Posted by Anjali Kaur on Dec 25, 2020

Sample Paper 2 of Indian Economy

Hi students, in this post, you will see that I will be solving a sample paper of economics for the class XII CBSE examination. I will be providing the full explanation for the answer as well.

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Q1. During India’s first seven five- year plans, the Government of India adopted ______ policy to protect domestic industries.

A1. Import Substitution. Read What is trade policy?

Q2. Mention any one advantage of Organic farming.
A2. Safe and Healthy food.

Q3. State whether the statement is true or false.
“In the past few decades, primary sector has created maximum jobs in India”

A3. False. Read Development path of Pakistan.

Q4. __________ was the predecessor organisation to World Trade Organisation.

A4. General Agreement on Tariffs and Trade(GATT). Read World Trade Organization.

Q5. India is not a member of which of the following regional/global economic grouping?

(A)EuropeanUnion (B) BRICS C) G-20 D) SAARC

A5. European Union

Q6. Pakistan introduced its economic reforms in the year ________

A6. 1988 Read Development path of Pakistan.

Q7. State whether the statement is true or false.
“Self- Help Groups (SHGs) are an example of a microcredit organization.”

A7. True.

Q8. The main aim of ‘Great Leap Forward’ was to ensure rapid increase in _______ (primary/secondary/tertiary) sector in China.

A8. Secondary sector in China. Read development experience of India, China and Pakistan.

Q9. State any one outcome of the implementation of Economic Reforms in India in 1991
A9. The greater inflow of investment. What is Liberalization?

Q10. Arrange the following events in chronological order and choose the correct answer from the given alternatives:

Creation of Pakistan

Establishment of People’s Republic of China

First 5- Year Plan of India

First 5- Year Plan of China

Q11. First Industrial Policy Resolution of Independent India was announced in the year _______. (Fill in the blank with the correct alternative)

(A) 1947 (B) 1948 (C) 1951 (D) 1956

A11. B) 1948

Q12. ‘Human Capital Formation gives birth to innovation, invention, and technological improvements.” Do you agree with the given statement? Support your answer with valid arguments.

A12. The given statement is correct.

Human Capital Formation not only increases the productivity of available human resources but also stimulates innovation and creates the ability to adopt new technologies.

Innovation and technological improvement

Human capital formation stimulates innovation and open-mindedness, which helps people to absorb new technologies. As innovations lead to better economic growth.

Positive change in attitude

Investment in human capital makes people more knowledgeable, skilled, and modern in their thoughts and actions. It changes their outlook and attitude towards various aspects such as traditions, job markets that are important in the development of the country. It leads to the emergence of modern society desired for economic development. Read the role of human capital.

Q13. Critically evaluate the role of the rural banking system in the process of rural development in India.
A13. The rapid expansion of the banking system had a positive effect on rural farm and nonfarm output, income, and employment. In spite of it, the following problems have been faced in the rural banking such as-

  1.  The volume of rural credit in the country is still insufficient in comparison to its demand and institutional sources have failed to cover the entire rural farmers of the country.
  2. Less attention has been given to the credit requirements of the needy (small and marginal farmers) and the problem of overdue agricultural credit continues.

Credit needs of the farmers can be classified in two categories:

  1. According to Time: People need credit according to the time period. This is of the following types:
    1. Short-Term Credit Needs- Where loan given for 6-15 months, to buy seeds, tools, fertilizers, etc.
    2. Medium-Term Credit Needs– Under this loan period ranges between 15 months to 5 years to buy machinery, equipment, etc.
    3. Long-Term Credit Needs– Under this loan period ranges between 5-20 years for buying assets like tractor, land, heavy machines, etc.
  2. According to Purpose: Rural people require credit to meet the purpose of their needs. This is of two types:
    1. Productive Purpose- This loan is granted to increase agricultural production. For instance, to buy commodities related to increasing agricultural production; seeds, fertilizers, machines, etc.
    2. Non-Productive Purpose- Under this, a loan is provided to meet social obligations, and not for agricultural production. For instance, to meet expenses related to religious ceremonies, deaths, marriages, medical emergencies, etc. Read the rural credit system.

Q14. Compare and analyse the given data of India and China with valid reasons :

A14. a) The given data shows that China could arrest its annual population growth rate with the implementation of some stringent measures in the late 1970s like the introduction of the one-child norm. This step has been instrumental in controlling the growth of the population in China. India stands virtually more than double China at its annual population growth rate of 1.2% as compared to China’s annual population growth rate of 0.5% pa.

b) The social dynamics of both countries are similar to each other; the sex ratio is low and biased in both countries due to the preference for a male child. Whereas India stands at 929 females per 1000 males, China is not far ahead at 941 females per 1000 males.

Q15. India is often called the ‘Outsourcing Destination’ of the World. Discuss the prime reasons for this name given to India.
A15. Reasons for India as outsourcing destination-

(i)  Availability of skilled manpower- India has vastly skilled manpower which enhances the faith of MNCs.

(ii)  Favourable Government policies- MNCs get various types of lucrative offers from the Indian government such as tax holidays, tax concessions, etc.

Q16. State the meaning of import substitution. Explain how import substitution can protect the domestic industries.

A16. Import substitution refers to a policy of replacement or substitution of imports by domestic production.
The domestic industries of India were not in a position to compete against the goods produced by developed economies. So, the policy of import substitution helped in protecting them in two ways:

  1. The tariff on imported goods, and
  2. Fixation of quotas helped in restricting the level of imports.

As a result, domestic firms could expand without fear of competition from the foreign market. What is trade policy?

Q17. (a) State any one positive contribution made by the British in India.

A17. Introduction of Railways

Q17 (b) Indicate the volume and direction of foreign trade of India at the time of Independence.
A17. The restrictive policies of commodity production, trade, and tariff pursued by the colonial rule adversely affected the volume and direction of India’s foreign trade, as:

  1. British maintained monopoly control over India’s exports and imports.
  2. More than half of India’s foreign trade was restricted to Britain while the rest was allowed with a few other countries like China, Ceylon(Sri Lanka), and Persia (Iran)
  3. India had a huge export surplus during colonial rule.

Q18. Define any two of the following:

(a) Absorptive capacity of environment

A. Absorptive capacity of the environment- It means the ability of the environment to absorb degradation without causing environmental damage. Read Sustainable Economic Development.

(b) Carrying capacity of environment

A. It implies that the resource extraction is not above the rate of regeneration of the resources and wastes generated are within the assimilating capacity of the environment.
(C) Poverty Line (in terms of calorific value).

A. ‘Poverty Line’ refers to that line that expresses per capita average monthly expenditure incurred by the people to satisfy their minimum needs.

In India, the person who spends Rs 816 on consumption in rural areas and Rs 1000 in urban areas per month at 2011-12 prices are treated as ‘Below Poverty Line’. There are nearly 20% of the country’s population that is absolutely poor. What is poverty?

Q19. Why are fewer women found in regular salaried employment?
A. (i) Lesser women are found in regular salaried employment in India, as such jobs require skills and a high level of literacy.

(ii) Lack of mobility among women in India due to social constraints

Q20. (b) Analyze the recent trends in the sectoral distribution of workforce in India:

A. The given data indicates that over the given period, the proportion of the workforce in the primary sector has gone down rapidly. Whereas, the employment share of both the secondary sector and the services sector has increased. While the share of the secondary sector has gone up by approximately 9% recently, the corresponding figure for the services sector has gone up by approximately 7%.

Q21. “Ujjwala Yojana has been a game-changer for rural India.” State any three conventional fuels being targeted under the LPG cylinder distribution scheme (Ujjwala Yojana).
A. The conventional sources of energy cause environmental pollution therefore the government has introduced the ‘Ujjwala Yojna’ as a game-changer for rural India by providing free LPG gas cylinders (cleaner fuel) to rural households.
The three conventional fuels targeted under Ujjawala Yojana are:

  1. (i)  Agricultural waste and dried dung
  2. (ii)  Firewood
  3. (iii)  Coal

Q22. “The Indian Health System needs a stronger does of public expenditure to cure itself.” Justify the given statements with valid arguments.

A22. The statement is defended as the improvement in the health system in

India has been unreasonably slow since independence. The Indian health system has been a victim of relatively low public expenditure.

Health infrastructure includes hospitals, doctors, nurses, and other para-medical professionals, beds, equipment, and a well-developed pharmaceutical industry.

Challenges faced in the health infrastructure

The following challenges or deficiencies faced by the Indian health infrastructure includes:

  1. Unequal distribution of health care facilities
    • The distribution of health care facilities is very inequitable across different parts of the country.
    • 20% of total hospitals and 50% of total dispensaries are located in rural areas, even though 70% of India’s population lives in rural areas.
  2. The spread of communicable disease
    • There is an urgent requirement to identify, prevent, and make people aware of some communicable diseases that are posing a serious threat to society.
    • These diseases are Covid-19 (Coronavirus disease), AIDS (Acquired immune deficiency syndrome), HIV (Human immunodeficiency virus), etc.
  3. Privatization of health care
    • The health care provided by the private sector is very expensive that every Indian cannot afford.
  4. Improper Sanitation facilities
    • Poor level of sanitation in India due to lack of funds.
    • India is not able to maintain the required standard of clean surroundings and making people aware of the benefits of clean surroundings.
    • About 30% of the houses in urban areas do not have toilet facilities.
  5. Poor maintenance of health care centers
    • Lack of funds led to poor maintenance of health care centers.
    • The private sector does not face this problem, but this sector passes the cost of maintenance to the people who avail of their services by charging a big amount of fees.

Q23. Critically examine the results of Poverty Alleviation Programmes implemented in India since independence.

A23. Poverty Alleviation Programmes are the designated programmes to target reduction in/removal of poverty in a country. India, which inherited poverty from British rule, tried her level best to eradicate poverty through various Poverty Alleviation Programmes over the years. As a result, the percentage of absolute poor in some states has fallen well below the national average of poverty. However, the problems of malnourishment, hunger and illiteracy continue to be a common feature in many parts of India, because of the following reasons:

  There has been no radical change in the ownership of assets.

  Due to the unequal distribution of land and other assets, benefits from such programs have been appropriated by the non-poor.

  Inadequate resource allocation for these programmes.

  The Government officials responsible for implementing these programs were ill-motivated and inadequately trained. To conclude we may say that poverty alleviation programs were a great step but could not achieve the desired results due to improper implementation. Read Poverty alleviation programs.

Thank You.

Try Sample paper 1 of macroeconomics

Try Sample paper 1 of Indian economy.

Try Sample paper 2 of macroeconomics

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