Students can access the CBSE Sample Papers for Class 12 Economics with Solutions and marking scheme Set 1 will help students in understanding the difficulty level of the exam.
CBSE Sample Papers for Class 12 Economics Set 1 with Solutions
Time : 3 Hours
Maximum Marks: 80
General Instructions :
- This question paper contains two sections:
Section A – Macro Economics
Section B – Indian Economic Development - This paper contains 20 Multiple Choice Questions of 1 mark each.
- This paper contains Short Answer Questions of 3 marks each to be answered in 60 to 80 words.
- This paper contains 6 Short Answer Questions of 4 marks each to be answered in 80 to 100 words.
- This paper contains 4 Long Answer Questions of 6 marks each to be answered in 100 to 150 words.
Section-A (40 Marks)
Macro Economics
Question 1.
Read the following statements carefully: [1]
Statement 1: Consumption function assumes that, consumption changes at a constant rate as income changes.
Statement 2: Autonomous consumption is the ratio of total consumption (C) to total income (Y).
In light of the given statements, choose the correct alternative from the following:
(a) Statement 1 is true and Statement 2 is false.
(b) Statement 1 is false and Statement 2 is true.
(c) Both Statements 1 and 2 are true.
(d) Both Statements 1 and 2 are false.
Answer:
(a) Statement 1 is true and Statement 2 is false.
Explanation: The consumption function assumes a constant rate of change in consumption as income changes. This concept is known as the Marginal Propensity to Consume (MPC). Autonomous consumption refers to the level of consumption that exists even when disposable income is zero or when disposable income is negative. It is not a ratio of total consumption to total income.
Question 2.
For a closed economy (with no foreign trade), which one of the following is correct? [1]
(a) GDP = GNP
(b) GDP > GNP
(c) GDP < GNP
(d) GDP + GNP = 0
Answer:
(a) GDP = GNP
Explanation: There is no foreign trade in a closed economy, all income is generated within the country by its residents. Therefore, the income measured by GDP is equal to the income measured by GNP, since the net factor income from abroad’ is zero.
Question 3.
The value of can be greater than one. (Choose the correct alternative to fill up the blank) [1]
(a) Marginal Propensity to Consume
(b) Average Propensity to Consume
(c) Marginal Propensity to Save
(d) Average Propensity to Save
Answer:
(b) Average Propensity to Consume
Explanation: The Average Propensity to Consume (APC) is calculated by dividing total consumption by total income. It represents the proportion of total income that individuals spend on consumption. If the total consumption exceeds the total income, then the APC can be greater than one.
Question 4.
As per the Reserve Bank of India (RBI) press report, dated 29th December 2022: [1]
“Net external commercial borrowings to India recorded an outflow of US$ 0.4 billion in the second quarter (2022-23)”
The above transaction will be recorded in the _________ account on __________ side of Balance of payments account of India.
(a) current, credit
(b) current, debit
(c) capital, credit
(d) capital, debit
Answer:
(d) capital, debit
Explanation: The transaction of net external commercial borrowings resulting in an outflow of US$ 0.4 billion in the second quarter (2022-2023) would be recorded in the capital account on the debit side of the Balance of Payments account of India. Outflows of foreign currency is recorded on the debit side and inflows are on the credit side of BOP.
Question 5.
“The value of all goods and services can be expressed in monetary units.” [1]
On the basis of the given statement, identify the function performed by money:
(a) Medium of exchange
(b) Store of Value
(c) Unit of account
(d) Means of standard of deferred payments
Answer:
(c) Unit of account
Explanation: Money serves as a unit of account by providing a common measurement for expressing the value of goods and services in monetary terms. It allows for the comparison and calculation of prices, costs, and values, across different items and facilitates economic transactions by providing a standardised unit for pricing and accounting.
Question 6.
Find the missing figures and choose the correct alternative: [1]
| Round | Deposits | Loans (80%) | Reserve Ratio (20%) |
| I | 1,000 (Primary) | 800 | 200 |
| II | 800 (Secondary) | …(i)… | 160 |
| Total | …(ii)… | …(iii)… | …(iv)… |
Alternatives:
(a) 640,1000,4000,5000
(b) 960,5000,4000, 1000
(c) 640, 4000, 1000, 5000
(d) 640,5000,4000,1000
Answer:
(d) 640, 5000, 4000, 1000
Explanation: The bank requires to maintain a CRR of 20 percent.
If a person deposits ₹1,000 with the bank, then the bank keeps only ₹200 in the cash reserve and lends the remaining ₹800 to another person (Loans). They open a credit account in the borrower’s name for the same. Similarly, the bank keeps 20 percent of ₹800 (i.e., ₹160) and advances the remaining ₹640 to another person(loans).
This process continues until the initial primary deposit of ₹1,000 and the initial additional reserves of ₹800 lead to additional or derivative deposits of ₹4,000 (800 + 640 + 512 +……..).
Adding the initial deposits, we get total deposits of ₹5,000. In this case, the credit multiplier is ₹5
(reciprocal of the CRR) and the credit creation is five times the initial excess reserves of ₹800.
Question 7.
Graphically, the Aggregate Demand function can be obtained by vertically adding the _________ and ________ functions. (Choose the correct alternative to fill up the blanks) [1]
(a) consumption, saving
(b) consumption, investment
(c) investment, saving
(d) aggregate supply, consumption
Answer:
(b) consumption, investment
Explanation: The Aggregate Demand (AD) function can be graphically obtained by vertically adding the consumption and investment functions. This process involves combining the two components to create a curve that represents the total spending in an economy at various price levels. The AD curve showcases the relationship between the overall price level and the aggregate quantity of goods and services demanded.
Question 8.
Identify the correct reason(s) that may affect the demand for foreign exchange in an economy. [1]
I. Imports of visibles
II. Exports of invisibles
III. Remittances by residents working abroad
IV. Purchase of assets abroad
Alternatives:
(a) I and II
(b) II and III
(c) III and IV
(d) I and IV
Answer:
(d) I and IV
Explanation: Both imports of goods (visibles) and services (invisibles) and the purchase of assets abroad increase the demand for foreign exchange in an economy. This is because they require the conversion of domestic currency into foreign currency to facilitate payments and transactions. Therefore, the correct alternative is (d) I and IV.
Question 9.
Suppose for a given economy, [1]
S =- 60 + 0.1Y
I = ₹4,000 crore
(Where S = Saving Function, Y = National Income and I = Investment Expenditure)
Equilibrium level of Income would be ₹ ____________ crore.
(Choose the correct alternative to fill up the blank)
Alternatives:
(a) ₹4,000
(b) ₹40,000
(c) ₹40,600
(d) ₹60,400
Answer:
(c) ₹40,600
Explanation: To find the equilibrium level of income, we need to set the saving function (S) equal to the investment expenditure (I) and then solve for the National Income (Y). Given:
S =- 60 + 0.1Y
I = ₹4,000 crores
So, S =1
-60 +0.1Y = 4,000
0.1Y = 4,000+60
0.1Y = 4,060
4,060
Y \(=\frac{4,060}{0.1}\)
Y = ₹40,600
Question 10.
Read the following chart carefully and choose the correct alternative: [1]
Alternatives:
(a) Interest received on loans
(b) Multilateral Loans
(c) Portfolio Investment
(d) Government Aid
Answer:
(c) Portfolio Investment
Explanation: Investments made abroad in financial assets are referred to as portfolio investments. Usually, it lasts only for a short time. Purchasing shares in a foreign nation is one of the example.
Question 11.
‘Current account deficit in an economy must be financed by a corresponding capital account surplus’. Do you agree with the given statement? Give valid reason(s) in support of your answer. [3]
Answer:
I agree with the statement, that a current account deficit in an economy must be financed by a corresponding capital account surplus. This is supported by the accounting identity, that states that the sum of the current account and the capital account must be zero. In the Balance Of Payments (BOP) framework, the current account represents the net balance of trade in goods and services, net income from abroad, and net transfers. If a country has a current account deficit, it means that it is importing more goods and services, receiving less income from abroad, or experiencing net outflows of transfers. To maintain the accounting identity, the current account deficit must be offset by a surplus in the capital account. The capital account includes transactions related to capital flows such as foreign direct investment, portfolio investment, borrowing, and lending. These capital inflows can help finance the current account deficit.
Question 12.
(A) On the basis of the given data, estimate the value of Domestic Income: [3]
| S. No. | Items | Amount (? in crore) |
| (i) | Household Consumption Expenditure | 600 |
| (ii) | Gross Fixed Capital Formation | 200 |
| (iii) | Change in stock | 40 |
| (iv) | Government Final Consumption Expenditure | 200 |
| (v) | Net Exports | (-) 40 |
| (vi) | Net Indirect Taxes | 120 |
| (vii) | Net Factor Income From Abroad | 20 |
| (viii) | Consumption of Fixed Capital | 40 |
OR
(B) State the meanings of the following: [3]
(i) Externalities
(ii) Operating Surplus
(iii) Consumption Goods
Answer:
(A) On the basis of given data, Domestic Income i.e., NDPFC can be calculated by expenditure method. Formula for calculating GDPMP (Expenditure method):
GDPMP = 600 + 200 + 40 + 200 + (- 40)
= ₹1,000 crores
NDPFC = GDPMP – Depreciation- Net Indirect Tax
= 1,000-40-120
= ₹840 crores
OR
(B) (i) Externalities: Externalities refer to benefits (positive externalities)/ harms (negative externalities) which are caused by one entity to another without being paid/ penalised for it.
(ii) Operating Surplus: Operating Surplus is the sum total of rent, royalties, interest and profits. It is also known as non-wage income.
(iii) Consumption goods: Goods which are consumed by the ultimate consumers or meet the immediate need of the consumer are called consumption goods. It may include services as well.
Question 13.
For a hypothetical economy, the government incurs an investment expenditure of ₹1,000 crore. If the value of Marginal Propensity to Save (MPS) falls from 0.25 to 0.10. Calculate the value of increase in income due to change in the value of Marginal Propensity to Save (MPS). [4]
Answer:
Given,
Change in Investment (AI) = ₹1,000 crore
| MPS |
Investment Multiplier \(K=\frac{1}{\text { MPS }}\) |
Change in Income (ΔY) ΔY = K × ΔI (₹ in crore) |
| 0.25 | \(\frac{1}{0.25}=4\) | 4 x 1,000 = 4,000 |
| 0.10 | \(\frac{1}{0.10}=10\) | 10 x 1,000 = 10,000 |
Increase in Income (ΔY) = ₹10,000- ₹4,000 = ₹6,000 crore
Question 14.
(A) “In an economy, ex-ante Aggregate Demand is more than ex-ante (planned) Aggregate Supply.” [4]
Elaborate the possible impact of the same, on the level of output, income and employment. [4]
OR
(B) “With an objective to reduce inflation, Reserve Bank of India may promote the commercial banks to park their surplus funds with it.”
Discuss the rationale behind the step taken by the Reserve Bank of India.
Answer:
(A) When ex-ante (planned) Aggregate Demand (AD) exceeds ex-ante (Planned) Aggregate Supply (AS) in an economy, it indicates that households and businesses are planning to spend more on goods and services than what producers expect to supply at the current level of output. This situation can have several impacts on the level of output, income, and employment:
(i) Increased production: To meet the higher demand, firms will aim to increase their production levels. They may hire additional workers, invest in more capital goods, and utilise existing resources more intensively. This increased production leads to an expansion of the economy’s output.
(ii) Higher income and employment: With increased production, firms will require more labour, leading to higher employment levels. This, in turn, generates more income for workers, increasing their purchasing power. As a result, aggregate income in the economy rises.
(iii) Positive multiplier effect: The increase in aggregate income can have a multiplier effect on overall demand. As households receive higher income, they are likely to increase their consumption, further boosting aggregate demand. This, in turn, encourages more production and generates a positive cycle of economic growth.
OR
(B) When the RBI wants to reduce inflationary pressures in the economy, it can increase the reverse repo rate. The reverse repo rate is the interest rate at which commercial banks can park their surplus funds with the central bank. By increasing this rate, the RBI makes it more attractive for commercial banks to lend their excess funds to the central bank instead of lending them to businesses and individuals.
The rationale behind this step is as follows:
(i) Absorbing liquidity: When commercial banks park their surplus funds with the RBI, it reduces the amount of money available for lending in the economy. By absorbing liquidity from the banking system, the RBI aims to control excessive money supply, which can contribute to inflationary pressures.
(ii) Reducing aggregate demand: When commercial banks have less capacity to lend due to parking funds with the RBI, it restricts the availability of credit in the economy. This, in turn, reduces the purchasing power of individuals and businesses, leading to a decrease in aggregate demand. Lower aggregate demand helps in suppress inflationary pressures.
(iii) Controlling inflation expectations: By increasing the reverse repo rate and tackle banks to park funds with the central bank, the RBI signals its commitment to combating inflation. This action helps in managing inflation expectations among market participants, including businesses and consumers. When inflation expectations are fasten, it can have a reducing effect on actual inflation rates.
Question 15.
Elaborate the ‘Banker’s Bank and Supervisor’ function performed by the Reserve Bank of India. [4]
Answer:
Functions of Central Bank as Bankers’ Bank and Supervisor are as follows:
(i) Make Surplus Cash reserve: As the banker to the commercial banks, the Central Bank holds surplus cash reserves of commercial banks.
(ii) Provides Loan: It also gives loans to the commercial banks when they are in need of funds.
(iii) Manages Routine Banking: The Central Bank also provides a large number of routine banking functions to the commercial banks, like cheque clearing, remittance facilities, accepting deposits, credit creation, etc.
(iv) Supervise and Regulate: It also acts as a supervisor and a regulator of the banking system. It makes rules regarding their licensing, branch expansion, liquidity of assets, amalgamation (merging of banks) and liquidation (the winding up of banks), etc. The control is exercised by periodic inspection of banks and the returns filed by them.
Question 16.
(A) On the basis of the given information, calculate the value of: [3]
(i) Fiscal deficit
(ii) Primary deficit [2]
| S. No. | Items | 2021-22 (₹ in crore) |
| (i) | Revenue Receipts | 20 |
| (ii) | Capital Expenditure | 15 |
| (iii) | Revenue Deficit | 10 |
| (iv) | Non-debt-creating capital receipts | 50% of revenue receipts |
| (v) | Interest Payments | 4 |
(B) State any two features of public goods. [1]
OR
(C) Explain the economic stability objective of Government Budget. [3]
(D) ‘Under the Ayushman Bharat Scheme, the Government provides free medicines to the economically backward section of the society’.
Identify and discuss the nature of the government expenditure indicated in the given statement. [3]
Answer:
(A) (i) Fiscal Deficit = Revenue Deficit + Capital Expenditure- Non-debt creating capital receipts
Given:
Revenue Deficit = ₹10 crores
Capital Expenditure = ₹15 crores
Non-debt creating capital receipts = 50% of revenue receipts = 50 % of ₹20 crores = ₹10 crores
Fiscal Deficit = 10 crores + ₹15 crores- ₹10 crores = ₹15 crores
Therefore, the value of fiscal deficit is ₹15 crores
(ii) Primary Deficit- Fiscal Deficit- Interest Payments
Given:
Fiscal Deficit = ₹15 crores
Interest Payments = ₹4 crores
Primary Deficit = ₹5 crores- ₹4 crores = ₹11 crores
Therefore, the value of primary deficit is ₹11 crores.
(B) Two features of public goods are:
(i) Non-excludable: Public goods are non-excludable, which means that it is to difficult or impossible to exclude individuals from benefitting from or accessing the good. Once the good is provided, it is available to all members of society, regardless of whether they have contributed to its production or not. For e.g., a public park is open for everyone to use, regardless if they have paid for its maintenance or not.
(ii) Non-rivalrous: Public goods are non-rivalrous, meaning that one person’s consumption or use of the good does not diminish or reduce the availability of the good for others. In other words, the consumption of the good by one individual does not reduce its availability or usefulness to others in society. For e.g., the enjoyment of a fireworks display by one person does not diminish the ability of others to enjoy the same display.
OR
(C) Economic Stability: Government can bring economic stability i.e., can control fluctuations in general price level through taxes, subsidies and expenditure. For instance, when there is inflation, government can reduce its own expenditure and when there is depression characterised by falling output and prices, government can reduce taxes and grant subsidies to encourage spending by people.
In the case of inflation or deflation, where prices are rising or falling quickly, the government aims to stabilise the economy by adjusting taxes and expenditures. If there is inflation, the government may increase taxes or reduce its own spending to reduce aggregate demand, thereby helping to curb price increases. Conversely, if there is deflation and the economy is experiencing a decline in prices, the government may reduce taxes or increase its expenditure to stimulate aggregate demand, encouraging economic activity and price stability.
(D) Expenditure incurred by the government under the Ayushman Bharat Scheme for providing free medicines to the economically backward section is classified as revenue expenditure. Revenue expenditure refers to government spending that does not lead to the creation of assets or a reduction in liabilities.
In this case, the funds allocated for providing free medicines do not result in the acquisition of long-term assets or the reduction of government liabilities. Instead, the expenditure is aimed at meeting the day-to-day operational expenses of the scheme, such as purchasing medicines and ensuring, their distribution to eligible individuals.
For example, Under Ayushman Bharat Yojana Scheme, coverage of ₹5 lakh per family per annum for secondary and tertiary care across public and private hospitals. Since the expenditure is recurring and does not have a long-term impact on the government’s assets or liabilities, it falls under the category of revenue expenditure.
Question 17.
(a) Giving valid reasons, explain how the following would be treated while estimating domestic income? [3]
(i) Payment made by American tourist for goods purchased in India.
(ii) Tomatoes grown by Ms. Puja in her kitchen garden.
(b) “Machine purchased by a firm is always a capital good.” Do you agree with the given statement? Give valid reasons for your answer. [3]
Answer:
(a) (i) Yes, Payment made by an American tourist for goods purchased in India would indeed be included in the estimation of domestic income. When an American tourist buys goods in India, it represents a transaction involving the sale of goods to a foreign resident. This payment contributes to India’s export earnings, as it involves the exchange of goods for money with a non-resident. Therefore, the payment made by the American tourist would be considered as a part of India’s domestic income, specifically as a component of export income.
(ii) No, Tomatoes grown by Ms. Puja in her kitchen garden would generally not be included in the estimation of domestic income. The reason for this is that domestic income typically refers to income generated from economic activities within the country’s formal market economy. The production of tomatoes in Ms. Puja’s kitchen garden, while valuable for personal consumption, is usually considered a non-commercial or non-market activity. It is difficult to ascertain their market value and such transactions are not typically undertaken for monetary consideration. Therefore, the tomatoes grown in a personal kitchen garden would not be included in the estimation of domestic income.
(b) No, Capital goods are those final goods which help in the production of other goods and services.
A machine purchased by a firm is typically classified as a capital good. Capital goods are durable assets that are used in the production process to create other goods and services. They are not consumed immediately but are utilised over an extended period to generate additional output. Hence, if a machine is purchased for the production of goods and services then it will be considered as a capital good. But, if it is purchased for resale than it is considered as an intermediate good not capital good.
Section-B (40 Marks)
Indian Economic Development
Question 18.
Identify the correct combination of the ‘Goals of Indian Five-Year Plans’: [1]
(a) Growth, Equality, Modernisation, Self-Reliance
(b) Development, Equality, Modernisation, Sustainability
(c) Good Health, Education, Modernisation, Sustainability
(d) Growth, Equity, Modernisation, Self-Reliance
Answer:
(d) Growth, Equity, Modernisation, Self-Reliance
Explanation: Growth: Focusing on economic development and increasing the overall GDP.
Equity: Promoting social justice and reducing income disparities.
Modernisation: Upgrading infrastructure and adopting advanced technologies.
Self-Reliance: Reducing dependence on imports and promoting domestic production.
Question 19.
‘China has performed exceedingly well in various health and economic indicators’. [1]
Identify which of the following is not a health indicator?
(a) Infant Mortality Rate (per 1000 live births)
(b) Life Expectancy at Birth (years)
(c) Percentage of people below poverty line (National)
(d) Maternal Mortality Rate (per 1 lakh births)
Answer:
(c) Percentage of people below poverty line (National)
Explanation: While poverty is an important socio-economic indicator, it is not directly linked to health outcomes. The other options, such as infant mortality rate, life expectancy at birth, and maternal mortality rate, are all health indicators that reflect different aspects of population health.
Question 20.
The shackles of agriculture during the colonial rule were permanently broken by the Green Revolution that resulted from the application of ___________. (Choose the correct alternative to fill up the blank) [1]
I. High Yielding Varieties (HYV)
II. Mechanization of Agriculture
III. Chemical Fertilizers and Pesticides
IV. Organic Fertilizers and Pesticides
Alternatives:
(a) I, II, IV
(b) I, II, III
(c) II, III, IV
(d) I, III, IV
Answer:
(b) I, II, III
Explanation: The Green Revolution, which broke the shackles of agriculture during colonial rule, resulted from the application of:
I. High Yielding Varieties (HYV)
II. Mechanisation of Agriculture
III. Chemical Fertilizers and Pesticides. The chemical fertilizers and pesticides have affected soil fertility and general health.
Question 21.
Study the following picture and answer the given question: [1]
Women in rural households take up bee-keeping as an entrepreneurial activity. Such kind of activities may be envisaged under ___________ as diversification activity. (Choose the correct alternative to fill up the blank).
(a) Animal husbandry
(b) Fisheries
(c) Horticulture
(d) Poultry
Answer:
(c) Horticulture
Question 22.
Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative from those given below.
Assertion (A): In 1991, as an immediate measure to resolve the Balance of Payments crisis, the rupee was devalued against foreign currencies. [1]
Reason (R): Devaluation of currency was eminent, to replenish the deteriorated foreign exchange reserves.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is true, but Reason (R) is false.
(d) Assertion (A) is false, but Reason (R) is true.
Answer:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Explanation: In 1991, India faced a Balance of Payments crisis with low foreign exchange reserves. To address this, the rupee was devalued against foreign currencies. The Reason for the devaluation was the low exchange reserves. Thus, it was necessary to take immediate measures to restore economic stability. Therefore, both Assertion and Reason are true, and Reason explains the Assertion.
Question 23.
___________ in China, farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs on the basis of prices fixed by the government and the rest were purchased and sold at market prices. (Choose the correct alternative to fill up the blank) [1]
(a) Commune System
(b) Great Leap Forward
(c) Dual Pricing
(d) Great Proletarian Cultural Revolution
Answer:
(c) Dual Pricing
Explanation: Dual pricing is the practice of setting different prices in different markets for the same product or service. It was a system implemented in China where farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs based on prices, determined by the government. The remaining quantities were bought and sold at market prices. This system aimed to strike a balance between centralised planning and market mechanisms in the economy.
Question 24.
Micro credit programmes play a vital role in ensuring an overall development of the rural economy as they ___________ (Choose the correct alternative to fill up the blank) [1]
(i) provide financial support
(ii) lead to women empowerment
(iii) enhance the reach of formal credit system
Alternatives:
(a) (i) and (ii)
(b) (ii) and (iii)
(c) (i) and (iii)
(d) (i), (ii), and (iii)
Answer:
(d) (i), (ii), and (iii)
Explanation: Microcredit programmes play a vital role in the overall development of the rural economy because they provide financial support, lead to women empowerment, and enhance the reach of formal credit systems. This encourages economic growth, boost productivity and ultimately create jobs.
Question 25.
____________ may be defined as the measure of the extent of demographic participation in the social and political decision-making. (Choose the correct alternative to fill up the blank) [1]
(a) Economic indicator
(b) Liberty indicator
(c) Health indicator
(d) Demographic indicator
Answer:
(b) Liberty indicator
Explanation: Liberty indicator may be defined as the measure of the extent of demographic participation in social and political decision-making. It refers to the degree of freedom and opportunity individuals have to participate in the decision-making processes, that shape their society.
Question 26.
Read the following statements carefully: [1]
Statement 1: The nature of unemployment problem in India is uni-faceted.
Statement 2: Worker-population ratio is an indicator used for analysing the employment situation in a country.
In light of the given statements, choose the correct alternative from the following:
(a) Statement 1 is true and Statement 2 is false.
(b) Statement 1 is false and Statement 2 is true.
(c) Both Statements 1 and 2 are true.
(d) Both Statements 1 and 2 are false
Answer:
(b) Statement 1 is false and Statement 2 is true.
Explanation: The unemployment problem in India is not uni-faceted but rather multifaceted. It has various dimensions and complexities, including different types of unemployment such as structural, frictional, and cyclical unemployment. The worker-population ratio is an important indicator used to analyse the employment situation in a country. It measures the proportion of the working-age population that is employed and provides insights into the level of employment or unemployment.
Question 27.
From the set of the events given in column I and corresponding facts given in Column II, choose the correct pair of statements: [1]
| Column I | Column II | ||
| A. | Adoption of mixed economic system | I. | The common development policy of India and China |
| B. | Introduction of economic reforms in China | II. | Imposed by World Bank |
| C. | Great Leap Forward Campaign | III. | Focused on massive industrialization |
| D. | First Five Year Plan of Pakistan | IV. | Announced in 1953 |
Alternatives:
(a) A-I
(b) B-II
(c) C-III
(d) D-IV
Answer:
(c) C-III
Explanation: The Great Leap Forward Campaign, which took place in China, focused on achieving rapid industrialisation and agricultural collectivisation. It was implemented from 1958 to 1962 and aimed to transform China’s economy and society to large-scale industrial and agricultural projects. The two main target of this campaign was increasing grain and steel production.
Question 28.
(A) “During the colonial period, a number of socio-economic indicators were in a dilapidated state.” [3]
List any three such indicators that led to the worsening of India’s demographic profile.
OR
(B) “Pre-independent India’s occupational structure experienced growing regional variation.” [3]
Justify the above statement with valid explanation.
Answer:
(A) During the colonial period, India experienced several socio-economic indicators that contributed to the worsening of its demographic profile. Three such indicators are as follows:
(i) Low Life Expectancy: Under colonial rule, healthcare infrastructure and access to medical facilities were inadequate, resulting in low life expectancy rates. Limited access to healthcare services, poor sanitation, and lack of nutrition led to high mortality rates, particularly among the poor population.
(ii) High Infant Mortality Rate: Infant Mortality Rate (IMR) refers to the number of deaths of infants under one year of age per 1,000 live births. Dining the colonial period, India faced high IMR due to various factors, including inadequate healthcare facilities, poor sanitation, and malnutrition. Lack of awareness about hygiene practices and limited access to clean drinking water also contributed to the high infant mortality rate.
(iii) Poor Maternal Health: Maternal health indicators, such as Maternal Mortality Ratio (MMR), were adversely affected during the colonial period. Limited access to quality healthcare services, lack of trained medical personnel, and inadequate maternal care facilities led to a high MMR. These socio-economic indicators highlight the adverse effects of colonial rule on India’s demographic profile, including low life expectancy, high infant mortality rates, and poor maternal health
OR
(B) The statement that “pre-independent India’s occupational structure experienced growing regional variation” is justified due to several factors that contributed to the diverse occupational patterns across different regions of India during that period. Following are the explanations:
(i) Geographical and Environmental Factors: India’s diverse geographical and environmental characteristics influenced the occupational structure in different regions. For example, regions with fertile land and favourable climatic conditions were more suitable for agriculture-based occupations.
Therefore, agricultural activities such as farming, livestock rearing, and fishing dominated regions like Punjab, Uttar Pradesh, and coastal areas. On the other hand, regions with hilly terrain or arid conditions had limited agricultural opportunities and relied more on pastoralism, forestry, or mining.
(ii) Historical and Cultural Factors: These historical and cultural factors played a significant role in shaping the occupational structure in different regions. For instance, regions with a strong tradition of craftsmanship and artisanal skills, such as Gujarat, Rajasthan, and Uttar Pradesh, witnessed the dominance of occupations like pottery, weaving, metalwork, and handicrafts. In contrast, regions with a maritime history, such as Gujarat, Maharashtra, and Tamil Nadu, had thriving occupations related to seagoing, trade, and shipbuilding.
(iii) Economic and Industrial Development: The level of economic and industrial development varied across different regions of pre-independent India. Some regions were more industrialised and had a higher concentration of factories, mills, and manufacturing units. For example, regions like Bengal, Maharashtra, and Gujarat were industrial hubs during that time. This led to a higher proportion of industrial and factory-based occupations in those areas.
Question 29.
“Ravya was initially working as an office clerk in a firm. In the pursuit to attain, a higher position and income, she attended a few on-the-job training sessions. These sessions contributed positively to her skills and expertise.” [3]
Explain the impact of Ravya’s decision on human capital formation.
Answer:
Ravya’s decision to attend on-the-job training sessions as an office clerk has positively impacted her human capital formation. These sessions have enhanced her skills, knowledge, and adaptability, making her more productive and valuable in her role. The training exposed her to modern technologies and ideas, improving her job performance. Ravya’s commitment to continuous learning, positions her for career advancement opportunities. Overall, attending on-the-job training has provided to her professional growth and the success of the firm.
Question 30.
“In the late 1970s, China introduced the One-child policy that led to arrest in the population coupled with skewed sex ratio.”
Justify the given statement with valid arguments in support of your answer.
Answer:
China, known for its large population, faced a high annual population growth rate that gave rise to the implementation of the one-child policy in the late 1970s. This policy successfully curbed population growth, but it also had unintended consequences. One such consequence was a skewed sex ratio, with approximately 949 females for every 1000 males in China.
This imbalance can be attributed to both the one-child policy itself and the cultural preference for sons that existed in the society. The strict limitations on family size led to selective abortions and female infanticide, increasing the gender imbalance. As a result, China experienced a decline in population growth, alongside the challenge of a significantly imbalanced sex ratio.
Question 31.
(A) State and elaborate whether the following statements are true or false with valid arguments:
(i) Agricultural marketing is a process that ensures the transportation of various agricultural commodities only. [2]
(ii) Jan-Dhan Yojana has been a crucial step for financial resource mobilization in the Indian economy. [2]
OR
(B) “Since independence, the government has been playing an important role in generating employment directly or indirectly.” Discuss.
Answer:
(A) (i) Agricultural marketing is a process that ensures the transportation of various agricultural commodities only” is false.
Agricultural marketing encompasses a wide range of activities beyond transportation. It includes the gathering, sorting, storage, processing, packaging, grading, and distribution of agricultural commodities across the country. Transportation is just one aspect of agricultural marketing, alongside other important functions that contribute to the overall process.
(ii) Jan-Dhan Yojana has been a crucial step for financial resource mobilization in the Indian economy” is true.
The Jan-Dhan Yojana, introduced in 2014 by the Government of India, aimed to provide financial inclusion by ensuring access to banking services for all households. This initiative has been instrumental in mobilising financial resources, particularly in rural areas, by encouraging individuals to open bank accounts and participate in the formal banking system. This yojana has promoted thrift habits and efficient allocation of financial resources, particularly in rural areas.
OR
(B) The government has played a crucial role in employment generation, both directly and indirectly. Directly, government departments and enterprises have been significant employers, offering job opportunities in various sectors such as administration, defence, education,, healthcare, and public services. This direct employment contributes to reducing unemployment and providing livelihoods.
Indirectly, the government’s actions have a multiplier effect on employment. As government enterprises increase their output, private enterprises that rely on them for raw materials also witness a surge in production, leading to increased employment opportunities. Furthermore, the government’s investments in infrastructure development stimulate the economic activities and create additional jobs in related sectors.
In conclusion, the government’s direct and indirect employment initiatives have played a vital role in generating employment opportunities and driving overall economic growth since independence.
Question 32.
Identify the situation depicted in the given image. Suggest the impact of the indicated situation, on the Indian economy. [4]
Answer:
The provided image depicts the growing trend of the Indian workforce transitioning from formal sector employment to informal sector employment, commonly referred to as the ‘informalisation of the workforce.’ It is the part of an economy that is neither to need nor monitored by any form of government. In India, the informal sector comprises a vast number of individuals, including farmers, agricultural labourers, non-farm casual wage labourers, small enterprise owners, and self-employed individuals.
Those working in the informal sector often face challenges such as irregular income, lack of government protection or regulations, and the possibility of being dismissed without compensation or notice. Recognising these issues, the government is taking steps to safeguard the interests of workers in the informal sector and ensure their well-being.
Question 33.
(A) Green revolution transformed India from a subsistent food grain economy to a food surplus economy.” [3]
Justify the statement, giving reasons in support of your answer.
(B) “In order to protect domestic industries, India followed the regime of restrictions on imports.” [3]
Briefly outline and discuss such steps taken by the government to promote import substitution policy
OR
(C) “In India, after 1947 land reforms were introduced on a large scale.” [3]
In the light of the given statement, discuss any one such land reform. [3]
(D) “In the post-reform period, the Government of India decided to retain profit-making Public Sector Undertakings (PSUs). It provided a special status to PSUs to enable them to expand in the global market.”
Do you agree with the given statement? Give valid reasons in support of your answer.
Answer:
(A) Before the Green Revolution, a significant portion of agricultural produce in India was consumed by the farmers themselves instead of being sold in the market. This was primarily due to the low productivity of traditional farming methods and the limited surplus available for sale. However, with the advent of the Green Revolution, there was a substantial increase in agricultural output, particularly in the case of wheat and rice.
It introduced high-yielding varieties of seeds, modern farming techniques, irrigation systems, and the use of fertilizers and pesticides. These advancements significantly boosted agricultural productivity, leading to increased yields per hectare. As a result, farmers were able to produce a surplus of food grains beyond their own consumption needs. With the increased productivity and surplus production, farmers had a greater quantity of agro produce, such as wheat and rice, available for sale in the market: The surplus production was not only sufficient to meet domestic demand but also allowed for exports to other countries. This shift from self-consumption to market-oriented production led to the achievement of a marketed surplus
(B) India implemented import substitution policies as a means to safeguard its domestic industries. These policies aimed to replace imported goods with domestically produced ones. Several tools were utilised to protect domestic industries from foreign competition:
(i) Tariffs: Tariffs are taxes imposed on imported goods, making them more expensive and less attractive to consumers. By raising the cost of imported goods, tariffs discourage their usage and promote the consumption of domestically produced option.
(ii) Quotas: Quotas establish limits on the quantity of goods that can be imported. By restricting the amount of foreign goods entering the country, quotas create a protected market for domestic industries, enabling them to compete more productively.
OR
(C) One significant land reform introduced in India after 1947 was the implementation of land ceilings. Land ceilings aimed to address the issue of excessive land concentration and promote equitable distribution of agricultural land among farmers. Under this reform, the government set a maximum limit on the size of landholding that an individual or family could own.
The specific limit varied across states, but the objective was to prevent the accumulation of large landholdings in the hands of a few wealthy landowners. Excess land beyond the specified ceiling limit was redistributed to landless farmers or those with small landholdings, thereby providing them with an opportunity for increased agricultural productivity and economic stability. This step was essential to promote equity in the agricultural sector.
(D) The government’s initiative to identify profit-making PSUs as Maharatnas, Navratnas, and Miniratnas and grant them greater managerial and operational autonomy was aimed at improving efficiency, inspire professionalism, and enabling them to compete effectively in the liberalised global environment. This move allowed these PSUs to take decisions more independently and adapt to market dynamics, resulting in improved performance and their establishment as market leaders over the years.
By conferring the status of Maharatnas, Navratnas, and Miniratnas, the government acknowledged the exceptional performance and potential of certain PSUs. This recognition provided them with increased credibility and visibility, both domestically and internationally. It also infused a sense of pride and motivation within the organisations, driving them to strive for excellence.
Question 34.
Read the following text carefully:
Sustainable development is the development that meets the needs of the present, without compromising the ability of future generations to meet their own needs. India is critical in determining the success in a pursuit to achieve sustainable development. The Union Budget 2023 presented byFinance Minister Nirmala Sitharaman builds on India’s commitment to lead the global action against climate change, preserve biodiversity and support sustainable development.
The government has accelerated the pace of Green Growth as India is facing the grave reality of depleting natural resources, limited supply of water, minerals, and fossil fuels. In a bid to counter the climate threat, India has committed to achieving net zero by 2070; released a low-carbon development strategy; and introduced the concept of ‘LIFE’ (Lifestyle for Environment) to promote responsible consumption. The Green Growth actions include several pointed measures that would facilitate the much needed steady decarbonisation of Indian industries, reduce dependency on fossil fuel imports and establish technology and market leadership in this sunrise sector.
For instance:
The allocation of ₹35,000 crore of priority capital investment towards achieving net zero by 2070 and clean energy transition ensures the country’s energy security.
The outlay of ₹19,700 crore for the Green Hydrogen Mission will mobilise a green hydrogen production capacity of 5 metric million tonnes by 2030.
Moreover, to encourage the optimal use of wetlands, enhance biodiversity, carbon stock, eco-tourism opportunities and income generation for local communities, the Amrit Dharohar Scheme will be implemented over three years.
Source: https://economictimes.indiatimes.com/industry/renewable/view-budget-2023-ensured-india-isprimed-for-green-growth.
On the basis of the given text and common understanding, answer the following questions:
(i) Define sustainable development. [2]
(ii) Briefly elaborate, any two reasons behind the objective of Green Growth being set up by the Indian Government. [4]
Answer:
(i) Development that satisfies the requirements of the present generation without compromising the capacity of future generations to satisfy their own needs is known as sustainable development. Sustainability improves the quality of human life. It helps in minimising the depletion of natural resources. It teaches us to respect and care for all the life forms. It is to promote the development that minimises environmental problems.
(ii) Two reasons behind the objective of Green Growth set up by the Indian Government, as mentioned in the above text, are:
(a) Depletion of Natural Resources: India is facing the reality of depleting natural resources, limited water supply, minerals, and fossil fuels. Recognising the urgency of addressing these challenges, the government has embraced, Green Growth as a strategy to mitigate the adverse impacts of resource depletion.
By promoting sustainable practices, renewable energy, and resource-efficient technologies, the objective is to reduce dependence on defined resources, preserve natural ecosystems, and ensure the availability of resources for future generations.
(b) Climate Change and Environmental Threats: The government’s objective of Green Growth is also driven by the need to counter the threats posed by climate change and environmental degradation. India has committed to achieve net-zero emissions by 2070 and has released a low-carbon development strategy.
By adopting green growth policies and measures, such as promoting clean energy transitions and decarbonisation of industries, the government aims to mitigate the impacts of climate change, reduce greenhouse gas emissions, and preserve biodiversity. Additionally, the concept of ‘LiFE’ (Lifestyle for Environment) is introduced to promote responsible consumption and encourage sustainable practices among individuals and communities.
Overall, the objective of Green Growth by the Indian Government is motivated by the need to address resource depletion, conflicting climate change, preserve biodiversity, and ensure a sustainable future for both the environment and the economy.