Students can access the CBSE Sample Papers for Class 12 Economics with Solutions and marking scheme Set 2 will help students in understanding the difficulty level of the exam.
CBSE Sample Papers for Class 12 Economics Set 2 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: Below Break Even Point, Average propensity to consume is greater than 1.
Statement 2: Average Propensity to Consume is the ratio of Change in consumption and Change in income.
Choose the correct alternative from the following:
(a) Statement 1 is true and statement 2 is false.
(b) Statement 2 is true and statement1 is false.
(c) Both statements 1 and 2 are true.
(d) Both statements 1 and 2 are false.
Answer:
(a) Statement1 is true and statement 2 is false
Explanation:
Below Break Even Point, Consumption is greater than Income.
\(\begin{aligned} & \mathrm{APC}=\frac{\mathrm{C}}{\mathrm{Y}} \\ & \mathrm{APC}=\frac{200}{100}=2\end{aligned}\) (Hypothetical figures are taken)
Average propensity to consume is the ratio between total consumption
Question 2.
For a Two -Sector Economy (with no Government Sector), which of the following is correct? [1]
(a) NNPMP = NNPFC
(b) NNPMP>NNPFC
(c) NNPMP < NNPFC
(d) NNPMP + NNPFC = 0
Answer:
(a) NNPMP = NNPFC
Explanation:: In an economy having no Government Sector, there is no scope of Taxation (imposed by government only) and Subsidy (given by government only). And difference between Market price and Factor cost is Net indirect taxes (Indirect tax – Subsidy). Therefore, this difference will become zero.
NNPMP = 100 crores
(-) NIT = 0
NNPFC = 100 crores
Question 3.
The value of ___________ can be negative. [1]
(a) Average Propensity to Consume
(b) Marginal Propensity to Consume
(c) Average Propensity to Save
(d) Marginal Propensity to Save
Answer:
(c) Average Propensity to Save
Explanation: APS refers to average propensity save, which defines the amount of savings in every 1 rupee of income. When Savings are negative or when Consumption exceeds Income. It occurs below Break Even Point.
If
Y = 1,000 crores
C = 1,200 crores
S = Y-C
= 1,000- 1,200 = (-) 200 crores
\(\begin{aligned} \text { APS } & =\frac{\mathrm{S}}{\mathrm{Y}} \\ & =\frac{-200}{1,000}=-0.2\end{aligned}\)
Question 4.
As per The Economic Times, published dated April 17, 2023: [1]
“Apple first Retail Store in Mumbai to open on April 18, followed by Delhi launch on April 20.”
The above transaction will be recorded in the ____________ account on the ___________ side of Balance of Payment Account of India.
(a) Current, Debit
(b) Current, Credit
(c) Capital, Debit
(d) Capital, Credit
Answer:
(d) Capital, Credit
Explanation: This transaction is Foreign Direct Investment from U.S. Based Company in India. And Capital Account of BOP records those transactions with rest of the world which affect assets and liabilities of a country. It will result into inflow of foreign exchange. So, it will be recorded on the credit side of BOP.
Question 5.
“A has surplus production of rice and needs wheat for exchange of rice.” [1]
On the basis of above information, identify the limitation of Barter System.
(a) Lack of common unit of value
(b) Difficulty in deferred payments
(c) Lack of storage of value
(d) Lack of double coincidence of wants
Answer:
(d) Lack of double coincidence of wants
Explanation: Double coincidence of wants means the simultaneous fulfillment of mutual wants by buyers and sellers. It also means that possessions and needs of two individuals should coincide at the same point of time. And it is not easy to find such a person for A who has wheat and needs rice. It causes waste of lot of time and energy.
Question 6.
Find the missing figures and Choose the correct alternative: [1]
Rounds | Primary Deposits (in crores) | Loans (in crores) | Legal Reserves (in crores) |
1st Round | 5,000 | 4,000 | (i) …… |
2nd Round | 4,000 | 3,200 | 800 |
3rd Round | — | — | — |
(and so on till all the excess reserves are exhausted) | — | — | — |
Total | – (»)……………… | (iii)….. | (iv) |
Choose the correct alternative:
(a) 9000, 20000, 5000, 1000
(b) 1000, 25000, 20000, 5000
(c) 5000,9000,7200,800
(d) 1000, 20000, 25000, 5000
Answer:
(b) 1000,25000,20000,5000
Explanation:
(i) Loans = Primary Deposits- Legal Reserves
4,000 = 5,000- Legal Reserves
Legal Reserves = 5,000- 4,000 = 1,000 crores
(ii) Legal Reserve Ratio (LRR)= \(\frac{\text { Legal Reserves }}{\text { Initial Deposits }}\) × 100
\(\frac{1,000}{5,000}\) = 100 = 20%
Total Deposits = \(\frac{1}{\mathrm{LRR}}\) x Initial Deposits
\(\frac{1}{20 \%}\) x 5,000 = 25,000 crores
(iii) Total Loans = Total Deposits- Total Legal Reserves …[From point (iv)] = 25,000- 5,000 = 20,000 crores
(iv) Process of credit creation continuous till legal reserves become equal to initial deposits i.e:, 5,000 crores.
Question 7.
Graphically, the parallel distance between Aggregate Demand Curve and Consumption Curve Indicate: [1]
(a) Aggregate Supply
(b) Ex-Post Saving
(c) Autonomous Investment
(d) Ex-Ante Saving
Answer:
(c) Autonomous Investment
Explanation: Autonomous investments are made because they are deemed as basic necessities to individual, organisation, or national well-being, and are executed even when levels of disposable income for investment are zero or close to zero.
AD =C + I
So
AD-C =1
Here,
I = Autonomous Investment
Question 8.
Identify the Impact of depreciation of home currency. [1]
I. Increase in Exports
II. Decrease in Exports
III. Increase in Imports
IV. Decrease in Imports
(a) I and IV
(b) II and III
(c) I and II
(d) n and IV
Answer:
(a) I and IV
Explanation: Depreciation of home currency shows fall in the value of domestic currency (Rupee) in relation of foreign currency (dollar).
(i) Purchasing power of Rupee is decreasing. Due to which Imports become expensive and hence, fall in imports
(ii) Purchasing power of Dollar is increasing. Due to which Exports become cheaper and hence, rise in exports.
Question 9.
In an Economy, given the Consumption Function C = 75 + 0.5Y, where C = Consumption Expenditure, Y = Income and Investment Expenditure = ₹1,000 crores. [1]
Equilibrium level of income would be ___________ crores.
(a) 1,850
(b) 18,500
(c) 2,150
(d) 53,750
Answer:
(c) 2,150
Explanation:
At Equilibrium,
Y =C + I
Y = 75 + 0.5Y + 1,000
Y- 0.5Y = 1,075
0.5Y – 1,075
Y = 1,075× \(\frac{10}{5}\)
= 1,075 × 2 = 2,150
Question 10.
Read the following chart carefully and choose the correct alternative: [1]
Alternatives:
(a) Accommodating transactions of BOP
(b) Official Reserve Account
(c) Neither (a) nor (b)
(d) Both (a) and (b)
Answer:
(d) Both (a) and (b)
Explanation: Official Reserve Account is that account of BOP which records accommodating transactions of BOP. These are deliberately done by monetary authority of a country to maintain balance in BOP. So, such transactions act as accommodating item in BOP.
Question 11.
“Balance of Payments always balances.”
Do you agree with the given statement? Given valid reason(s) in support of your answer. [3]
Answer:
No, I don’t agree with the given statement.
Reasons:
(i) BOP balances always in the accounting sense. Because the transactions are recorded on the basis of double-entry system. If one account is debited with a certain amount, other account is credited with the same amount.
(ii) But in practical sense, it is not always balanced. There may be a situation of Surplus BOP or deficit BOP. A negative balance in Current account of BOP may be balanced through a positive balance in Capital account of BOP. A negative balance in Capital account of BOP may be balanced through Official Reserve Account.
Question 12.
(A) On the Basis of given data, estimate the value of “Private Final Consumption Expenditure”: [3]
Items | Amount (in ₹ crores) |
Net Indirect Taxes | 200 |
Net Imports | 120 |
Net Factor Income to abroad | 40 |
Net Domestic Fixed Capital Formation | 600 |
Change in Inventories | 60 |
Govt. Final consumption Expenditure | 400 |
Consumption of fixed Capital | 140 |
National Income | 2100 |
OR
(B) State the meaning of following: [3]
(i) Transfer Income
(ii) Real GDP
(iii) Consumption of Fixed Capital
Answer:
(A) Given, National Income (NNPFC) = ₹2,100 crores.
NNPFC = GDPMP – Depredation – Net Indirect Taxes – Net factor Income to abroad
2,100 = GDPMP– 140- 200- 40
2,100 = GDPMP– 380
GDPMP = 2,100 + 380 = ₹2,480 crore
GDPMP = Private Final Consumption + Net Domestic Capital Formation + Change in Inventories + Depredation + Government Final Consumption + (X- M)
= Private Final Consumption + 600 + 60 + 140 + 400- 120
2,480 = Private final consumption + 1,080
Private Final Consumption = 2,480- 1,080 = ₹1,400 crore.
Note: If Net Domestic fixed capital formation is given then answer will be obtained in “Net”.
Depreciation is added back because Net Fix Capital Formation is given.
OR
(B) (i) Transfer Income: It is the Income earned without rendering any factor services. It is one sided income and there is no corresponding value addition in the economy. It is a unilateral concept and is not included in National Income, e.g., Old age pension, subsidy.
(ii) Real GDP: It is the market value of all the final goods and services produced in the domestic boundary of a country in an accounting year, measured at constant prices or base year prices. It is an inflation- adjusted measure.
Real GDP = \(\frac{\text { Nominal GDP }}{\text { Deflator }}\)
(iii) Consumption of Fixed Capital: It refers to fall in value of a fixed asset due to continuous used in the production activity i.e., normal wear and tear, accidental damages and expected obsolescence.
Question 13.
Suppose, in a hypothetical economy, the Savings increase by₹10 crores when national income increases by ₹50 crores. Compute the additional investments needed to attain an increase in national income by ₹3000 crores. [4]
Answer:
Given :
Increase in Savings = ΔS = 10 crores
Increase in National Income = ΔY = 50 crores
To Find:
Additional Investments = ΔI to attain ΔY = 3,000 crores
\(\mathrm{MPS}=\frac{\Delta \mathrm{S}}{\Delta \mathrm{Y}}=\frac{10}{50}=0.2\)
Now,
Investment Multiplier (k)
\(\begin{aligned} =\frac{1}{\mathrm{MPS}}=\frac{1}{0.2}=5 \\ k & =\frac{\Delta \mathrm{Y}}{\Delta \mathrm{I}} \\ 5 & =\frac{3,000}{\Delta \mathrm{I}} \\ \Delta \mathrm{I} & =\frac{3,000}{5}\end{aligned}\)
AI = 600 crores
Question 14.
(A) In an Economy, the level of planned aggregate expenditure is less than planned output.
Elaborate what can the possible causes of this situation be in the economy? [4]
OR
(B) To tackle the problem of inflation, RBI may sell securities to the public? Explain the role of RBI in correcting the excess demand in an economy.
Answer:
(A) It means that planned AD < planned AS.
Causes:
(i) Increase in tax rate leads to fall in disposable income of people. People will reduce consumption expenditure and hence fall in AD.
(ii) Fall in Investment expenditure due to rise in rate of interest. Producer will be discouraged to invest more and hence fall in AD.
(iii) Decrease in Government expenditure on public welfare programmes. It will lead to fall in money supply and hence fall in AD.
(iv) Fall in export demand due to rise in prices in the country. It will lead to fall in AD.
(v) Rise in Import demand due to cheap prices in international market. It will lead to fall in AD of domestically produced goods.
It also denotes that AD is more than AS, then the planned inventory would fall below the desired lend. To bring back to desired output, the producer will continue to produce, thereby increase income till they reach to a lend where AD = AS.
OR
(B) (i) When there is excess demand, Central Bank (RBI) starts to sell securities at an attractive interest rate. People encourages to buy securities. It reduces disposable income in the hands of the public. Overall money is absorbed from the economy. It leads to decrease in aggregate demand due to reduction of disposable income.
(ii) Open Market: When there is excess demand Central Bank sells securities. This leads to flow of money out of the commercial banks to the Central Bank when people make payment by cheques. Thus, reduces deposits with the banks leading to decline in their lending capacity. This leads to decline in borrowing and also in aggregate demand.
Question 15.
Elaborate “lender as the last resort” function performed by the Central Bank of a country. [4]
Answer:
(i) It means that if a commercial bank becomes insolvent and fails to get any financial help from anywhere, it finally approaches RBI and RBI acts a last hope for commercial bank.
(ii) Central Bank provides loan to commercial bank against approved securities.
(iii) While doing so, RBI takes care of all the stakeholders of bank, for e.g., depositors of the bank.
(iv) It also ensures that it does not create panic among depositors of other commercial banks and tries to maintain trust of people in the banking system.
Question 16.
(A) On the basis of given information, calculate the value of: [3]
(i) Fiscal Deficit
(ii) Primary Deficit [2]
Items | Amount (in ₹ crores) |
Revenue Expenditure | 35,000 |
Interest Payments | 25 % of Revenue Deficit |
Revenue Receipts | 25,000 |
Borrowings | 7,500 |
(B) State any two differences between Private goods and Public goods. [1]
OR
(C) Giving valid reason(s), categorise the following as Revenue Receipts or Capital Receipts: [3]
(i) Deposits by general public in National Saving Certificates.
(ii) GST collection.
(D) As per Union Budget 2023, new tax regime is as follows: [3]
Annual Income (in ₹) | Tax Rate |
0-3 lakh | Nil |
3-6 lakh | 5% |
6-9 lakh | 10% |
9-12 lakh | 15% |
12-15 lakh | 20% |
More than 15 lakh | 30% |
Read the above table carefully and identify the nature of tax. Also, discuss any one implication of it on the economy.
Answer:
(A) (i) Fiscal Deficit = Borrowings = 7,500 crores
(ii) Revenue Deficit = Revenue Expenditure- Revenue Receipts
= 35,000- 25,000 = 10,000 crores
Interest Payments = 25% of Revenue Deficit
= \(\frac{25}{100}\) × 10,000 =2,500 crores
Primary Deficit = Fiscal Deficit- Interest Payments
= 7,500-2,500 = 5,000 crores
(B) Differences between Private goods and Public goods:
Basis of Difference | Private Goods | Public Goods |
1. Meaning | These goods are meant for individual use having rivalry and excludability feature. | These goods are meant for collective use having Non-rivalary and non-excludability feature. |
2. Example | Bread, Clothes, Mobile | Street lights, Defence, Law and order. |
(C) (i) It is Capital Receipt of the government. It is a kind of loan raised by government from general public in which people deposits their money. It is an obligation for government to repay that in future. So, it Creates liability for the government.
(ii) It is a Revenue Receipt of the government, it is a tax receipt of the government. So, it neither creates liability of government nor reduces its assets.
(D) It is the tax slab of Income tax, which is progressive in nature.
Implication:
Rich people will pay high tax and people having less income will pay less tax and poor people who do not come under tax slabs are exempted from tax. Tax collections are spent on welfare projects especially meant for poor. It will reduce the income in equalities between rich and poor.
Question 17.
(a) Giving valid reasons, explain how the following would be treated while estimating National Income. [3]
(i) Employer’s Contribution to Social Security Schemes.
(ii) Profit earned by Reliance Mart Store located in Dubai
(b) “Increase in GDP always leads to increase in welfare of people.” Do you agree with the given statement? Give any one valid reason in support of your answer. [3]
Answer:
(a) (i) It will be included in National Income. It is a reward paid by the Employer to employee for rendering his services. It is a part of Compensation of Employees.
(ii) It will be included in National Income. It is a reward earned by Normal Resident of our country (India) situated abroad. It is net factor income from abroad.
(b) No, I don’t agree with the given statement.
Reason:
Unequal distribution of Income and Wealth: If GDP increases in such a way that it widens the gap between rich and poor, it cannot be termed as an indicator of welfare. Rich section is getting richer and poor section is getting poorer. If increase in production in an economy benefits only few
people and a large section of population is deprived of the growth in an economy, certainly it is not termed as welfare of country.
Section-B (40 Marks)
Indian Economic Development
Question 18.
Identify the correct sequence of alternatives given in Column II by matching them with respective items in Column I: [1]
Column I | Column II |
A. Drain of Wealth | (i) Production for self consumption only |
B. Infrastructure | (ii) Distribution of work force across different sectors of the economy |
C. Subsistence Farming | (iii) Foundation for growth and development of a country |
D. Occupational Structure | (iv) Outflow of wealth of India to Britain |
(a) A-(i); B-(ii); C-(iii); D-(iv)
(b) A-(iv); B-(iii); C-(i); D-(ii)
(c) A-(iii); B-(ii); C-(i); D-(iv)
(d) A-(iii), B-(i); C-(ii); D-(iii)
Answer:
(b) A-(iv); B-(iii); C-(i); D-(ii)
Explanation:
(i) Drain of wealth theory states that During British Rule, their policies were such that wealth of India was flowing to Britain.
(ii) Infrastructure means economic and social elements like railways, communication, power, education and health which are foundation for growth and development of a country.
(iii) Subsistence farming means that farming which is done for consumption of family only and not for sale in the market.
(iv) Occupational Structure means how percentage of workforce is engaged in primary, secondary and tertiary sectors of the economy
Question 19.
“India was facing a low life expectancy rate at the time of Independence”. Which one of the following Indicators of Human Development Index is “lower the Better 7? [1]
(a) Life expectancy rate
(b) Adult Literacy rate
(c) Infant Mortality rate
(d) Percentage of population having access to improved water resources
Answer:
(c) Infant Mortality rate
Explanation: Infant mortality rate shows the number of deaths per 1000 live births under one year of age. It is lower the better. All other indicators mentioned are higher the better.
Question 20.
In the Pre-Reforms period in India, Public sector was directly participated in the process of Industrialisation. It was due to : [1]
(a) Objective of Growth with social justice
(b) No Private Entrepreneurs In the country
(c) Centrally Planned Economic System
(d) Dictatorship by ruling Political party
Answer:
(a) Objective of Growth with social justice
Explanation: Public sector directly participated in the process of Industrialisation in the pre- reforms period to achieve the objective of growth along with social justice. Private sector had lack of capital and lack of incentives for investment.
Question 21.
Study the following picture and answer the given question: [1]
People in rural areas pool their resources by small savings. Credit is offered to its different members without any security and with a very less rate of interest. Identity the type of Credit:
(a) Credit From SBI
(b) Credit from moneylender
(c) Micro Credit Programme
(d) Credit from NABARD
Answer:
(c) Micro Credit Programme
Explanation: It is a micro credit programme through Self- Help Groups (SHGs) in which people mobilises their small savings and gives loans to their members. It is a kind of self- employment programme.
Question 22.
Read the following statement: Assertion (A) and Reason (R). Choose the correct alternative from those given below: [1]
Assertion (A): Privatisation is the process of involving the private sector in the ownership of public sector undertaking.
Reason (R): The Role of RBI was transformed from a regulator to a facilitator in NEP, 1991.
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 and 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:
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
Explanation: Both (A) and (R) is true. But (R) is not the correct explanation of (A). Role of RBI was changed and it was financial sector reforms which was part of Liberalisation, not Privatisation.
Question 23.
A Campaign ___________ was initiated by Mao Zedong in China in which students and professionals were sent to countryside to gain professional expertise. [1]
Choose the correct alternative:
(a) One Child Policy
(b) Great leap forward
(c) Open door Policy
(d) Great Proletarian Cultural Revolution
Answer:
(d) Great Proletarian Cultural Revolution
Explanation: Great Proletarian Cultural Revolution was the Campaign which was initiated in 1965 by Mao Zedong in China. It focused on spreading the Maoism ideology across the country. And to achieve this objective, students and professionals were sent countryside to gain professional experience.
Question 24.
Which of the following statement(s) highlight the deficiency of Organic Farming? [1]
(i) High Nutritional value
(ii) Environmental Friendly
(iii) Short shelf-life
(iv) High Cost per unit of output
Choose the correct alternative:
(a) (i) and (iii)
(b) (ii) and (iv)
(c) (iii) and (iv)
(d) (i) and (iv)
Answer:
(c) (iii) and (iv)
Explanation: Organic Farming discards the use of chemical fertilizers and pesticides. It is ecofriendly farming and high nutritional value. But shorter shelf-life and High cost are constraints in organic farming.
Question 25.
Which of the following Statement is correct regarding performance of Economies of India and its Neighbours? [1]
(a) India’s rank is better than China in HDI Ranking
(b) India lacks far behind Pakistan in Population
(c) Pakistan adopted commune system of farming
(d) One Child Policy was adopted by China
Answer:
(d) One Child Policy was adopted by China
Explanation: One Child Policy was adopted by China in 1979. China is ahead of India in HDI ranking
and India is ahead of Pakistan in population. China adopted commune system of farming.
Question 26.
Read the following statements carefully: [1]
Statement 1: Participation rate is the ratio between total workforce and total population.
Statement 2: Workers in informal sector get social security benefits.
Alternatives:
(a) Statement 1 is true and Statement 2 is false.
(b) Statement 2 is true and Statement 1 is false.
(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:
(i) Participation rate shows the percentage of population that is engaged in production activity in the economy.
Participation Rate = \(\frac{\text { Toral workforce }}{\text { Total population }} \times 100\)
(ii) The working age population refer to people aged 15 to 64. This indicator is broken down by age group and is measured as percentage of each age group.
(iii)Workers in formal or organised sector get social security benefits like pension, Gratuity, PF etc.
Question 27.
Choose the correct Chronological order: [1]
(i) Pakistan’s Economic Reforms
(ii) India’s Economic Reforms
(iii) China’s Economic Reforms
(iv) Planning commission In India
(a) (i), (ii), (iii), (iv)
(b) (ii), (iii), (iv), (i)
(c) (iii), (ii), (i), (iv)
(d) (iv), (iii), (i), (ii)
Answer:
(d) (iv), (iii), (i), (ii)
Explanation:
(i) Planning Commission in India- 1950
(ii) China’s Economic Reforms- 1978
(iii)Pakistan’s Economic Reforms- 1988
(iv)India’s Economic Reforms- 1991
Question 28.
(A) “During the period of Planning, Policy makers of India choose “self- reliance and self-sufficiency” as a common objective of all the Plans.” [3]
Discuss why it was necessary for India to follow it.
OR
(B) “British Rule made the Indian Economy as stagnant and backward economy. In spite of it, their contribution in infrastructural development cannot be denied.”
Do you agree with the given statement? Give reason(s) in support of your answer. [3]
Answer:
(A) (i) Self-reliance means non-dependence of a country on rest of the world for financial resources.
(ii) Self-sufficiency means non- dependence of a country on rest of the world for essential supplies.
(iii) Policy makers decided to choose this twin target so that India doesn’t need to look for developed countries in the times of emergency.
(iv) For example, In 1965, US pressurised India to stop war with Pakistan. This External interference is a threat to Country’s Sovereignty.
(v) Therefore, acheiving self-reliance was considered to be an important objective for India in order to avoid being agreeable to the developed nations.
OR
(B) Yes, I do agree with the given statement. British Rule has immense role in building infrastructure in our country.
Reasons:
(i) Railways were introduced during British Rule in 1850. It aimed at transporting goods to different parts of the country which enhanced the size of market.
(ii) Post and Telegraph was also introduced during British Rule. It aimed at providing information to distant places which enhanced the communication network.
(iii) Ports were developed for exporting raw material and importing British goods which paved the way for international trade.
(iv) Roads were also developed across the country to transport goods from one place to another which also enhanced the size of market.
(v) However, the motive behind this development was simply to foster the colonial interest of the British government.
Question 29.
“Prerana was doing job in an MNC in Gurgaon. Then she decided to pursue higher studies from UK. She completed her MBA from UK and started working there. Now, she is settled over there and doesn’t want to come back to India. Her cousins, family members, friends are also planning to pursue education and career in abroad.”
Discuss what problem India is facing in human capital formation? [3]
Answer:
One of the major problems Indian is facing in human capital Formation is ‘Brain-Drain’.
(i) Brain- drain means migration of educated, skilled and trained people from our country to other countries of the world.
(ii) They migrate in search of better education, better job opportunities and a high standard of life which they don’t find in India.
(iii) These skilled labours contribute to growth and development of other countries, which they could do it in India.
(iv) It weakens the human capital formation and growth of India.
(v) Thus, it led to lack of proper manpower planning the lack of balance ultimately results in the wastage of resources.
Question 30.
“Pakistan is in the worst economic crisis and approached IMF for a loan of 3 billion dollars.” [4]
Justify the given statement with valid arguments in favour of your answer.
Answer:
The Economic crisis in Pakistan has become worst since independence. Severe BOP crisis forced Pakistan to take help form IMF.
Arguments:
(i) Political instability and corruption have been major problems in Pakistan since 1947. Hence, long term policies cannot be formulated for growth of economy.
(ii) Pakistan is highly dependent on remittances from abroad rather than on domestic resources.
(iii) Inflation is on all time high and Pakistan Rupee is depreciating continuously.
(iv) Fiscal deficit and revenue deficit of Pakistan has increased. BOP balance has become negative to such an extent that it asked IMF for a loan of 3 billion dollars.
Question 31.
(A) State and Elaborate whether the following statements are true or false, with valid arguments:
(i) Diversification of production activity means shift from crop farming to some other production activity. [2]
(ii) Pradhan Mantri Kaushal Vikas Yojna focuses on providing job guarantee for a period of minimum 100 days. [2]
OR
(B) “Government of India initiated various measures to improve, agricultural marketing system.” Discuss.
Answer:
(A) (i) True. Diversification of production activity mean shift from crop farming to other production activities. It consists of horticulture, fishing, organic farming, arid animal husbandry. It generates employment in rural areas besides farming activity. Also, it reduces the market risk and price fluctuations in farming. For example, diversification of crop production means changing the cropping pattern.
(ii) False. Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) focuses on providing job guarantee for a period of 100 days. Pradhan Mantri Kaushal Vikas Yojna focuses on skill training to youth so that they become self- employed and secure a better livelihood.
OR
(B) Measures taken by Government to improve Marketing system are as follows.
(i) Regulated Markets: Regulated market were established by government. Government appointed a market committee for each regulated market to ensure manage sale and purchase.
(ii) Policy Instruments: Policy instrument includes.
(a) MSP (Minimum Support Price)
(b) Maintenance of buffer stock of wheat and rice
(c) PDS (Public Distribution System)
MSP is an assurance to the farmer by government that farmers can sell their product to government at minimum price, fixed by government. If farmers are able to sell at higher price in market then they can do so.
Question 32.
Do you agree with the situation depicted in the picture? Give Valid Reasons in support of your answer. [4]
Answer:
The situation depicted in the picture is ‘Jobless Growth’. And I do agree with it. Jobless growth means increase in GDP of a country without much creating job opportunities. It leads to situation of unemployment in the country.
Reason:
(i) After economic reforms in 1991, foreign investment leads to setting up of MNCs in our country to a large scale.
(ii) These Companies are especially from developed nations and are highly efficient in technology. In a jobless growth economy, unemployment remains stubbornly high even as economy grows.
(iii) It reduces the cost of production. But India is highly populated country and they don’t find any interest in using the manpower which increases the cost of production.
(iv) Indian Companies follow the same due to fear of competition and lag behind. That’s why, Indian Economy is growing without creating jobs.
Question 33.
(A) “Opening up of Economy for rest of the world in 1991 paved the way of growth of Indian Economy.” [3]
Justify the given statement with valid arguments.
(B) “Green Revolution led to sudden increase in production of wheat and rice. It had a significant achievement with some limitations as well.” Discuss two limitations of green revolution. [3]
OR
(C) Agricultural Subsidy has always been a debatable issue. [3]
Give two arguments in favour of it.
(D) “India had to contract the role of Public sector and expand the role of Private Sector post 1991.” Do you agree with the given statement? Discuss it. [3]
Answer:
(A) The given statement states the process of Globalization in 1991. Certainly, it paved the way of growth of Indian Economy.
Arguments:
(i) Foreign Investment: Equity limit of foreign investment was increased. It led to flow to foreign direct as well as foreign portfolio investment. It was a major step to generate employment in the country.
(ii) Tariff Reduction: Heavy import duty was imposed before 1991 which were withdrawn. It promoted trade of India with rest of the world. Increased trade led to increase in foreign exchange reserves.
(iii) Competitiveness: Foreign Investments in India led to opening up of various MNCs which increased competitiveness. Domestic Companies become competitive and improved the quality of their products.
(iv) Long-term Trade Policy: Foreign trade policy was enforced for long duration.
(B) Limitations of Green Revolution :
(i) Limited Crops: It benefitted the production of food grains especially wheat and rice. There was no increase in production of cash crops like tea, jute, cotton, pulses. The poor farmers could not afford Hield Variety Seed (HYV).
(ii) Limited Areas: It covered states like Punjab, Haryana and Tamil Nadu. Other states like Odisha, Bihar and eastern states like Manipur, Meghalaya left untouched with the benefits of green revolution. It created imbalance between states.
OR
(C) Arguments in favour of Agricultural Subsidy:
(i) Agriculture is a risky business as it is highly dependent on natural factors like rainfall. Irrigational facilities have not been accessible to all areas. To make it accessible, subsidy is needed to reduce the burden of cost on farmers.
(ii) There is high percentage of small and marginal farmers. They cannot afford to buy expensive seeds, fertilizers and other inputs like tractors, threshers etc. High cost and less yield discourage them to do farming.
(iii) The subsidisation of inputs and credits has influenced and continues to influence the acceptance of the new technology.
That’s why, agricultural subsidies are needed to benefit the small and marginal farmers.
(D) Yes, I do agree with the given statement that India had to contract the role of public sector and expand the role of private sector.
Arguments:
(i) Red Tapism and Corruption were on the peak in public sector undertakings which led to need of contraction of public sector.
(ii) Inefficiency and over staffing were another problem in PSUs which made them a dead weight loss and need to sell them was emerge.
(iii) There were various industries in public sector in which there was no competition and enjoyed monopoly. It deteriorated their quality and privatisation was adopted. That’s why, disinvestment in PSUs was done and role of private sector was expanded.
Question 34.
Read the following text carefully and answer the given questions on the basis of the same and common understanding:
The increasing volume and complexity of waste associated with the modem economy is posing a serious risk to ecosystems and human health. Every year, an estimated 11.2 billion tonnes of solid waste is collected worldwide and decay of the organic proportion of solid waste is contributing about 5 percent of global greenhouse gas emissions. Every year, an estimated 11.2 billion tons of solid waste are collected worldwide. Of all the waste streams, waste from electrical and electronic equipment containing new and complex hazardous substances presents the fastest-growing challenge in both developed and developing countries. Poor waste management – ranging from non-existing collection systems to ineffective disposal -causes air pollution, water and soil contamination. Open and unsanitary landfills contribute to contamination of drinking water and can cause infection and transmit diseases. The dispersal of debris pollutes ecosystems and dangerous substances from electronic waste or industrial garbage puts a strain on the health of urban dwellers and the environment.
The solution, in the first place, is the minimisation of waste. Where waste cannot be avoided, recovery of materials and energy from waste as well as remanufacturing and recycling waste into usable products should be the second option. Recycling leads to substantial resource savings. For example, for every tonne of paper recycled, 17 trees and 50 per cent of water can be saved. Moreover, recycling creates jobs: the sector employs 12 million people in Brazil, China and United States alone.
Source: https://www.unep.org/explore-topics/resource-effidency/what-we-do/cities/solid-waste-management
(i) What do you understand by Solid Waste Management? [2]
(ii) “Poor waste management leads to serious threats to the environment.” Discuss. [4]
Answer:
(i) Solid waste management means to treat the solid waste materials like paper, glass, plastics, metal wastes etc., in such a way that it does not create a threat to environment. It comprises of collecting, segregating and treating or disposing of solid wastes. The waste are collected from different sources and all disposed of.
(ii) “Poor waste management leads to serious threats to the environment” in the following ways:
(a) Plastic bottles, polythenes, tetra packs are thrown on the streets, roads, sea beaches etc. which are consumed by stray animals and aquatic animals. It takes away their lives.
(b) Electronic wastes like mobile phones, batteries, bulbs etc. are a big threat to aquatic life as they contain harmful chemicals.
(c) Landfills produces harmful gases and when mix with air, it creates air pollution. It leads to serious diseases.