Indian Economy (1950-1990) - Revision Notes (Five Year Plans, Agriculture, Industry & Trade)

Quiz-style flashcards covering the key concepts from the Indian Economy notes (1950-1990), including Five Year Plans, agriculture, industry, and trade policies.

What characterizes a mixed economy in the Indian context described in the notes?

Market provides goods/services it can produce; the government provides essential goods/services which the market fails to supply.

What are the four common goals of the Five Year Plans?

Growth, Modernisation, Self-reliance/Self-sufficiency, and Equity.

What does Growth refer to in the Five Year Plan goals?

Increase in the country’s capacity to produce goods and services; a steady rise in GDP is a good indicator.

What does Modernisation include beyond the use of new technology?

Adoption of new technology and social changes, such as equality of opportunities between men and women.

What is meant by Self-reliance/Self-sufficiency in the Five Year Plans?

Avoid imports of goods that India can produce; reduce dependence on foreign countries and avoid foreign interference.

What does Equity aim to achieve in the Five Year Plans?

Reductions in income and wealth inequality; ensure basic needs (food, housing, education, health care) are accessible to all.

What are the major policy initiatives in the agricultural sector?

Land reforms, involving abolition of intermediaries and land ceilings.

What was the abolition of intermediaries in land reforms?

Abolition of the Zamindari system; farmers became direct landowners, intended to boost output.

What is land ceiling?

Fixing the maximum size of land that can be owned by an individual to reduce land ownership concentration and promote equity.

What are the major drawbacks of land reforms?

Zamindars continued to own large tracts via loopholes; land ceiling faced court challenges delaying implementation; reforms were unsuccessful in most states (except Kerala and West Bengal).

What is the Green Revolution?

A large increase in food grain production using high-yield variety (HYV) seeds, notably for wheat and rice.

Why was the Green Revolution implemented in India?

To break stagnation in agriculture from colonial rule and to overcome shortages of food grains.

What are the merits/benefits of the Green Revolution?

Increase in farmers’ incomes; greater marketable surplus; self-sufficiency in food grains; creation of buffer stock; decrease in price of food grains.

What are the demerits/limitations/risks of the Green Revolution?

Increased disparities between small and large farmers; HYV crops more prone to pests; benefits concentrated in affluent states and mainly wheat-growing regions.

What steps did the government take to ensure Green Revolution benefited small farmers?

Loans at low interest rates; subsidies on fertilisers and pesticides; innovative pest control techniques.

What are the arguments against farm subsidies?

Fertiliser subsidies also benefit the fertiliser industry and big farmers; subsidies impose a fiscal burden.

What are the arguments in favour of subsidies?

Most farmers are very poor and cannot afford expensive agricultural inputs; removing subsidies would increase inequality and violate equity.

Why was the public sector given a leading role in industrial development during the planning period?

Independence left Indian industrialists lacking resources; the market was not large enough to support major projects; hence state-led development.

What is the Industrial Policy Resolution of 1956 (IPR 1956) in brief?

Formed the basis of the Second Five Year Plan and promoted a state-led, regulated industrial framework.

How was the private sector regulated under IPR 1956?

No new industry could start without a government license; existing industries needed a license to expand or diversify.

What is the Karve Committee’s definition of a Small-Scale Industry (SSI)?

An industrial unit with maximum investment of ₹1 crore in its assets.

Why did the government promote small-scale industry (SSI)?

They are labour-intensive and generate more employment.

How did the government promote and protect SSI?

Reservation of certain products for SSI; concessions like lower excise duty; bank loans at lower interest rates.

What is Import Substitution Policy?

A policy to protect domestic industries by substituting imports with domestically produced goods.

What is the rational behind Import Substitution Policy?

Self-reliance and savings of scarce foreign exchange by imposing tariffs and quotas.

What are tariffs and quotas?

Tariffs are taxes on imported goods; quotas are quantitative limits on imports/exports.

What are the key criticisms in the critical evaluation of industrial and trade policies?

Inefficient public sector; excessive regulation/permit-license raj; protection against foreign competition reduced incentives to improve quality.

What is the 'permit license raj'?

A regime requiring licenses to start or operate an industry; licenses often misused by industrial houses.

How did protection under self-reliance policy affect incentives for Indian producers?

Protection from foreign competition reduced the incentive to improve the quality of goods.