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

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

AP Inter 2nd Year Economics Model Paper Set 2 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.
India is a developing country. Discuss.
Answer:
The nature of the Indian economy is underdeveloped before the advent of planning. The pace of development has quickened since 1951. The following facts will prove that Indian economy is passing through a crucial phase of economic development.

1) National income trends : Over the four and half decades of economic planning, the economy registered significant advance. In 1950 – ’51 India’s net national product at factor cost at 1980 – ’81 prices was ₹ 40,454 crores. Since then it had increased to ₹ 91,71,045 crores in 2013 – ’14 from 4,71,619 crores in 1990 – ’91.

2) Rise in per capita income : A rise in per capita income is considered to be a better index of growth than the growth of net national product. In 1950 – ’51 India’s percapita net national product at 1980 – ’81 prices was ₹ 1,127. Since then it has raised by $ 1,070 to $ 1,530 in 2011.

3) Changing sectoral distribution of domestic product: An important index of development is a stealv decline in the contribution of agriculture and allied activities to gross domestic product. In 1950 – ’51 the share of agriculture and allied activities in the gross domestic product was 56.5%. The output of agriculture sector is 13.9%, secondary is 26.2% and tertiary sector is 59.9% in 2013 – ’14.

4) Occupational distribution of population : In India the occupational distribution of population has not changed significancy during plan period. In India where agriculture and allied activities accounted for 68.8% of workforce in 1991 as against 72.1% in 1951. It is 48.9% in primary sector, 24.3% in industrial sector, 26.8% in tertiary sector in 2011.

5) Growth of production : The index of agriculture production increased by 100%. There is now in evidence much larger area under irrigation greater use of fertilisers and of improved agricultural practices. Indian agriculture has been greatly stabilised by the adoption of modem technology in farming.

6) Growth of basic capital goods industries : During British rule the share of basic and capital goods industries in the total industrial production was nearly one-fourth. From 1956, a large number of basic and heavy industries have been set up to make the country’s industrial structure strong.

7) Expansion in social overhead capital : Infrastructural facilities often referred to as economic and social overhead Indian planners were fully aware of the link between infrastructural facilities and general economic development. Their development can also be assured for better human-living. Tremendous amount of progress achieved in the transport, banking, irrigation, education and communications. There has been a spectacular progress in the field of education and public health. The rate of literacy increased to 52% of population.

8) Science and Technology : For rapid economic progress, the application of science and technology to all economic and non-economic activities has become essential. 1958 the science policy resolution was adopted to provide positive incentives for the development and utilisation of science and technology in nation building activities. Our achievements in nuclear energy and in space technology have put India in the small select company of scientifically most developed countries.

Question 2.
What, are the causes for the rapid growth of population in India and low death 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 afid 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.

II. Social factors :
a) Compulsory Marriage : Marriage is both a religious and social necessity in India. Presently in India by the age of 50 only 5 out of 1000 Indiem women remains unmarried. More marriages means more population.

b) Early Marriage : Not only marriages are almost compulsory, they take place at quite young age in India, which provides more time for women to give birth to children.

c) Religious beliefs and Superstitions : Most Indians due to their religious and superstitions desire to have more children having no regard to their economic conditions. Every child is considered as “Gift of God”.

d) Joint family system : Joint family system in India also encourages people to have large families.

e) Illiteracy : Lack of education among people especially among women causes people to have irrational attitudes and hence big families.

Causes of the low death rate :
a) Control over famines : Famines, which were widespread before independence have not occurred on a large scale since independence.

b) Control over epidermics : Cholera and smallpox often resulted in epidermics before independence. Now smallpox is completely eradicated and cholera is very much under control. Similarly there has been decline in the incidence of malaria and tuberculosis. These have resulted in reducing the death rate.

c) Other factors : Other factors which have reduced death rate are :

• spread of literacy and education.
• expanded medical facilities and health care awareness.
• improved supply of safe drinking water.
• improvement in the nutritional level.
• improvement in sanitation.
• agricultural development in terms of HYVP.

Question 3.
Explain causes of poverty in India.
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.

There are two types of poverty.
1. Absolute poverty
2. Relative poverty

1) Absolute poverty : Absolute poverty of a person means that his income or consumption expenditure is so meager that he lives below the minimum subsistence level.

2) Relative poverty : Relative poverty merely indicates the large inequalities of income. Those who are in the lower income groups receive less than mose in the higher income groups.
Causes of poverty : Poverty cannot be attributed to any one single set of causes. It is a complex phenomenon and as such is the outcome of interaction of diverge factors, economic and non-economic.

1) Underdevelopment : The root cause of poverty is the underdevelopment of Indian economy. Dandekar and Rath have argued that unviable and unprofitable farms with little capacity for capital accumulation have been responsible for rural poverty in India. Small and scattered holdings, lack of adequate inputs, lack of credit facilities and insecure tenancy system are all responsible for backwardness of Indian agriculture which causes rural poverty. Industrial development has failed to make any dent on poverty.

2) Unemployment and low levels of wages : Poverty is caused by under-employment or unemployment coupled with low rates of wages. This is because supply of labour is more than that of demand for labour. Due to shortage of capital, the industrial sector is not in a position to absorb more number of people. This causes poverty.

3) Population explosion : In India population has increased from 361.09‘millions in 1951 to 1210.19 millions in 2011. Due to scarce capital and low level of technology, it is not possible to provide sufficient goods services to the fast growing population. Rapid growth of population is another important cause for the prevailing poverty in the country.

4) Inequality in Assets and Income Distribution : The relative poverty is to be attributed to inequality in the distribution of National Income. Most of the agricultural labourers are in a states of poverty because; they have less than one hectares land to cultivate. Likewise, inequality in the ownership of industrial and commercial capital is one of the reasons of urban poverty in India.

5) Low availability of essentials : Another important cause for poverty in India is the low availability of essential commodities. The country is not able to produce sufficient goods and services as needed by the rapid growing population. The consumer goods shortage is responsible for low level of standard of living. There is a wide disparity in the consumption levels of the top rich and the bottom poor.

6) Inflation : Continuous rise in prices is another cause of poverty. When the prices rise, the purchasing power of money falls and it leads to improverishment of the lower middle and poorer sections of the society. Inflation affects the living standards of the people having low incomes.

7) Failure of five year plans : The main objective of the planning is to provide minimum level of living to all its citizens. It was felt that growth rate achieved during the five decades of planning would not be sufficient to remove poverty.

8) Social factors : Economic development depends not onl$ on available resources but also on social factors. Indian people lack initiative and resourcefulness. In short, dogmatic and fatalistic attitude is responsible for inertia, lack of initiative and dynamism. Thus, Indian social institutions and attitudes hamper economic progress and are responsible for perpetuating poverty. The caste system and joint family system and the laws of inheritance are a great obstacle to economic progress.

9) Political Factors : Being under foreign rule, India was exploited under the British regime. Since Independence, the other political factors have adversely affected the economic progress. We have political leaders who have placed self before service and who do not hesitate to enrich themselves at the cost of the country. The Indian administration is known to be corrupt and inefficient. The legislators would not pass laws which may help the poor. Some times they may hit their interest.

10) Institutional factors : There are certain institutional factors operative in rural areas as well as urban area having a strong bearing on ownership, management and work. Semifeudalism is an institutional factor responsible for rural poverty. The social and political institutions in rural areas have not allowed the land reforms and technological reforms to make a dent on rural poverty. The government is providing agricultural inputs like electricity seeds fertilizers and credit facilities at subsidized prices to be farmers. But these facilities are not catering the needs of poor farmers having small holdings and also the tenants. The institutional rigidities have not allowed equitable sharing of public goods such as education and health.

Question 4.
Explain the importance of agricultural sector in Indian economy.
Answer:
Agriculture plays a vital role in Indian economy and is the backbone of Indian Economy. It provides employment to around 55 percent of the total work force in the country. It provides raw materials for industries and market for industrial goods. It is the supplier of food for 121 crore people. India is the land of producing multiple goods (crops). In our country agriculture is not only an important occupation of people but also a way of life culture and customs.

Importance :
1) Share of Agriculture in the National Income: Agriculture sector, including forestry, fishing, mining, quarrying and allied activities like animal husbandry, horticulture, silk industry etc., is significantly contributing to the Gross Domestic Product in India.

The share of agriculture in National Income has been disclining gradually from 1950 – 51. This is mainly due to the development of non-agriculture sectors during the five years plans in the economy. The share of agriculture in national income declined gradually from 56.5 percent in 1950 – 51 to 13.9 percent by 2013 – 14. The share of agriculture in national income in U.K. and U.S.A is 2 to 3 percent. The proportion is about 7 percent in France and 6 percent in Australia.

2) Employment Providing Sector : Agriculture dominates the economy to such an extent that a very high proportion of working population in India is engaged in agriculture.

Agriculture provided employment to 98 million peoples in 1951. The number of people working on lands both the cultivators and agricultural laborers increased to 234 million in 2011.

In case of developed countries the population engaged in agriculture is very much less. Ex : In USA and UK only 2 percent, in Japan and France 4 percent.

3) Importance in International Trade: For a long time three agricultural based exports of India like cotton textiles, Jute and tea accounted more than 50 percent. If we add other agricultural commodities the share of agriculture in exports will rise to 70 to 75 percent.

At present we are exporting Sugar, Cotton, Tobacco, Rice, Cashew nuts, Spices, Oilcakes, Coffee, Tea, Fish, Meat, Fruits, Pulses etc., to foreign countries-. By exporting all these products we are earning foreign exchange.

4) Effective Social Safety Net: Though agriculture presently contributes less than 15 percent of Indians GDP yet it continues to employ more than half of the work force. If crops, animal husbandry, fisheries, agro-forestry, silk industry and horticulture are developed at household level, hunger and poverty will be alleviated. Green Revolution, along with White Revolution and Blue Revolution, provides income and employment to the rural poor by eradicating poverty. Thus, agriculture acts as an effective social safety net.

5) Food Supplier of the Expanding Population: The Hunger Index shows that India’s rank is 55 out of 76 countries. According to FAO, India is a hunger affected country. Because of the heavy pressure of population the existing levels of food consumption in our country are very low. The per capita availability of food grains was 510.1 grams per day in 1991. But it has declined to 468.9 grams in 2013. Therefore, unless agriculture is able to increase continuously its marketed surplus of food grains a crisis will emerge.

6) Role of agriculture in Industrialization: Industries which depend on agriculture products for their raw material are called agro-based industry. Industries like Cotton, Jute, Textile, Sugar, Flour mills, Edible oil etc., directly depend on agriculture for raw material. Some other industries like handloom weaving, rice husking, food processing, oil crushing, horticulture etc., are depend on agriculture. The development of agriculture sector will expand the demand for industrial goods. Thus the development of industrial sector facilities the development of agriculture sector by supplying inputs like machines, fertilizers, pesticides etc.

7) Market for Industrial Products : Two thirds of the populations of developing country like India lives in rural areas. The purchasing power of these people in rural areas is too low to purchase industrial products. If steps are taken to increase agriculture produce and productivity, the income of the rural sector will increase. As a result of increase in income of those who depend on agriculture in rural areas caused demand for industrial goods. The increased demand for industrial goods leads to the development of industrial sector.

8) Other Factors :
a) The development of agriculture sector directly promotes growth in transport sector.
b) Development of agriculture sector invites expansion of branches of banks into rural areas.
c) Agriculture development minimizes migration from rural to urban.
d) Farm tourism in rural areas can be developed through the development of agriculture.
e) Agriculture and its allied sectors play a key role in protecting biodiversity.

Question 5.
Explain the role of industrial sector in Indian economy.
Answer:
Industrialisation is a pre-requisite for any country, in a particular underdeveloped country like India. The major sectors like Agriculture and tertiary sectors depend upon the available production of equipment and machinery at reasonable prices by the industrial sector.

1) Raising Income : The first important role is that industrial development provides a secure basis for a rapid growth of income. In the industrially developed countries, for example the percapita income is very high where, as for the industrially backward countries is very low. Percapita income in 2012 in Germany was $ 44,010, Japan $ 47,870, U.K. $ 38,250, USA $ 50,120 and India only at $ 1530 per annum.

2) Changing the structure of the Economy : Secondly, in order to develop the economy underdeveloped countries need structural change through industrialization. The benefits of industrialization will ‘trickle down’ to the other sectors of the economy in the form of development of agricultural and service sectors leading to the rise in employment, output and income. In India sectoral contribution to gross domestic product is 13.9 percent from Agriculture, 26.2 percent from Industry and 59.9 percent from Service sector during the year 2013 – 14. (provisional)

3) Meeting High – Income Demands : Demands of the people are usually for industrial products alone. After having met the needs of food, income of the people is spent mostly on manufactured goods. To meet these demands and increase the economy’s output, underdeveloped countries need industialization.

4) Overcoming Deterioration in the terms of India : India need industrialization to free themselves from the adverse effects of fluctuations in the prices of primary products and deterioration in their terms of trade. Such countries mainly export primary products and import manufactured goods. For economic development such countries must shake off dependence on primary products. They should adopt import substituting and export oriented industrialization strategy.

5) Absorption of Surplus labour in Industries : The next advantage is underdeveloped countries like India are characterised by surplus labour and rapidly growing population. To absorb all the surplus labour it is essential to industrialise the country rapidly. It is the establishment of industries* alone that can generate employment opportunities on an accelerated rate.

6) Bringing Technological Progress : Another advantage is research and development is associated with the process of industrialization. This results in bringing about an industrial civilization (or) environment for rapid progress which is necessary for any healthy economy.

7) Strengthening the Economy : Finally industrialization of the country can provide the necessary elements for strengthening the economy.

Section – B (8 × 5 = 40)

Note :

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

Question 6.
Differentiate between economic growth and development.
Answer:
The terms of Economic Growth and Economic Development are used synonymously, there exists some differences.

According to C.P. Kindle Berger “Economic growth means more output and economic development implies more output and changes in the technological and institutional arrangements by which it is produced”.

According to United Nations expert committee “Development concerns not only man’s material needs but also the improvement of the social conditions of his life. Development is therefore not only economic growth, but growth plus change social, cultural, institutional and economic”.

The following are the main differences between Economic Growth and Economic

Economic growth	Economic development
1. Economic growth refers to an increases in a country real output, of goods and services.	1. Economic development refers to not only economic growth but also progressive changes in the social economic structure of a country.
2. Economic growth is a single dimen-sional phenomenon.	2. Economic development is a multi-dimensional phenomenon.
3. Economic growth is mainly related to developed countries.	3. Economic development is generally related to developing countries.
4. It is a narrow concept.	4. It is a wider concept.
5. It does not require governmental intervention.	5. It is not possible to achieve economic development without the intervention of the government.
6. It denotes quantitative changes in the economy.	6. It denotes qualitative changes in the economy.
7. Economic growth does not indicate the distribution of income and wealth in the economy.	7. Economic development indicates the distribution of income and wealth in the economy.
8. Economic growth can be compared with the physical growth of a person.	8. Economic development is like overall improvement of a person. (Both physical as well as intellectual).
9. It can be measured.	9. It cannot be measured.

Question 7.
What are the family planning programmes in India ?
Answer:
Importance of the family planning programme as a device to control population explosion is now universally recognised. In China, the state approved of one child norm and has succeeded in bringing down the birth rate 21.6 per thousand as against 26 per thousand in India in 2012. China is successful in bringing down the birth rate because of wide spread use of contraceptives.

The following aspects of the family planning programme in this country deserve particular mention.

1. Public Information Programme : Under public information programme, couples in the reproductive age are explained the usefulness of adopting family planning. Hence, the Government has decided to use all kinds of publicity, including cinema, radio, television and newspapers to propagate the importance of family planning.

2. 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 in it for sterilisation. Family planning is completely voluntary in this country, coercive methods halve been generally avoided. During the emergency period, forcible sterilisation was done. The Govt, take policy of decision that preference for employment will be given to the people who accept small family norm and those who reject family planning may be denied certain facilities.

3. Family planning centres : Establishment of family planning centres is an integral part of any family planning programme. These centres provide various clinical facilities heeded for family planning. In addition to these, clinical centres, a large number of contraceptive distribution centres should also be located in both urban and rural areas.

4. Research : Research in the field of demography, communication action, reproduction biology and fertility control has to be given a high priority in any family planning programme.

Question 8.
Explain about Deen Dayal Upadhyaya Grameena Kaushal Yojana.
Answer:
Deen Dayal Upadhyaya Grameen Kaushal Yojana was launched on 25^th September 2014 in view of 98^th birth anniversary of Pandit Deenadayal Upadhyaya. Earlier the Yojana was known as Aajeevika Skills Development Programme (ASDP).

The Rational launching the yojana : The Yojana was launched in light of solving huge problem of unemployment among the ruai youth despite the fact that they have merits. In order to correct this match, Union Government decided to launch skill development programme scheme.

Status of skilled workers In India : In India as against 12 million people entering the work force every year during the last 10 years only 1 million youth were trained. Further out of 12 million people, only 10 percent were skilled ones, while the percentage in European Unions is 75 percent and in China 50 percent.

Main features of DDUGKY : The main features of the Deena Dayal Upadhyaya Kaushal Yojana are :

• The Yojana aims to give training 10 lakh rural youth for jobs in three years, that is by 2017.
• The minimum age for entry under the Yojana is 15 years compared to 18 years under the Aajeevika skills programme.
• Skill Development training centre’s to be launched. So as to address the unemployment problem in rural area.
• The skills imparted under the Yojana will now be bench marked against international standards and will compliment the Prime Minister make in India compaign. This scheme was launched to enhance the employability of rural youth which is the key to unlocking India’s demographic dividend. A sum of ₹ 1500 crores was allotted for this scheme in the 2015 – 16 budget.

Question 9.
How do you reduce the inequalities in the distribution of income and wealth ?
Answer:
The main objective economic planning is to reduce income inequalities and to maintain social justice. To achieve this the government of India initiated the following measures.

i) Land reforms : Agricultural land was not property distributed among farmers. Thus, legislative measures were undertaken to abolish landlords and their intermediaries and ceiling on holdings were fixed. The implementation of land reforms in West Bengal states causes 18 percent increase in agricultural output and also reduced the income inequalities.

ii) Control over monopolies and restrictive trade practices : The monopolies and restrictive trade practices Act was passed in December 1969, which came into force on June 1^st, 1970. The Act provides for the control of monopolies and for the prohibition of monopolistic and restrictive trade practices.

iii) Cooperative enterprises : Another instrument to balance the undue growth of big business in private sector is the decentralised sector in the farm of cooperative enterprises. This sector works for common good rather than for private and personal gain. Profits earned by cooperative sector are shared by very large number of members. This leads to reduce income inequalities.

iv) Encouragement of new enterprises : Special concessions and incentives provided to the new entrants in an industry can restrict the concentration of economic power. If the government strictly implements the rule not to give licenses to start industries by the already existing farms, it would definitely reduce concentration of economic power.

v) Social security: The government has repeatedly declared that it aimed at “Growth with social justice”. The government undertook so many social security measures such as workmen’s compensations and maturity benefits, fixation of minimum wages, the employees Provident Fund, security for the old and disabled and family pension scheme for industrial workers and workers in mines and plantations.

vi) Taxation : Indian tax system is progressive and has been designed to prevent concentration of wealth in a few hands.

vii) Control over capital issues : Already the new capital issues are under government control. But it seems the control has not been effective checking monopolistic tendencies. In India many industries with monopolistic power yield huge incomes which are the cause for income inequalities. As a result of this, the capital Issues Act 1956 was replead in May 1992.

viii) Employment and wage policies : The Government of India started many employment generation programmes to reduce income inequalities. For example, Integrated Rural Development Programme, National Rural Employment’Programme etc. The wage rates allowed to the employees working in unorganized sector is very low. Implementation of minimum wages act leads to reduce income inequalities.

Question 10.
Explain the causes of rural indebtedness.
Answer:
A majority of rural households are in indebtedness. Among the rural households, in- debtedness is highly prevalent in cultivators household, especially in the case of marginal and small farmers. Generally, these households are borrowing from non- institutional sources at a high rate of interest which results in rural indebtedness. The following are the main causes for increasing rural indebtedness in India.

1. Ancestral debt: The most important cause of the existing rural indebtedness is the ancestral debt which is inherited from ancestors. Infact, the volume of inherited debt should be limited to the extent of inherited property. Hence, many of the rural poor in our country are starting their career with a heavy burden of ancestral debt.

2. Poverty : The basic cause of the indebtedness of the farmers is their poverty. The farmers have to borrow for various purposes, as he has no past savings of his own. Poverty either forces the peasants to borrow or prevents them to pay off debts.

3. Natural calamities : Another cause of rural indebtedness is that indian agriculture is still a gamble in monsoons. Frequent failure of monsoons results is drought. On the other hand, excessive rains cause havoc in the form of floods which damage crops. All these problems force the farmers to borrow funds.

4. Extravagance of the farmers : It has been observed that Indian farmers spend more on social and religious functions like marriages, festivals, births, funerals, dinners, ornaments etc, beyond their capacity. All these funds borrowed for such unproductive purposes cannot be paid off easily.

5. Money lenders : Money lenders are the main source for the provision of credit facilities in the rural areas. Money lenders are least interested in the well being of farmers. Hence, they tempt the farmers to borrow funds for unproductive purposes at high rates of interest keeping in grab of their valuable assets. They adopt many unfair methods to exploit the rural people.

6. Small size land holdings : The average size of land holdings in India is very small due to sub-division and fragmentation of land holdings. When the holdings are small, modernization of agriculture becomes impossible.

7. Litigations : Litigation either civil or criminal is another cause of rural indebtedness. People in rural areas generally indulge in various kinds of disputes like disputes over boundaries, pathways, fencing etc. Hence, their valuable time and money is being wasted and this adversely affect farm production. All these lead to increase in their debts.

8. Passion for land : The peasants have a tremendous passion for land and desire to make improvements on land. These improvements on land should be done through saving and not through borrowing. But farmers mostly borrow for these purposes.

9. Other causes : In addition to the above causes, purchase of household luxuries, spending on bad habits, increasing cost of cultivation, dependence on non-institutional sources, expenditure on medicines, lack of support prices for the crops etc, are becoming responsible factors for increasing rural indebtedness.

Question 11.
What are the functions of NABARD.
Answer:
National Bank of Agriculture and Rural Development (NABARD) is an apex bank for rural credit and does not deal with rural people directly. The NABARD set up on July 12, 1982. It provides grants assistance through the co-operative banks, commercial banks, Regional Rural banks and self help groups etc.

Disbursement of Refinance : NABARD has initiated several innovative projects like Rural Infrastructure Development Fund (RIDF), Farm Innovation and Promotion Fund (FIPF), Kissan Credit Cards. It is playing an energetic role in strengthenning the rural eredit structure in the country. The following are the features of these schemes.

1. R.I.D.F. : Rural Infrastructure Development Fund (RIDF) was created in 1995 – 96 from out of short fall of commercial banks lending to priority sectors and agriculture. Since the NABARD has partnered State Government in the creation of rural infrastructure. The annual allocation of funds under the RIDF has gradually increased from ₹ 2000 crore in 1995 – 96 to 20000 crore in 2012 – 13.

2. Kisan Credit Card System : KCC scheme was introduced in 1998 – 99 with a view to facilitate short term timely credit to farmers. Commercial banks, Regional Rural Banks and Cooperative Banks which are refinanced by NABARD are implementing this scheme. Since its inception till the end of August, 2012 ₹ 91676 crore have been issued to nearly 9.54 crore kisan credit card holders.

3. Micro Finance : The aim of this programme is to bring banking service to the door steps of the poor. Micro Finance is a novel approach to banking with the poor. Under this scheme bank credit is extended to the poor through Self Held Groups (SHGs) which were incepted by NABARD in 1986 – 87 as non-govt, organisations. Micro credit attempts to combine lower transactions cost and high degree of repayments. NABARD disbursed ₹ 3916.64 crore in 2012 – 13 to SHGs.

4. Swanajayanthi Gram Swarozgar Yojana (SGSY) : It was launched by the Govt, of India on April 1, 1999 by combining various programmes like IRDP, TRYSEM, DWCRA and allied schemes. Under this scheme up to 2011,168.46 lakh Swarojgaries have been assisted with a total out lay of ₹ 42.168 crore. NABARD disbursed an amount of ₹ 111.72 crore to SGSY in its annual budget 2012 – 13.

Question 12.
What are the causes of industrial backwardness in India ?
Answer:
India could not achieve the desired growth rate in the industrial sector even though it is rich in natural resources and has huge working population. Even after completion of eleven Five Year Plans, there is wide gap between targets fixed targets achieved. Rakesh Mohan opines that there is a gap of 20 percent on an average between the targets fixed and targets realized in each plan annually. The reasons for this are as follows.

Reasons for Industrial Backwardness in India

1) Under – utilisation of productive capacities : Many of the industrial units failed to utilize the existing productive capacities fully. There are many reasons for this. Among them is raw material scarcity, low technical know-how etc. For example during 2005 – 2006, out of 203 public sector enterprises, the capacity utilization was below 50 percent by nearly 67 percent of the units.

2) Performance of public sector units : Prior to liberalization, there was a phenomenal growth of the public sector. Many of the public sector units were under losses. The number of loss making units decreased from 105 in 1999 – 00 to only 63 in 2011. However, the losses increased from ₹ 10,302 crores in 1999 – 00 to ₹ 27,602 crores in 2011 – 12.

3) Political factors : In many situations, political factors influence decision about location of projects not considering feasibility. This approach leads to a considerable wastage of capital resources.

4) Infrastructural constraints: One of the major constraints in industrial development is poor quality and high cost of infrastructure particularly power and transport network. All such infrastructural constraints not only showed adverse effect on industrial growth but also reduced the competitiveness of Indian industries that were, fast emerging in the new global economic environment.

5) Gaps between targets and achievements : In the earlier period of planning achievements were below the targets. Rakesh Mohan has observed. “The average industrial growth rate-achieved over thirty – five to forty years has been about 6.2 percent rate to the average of about 8 percent projected”.

6) Emergency challenges: As a founder member of the World Trade Orginization, India has withdrawn all quantitative restrictions on imports. This resulted into the closure of a nuclear of industrial units. Thus, the industrial sector facing so many problems.

Question 13.
What are the advantages of Road Transport or Roadways ?
Answer:
The principle mode of connectivity between places in roadways. India has one of the largest road networks in the world, spread over 48.65 lakh k.m. district and villages road constitutive 95.2% of the total road network in our country.

Advantages of Roadways :

1. Road transport connects all the villages and regions and finally it connects to the railways.
2. Road transport does not required heavy capital expenditure.
3. The chances of delay, damages are less in case of road transport.
4. Road transport provides transports the goods to the railway station.
5. Road transport help the farmers particularly easily and quickly to transport to mandis and towns.
6. Road transport is more Flexible when compared to other means of transport. It can provide door to door service.
7. Enables to defence forces to move areas inaccessible by railways in emergencies.

Question 14.
Explain the need of foreign Direct investment in India.
Answer:
Foreign Direct Investment is a major source of non – debt financial resource for the economic development of India. Foreign companies invest in India to take advantage of cheaperwages, special investment privileges like tax exemption.

1. Encouraging foreign firms to transfer state – of – the art technology in defence production.
2. For a country where foreign investments are being made, it also achieving technical know-how and generation of employment.
3. The continuous inflow of FDI in India, which is allowed across several industries.

Question 15.
Causes for Soil or land pollution.
Answer:
Soil pollution is defined as “Unfavourable alteration of soil quality by disturbing the natural composition which decreased soil productivity”.

Causes for Soil Pollution :

1. Soil pollution or land degradation is primarily caused by soil erosion, in which the fertile upper surface of the land erode and land become barren. It happens due to deforestation, extensive cultivation, mining activities etc.
2. Desertification is spreading due to over grazing, extensive use of poor soils, alkalization and salination of soil.
3. Soil is also degrading because of excessive use of chemical fertilizers and pesticides leads to acidification which changes chemical properties and destroy plants and agricultural sector on the whole.
4. Filling of wastages and other disposals into the land also causes land degradation.

Question 16.
State Gross Domestic Product (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.
The three sectors in A.P economy are as follows.

1. Primary sector : Agriculture, Animal husbandary, Forests etc.
2. Industrial sector : Industries, Gas, Irrigation, Construction.
3. Tertiary sector : Trade, Hotels, Transport, Communication, General Administration Social Services.

Andhra Pradesh makes use of the product method for estimating the SGDP in Agriculture sector, industrial sector, service sector. The GSDP in 2004 – 05 was 1,34,767 crores and it has incrosed to ₹ 2,50,282 crores in 2013 – 14. The annual growth in 2005 – 06 was 5.35 percent and it decreased to 2.14% in 2008 – 09 and picked up again and reached 7.29% in 2011 – 12.

Question 17.
What is correlation ? State it’s importance.
Answer:
Correlation is an analysis of the co-variation between two or more variables.

1. The correlation is a statistical device which help to analyzing the co-variation between two or more variables.
2. If the value of a variable is given, we can know the value of another variable.
3. With the help of correlation we can predict about the future.
4. It helps us in knowing the important variables on which other depend.
5. In the field of commerce and industry, the technique of correlation coefficient helps to make estimates like sales, price or costs.

Section – C (15 × 2 = 30)

Note :

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

Question 18.
Economic growth.
Answer:
Economic growth refers to an increase in a country’s real output of goods and services. It related to developed countries.

Question 19.
Planning Commission’s definition of developing country.
Answer:
“An under developed economy is characterised by the existence, in greater or lesser degree of unutilised or underutilised man power on the one hand and of unexploited resources on the other”.

Question 20.
Primary sector.
Answer:
The primary occupation include all these essential activities such as agriculture and allied activities like animal husbandry, forestry, fishery, poultry etc., changes in occupational structure are very much associated with economic development.

Question 21.
Density of population.
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.

Question 22.
TRYSEM.
Answer:
This was initiated in 1979 with the objective of tackling unemployment problem among the rural youth. It aimed at training about 2 lakh rural youth every year to enable to become self employed. The TRYSEM was merged into Swamajayanthi Gram Swarozgar Yojana in April 1999.

Question 23.
Economic holdings.
Answer:
Economic holdings is the size of holdings which provides a decant standard of giving of the members of the family.

Question 24.
Rythu Bazar.
Answer:
It is a market where there is no existence of middle men between farmer Vs buyer.

Question 25.
Industrial Estates.
Answer:
It was established in the year 1955 by small scale industries board for the development of small scale industries. An industrial estate is a group of small scale units constructed on an economic scale in suitable sizes with facilities of water transport, electricity, banks and is provided with special arrangements for technical guidance and common service facilities.

Question 26.
LIC.
Answer:
Life Insurance Corporation of India was set up in 1956. LIC has its central office at Mumbai with 7 Zonal offices, 101 divisional offices and 2,048 branch offices. It mobilise savings of the public to invest in the industrial securities.

Question 27.
Annual plan.
Answer:
Annual plan is a part of five year plan. The targets of five year plans are divided into annual targets and detailed plans will be prepared year – wise.

For example : There was a plan holiday for three years from 1966 – 69 at that time annual plans are implemented by postponing the commencement of 4^th plan.

Question 28.
Globalisation.
Answer:
It is the process of integrating various economies of the world without creating any hindrance in the free flow of goods and services, technology, capital even labour or human capital.

Question 29.
Rolling plan.
Answer:
Rolling Plan : This concept was introduced by Yunnar Myrdal. This kind of plan does not have a fixed period of time. It has only duration and moves forward, the completed year will be deleted and next year will be added.

Question 30.
Environment.
Answer:
The word environment is derived from French word environner which means to surround or encircle. Everything which surrounds us is collectively called as environment.

Question 31.
Sustainable development.
Answer:
The process of development which sustains the human well being in future also.

Question 32.
Global warming.
Answer:
Global warming is the increase of Earth’s average surface temperature due to the effects of green house gases such as carbon dioxide emissions from burning fossil fuels or from deforestation, which trap heat that would otherwise escape from earth.

Question 33.
Sarva Siksha Abihiyan.
Answer:
This was introduced during 2001 – 2002 with an aim to provide universal elementary education for all children in the 6 to 14 age group by 2014 SSA has how been renamed as ‘Rajiv Vidya Mission’ in.A.P.

Question 34.
Eco-Tourism.
Answer:
Andhra Pradesh vision – 2020 envisaged East Godavari tourism as a growth engine. It is one of the important type of tourism in.A.P. Maredumilli, Nelapattu (Nellore) Mamandur, Talakona (Chittoor), Balapalli (Kadapa), Ethipothala (Guntur), Kambala Konda (Visakhapatnam) Sre the famous eco – tourism centres in A.R

Question 35.
Range.
Answer:
Range is the simplest method of studying dispersion. It is defined as the difference between the value of the smallest item and the value of the largest item included in the distribution.
Range = L – S
Where L Largest item; S = Smallest item.

Question 36.
Fisher’s Price index Formula.
Answer:
P₀₁ = \(\sqrt{L \times P}\)
\(\sqrt{\frac{\Sigma P_1 Q_0}{\Sigma P_0 Q_0} \times \frac{\Sigma P_1 Q_1}{\Sigma P_0 Q_0}}\) × 100

Question 37.
Correlation.
Answer:
Correlation is an analysis of the co-variation between two or more variables. There are two types of correlation.

1. Karl Pearson’s method.
2. Spearman’s Rank method.

Karl Pearson’s correlation (r) = \(\frac{\Sigma x y}{\sqrt{\Sigma x^2 \times \Sigma y^2}}\)
Spearman’s correlation (rk) = 1 – \(\frac{6 \Sigma D^2}{N\left(N^2-1\right)}\)
(Or) 1 – \(\frac{6 \Sigma D^2}{N^3-N}\)