – Focus on agriculture
2nd Plan – Focus on industries
3rd Plan – Self-reliance and agriculture
4th Plan – Growth with stability
5th Plan – Poverty removal
6th–8th Plans – Modernization and employment
9th–12th Plans – Economic reforms and inclusive growth
Planning system ended in 2017 and replaced by NITI Aayog.
9. Short Notes
(a) LPG
LPG stands for Liberalization, Privatization and Globalization (1991 economic reforms).
Liberalization – Removing restrictions
Privatization – Selling public companies to private sector
Globalization – Connecting Indian economy with world economy
(b) Zamindari System
It was a land revenue system during British rule.
Zamindars collected tax from farmers and paid to British.
Farmers were exploited under this system.
(c) Types of Economy
Capitalist Economy – Private ownership
Socialist Economy – Government ownership
Mixed Economy – Both private and government ownership (India follows this)
(d) Tariff and Non-Tariff Barriers
Tariff Barrier – Tax on imports
Non-Tariff Barrier – Other restrictions like quota, license etc.
(e) Bilateral vs Multilateral Trade
Bilateral Trade – Trade between two countries
Multilateral Trade – Trade among many countries
(f) RBI (Reserve Bank of India)
RBI is the central bank of India.
It controls money supply, issues currency and controls banks.
(g) Small Scale Industries
Small industries with low investment and small number of workers.
They provide employment and promote rural development.