CA Foundation Economics

Chapter 10: Ten Marks

What were the two main objectives of the 1991 Economic Reforms?

• Shift from a centrally controlled economy to a market-oriented economy.

• Achieve macroeconomic stabilization by reducing the fiscal deficit.

Why did the Green Revolution become necessary?

• Food crisis after the 1966–67 droughts.

• Low agricultural productivity.

• Dependence on PL-480 food imports.

• Need for self-sufficiency in food grains.

What was the nature of the Indian economy before British rule?

What was the nature of the Indian economy before British rule?

Why did Britain change India's trade pattern?

• Needed raw materials

• Needed markets for finished goods

• Industrial Revolution increased British production

What were the major effects of British rule on Indian industries?

• Destruction of handicrafts

• Decline of manufacturing

• Rise in unemployment

• Dependence on agriculture

Name four consequences of the destruction of Indian industries.

• Unemployment

• Fragmentation of land

• Poverty

• Low agricultural productivity

What problems did the Zamindari system create?

• High rents

• Absentee landlordism

• Farmer indebtedness

• Low agricultural productivity

What was India's condition at Independence?

• Mostly rural

• Low literacy

• Low life expectancy

• High poverty

What was the objective of the Planning Commission?

To implement Five-Year Plans for planned economic development based on the Nehruvian model.

What were the two philosophies guiding India's industrial policy in the 1950s?

• Nehruvian philosophy (heavy industries)

• Gandhian philosophy (village & cottage industries)

Why is the period 1950–1980 called the "Hindu Growth Rate"?

Because GDP grew at only about 3.5% annually.

What caused the Green Revolution?

• Food crisis

• Droughts (1966–67)

• Low farm productivity

• Need for food self-sufficiency

What were the main features of the Green Revolution?

• HYV seeds

• Irrigation

• Fertilisers

• Pesticides

• Modern technology

What was the License Raj?

A system where businesses required government licences and approvals before expanding or producing

What was the purpose of the MRTP Act, 1969?

To regulate monopolies and restrict concentration of economic power

What were "Reforms by Stealth"?

Limited liberalisation measures introduced during the 1980s before the major 1991 reforms.

Which three areas did early liberalisation focus on?

• Industry

• Trade

• Taxation

List four causes of the 1991 Economic Crisis.

• Huge fiscal deficit

• Balance of Payments crisis

• Low foreign exchange reserves

• Gulf War oil shock

What does LPG stand for?

• Liberalisation

• Privatisation

• Globalisation

What are Stabilisation Measures?

Short-term reforms to control inflation and improve the Balance of Payments.

What are Structural Reforms?

Long-term reforms to improve productivity and competitiveness.

Mention four Fiscal Reforms of 1991.

• Tax reforms

• Better tax compliance

• Lower subsidies

• Disinvestment

Mention four Monetary & Financial Sector Reforms.

• Interest rate liberalisation

• Private banks

• Lower SLR & CRR

• Prudential banking norms

What role does SEBI play?

Regulates the capital market and promotes transparency and efficient allocation of resources.

What were the major features of the New Industrial Policy (1991)?

• End of License Raj

• Reduced public sector reservation

• Liberalised FDI

• MRTP reforms

• Disinvestment

What were the main Trade Policy Reforms?

• Lower tariffs

• Removal of import licensing

• Fewer quantitative restrictions

• Export promotion

Mention four achievements of the 1991 reforms.

• Higher private investment

• More FDI

• Greater global integration

• Better infrastructure growth

Why was NITI Aayog established?

To replace the Planning Commission and promote cooperative federalism, innovation, and policy thinking.

What are the three sectors of the Indian economy?

• Primary

• Secondary

• Tertiary

: Which sector contributes the highest share to India's GVA according to the chapter?

The Services (Tertiary) Sector, contributing about 53.89% of GVA