General awareness: Economics Notes # 1

(Source: XI NCERT Economics chapter 1 & 2)

CHAPTER 1: INDIAN ECONOMY ON THE EVE OF INDEPENDENCE

• Muslin is a type of cotton textiles which had its origin in Bengal, particularly in and around Dhaka. (Daccai Muslin – Famous).
• The finest variety of Muslin was called Malmal. 
• Notable estimators of Indian income were –
  D Naoroji, William Digby, Findlay Shirras, V.K.R.V Rao & R.C. Desai
  
  
  V.K.R.V Rao’s estimates of national & per capita incomes during colonial period were significant. 
• Tata Iron & Steel Company (TISCO) was established in 1907. 
• The opening of the Suez canal further intensified British control over Indias’s foreign trade 
• The population of British India were first collected through a census in 1881. 
• Before 1921, India was in the first stage of demographic transition. 
• The 2^nd stage of transition began after 1921.
• The British introduced railways in India in 1850.
• Tata Airlines was established in 1932 inaugurating aviation sector in India.

CHAPTER 2 : INDIAN ECONOMY 1950-1990

- India borrowed the concept of five year plans from the former Soviet Union.

- The long term plan is called perspective plan five year plans provided the basis for perspective plan.

- 1950 – Planning Commission was set up.

- The goals of the five years plans are : GROWTH, MODERNISATION, SELF RELIANCE & EQUITY.

- Growth refers to increase in GDP.

- GDP is the market value of all goods and services produced in the country during a year.

- Adoption of new technology is called modernization.

- The first 7 5 year plans gave importance to self reliance.

- 2^nd 5 year plan laid down the basic ideas regarding goals of Indian Planning, this plan was based on the ideas of Mahalanobis.

- Mahalanobis – The architect of Indian Planning, Mahalanobis  established the Indian Statistical Institute (ISI) in Calcutta & started a Journal “Sankhya”.

- Land Reforms :-

• Land to the tiller policy
• Equity in agriculture called for land reforms which primarily refer to the change in the ownership of land holdings.
• Land ceiling was another policy to promote equity in the agricultural sector.
• The purpose of land own ceiling was to reduce the concentration of land ownership in a few hands.
• Land reforms were successful in Kerala and West Bengal.

- Green Revolution:

• The stagnation in agriculture during the colonial rule was permanently broken by the green revolution.
• Use of High Yielding Variety (HYV) seeds especially for wheat & rice.
• The portion of agricultural produce which is sold in the market by the farmers is called marketed surplus.

- In accordance with the goal of the state controlling the commanding heights of the economy. The industrial policy resolution of 1956 was adopted. This resolution formed the basis of the 2^nd 5 year plan. 
- This resolution classified industries into three categories.

a.Industries exclusively owned by the state

b. Industries in which the private sector could supplement the efforts of the state sector.

c. Industries by Private Sector.

- In 1955, the village and small scale industries committee, also called the Karve committee, noted the possibility of using small scale industries for promoting Rural Development. 
- In the first 7 plans trade was characterized by what is commonly called an inward working trade strategy. Technically this strategy is called import substitution. This policy aims at replacing or substituting imports with domestic production. Protection from imports took two forms:

                                Tariffs & Quotas.

                A. Tariffs are a tax on imported goods.

                B. Quotas specify the quantify of goods which can be imported.

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