AP Inter 2nd Year Economics Model Paper Set 1 with Solutions

Thoroughly analyzing AP Inter 2nd Year Economics Model Papers Set 1 helps students identify their strengths and weaknesses.

AP Inter 2nd Year Economics Model Paper Set 1 with Solutions

Time: 3 Hours
Maximum Marks: 100

Section – A (3 × 10 = 30)

Note :

• Answer any THREE of the following questions in 40 lines each.
• Each question carries 10 marks.

Question 1.
Explain the feature of developing countries with special reference to India.
Answer:
Developing economies are distinguished from developed economies on the basis of their per capita income. Most of the economies are agarian in nature and their present rate of capital formation is low and inadequate to meet the requirements of their development.

According to United Nations “The countries which have real per capita income less than a quarter of the per capita income of the United States are developing countries”.

The following are the characteristic features of developing countries with special reference to India.
1) Low per capita income : One of the basic features of developing countries is low per capita income. The low income and middle income countries combined together are called developing countries.
The per capita G.N.I. of India has increased from $ 1,070 to $ 1,530 (2011) entered into the group of lower middle income countries.

2) Scarcity of capital: The rate of capital formation is low in most of the developing countries. In the most of developing countries the saving rates range between 15 to 20%.
According to C.S.O estimates the growth of gross domestic saving was 27.9% and capital formation was 24% in the year 2011 – 12.

3) Unemployment : Wide spread unemployment is one of the important features of developing countries. In India unemploymeht is due to the deficiency of capital. There is disguised unemployment in rural areas. Around 60% of the population is depending on agriculture for employment. The planning commission estimated that there was a back log of 37 million unemployed at the beginning of 11^th plan and it was expected that 82 million by the end of the plan.

4) Demographic characteristics : The developing countries are facing the problem of heavy population. They are successfully reducing the mortality rates by improving the medical facilities but failed to control the birth rates, this led to population explosion. India is also facing the problem of heavy population. It’ s population was 1210 million in 2011 and it increased to 1278 million in 2015.

5) Predominance of agriculture : One of the basic features of developing countries is that they are predominantly agrarian economies. The share of agriculture in G.D.P is between 20 to 30%.
According to Indian economic survey 2013 – ’14, 54.6% of the working population is engaged in the agriculture sector and it contributes 13.9% of the G.D.P

6) High incidence of poverty : The another important feature of developing countries is the prevalence of mass poverty. The people in these countries suffer from low level of income, malnutrition, ill health and illiteracy.

India is also facing the problem of poverty. As per Tendulkar committee reports, the planning commission has updated the poverty line. Based on this; The percentage of population living below the poverty line was 29.8% in 2009 – 10.

7) Income inequalities : The most important feature of developing economies is the disparities in income and wealth. Compared to the developed countries, the income inequalities are larger in the developing countries.

According to 68^th round of NSSO for the year 2011-12 the monthly per capita consumption expenditure of the poorest 10% of the rural population rise by 11.5% in 2011 -12 compared with the 66th round for the year 2009 -10. In urban areas, the growth was 17.2% and 30.2% respectively over the same period.

8) High density of population : The density of population is very high in the developing countries due to the large size of population. The density of population of the world was 50 per sq.km in 2011. It is in India was 382 per sq.km in 2011, where it was 3 in Australia, 33 in USA, 145 in China etc.

9) Low quality of life : The quality of life in the developing countries is very low in comparison with developed countries. These countries people suffer from malnutrition, high population, safe drinking water and lack of sanitation etc. The life expectancy at birth is below 65 years.

10) Technical backwardness : In the developing countries the production techniques are backward due to lack of research and development. These countries use labour intensive technique because high population and capital deficiency.

Indian economy is also technically backward. Modern and traditional techniques are used side by side in different sectors of the economy. It has affected the productivity in the economy.

11) Dual economy : Economists talk of various types of dualism existing in developing economies. They are (a) Social dualism (b) Technological dualism (c) Financial dualism.

Indian economy also characterised by the dualism, the product and factor markets in India are divided with different degree of imperfections. Technological dualism is existed in India. There prevailed two kinds of economic sectors i.e., organised and unorganised sectors. The industrial sector uses the modern technology and agriculture sector still follows old method of production.

12) Price instability: The price instability is also basic feature of the developing countries. In India there is continuous price instability because of shortage of essential commodities and gap between consumption and production.

Question 2.
What are the measures to control population explosion.
Answer:
Population explosion is one of the obstacles for the development of the economy. Therefore it is not something to be welcomed and praised. Hence an attempt must be made to control population explosion.

Measures :
1. Economic measures
2. Social measures
3. Family planning programmes

1. Economic Measures : The size of population in India is large and it is neither desirable nor possible to reduce it. Under these circumstances, vigorous efforts are to be taken on the economic front. As a matter of fact, only economic measures can ensure a permanent solution to the problem. The following measures are suggested by the economists, to reduce the intensity of population explosion.

i) Expansion of industrial sector : The family size o’f the people employed in the industrial sector is smaller than that of the people who are employed in the agricultural sector. In the country side any number of people can work on the family farm, through some of them will hardly make any contribution to the output.

Most of the operational holdings in India are not economic and can thus provide only subsistence living. Most of the peasants think that the benefits from an additional child is greater than the cost of its upbringing. Industrial workers are aware of the difficulties in getting employment and interested in restricting the size of the \ family. Moreover, higher productivity in the industrial sector makes industrial worker’s conscious of their standard of living. They realise that in order to raise their standard of living they must restrict the size of their family.

ii) Creation of employment opportunities in urban areas : Industrialisation in the country, there can be many other factors which contribute to the growth of urban centres. In order to check and reduce the people to migrate from the country side to cities, the Government has to create job opportunities in these places. If this programme is carried out in an effective manner and the migration of rural population to urban areas stops in a big way, it may prove to be a powerful check on the growth of population.

iii) Equitable distribution of income and removal of poverty: Poor people have virtually no interest in limiting the size of family. They have little stakes in their lives and are thus unconcerned about their families. While living in poor conditions, they often lose human qualities and at times get alienated even from themselves. Once the poor people get basic needs of life, they will have no economic compulsion to have more children and their attitude towards the size of family will undergo a change. In the change of situation not only will they become conscious of the number of children they should have, but will also undertake every possible effort to make the life of their children as comfortable as they can.

2) Social Measures : Population explosion is as much as a social problem as much it is a economic problem many of its causes are deep-rooted in the social life of the country. Literacy, superstitions and orthodoxy contribute to population explosion in the countiy. In order to bring down the birth rate, which is still very high, all the social evils must be removed.

(i) Education : Contribution of education in bringing down the birth rate is significant. Education often changes the attitude of person towards family, marriage and number of children he should have. Most educated people delay their marriage and prefer to have small family. Education, by making a frontal attack on orthodoxy and superstitions, induces people to family planning. When education is wide spread both boys and girls are sent to schools and colleges this automatically delays marriages and thus automatically reduces reproductive span of women.

(ii) Improving the status of women : Although the constitution of India has guranteed equality between men and women, there is discrimination in social life and position and status of women is inferior to that of men both socially and economically. This is perphaps the most important reason education is less among women and its absence, they are quite indifferent to family planning, however the discrimination between the men and women in the society leads to growth in family size. In backward society women are not generally allowed to exercise their discretion in respect of number of children they should have.

(iii) Raising the minimum age of marriage : Since fertility rate depends to a great extent on the age of women at the time of marriage. So it is necessary that every possible social, legal and educative measures in undertaken to raise it. In 1978, the child marriage restraint act was amended to raise the marriage to 21 years for men and 18 years for women, National population policy was amended to raise 21 years for men and 25 years for women with a view to restrict the rate of growth of population.

3. The Family planning programme : Importance of the family planning programme as a device to control population explosion is universally recognized.

(i) Public information programme : Under public information programme, couples in the reproductive age are explained the usefulness of family planning. Hence the Government has decided all media of publicity, including cinema, video, T.V to publicize the importance of family planning.

(ii) Incentives and Disincentives : The Government has introduced various schemes under which incentives are being given to those who accept family planning. The system of cash prizes has given some inducement to the people to go in for sterilization.

(iii) Family planning centres : Establishment of family planning centres is an integral part of any family planning programme. These centres provide various clinical facilities needed for family planning.

Question 3.
What are the causes for inequalities in the distribution of income and wealth ?
Answer:
Inequality in the distribution of National Income is one of the major problems which our planning process and economic policies have attempted to tackle.

1) Inequalities in land ownership: There was concentration of landed property in India during the British period on account of Zamindari system. Minhas, Dandekar and Rath and Bardhan have clearly stated that all agricultural workers and marginal and small farmers with less than 2 hectare holdings are poor. Big and large farmers not only have capacity to save, they also have an access to institutional finance. Naturally, they are attempting to improve the farm techniques. This causes income inequalities.

2) Inflation : Since the mid -1950’s prices have been rising continuously eroding the real income of the working class, while the industrialists, traders and farmers with large marketable surplus have benefited a great deal from this inflationary process. In India, very little has been done to offset this redistributive effect of inflation and as a result, it has greatly accentuated income inequalities.

3) Inequality in credit facilities : In India, there is inequity in credit facilities which accentuates the inequalities arising from an unequal distribution of wealth. Business firms and individuals having an access to the formal capital markets manage to obtain finance on very favourable terms, while vast mass of small and marginal farmer agricultural labourers and artisans depend heavily on money lenders who charge an exorbitant rate of interest and also exploit these poor people in a number of ways.

4) Urban Bias in Private Investment: While 70 percent of the population in India lives in rural areas, about 70 percent of the private investment goes to industries in urban areas. Therefore, there is a distinct “urban bias” in the pattern of Private investment. This urban bias taken the form of highly mechanized projects in which the share of wages in value added is relatively low. This naturally leads to inequality in income distribution.

5) The Role of the Government : The public investment essentially plays a supportive role to private investment. The Govenment is no longer serious about reducing income inequalities.

Question 4.
What are the causes for low productivity in Indian Agriculture ? Suggest measures to improve it.
Answer:
Agriculture plays a predominant role in Indian economy. The productivity in Indian Agriculture is too low when we compared to the agricultural productivity of other countries in the world.

The causes for low level of agriculture productivity in India are manifold. They can be grouped into four broad categories.
1) General causes
2) Institutional causes
3) Technical causes
4) Environmental causes

1) General causes :
i) Pressure of Population on Agriculture : Pressure of population on agriculture is heavy as a result of high growth rate of population and slow growth rate of other sectors of the economy. In 2011, about 263 million workers out of 348 million rural working populations are employed in agriculture. Increasing pressure of population on agriculture results, in the subdivisions and fragmentation of holding. Consequently, the productivity in agriculture sector remains low in India.

ii) Social Environment : The social environment of villages is an obstacle in agricultural development. The farmers in rural are illiterate, superstitious, conservative and unresponsive to new agriculture techniques. The decline of joint family system and land hunger are also discouraging the rural atmosphere. Peasants are not able to take proper care of their agriculture. Unless this atmosphere is changed, it is too difficult to enhance the productivity of agriculture.

iii) Lack of Infrastructural Facilities : Infrastructural facilities like transport, storage, credit and marketing are inadequate in rural areas to the growing population, due to lack of these adequate infrastructure facilities, the agricultural productivity in rural areas is very low.

iv) Impact of the British Regime: During British rule in India, they have not shown any interest in developing agriculture sector but made our economy as colonial one. Moreover, their policies like land tenure system, collection of land cess gave a deadly blow to the Indian agriculture.

2) Institutional causes :
i) Uneconomic Land Holding : According to the National Sample Survey, 52 percent land holdings had a size of less than 2 hectares in 1961 – 62. In 2010 – 11, 85 percent of total land holdings are less than 2 hectares. As a result of laws of inheritance and other reasons there is a further divisions and fragmentation of land holdings. Hence, these small holdings are adversely affecting productivity of agriculture.

ii) Defects in Land Tenancy System: The Indian agriculture system was adversely affected before Independence because of defectives in Zamindari, Jagirdari, Mahalvari systems which exploited the farmers. In this system lack of certainty in rent, security of tenure and ownership right the tenants don’t show any attention to develop agriculture. Hence, India has become less productivity.

iii) Lack of credit and marketing facilities : The cultivators are not able to invest requisite sources in agriculture due to lack of marketing facilities and required credit at fair rate of interest. Even support price policy and subsidies to inputs of agriculture fired by the Government are unsatisfactory. Hence, peasants follow traditional methods which results in low productivity.

3) Technical causes :
i) Outmoded Agricultural Techniques : T. W. Schultz of famous economist opined that the peasants in India are still using traditional or outmoded techniques. Indian farmers are still using wooden ploughs, bullock carts, sickles etc. Use of fertilizers and new high yielding varieties of seeds is also extremely limited. Hence, the productivity in agriculture is low.

ii) Inadequate Irrigation Facilities : Gross cropped area in India in 2010 -11 was 198.97 million hectares but only 89.36 million hectares of land had irrigation facilities. It implies that 55 percent of the gross cropped area continues to depend on rains. Rainfall is often insufficient, uncertain and irregular. In such atmosphere it is difficult to extend the new agricultural technology all over the country.

iii) Scarcity of Agricultural Inputs : The supply of modem agricultural inputs like fertilizers, pesticides, hybrid seeds, farm machinery etc., are inadequate to meet the requirements of our country. In order to achieve high production in agriculture requisite supply of inputs is essential.

4) Environmental causes : Environment also plays a vital role in affecting the productivity of agriculture, increase in the temperature. Degradation of soil, changes in temperature, pollution of water and air etc., adversely affect the productivity of agriculture are

• Global warming.
• Soil Degradation.
• The intensive cultivation of high yielding variety crops.
• The reckless use of fertilizers.
• Shifting cultivation.
• Displacement of the traditional practies of crops.

Measures to increase agricultural productivity in India :

1. The proportion of people depending upon agriculture must decrease. Development of non – farm activities in rural areas go a long way for decreasing the dependency load in agriculture.
2. A favourable support price policy leads to increased yield levels in agriculture.
3. Agriculture, like industry must be protected for favourable terms of trade.
4. Public investment in agriculture must increase.
5. Timely and adequate institutional credit automatically enhances the access to vital inputs in agriculture.
6. Strict implementation of land reforms is necessary. Land reforms remove the structural dificiencies in agriculture.

Question 5.
Explain the problem faced by the small scale industries and their importance.
Answer:
The small scale and cottage industries play apvital role in the Indian economy. As ancillary industries, they are contributing to the growth of the agriculture and industrial sectors in a developing country like India.

The recommendations of Abid Hussian Committee, the Government raised the investment limit on plant and machinery for small units and ancillaries to 3 crores and that for tiny units to ₹ 25 lakhs.

Merits :

1. Expansion of small scale industrial sector and its share in industrial production : The rapid growth of small scale units from 2006 – 07 onwards contributing much to India’s gross domestic product.
2. Employment opportunities : The small industries are labour intensive they could generate employment opportunities to the tune of 191.4 lakh persons in 1994 – 95, 249.3 lakh persons in 2001 – 02 and it increased to 1012.6 lakh persons in 2011 – 12.
3. Capital formation : The spreading of industry over the country side would encourage the habits of thrift and investment in the rural areas.
4. Low capital : The small scale units are best suited to the developing countries like India, which are labour intensive and capital scarce economics. It does not require much capital for the establishment of these units.
5. Skill formation : A small scale enterprise does not require any sophisticate skill. But it provide industrial experience for large number of small scale managers.
6. Low import intensity : Low import intensity in the capital structure of small scale enterprises reduces the need for foreign capital.
7. Decentralized industrial development : Development of small scale industries will bring about decentralization of industries. It will promote the object of balanced regional development.
8. Equitable distribution : The profits earned by small scale enterprises distributed among large number of enterpreneurs leads to decentralization of income and wealth.
9. Exports : The contribution of small scale enterprises to earn foreign exchange is very high. The share of exports from the small scale sector represents about 31.1% of total exports in 2006 – 07.

Demerits :

1. Inefficent human factor : Most of the rural people are ‘ illiterates and lack technical know-how in the areas of production, finance, accounting and marketing management.
2. Lack of credit facilities : The small industrialists are generally poor and there are no facilities of cheap credit either. Thus, they are caught up in the vicious circle of debt trap.
3. Problem of raw materials : The quantity, quality and regularity of the supply of raw materials are all highly unsatisfactory. According to an estimate, about 40 percent of such units have become sick owing to non – availability of raw materials regularly.
4. Absence of organized marketing: Since marketing is not properly organized, the helpless artisans are completly at the mercy of middlemen. The small scale units cannot afford to spend lavishly on advertisement to promote their sales.
5. Lack of machinery and equipment : Small scale units are facing inadequate modem machines and equipment. This leads \ to low productivity in small scale units.
6. Power shortage : In recent years power shortage and frequent power cuts played havoc with small scale industries. More hours of power cut are there in rural areas which affect the growth of small scale units.
7. Lack of technological up – gradation : It is found that the levels of productivity and technology used by the small scale sector are not globally competitive. Without technological upgradation these units may not serve in a globally integrated economy.
8. Heavy taxation : Cottage and small scale industries have also to bear a heavy burden of taxation both on raw materials and also on finished goods.

Section – B (8 × 5 = 40)

Note :

• Answer any EIGHT of the following questions in 20 lines each.
• Each question carries 5 marks.

Question 6.
Causes of high birth rate in India.
Answer:
Population increases because of high birth rate, low death rate and immigration. The birth rate has not declined significantly in India during the last five decades because of a number of economic and social factors.

Causes of the high birth rate :
I. Economic factors :
a) Predominance of Agriculture : India is predominantly agriculture economy. In an agrarian economy, children are considered assets and not burdens as they help in agricultural fields and also other sectors.

b) Slow urbanization process and Predominance of villages : The process of urbanization has been slow in this country and it has failed to generate social forces, which usually bring down the birth rate. The social system and family structure of rural life seem to survive transplantation to the town or city quite remarkably. According to .sociological studies.

c) High incidence of Poverty : There is high incidence of poverty in India. Poor people tend to have large families as they consider every child as earning hand. In a poor country like India children are considered as an asset of generating income.

Question 7.
What are the different concepts of poverty ?
Answer:
Poverty can be defined as a social phenomenon in which a section of the society is unable to fulfill even its basic necessities of life.

When a substantial segment of a society is deprived of minimum level of living and countries at a base subsistence level, that society is said to be played with mass poverty.

Concepts of poverty :
1) Absolute poverty : The population whose level of income or expenditure is below the figure considered to be the absolute poverty or a person whose income or consumption expenditure is so meagre that he lives belows the minimum subsistance level is called absolute poverty.

2) Relative poverty : According to the relative standard, income distribution of the population in different fractile groups is estimated and a comparison of the levels of living of the top 5 to 10 percent with the bottom 5 to 10 percent of the population is called relative poverty, or those who are in the lower income groups receive less than those in the higher income groups.

3) Poverty line : According to the planning commission a person who is not having monthly percapita total expenditure of ₹ 49.9 in rural area and ₹ 56.64 in urban area at 1973 – 74 prices is called as a person living below the poverty line.

Question 8.
What are the causes for unemployment in India ?
Answer:
A man is willing to work but he is not getting work. Therefore he is called unemployed. Unemployment is too serious an evil to be ignored. Widespread and growing unemployment is not due to any single factor.

1) Rapid rate of population growth :The most fundamental cause of widespread unemployment in India is the rapid rate of population growth which leads to increase in labour force. The rate of population growth rose to 2.2 percent per annum during the 1960s. As the population increased from 718.2 millions in 1983 to 1227.4 millions in 2011 – 12, corresponding the labour force also increased from 261.33 millions to 440.4 millions respectively. This is too big a number to be provided gainful employment at the present rate of growth of the economy.

2) Jobless growth : During the first three decades of economic planning, the GDP growth rate was as low as 3.5 percent per annum. In this period, employment increased at a moderate rate of 2 percent per annum. The rate of growth of employment picked up considerably to 2.90 percent per annum during the five year period 1990 – 00 to 2004 – 05 but again declined to almost zero present over the next five years i.e., from 2004 – 05 to 2009 – 10. Thus, the country could create only one million jobs during 2004 – 05 to 2009 – 10.

3) Inappropriate Technology : In India, while capital is a scarce factor, labour is available in abundant quantity. Under such circumstances, if market forces operate freely and efficiently, the country would have adopted labour – intensive techniques of production.

4) Lack of Rural Industrialization : With regard to large rural unemployment and under employment, the underlying cause is the very heavy pressure of population on land and the backward nature of our farming. As a result, agriculture cannot provide employment opportunities for the far too numerous rural population.

5) Inappropriate Educational System : The educational system in India is defective. According to Gunnar Myrdal, India’s educational policy does not aim at development of human resources. It merely produces clerks and lower cadre executives for the government and private concerns. Any educational system which fails develop human resources properly will not be able to provide employment to all those who have received it.

6) Lack of Manpower planning : The intake into various courses is not being plannned on the basis of the projections of the demand for skilled manpower in future.

7) Social factors : Since Independence, education among women has changed their attitude towards employment. Many of them now compete with men for jobs in the labour market. The economy has, however failed to respond to these challenges the net result is continuous increase in unemployment backlog.

8) Lack of self-employment opportunities : The rural marginal and landless households continue to remain unemployed (or) underemployed due to lack of self-employment. The well educated youth lacking entrepreneurship qualities waiting for years together to get government jobs at meager wages.

9) Decline of cottage industries : In rural India, village (or) cottage industries are the only means of employment particularly of the landless people. They depend directly on various cottage industries for their livelihood. But, now-a-days, these are adversely affected the industrialisation process.

Question 9.
Explain the features of Indian agriculture.
Answer:
1) Uncertainty in crop output : Monsoon and climatic conditions play a significant role in Indian agriculture which often affects agriculture productivity adversely. Moreover, floods and drought are quite common. Hence, Indian agriculture is rightly to be called a “gamble on monsoon”. As a result of these unforeseen contigencies production and productivity are uncertain.

2) Feudal relation of Agriculture : After independence Zamindari and Mahalwari systems were abolished and Ryotwari system came into existence. Under this system tenants do not possess security of tenure, regulation of rent and ownership rights.

3) Rural Indebtedness : After independence the Government has initiated co-operative credit societies and banks for providing rural credit However, the small and marginal farmers continue to depend on money lenders for their requirements. Hence, rural indebtedness prevailing in agriculture sector has become common. . Because of indebtedness farmers are unable to invest more on agriculture to reap much harvest.

4) Dualism in Labour market : Because of pressure of population on land, wages in agricultural sector are considerably lower comparatively to the industrial and service sectors of the economy. The cheapness of labour in the traditional agricultural sector causes that labour in agriculture sector to be used extensively rather than other sectors of the economy where wages are high.

5) Diversities in Agricultural sector : The nature of soil, magnitude’of rainfall, irrigation facilities etc, vary from one region to another region. Similarly, drought conditions, floods, problems of water salinity etc., vary among various regions of our country. The size of land holdings are differ in various regions. These variations affect cropping pattern.

6) Outmoded Farming techniques : Most of the Indian farmers continue to use outmoded farming techniques. The traditional agriculture depends on human and animal labour, rains and dung manure. Thus, this results in subsistence farming.

Question 10.
Reasons for poor performance of land reforms in India.
Answer:
Land reforms were implemented with good objectives, aiming at the development and empowerment of rural poor. However, in practice they were internally rejected. The following reasons can be mentioned for the poor performance of land reforms.

1. Lack of political will.
2. The rural poor are unorganised.
3. Absence of updation of land records.
4. Legal hurdles in the way of implementation.
5. Weak administrative set up.
6. Very little surplus lands were talan into possession.
7. Proyision of exemptions were used for evading the ceiling on land holdings.
8. Laws were challenged on number of other grounds like rates of compensation, calculation of standard holdings etc.
9. Reforms were given a low priority in development strategy.

Question 11.
Objectives of National manufacturing policy.
Answer:
Government of India brings back industrial policy into focus in the form of National manufacturing policy on November 4^th 2011.

Objects :

1. Increase manufacturing sector growth to 12 – 14% over the medium term.
2. Create 100 million additional jobs in the manufacturing sector by 2012.
3. Increase the share of manufacturing in gross domestic product from 16% to 25% by 2022.
4. Create appropriate skills among the rural and urban migrant.
5. Increase domestic value addition and technological depth in manufacturing.
6. Enhance global competitiveness of Indian manufacturing.

Question 12.
What are the activities considered under the India’s service sector ?
Answer:
Services in India are emerging as a prominent sector in terms of contribution of national and State incomes, trade flows, foreign direct investment (FDI) inflows and employment. The following activities can be considered to form the part of the service sector.

1. Trade.
2. Hotels and Restaurants.
3. Transport (Including Railways and transport by other means),
4. Storage.
5. Communication.
6. Banking and Insurance.
7. Real Estate and Business Services.
8. Public administration and defence.
9. Construction.
10. Other services including education, medical and health, religious and other community services, legal services, recreation services.

Question 13.
Explain the objectives of planning commission.
Answer:
Preparing plans for the most effective and balanced utilization of the country’s man power, physical and capital resources is the obligation of planning commission.

Objectives and functions :

1. To make an assessment of the material, capital and human resources of the country and to examine whether they are sufficient to meet the nation’s requirement.
2. To define the stages, on the basis of priority in which the plan should be carried out and propose the allocation of resources for the due completion of each stage.
3. To indicate the factors that tend to retard economic development and find feasible ways to overcome these factors.
4. To determine the conditions for the successful execution of the plan.
5. To determine the nature of the machinery required for securing the successful implementation of each stage of the plan in all its aspects.
6. To appraise from time to time the progress achieved in the execution of each stage of the plan and to recommend alternative policy measures when they are needed.

Question 14.
What do you mean by “sustainability” ? Explain the components of sustainability.
Answer:
Sustainability can also be defined as achievement of constant real consumption through time keeping the capital intact. A flow of consumption without reducing the capital is called sustainability.

There are three basic components of sustainable developments namely economic, social and environmental components. These three components are interdependent.

Economic Component : Economic components of sustainability require that societies pursue growth path that generate optimum flow of income while maintaining the basic stock of man-made capital, human capital and natural capital.

Social Components : Social components of sustainability are built on the twin principles of justice and equity. For development path to be sustained, wealth, resources and opportunities should be equally shared. All citizens should have access to minimum standards of security, human rights and social benefits such as food, health, education and opportunities of selfdevelopment.

Environmental Components : Environment components of sustainability require sustainable resource use, efficient sink function and maintainance of natural capital. The environment should be able to perform its three functions efficiently and uninterrupted so that ecological stability and resilience are not affected.

Question 15.
Objectives of W.T.O.
Answer:
a) It aims at raising standard of living, ensuring full employment and large and steady growth, expanding the production and trade in goods and services among the global countries.

b) To allow for the optimal use of the world’s resources in accordance with the objectives of sustainable development. This also considers environmental protection with economic growth.

c) To ensure the developing and least developed countries secure a share in the growth in international trade.

d) To convince the member countries for reciprocal, and mutually advantageous arrangements through reduction of tariffs and other trade harries.

e) To develop an integrated, more viable and durable multilateral trading system.

Question 16.
Occupational distribution of labour in A.P.
Answer:
Occupational distribution pattern in any country decides the level of economic growth. Any economy can be divided into

1. Agriculture sector
2. Industrial sector
3. Service sector

Dividing the total population according to their occupation or work is known as occupational distribution of population or labour.

According to the statistical abstract of A.P 2014, prepared on the. basis of the 2011 census, the total number of workers is A.P is 2,30,80,964. Among them, the total number of workers in industry sector in A.P is 33,40,133 which is 14.47% of total work force. Total number of workers related to primary sector is 1,43,92,736. i.e., 62.36% and 34.77% of total work force based on service sector.

The number of people depending on agriculture sector is still very high. Tertiary sector is in the second place and providing livelihood to the larger percent of population after agriculture sector. In A.P secondary sector’s contribution is steady and constant.

Question 17.
How many types of index numbers ?
Answer:
The first index was constructed in 1764 to compose the Italian price index in 1750 with the price level in 1500. Index numbers are devices for measuring difference in the magnitude of groups of related variabilities.

There are four types of index numbers.
They are :

1. Price index number .
   a) Wholesale price index number
   b) Retail price index number
2. Quantity index number
3. Cost living indent number
4. Special purpose index number

Section – C (15 × 2 = 30)

Note :

• Answer any FIFTEEN of the following questions in 5 lines each.
• Each question carries 2 marks.

Question 18.
Per capita income.
Answer:
The income per head per year is called per capita income. It is obtained by dividing the national income with population of the country.
Per capita income = \(\frac{\text { National income }}{\text { Population }}\)

Question 19.
Economic development.
Answer:
Economic development refers to not only economic growth but also progressive changes in the socio-economic structure of a country.

Question 20.
Population explosion.
Answer:
When the birth rate exceeds death rate during particular period of time.

Question 21.
Green Revolution.
Answer:
William S. Gand is the first economist who used the term green revolution. It was also called a “new strategy of agriculture development”. It is the result of the technological break through composed of improved irrigation facilities, better agricultural practices and mechanisation of agricultural operations.

Question 22.
Rythu Bazaars.
Answer:
It is a market where there is no existence of middle men between farmer Vs buyer.

Question 23.
Kisan Credit Card Scheme.
Answer:
It was introduced in 1998 to facilitate the flow for crop loan by providing adequate, timely cost, effective short term loans. It also enables the farmers to purchase agriculture inputs and to draw cash for their production needs.

Question 24.
MSMEs
Answer:
Micro, Small and Medium Enterprises. MSME sector in India constitutes enterprises with investment in plant and machinery less than 10 crore in manufacturing and less than 5 crore in case of service sector. The labour intensity of the MSME sector is much higher than that of the large enterprises.

Question 25.
Disinvestment.
Answer:
The Government of India in July 1991 initited the disinvestment process in India. The new industrial policy provides that in order to raise resources and encourage wide public participation, apart of the government share, holding in the public sector, would be offered to mutual funds financial institutions, general public and employees.

Question 26.
Science and technology.
Answer:
Science and technology are ideas and means with which man seeks to change his environment. Science represents accumulation of knowledge, while technology represents ‘refinement in tools. These two have helped to improve the quality of human life.

Question 27.
Service sector.
Answer:
Service sector is also known as tertiary sector. Service sector is the life line for the social and economic growth of a country. The service sector activities include trade, transport, communications, banking, insurance, education, health, energy, marketing etc., all these facilities and services constitutes collectively the tertiary sector.

Question 28.
Micro Insurance.
Answer:
A system that blends insurance with savings and credit practices. The member of self help groups, farmers, migrant workers and tribals are the target groups for this micro finance. This insurance offers both individuals and group insurance services.

Question 29.
Economic Planning.
Answer:
Plan may be defined as an outline or broad statement of schemes or programmes designed or evolved to relaise certain predetermined economic objectives.
(Or)
The efforts taken to reach the already set gains during a particular time period.

Question 30.
Plan holiday.
Answer:
The gap that occurred in the planning process. There was official gap was 1966 – 69. A unofficial gap occurred in 1990 – 92 due to economic and political instability in the country.

Question 31.
Biodiversity.
Answer:
The word biodiversity was coined by Walter Rosen in 1986. The variety and variability among living organisms is called as biodiversity or totality7 of genes species and ecosystems in a region.

Question 32.
SGDP.
Answer:
The State Gross Domestic Product may also be called as the State Income. The State gross domestic product is defined as the total value of the final/finished goods and services produced within the geographical boundaries of the State during a year.

Question 33.
Ozone Layer.
Answer:
The Ozone layer is present in the stratosphere which is immediately above the troposphere at a height of 12 k.m from the earth It is 40 k.m thick layer. Ozone absorbs the dangerous ultra violet rays from the sun and protects life on earth from death.

Question 34.
Density of population in A.P.
Answer:
The density of population determines the magnitude of the burden that State is being called upon to carry and to determine the future potential of growth.
Density of population = Total population in the area/total area in square k.m
In A.P the density of population is 304 per square km in 2011 census.

Question 35.
Project Tiger.
Answer:
This programme is being implemented with the objective of increase the number of our National animal tiger. The Nagarjuna Sagar, Srisailam Tiger Reserve Spreads over the districts of Kumool, Prakasam, Guntur which is the home to over 50 tigers and able to support even more.

Question 36.
Mean Deviation.
Answer:
Mean deviation also called as average deviation. It is the average difference between the items in a series from the mean or median or mode. In this mean deviation we ignored ± signs.
M.D = \(\frac{\Sigma f|D|}{N}\)

Question 37.
Laspeyre’s price index formula.
Answer:
P₀₁ = \(\frac{\Sigma \mathrm{P}_1 \mathrm{Q}_0}{\Sigma \mathrm{P}_0 \mathrm{Q}_0}\) × 100